DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the  13^th day of April, 2023 

Present      :   Sri. Vinay Menon V., President

                  :  Smt. Vidya A., Member                        

                  :  Sri. Krishnankutty N.K., Member                                Date of Filing: 09/11/2019  

                         CC/274/2019

Ravichandran,

S/o Ramachandran,

10/136, Jyothi Nivas,

Lankeswaram, Chittur,

Palakkad – 678 101                                   -                       Complainant

       (By Adv. U. Mohammed Mustahafa)

                                                                                                Vs

1. National Insurance Company Ltd.,

Divisional Office,

1^st Floor, Vetteel Chamber,

Ravipuram, M.G.Road,

Kochi – 682 016

Rep. by its Divisional Manager.

2. National Insurance Company Ltd.,

Branch  Office,

3^rd  Floor, East Fort Complex,

Fort Maidan, Palakkad – 678 001 

Rep. by its Branch Manager.                          -                       Opposite parties

            (O.P.s   by Adv. P. Ratnavally)

O R D E R

By  Sri. Vinay Menon V., President

1. Complainant seeks grant of Own Damage claim allegedly due to him from the O.P. Insurance company. The complainant claims that his car met with an accident on 10/07/2017. The O.P. company informed that since the car was under HP agreement, the insured amount would be paid directly to the finance company. Inspite of the assurance, the amount was not paid to finance company. Thereafter the complainant raised a claim on 1/11/2019 which was repudiated on 04/11/2019 on the ground there is undue delay on the part of the complainant in submitting claim. Aggrieved thereby, this complaint is preferred.
2. O.P. entered appearance and admitted the existence of a valid policy. Per version pleadings, as there was a hypothecation agreement, admitted amount could be handed over only to the financier company. The Surveyor deputed by the O.P. had pegged the value of the car at Rs. 79,000/- at total loss rate. The complainant had expressed his willingness to settle the dispute at this amount. Therefore the O.P. directed the complainant to produce an N.O.C. from the financier company. As the NOC was not provided in the financial year, the file was closed.  The complainant had transferred the vehicle in favour of a third party on 12/11/2019. Therefore the complainant has no right to file this complainant.  
3. The following issues arise for consideration:

1. Whether the complainant is entitled to file this complaint?
2. Whether the ground for repudiation is sustainable in the eyes of law?
3. Whether there is any deficiency in service  or unfair trade practice?

IV.        Whether the complainant is entitled to any reliefs sought for?

V.         Any other Reliefs?

4.         (i)         Complainant filed proof affidavit. Ext. A1 was marked. The complainant was

 examined as PW1.

(ii)        Opposite party filed proof affidavit and marked Exts.B1 to B9. 

5.         Chronology, essential for adjudication, is as hereunder.

Issue No.I 

6.         This issue is necessitated as O.P.s contented that the complainant had already disposed off the car on 12/11/2019, that R.C. was changed on 13/11/2019 and that in view of the transfer, the complainant is not entitled to file this complaint. In his testimony, the complainant admits that he had sold the vehicle.

7.         The question to be considered is whether this transfer would preclude the complainant from filing this complaint.

8.         Per pleadings, eventhough the complainant had not submitted the NOC from the financier during the Financial year of accident itself (2017-18), he had submitted the same on 01/11/2019. His claim was rejected on 04/11/2019. It is this rejection that is challenged before this Commission.

9.         A perusal of the chronology scheduled above would show that the complainant raised his claim after availing the NOC on 1/11/2019. His claim was rejected on 4/11/2019. Transfer was effected only on 13/11/2019. Hence, a right to seek remedy alleging deficiency in service became vested with the complainant on 4/11/2019. Hence, this complaint is maintainable with this Commission.

            Issue No.II

10.       Before assaying the sanctity of repudiation of the complainant’s claim by the O.P., it would be pertinent to take a look at the contents of Ext.B3 consent letter issued by the complainant to the opposite party with regard to the salvage value to have a better understanding of the contractual relationship between the complainant and the O.P.s.

                                    “2. That a competent surveyor has surveyed the damaged vehicle and it has been conformed that an economical repair with brand new parts is not possible in the material case. So I have agreed to settle the claim on a salvage loss basis. Whereby I will be allowed to retain the wreck with me. I will have the liberty to dispose the wreck off.

3. That I understand that as per terms of the said settlement on salvage loss basis, a sum of Rs.(80,000 – 1,000) = 79,000 (Net of excess) only will be paid considering the wreck value of Rs………. agreed.

4. That I understand that the policy of insurance referred above will stand cancelled with effect  from the date of accident.

5. That I understand that the wreck vehicle shall be under my absolute ownership and possession and I have the liberty to repair or dispose it of solely at my risk and costs and no liability would be attached to the insurance company consequent to apt damage caused by the use or otherwise of the wrecked vehicle.”

11.       As per Ext.B3, once having agreed to accept Rs.79,000/-,  the wreck was under the absolute ownership and possession of the complainant with full liberty to do whatsoever the complainant fancied including repair and transfer. 

12.       It is the unequivocal case of the opposite party that they had directed the complainant to produce the NOC from the financier and avail the Rs.79,000/- as agreed upon.  Per version, the claim was closed as the NOC was not produced within that financial year.  Subsequently after nearly two years, the complainant issued Ext.B5 communication seeking re-opening of the claim and sought for the amount. But the opposite party repudiated the claim on 4/11/2019 by issuing Ext. B6/A1 stating: 

“This has reference to the OD claim lodged by you against the accidents occurred on 10/7/17 and the request letter submitted by you on 1/11/2019 along with RC endorsement copy dated 23/09/2019.

                                    Based on your request, the claim was kept pending for you to submit hypothecation cancellation endorsement. Even after our several reminders over phone and letter, there was no response from you. Now there is inordinate delay in submitting finance cancellation RC endorsement copy. This claim was already closed since there was no response from you for more than two years.

                                    Hence we regret to inform you that we are unable to proceed further on this claim which was reported before two financial year ends.”

13.       The sole reason for closing the claim of the complainant, as can be perceived from a perusal of Ext.B6 letter of repudiation is that a claim was filed only after two years. A perusal of Ext.B7 letter dated 15/3/2018 shows that the O.P.s  had informed the complainant that the claim would be closed if  Loan closing certificate is not produced. The opposite parties had not stated the exact date on which the claim was closed.

14.       In a case like this, where the insurance company had raised a justification that they had repudiated the claim because the complainant failed to produce the requisite loan closing certificate (or any other document for that matter), the OP was bound to prove the case by way of production of relevant documents which requires or entitles the Insurance Company or lay a burden or cast a duty upon the insured to produce a document within the relevant financial year.

The O.P. has adduced no evidence showing that they were acting according to some Rules or Regulations.  

15.       After evidence was closed and the matter was taken for Orders, the O.P. filed an application as I.A. 203/2023 seeking to reopen evidence stating that they had filed a wrong document which was marked as Ext. B8. They produced the said document along with another application, I.A. 202/2023, to accept the said document. Basic pleadings, meriting allowing of both the applications, as stated in the affidavits forming part of both the applications were the presence of the following covenant in the policy that the O.P. failed to produce/seeking to produce.

“4. As per Private Car package Policy – General Exceptions – No – 7, 3^rd para clearly shows that,

“It is also hereby further expressly agreed and declared that if the company disclaim liability to the insured for any claim hereunder and such claim shall not within 12 calendar months from the date of such  disclaimer have been made the subject matter of a suit in a court of law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder” ”(sic).

A reading of this condition would show that it applies only when the company disclaims liability. Further they seek to lay fetters to the provisions of Limitation Act or provisions in Statutes that provide Limitation. As to whether such a provision barring statutory rights of a person would tantamount to Unfair Trade Practice is not dealtwith by this Commission at this juncture.

We fail to understand how this covenant would help the case of the opposite party, when they have accepted their liability and had allegedly closed the claim for want of NOC from the Financier.

Incidentally, both the I.A.s were dismissed.

16.       It is to be noted that the vehicle was under hypothecation agreement.  What happened between the financier and the complainant which prevented production of NOC within the time frame fixed by the insurance company is not known.

Yet the question is whether such a delay in the complainant settling his accounts with the financier company is so fatal so as to merit or warrant repudiation of claim by the opposite party. Even though, in the facts and circumstances of the case, the complainant has failed to adduce any cogent evidence (or even a feasible pleading) regarding the delay, we are of the impression that such a delay of two years is not fatal for the following reasons:

A.         No evidence is forthcoming from the part of opposite party to prove that there is any strictures, Rules, Regulations etc. restricting them from re-opening a claim that was closed; and

B.         The admitted amount had become due upon the O.P. admitting the claim of the complainant. Handing over of NOC was not a sine- qua- non for allowing or admitting the claim.  Handing over of NOC was required solely for effecting disbursement of the admitted amount.

17.       Therefore the reason for not re-opening the claim of the complainant and rejecting Ext.B5 request by way of Ext.B6 communication is arbitrary, unreasonable and perverse and ergo unsustainable in eye of law.               

Issue No. III

18.       Based on the finding in issue No.2 we hold that there is deficiency in service and unfair trade practice on the part of the opposite parties.  

Issue No. IV

19.       Complainant has claimed that he has incurred an amount of Rs.2 lakhs for repairing the vehicle. He further claims Rs.20, 000/- as compensation and Rs.10, 000/- as costs.

20.                   Ext.B3 is a consent letter, relevant contents of which were already reproduced in paragraph 10 supra. A perusal of the aforesaid detail would show that the complainant had consented to receiving Rs.79,000/- towards  full and final settlement under salvage loss basis. He had also undertaken not to raise any further claim in paragraph 6 of Ext.B3.

21.       In his deposition (page 4, lines 6 & 7), the complainant has stated that he had to expend around Rs.80,000/- for repairing the car. He further stated that the additional amounts were claimed for the difficulties and expenses he had suffered. 

22.       Therefore, we hold that the complainant is entitled only to Rs.79,000/- based on Ext.B3.

            Issue Nos. IV & V

23.       Resultant to the discussions made above, we hold that the complainant is entitled to the following reliefs:

1)         The complainant is entitled to Rs.79,000/- (Rupees Seventy nine thousand only)

2)         The complainant is entitled to an interest @10% p.a. on the aforesaid amount from  

1/11/2019 till the date of payment.

3)         The complainant is entitled to Rs.20,000/- (Rupees Twenty thousand only) for deficiency in service on the part of the O.P.

4)         The complainant is entitled to Rs.30,000/- (Rupees Thirty thousand only) for unfair trade practice on the part of the O.P..

5)         The complainant is entitled to cost of Rs.10,000/- (Rupees Ten thousand only) as claimed.

6)         The opposite parties are directed to pay these amounts within 45 days from the date of receipt of a copy of this Order, failing which the opposite party shall pay a solatium of Rs.250/- per month or part thereof till the date of final payment.   

                  Pronounced in open court on this the 13^th day of April, 2023.    

                                                                                           Sd/-

                                                                                                Vinay Menon V

                                                      President

                                                             Sd/-

   Vidya.A

                       Member        

       Sd/-                                                         Krishnankutty N.K.

                                                                                                      Member

APPENDIX

Exhibits marked on the side of the complainant :

Ext. A1 – Copy of repudiation letter dated 4/11/2019.

 Exhibits marked on the side of the opposite party: 

Ext.B1 – Copy of motor survey report dated 22/9/17

Ext.B2 -  Original of 3 quotations for salvage

Ext.B3 –  Original of consent letter dated 19/9/17

Ext.B4 –  Printout of registration details with regard to vehicle bearing No.KL09-AD-6873

Ext.B5 -  Original of communication dated 1/11/2019

Ext.B6 –  Same as Ext.A1

Ext.B7 – Copy of communication dated 15/3/2018

Ext.B8 – Original of certificate cum policy schedule

Ext.B9  - Printout of Section 64 VB particulars

Court Exhibit:  Nil

Third party documents:  Nil

Witness examined on the side of the complainant:

PW1 – Ravichandran (Complainant)

Witness examined on the side of the opposite party:  Nil

Court Witness: Nil

NB : Parties are directed to take back all extra set of  documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.