DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT : Sri. P.C. PAULACHEN, M.Com, LLB: PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri.V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Friday the 17th day of March 2023
C.C. 371/2017
Complainant
Elsamma Joseph,
W/o Chacko K.J,
Keerachina House,
Marikunnu (Post),
Calicut, Kerala – 673 012.
Opposite Parties
1. M/s. Royal Sundaram General Insurance Co.Ltd,
Corporate Office, vishranthi Melaram Towers,
No.2/319, Rajeev Gandhi Salai (OMR),
Karapakkam, Chennai -600 097.
(By Adv. Thomas Mathew)
2. M/s. Royal Sundaram General Insurance Co. Ltd,
4th Floor, M Sons Aracade,
Cherooty Road,
Calicut- 673 032.
ORDER
By Sri. P.C. PAULACHEN – PRESIDENT.
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
2. The case of the complainant, in brief, is as follows:
The complainant is the registered owner of Maruthi Alto LX car bearing registration number KL.11 V 7762. The vehicle was insured with the opposite party for the period from 08-01-2016 to 07-01-2017. The insurance premium of Rs.2,803/- was paid on the insured declared value (IDV) of Rs.66,000/-. On 03-07-2016, the vehicle met with an accident and the complainant raised a claim for the repair of the vehicle. But the opposite parties arbitrarily classified her claim on salvage loss basis. The vehicle is repairable as it was with good engine condition and had enough life left. However, without considering the concern of the complainant, the opposite parties insisted for a settlement on salvage loss basis, based on an inflated quotation procured by them.
3. The complainant obtained a quotation from M/s. Malabar Motors, Kozhikode, an authorised service centre for Maruthi vehicles, for Rs.47,500/- for repair of the vehicle. The complainant repeatedly requested the insurance company to reconsider/review their decision and settle the claim on repair basis subject to policy conditions. However, the company did not co-operate adopting a negative attitude. Later he issued a registered letter to the company, which was not replied by them. She made it clear to the company that she would meet the balance amount, if any, for the repairs. But her request was not heeded by the insurance company.
4. However, the first opposite party informed the complainant that they would be constrained to treat her claim as closed, if she failed to accept their demand. On 23-12-2016 a lawyer notice was issued to the company and thereafter entrusted the vehicle to M/s Malabar motors and got the vehicle repaired for Rs.49,386/- .
5. The accident was on 03-07-2016 and the insurance company has successfully evaded the settlement of the claim without any justifiable reasons. Their act/omission amounts to deficiency in service and unfair trade practice. The complainant was not able to use the vehicle for more than one year and was under great mental pressure because of the negligent attitude of the company. Hence the complaint to direct the opposite parties to pay a sum of Rs.49,386/-paid by the complainant to Malabar motors, Rs.4,000/- paid towards towing and floor rent charges, Rs.50,000/- as compensation for the mental agony and harassment and Rs.10,000/- towards legal expenses.
6. The opposite parties jointly filed written version wherein they have denied and disputed all the allegations and the claims made against them. The policy is admitted. The policy is subject to terms and conditions. The lodging of the claim in the said policy on 26-07-2016 alleging accident to the insured vehicle on 03-07-2016 is admitted. The opposite parties immediately arranged a survey by a licenced surveyor and it was found that since the repair cost exceeded 75% of IDV, the claim was treated on total loss basis according to the policy terms and conditions. The IDV was Rs.66,000/- and the repair cost was assessed at Rs.59,951/- which is more than 75% of the IDV. The wreck was assessed at Rs.40,000/- and it was deducted from IDV and the net liability was worked at Rs.25,000/- after the excess of Rs.1,000/-. The mode of settlement under salvage loss is according to the policy terms and conditions and it was duly explained to the complainant and she was asked to submit the relevant documents. However, she did not co-operate in spite of reminders and a final reminder was sent on 24-11-2017 whereby she was asked to submit the pending documents and it was put to her notice that if there was no revert then the claim would be treated as closed. It was practically impossible for the company to keep the claim open indefinitely. The lawyer notice was duly replied. The complainant is claiming the entire repair bill whereas the total liability of the company is only Rs.25,000/-. The claims made under different heads are denied. The complaint is bereft of bonafides. There is no bonifide cause of action for the complaint. With the above contentions, the opposite parties pray for dismissal of the complaint with costs.
7. The points that arise for determination in this complaint are;
(1). whether there was any deficiency of service or unfair trade practice on the part of the opposite parties, as alleged?
(2). Reliefs and costs.
8. PW 1 was examined and Exts A1 to A9 were marked on the side of the complainant. No oral evidence was let in by the opposite parties. Exts B1 to B5 were marked.
9. Heard both sides.
10.Point No.1: The complainant has approached this Commission alleging deficiency of service and unfair trade practice on the part of the opposite parties. The specific allegation is that the insurer evaded the settlement of the claim lodged by her for repair of her vehicle which met with an accident, without any justifiable reasons insisting to settle the claim on salvage loss basis.
11. In order to substantiate her case, the husband of the complainant got himself examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the certificate cum policy schedule, Ext A2 is the copy of the receipt dated 04-07-2016 issued by M/s Highway Crain service, Ext A3 is the copy of the certificate dated 11-07-2016 issued by the Inspector of police, Traffic police station, Kozhikode city, Ext A4 is the letter dated 24-08-2016 issued by the insurance company. Ext A5 is the copy of the letter dated 05-12-2016 issued by the complainant to the insurance company, Ext A6 is the letter dated 24-11-2016 issued by the insurance company, Ext A7 is the copy of the receipt dated 10-12-2016 issued by Indus Motor Company Private Limited, Ext A8 is the copy of the lawyer notice dated 23-12-2016 and Ext A9 is the copy of the receipt dated 05-08-2017 issued by Malabar motors.
12. The case advanced by the opposite parties is that the claim of the complainant was considered on salvage loss basis according to the agreed terms and conditions after considering the report of the approved surveyor and loss assessor. However, the complainant did not co-operate and submit the documents called for and she repaired the vehicle somewhere else without their approval. Since it was practically impossible to keep a claim open indefinitely and also considering the non-co-operation of the complainant the claim was closed as un pursued, after giving notice. Ext B1 is the copy of the certificate cum policy schedule, Ext B2 is the copy of the claim form, Ext B3 is the copy of the survey report, Ext B4 is the copy of the letter dated 11-08-2016 and Ext B5 is the copy of the certificate of insurance and policy schedule.
13. The complainant has argued that unfair trade practice and the deficiency of service on the part of the opposite parties stand proved through the testimony of PW1 and the documents produced and marked on the side of the complainant as Exts A1 to A 9. It was pointed out that all the damage to the vehicle due to the accident could be removed by the repair/replacement of the parts whereas the insurance company insisted for the settlement of the claim on salvage loss basis depending on an inflated quotation procured by them and it amounts to unfair trade practice and deficient service. It was submitted that the market value of the vehicle is much more than the IDV. Per contra, the learned counsel for the opposite parties argued that the claim was rightly considered on salvage loss basis as per the terms and conditions of the policy and at no stretch of imagination, any deficiency of service or unfair trade practice can be attributed against the company and the attempt of the complainant is to see whether she can gain unlawfully.
14. The complainant is the owner of Maruthi Alto LX car bearing registration number KL.11 V 7762. The vehicle met with an accident on 03-07-2016. The vehicle was validly insured with the opposite parties at the relevant time of the accident as per Ext A1 policy. The IDV of the vehicle was Rs.66,000/- as per Ext A1. Ext B2 claim was lodged by the complainant on 26-07-2016. The vehicle was inspected and loss assessed by an approved surveyor and loss assessor and Ext B3 survey report was prepared. The surveyor assessed the repair cost at Rs.59,951/-. The wreck was assessed at Rs.40,000/-. The wreck value was deducted from IDV and net liability was fixed at Rs.25,000/- after the policy excess of Rs.10,000/-. The settlement of the claim on salvage loss basis was not acceptable to the complainant. So she repaired the vehicle at Malabar Motors spending Rs.49,386/- and Ext A9 is the receipt for the same. Finally, the claim lodged by the complainant was closed by the company as not pursued. There is no serious dispute on the above aspects.
15. It may be noted that the insurance contract is bound by the policy terms and conditions. The insurance policy represents a contract between the insurer and the insured and the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. In this context, it is worthwhile to have a glance at Ext B5 policy conditions. It provides that “ IDV shall we treated as the ‘Market Value’ throughout the policy period without any further depreciation for the purpose of Total Loss (TL)/Constructive Total Loss (CTL) claims. The insured private car shall be treated as a CTL if the aggregate cost of retrieval and/or repair of the Pvt car, subject to terms and conditions of the policy, exceeds 75% of IDV of the private car.” The relevant policy condition as to total loss calculation reads as follows. “3. The company may at its own option repair reinstate or replace the private car or part thereof and/or its accessories or may pay in cash the amount of loss or damage and liability of the company shall not exceed: a) for total loss/Constructive Total Loss of the Private car- the insured’s declared value (IDV) of private car (including accessories there on) as a specified in the schedule less the value of the wreck”.
16. Thus the policy terms and conditions permit the insurance company to consider the claim on salvage loss basis and if the repair cost exceeds 75% of the IDV, the claim shall be treated on total loss. Here the IDV was Rs.66,000/-. The repair cost was assessed at Rs.59,951/- which is evidently more than 75% of the IDV. So as per the policy, the claim is to be treated on total loss. The wreck value was assessed at Rs.40,000/- and it has been deducted from the IDV and the net liability of the company was assessed at Rs.25,000/- after the policy excess of Rs.1000/- . The company considered the claim on salvage basis as per the agreed policy terms and conditions and that being so, no unfair trade practice or deficiency of service can be attributed against the company.
17. Ext. B3 was prepared by an approved surveyor and the complainant could not assail the same. As per the agreed policy terms and conditions, the IDV shall be treated as the market value throughout the policy period without any further depreciation for the purpose of total loss claims. So the contention of the complainant that the market value of the vehicle was much more than the IDV cannot be countenanced.
18. From the forgoing discussion, we hold that there is no proof of any deficiency of service or unfair trade practice on the part of the opposite parties in settling the claim. However, the liability of the opposite parties to pay Rs.25,000/- to the complainant based on Ext B3 cannot be disputed. So the opposite parties are liable to pay a sum of Rs.25,000/- to the complainant. Since no unfair trade practice or deficiency of service is established or proved, the other reliefs sought for are not allowable. However, the complainant is entitled to get Rs.5,000/- as cost of the proceedings from the opposite parties.
19. Point No.3:In the light of the finding on the above point, the complaint is disposed of as follows :
a) CC 371/2017 is allowed in part.
b) The opposite parties are hereby directed to pay the complainant a sum of Rs. 25000/-(Rupees Twenty Five Thousand only) with interest at the rate of 6% per annum from the date of the complaint ie, 13-10-2017 till actual payment.
c) The opposite parties are directed to pay a sum of Rs.5000/- (Rupees Five Thousand only) to the complainant as cost of the proceedings.
d) The order shall be complied with within 30 days of the receipt of copy of this order
Pronounced in open Commission on this, the17thday of March, 2023.
Date of Filing: 13-10-2017.
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PRESIDENT
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MEMBER
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MEMBER
APPENDIX
Exhibits for the Complainant :
Ext. A1 – Copy of the certificate cum policy schedule.
Ext. A2 – Copy of the receipt dated 04-07-2016 issued by M/s Highway Crane service
Ext. A3 – copy of the certificate dated 11-07-2016 issued by the Inspector of police, Traffic police station, Kozhikode city,
Ext. A4 – letter dated 24-08-2016 issued by the insurance company.
Ext. A5 – copy of the letter dated 05-12-2016 issued by the complainant to the insurance company.
Ext. A6 – letter dated 24-11-2016 issued by the insurance company.
Ext. A7 – copy of the receipt dated 10-12-2016 issued by Indus Motor Company Private Limited.
Ext. A8 - Copy of the lawyer notice dated 23-12-2016.
Ext. A9 – Copy of the receipt dated 05-08-2017 issued by Malabar motors.
Exhibits for the Opposite Party
Ext. B1 – Copy of the certificate cum policy schedule.
Ext. B2– Copy of the claim form.
Ext. B3- Copy of the survey report.
Ext. B4– Copy of the letter dated 11-08-2016.
Ext. B5- Copy of the certificate of insurance and policy schedule.
Witnesses for the Complainant
PW1 – Chacko. K.J.
Witnesses for the opposite parties
Nil.
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PRESIDENT
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MEMBER
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MEMBER
Forwarded/ By Order
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Assistant Registrar
