8-1-8, nd  floor, Near Clock Tower

Above Sony World Show Room

S.D. Road, Secunderabad-3.                       ***                         Respondent/

                                                                                                Opposite Party

Counsel for the Appellant:                          Smt. T. Saradha

Counsel for the Resp:                                 Served

CORAM:

                         HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

                             &

    SMT. M. SHREESHA, MEMBER

MONDAY, THE  DAY OF JUNE TWO THOUSAND TWELVE

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          ***

1)                 The complainant appellant herein aggrieved by the order of the Dist. Forum granting inadequate compensation of Rs. 4, 13,388/- as against a claim of Rs. 11, 01,068/- preferred the appeal. 

2)                The case of the complainant in brief is that  it is a partnership firm  and purchased Chevrolet Tavera vehicle for earning  livelihood by means of self-employment, having availed loan from Sundaram Finance Ltd., and insured the same for a sum of Rs. 7,01,068/- covering the period from 27.09.2007 to 26.09.2008 with the respondent insurance company.    While so it met with an accident on 2.1.2008 in the limits of Dharward police station.  On a report the police registered it as a case in Crime No. 1/2008 u/s 279, 337, 338 and 304-A IPC.  The vehicle was totally damaged.    After  the insurance company the vehicle was kept at KUN Hundai at Hyderabad.   The insurance company appointed a surveyor who came and inspected the vehicle.  It gave its estimate to him along with claim form.    The insurance company has kept the matter pending for about 14 months despite its repeated reminders.    It had suffered not only mental agony but also financial loss.  It was liable to compensate by way of money for Rs. 2 lakhs and future loss of Rs. 10,000/- per month.  Therefore it has claimed  Rs. 7,01,068/- towards cost of the vehicle with interest @ 24% p.a., from the date of accident till the date of payment together with  Rs. 2 lakhs  each towards damages and mental agony and costs. 

3)                The insurance company resisted the case.  While admitting issuance of policy it denied its liability on the ground that the complainant is not a consumer.   On the day when the accident took place eight passengers were travelling including the driver.    The number of passengers allowed      It has violated the terms of the policy.  Immediately on receipt of claim it had deputed Sri M. N. Patel, surveyor and loss assessor who after inspection gave his report on 15.1.2008.  Equally one Sri Mukkamala VSD Prasad another surveyor & loss assessor submitted his report on 10.3.2008 informing that the complainant had taken permit from RTA, Andhra Pradesh and the vehicle had no permit to run in Karnataka State where   the accident took place.    It was violation of policy, and therefore the claim was repudiated on 13.3.2008, and the  fact was intimated to the complainant.    The claim is barred by limitation.    The claim towards interest is contrary to the terms and therefore prayed for dismissal of the complaint with costs. 

4)                 The complainant in proof of its case filed the affidavit evidence of one of its partners and got Exs. A1 to A15 marked while the insurance company filed the affidavit evidence of its Customer Service Officer and got Exs. B1 to B4 marked. 

5)                The Dist. Forum after considering the evidence placed on record opined that permit issued to the complainant restricts plying in the State of Andhra Pradesh and the accident took place in Bangalore of Karnataka State a violation of conditions of the policy.  The claim could be settled at 75% of the admissible claim applying the decision of National Commission in New India Insurance Company Ltd.        It had taken the actual damage at Rs. 5,51,183/-  and deducted 25%  arrived at Rs. 4,13,388/-  and granted the same with interest @ 12% p.a., from 25.1.2008 till the date of payment together with costs of Rs. 3,000/-.

6)                 Aggrieved by the said order, the complainant preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.   It ought to have seen that the vehicle was a new vehicle valued at Rs. 7,01,068/-, and it is evident from certificate issued by RTA., and therefore the claim could have been settled at Rs. 5,51,183/-  as  assessed by the surveyor.    However, the insurance company was liable to pay interest @ 2% as per clause 9(6) of the IRDA Regulations, 2002.    At any rate   the actual loss suffered by it has to be compensated and prayed that amount claimed be awarded. 

7)                 The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?

8)                It is an undisputed fact that the complainant had taken  passenger carrying policy  with the respondent insurance company  for Rs. 7,01,068/-   covering the period from  27.9.2007 to 26.9.2008  vide Ex. B1.  It is also not in dispute that the vehicle of the complainant/appellant herein met with an accident evidenced under Ex. A6 FIR, A7 panchanama, Ex. A8 Motor Vehicle Inspector’s report and Ex. A9 post-mortem examination report.    It is also not in dispute that complainant sent the claim form Exs. A2 & A3 basing on which the insurance company appointed M/s. M. N. Patel who conducted spot survey noted the damages vide his report Ex. B3.    Basing on it   Mukkamala  VSD Prasad  was appointed to submit final survey report.  He categorically mentioned  “ the permit produced by the  insured is restricted to  ply in motorable roads in Andhra Pradesh only, and seating capacity was seven in all.   However, nine persons   travelling at the time of accident.    originally estimated the loss  at Rs. 7,06,463/- viz., Rs. 1,12,360/- towards labour charges and Rs. 5,94,103/- towards cost of parts.   However,  later  assessed  the cost of spare parts  at Rs. 5,18,880/- , labour charges at  Rs. 67,416/-.  After   salvage and policy excess arrived the net loss at Rs. 5,51,183/-.    The Hon’ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Company Ltd., reported in II (2010) CPJ 9 (SC)  approving the  decision of the National Commission in  New India  Assurance  Company Ltd., Vs. Narayan Prasad  Appaprasad Pathak reported in  II (2006) CPJ 144 (NC)  opined that  in cases where  breach of conditions including  the limitation as to the use directed the same to be settled  on non-standard basis.   For benefit we   the same hereunder :

14.     In that case also the question was, whether the insurance company can repudiate the claims in a case where the vehicle carrying passengers and the driver did not have a proper driving license and met with an accident. The said guidelines are set out below:-

15.      From a perusal of the aforesaid guidelines it is clear that one of the cases where 75% claim of the admissible claim was settled was where condition of policy including limitation as to use was breached.

16.     In the instant case the entire stand of the insurance company is that claimant has used the vehicle for hire and in the course of that there has been an accident.  Following the aforesaid guidelines, this Court is of the opinion that the insurance company cannot repudiate the claim in toto. 

The complainant now contends that actual loss suffered by him as quantified  the arbitration award has to be awarded to him.  It may be stated herein that Ex. A15 is arbitration proceedings between the complainant and the financier for  the insurance company was not made a party.   We may state that the complainant even did not choose to contest and allowed the award to be passed against them for the entire amount.  Therefore, there is no point in arguing that award that was passed against him under the arbitration proceedings is to be mulcted against the insurance company.    Absolutely, there is no meaning in this argument as the complainant did not choose to contest nor the insurance company was made as party.    Evidently, the surveyor assessed the net loss at Rs. 5  The complainant did not examine any   or surveyor  to assess the loss.  No evidence whatsoever was filed in order to show that the surveyor assessed the loss without   the value of  particular item.    The learned counsel for the appellant   which he made  in  the written submission at para-17(b) as follows :”

“The   and the forum wailed to consider the IRDA regulations GR-8  Insurance Tariff Regulations with regard  to assessment of loss which mentions  in case of assessment  is more than 75%   it has to be treated as total loss/constructive total loss.  The said regulation further states for settlement of constructive total loss claim, the IDV will not change.  The said clause also mentioned depreciation of 15% for fixing the value of the vehicle if it   exceeding six months but not exceeding the one year age of the vehicle.  In view of the above clause  after deducting 15%  as depreciation as mentioned in GR-8  and thereon  to deduct 25%  on non-standard basis  as per the judgement of  Supreme Court in Amalendu Sahoo case  the Dist. Forum ought to have awarded an amount of Rs. 4,50,000/-  and interest thereon.” 

Even assuming the same is to be true what all the complainant would be entitled  to  is Rs. 4,50,000/- instead of Rs. 4,13,388/-.  Though the complainant contended that he was entitled to interest @ 2% more than the bank rate of interest in view of the fact that insurance company has not settled the claim within 30 days as per clause-9(6) of the regulations,  the complainant ought to have filed the bank rate of interest in order to grant 2% more than the

bank rate of interest.  The Dist. Forum awarded 12% interest in the  it was just and reasonable.    The complainant equally did not file any document or by filing its account the amounts earned by it in order to award loss of income during the period.   Except taking a plea the complainant did not substantiate by filing any document.   Therefore, at the most the complainant is entitled to Rs. 4  from 25.1.2008 till the date of payment together with costs of  Rs. 3,000/- awarded by the Dist. Forum.

9)                 In the result the appeal is allowed in part modifying the order of the Dist. Forum.  The insurance company is directed to pay Rs. 4,50,000/- with interest  @ 12% p.a., from 25.1.2008 till the date of payment together with costs Rs, 5,000/- in the appeal.     Rest of the claim is dismissed. 

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER

                                                                             11/06/2012

*pnr

UP LOAD – O.K.