IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.Ashok Kumar J.Dhole<br /> B.A(Hons), LL.B - President<br /> <br /> 2. Smt.M.Mahadevi<br /> M.Sc., M.Ed., -Member<br /> <br /> 3. Shri.G.V.Balasubramanya<br /> B.E, LL.B - Member<br /> <br /> CD 59-05 DATED 03-08-2005<br /> <br /> Complainant (Dr.) S.N.Sadasivan<br /> No.49, 4th Sub Road, J.T.Koppal<br /> V Stage, Kuvempunagar,<br /> Mysore-570023.<br /> (INPERSON)<br /> <br /> Vs. <br /> <br /> Opposite Party 1. Mr.Ajith Krishnan, <br /> Branch Manager, Direct Agents Branch, New India Assurance Company, 2951, 2nd Floor, <br /> JLB Road, Chamundipuram,<br /> Mysore.<br /> 2. Mr.P.B.Nayak, Senior Divisional Manager, Direct Agents Branch,<br /> New India Assurance Company, 2951, 2nd Floor, JLB Road, Chamundipuram, Mysore.<br /> (By Sri.M.G.Nagabhushana, Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 16-03-2005<br /> Date of appearance of O.P. : 12-04-2005<br /> Date of order : 03-08-2005<br /> Duration of Proceeding : 4 MONTHS<br /> <br /> <br /> PRESIDENT<br /> <br /> <br /> MEMBER<br /> <br /> <br /> MEMBER<br /> Sri. Ashok Kumar J.Dhole<br /> President,<br /> <br /> 1. This complaint is filed under section 12 of the C.P.Act, 1986, against the officers of the O.P. Insurance Company, seeking direction that the vehicle of the complainant should be insured for an amount of Rs.35,000/-, and also claiming unspecified damages for the act of O.P.1 and 2. O.P.1 is Branch Manager, and O.P.2 is Senior Divisional Manager of the New Indian Assurance Company. It is contended by the O.P. that this complaint is filed against them in person at name, hence it is not maintainable and they have sought direction to the complainant to amend the complaint. Such objection is technical objection. Hence, the matter was proceeded, as if the complainant was filed only against the New India Assurance Company. <br /> <br /> 2. Notice was duly served on both O.P.s, who appeared, filed version, and contested the matter. Both parties were given full opportunity to adduce oral and documentary evidence. Complainant was examined as C.W.1, whereas O.P.s were examined as R.W1 to R.W.3. Heard the complainant in person, and the learned counsel for the O.P.<br /> <br /> 3. Undisputed facts can be briefly summarized as under:- <br /> Complainant (Dr.) S.N.Sadasivan is aged about 77 years, and he is a retired Professor in Political Sociology. The complainant worked in various position in the National Academies, and after retirement is visiting Professor of Public Administration to the National Academy of Administration at a Mussoori. There is also no dispute that the complainant purchased a car, “Padmini Premier” in the year 1988, and it’s invoice price in the month of May 1988 was rs.1,65,000/-. There is also no dispute that the said Car was insured with the O.P. (New India Assurance Company) in different places from 1988 upto the year 2005. The complainant has stated in para 3 of his complaint that from 1988 upto 1993, the valuation of the Car was shown as Rs.92,000/- in the policy. From the year 1994 to 1996, it was shown as Rs.86,000/-. Once again during the year 1996 to 1999, it was shown as Rs.92,000/-. From the year 2000 to 2002, the declared value was shown as Rs.40,000/-, and during the year 2003 and 2004, it was shown as Rs.35,000/-. There is no dispute that the policy for the year 2004 to 2005 (5-1-04 to 4-1-05) is issued by showing the valuation of the car as Rs.35,000/-. The differences between the parties started in the year 2003. There is no dispute that complainant addressed a letter dated 16-01-03 to the Senior Divisional Manager, requesting him that the car is not properly valued. The Senior Divisional Manager sent him a reply dated 4-2-03, requesting him that if the car having higher market value, the complainant may furnish the valuation report by competent Automobile Engineer. The O.P. has assured to consider such report in future. But the complainant has not submitted any such report to the O.P., and insisted that the car should be insured only for Rs.35,000/-.<br /> <br /> 4. There is no dispute that the O.P. has issued the last policy bearing no.671007/31/04/02926, which is valid from 5-1-05 to 4-1-06. The complainant paid premium and obtained receipt on 23-12-04. At that time, there was mis-understanding between the parties, and this complaint was filed on 16-3-05.<br /> <br /> 5. It is the case of complainant that O.P. has unilaterally fixed the value of the car at Rs.20,000/-, which is unjust and improper. The car in worth Rs.35,000/- or 36,000/- and there was no proper valuation.<br /> <br /> 6. It is the case of the O.P. that manufacture of this vehicle is dis-continued by the company, and the value of the car is fixed as per the existing market rate. The complainant is not entitled to seek any relief, because, the contract of insurance is contract of indemnity, and the O.P. company is entitled to fix reasonable value of the car for the purpose of coverage of the risk. There is no deficiency in service, and this complaint is mis-conceived. For the above reasons, O.P. has prayed for dismissing this complaint. <br /> <br /> 7. Points for our consideration are as under:-<br /> 1. Whether the complainant is a “Consumer”, and this complaint is maintainable?<br /> 2. Whether this Forum has jurisdiction to entertain a dispute between the parties about the insured declared value of the disputed car?<br /> 3. Whether complainant has proved deficiency in service, if so what relief is entitled?<br /> <br /> REASONS<br /> <br /> 8. Points no. 1 to 3:- There is no dispute that complainant is owner of a “Premier Padmini” car bearing registration no.KA-09-M-6176, which was purchased in the year 1998, for an amount of Rs.1,65,000/-, and it was covered by comprehensive insurance policies by the O.P. in different places for different amounts. We are no concerned about the earlier policies. The differences between the parties started in the year 2003, when complainant addressed a letter dated 16-01-03, which was replied by O.P.2 on 4-2-03. It is made clear in the above mentioned letter that there was revision of all Indian Motor Tariff w.e.f. 1-7-02. It is further made clear that method of valuation is changed from the earlier insured estimated value (IEV) to insured declared value (IDV). Such change was contemplated to avoid disputes in the event of total loss claimed by a party. It appears that complainant has not properly understood the implication of the change in the policy.<br /> <br /> 9. O.P. has produced a Xerox copy of page 3 and 4, of rules framed by “Tariff Advisory Committee”. The provisions of this tariff rule are binding on all concerned, and any breach of the tariff is treated as breach of the provisions of Insurance Act, 1938. In view of the change in procedure, it was not possible for the O.P.s to insure the vehicle of the complainant on the basis of earlier value.<br /> 10. W.e.f. 30-06-02, the concept of “Insured declared value” (IDV) was introduced. A Xerox copy of the same is produced by the O.P. The vehicle, which is behind 5 years of age is to be valued as under:-<br /> “IDV of vehicles behind 5 years of age and of absolute models of the vehicle (that is models, which the manufacturers have discontinued to manufacture) is to be determined on the basis of a understanding between the insurer and insured.”<br /> <br /> It is further observed that<br /> “For the purpose of TL/CTL claim settlement this IDV will not change during the currency of the policy period in question. It is clearly understood that the liability of the insurer, which number of case exceed the IDV as specified in the policy schedule less the value of the wreck in as is vehicle condition”.<br /> <br /> 11. It is clear from the above rule that in case of vehicle beyond 5 years of age, both parties have to interact with each other, and come to a reasonable valuation. By letter dated 4-2-03, O.P. has requested the complainant to obtain such valuation report from a competent Automobile Engineer, so that it can be considered during the next renewal. But, the complainant has not done so, and approached the O.P. for renewal of the policy on 23-12-04 insisting that the vehicle should be insured for Rs.35,000/-. Such act of the complainant is not in conformity with the changed policy.<br /> <br /> 12. Nevertheless, the act of the O.P.1 in forcing the complainant to accept policy for an amount of Rs.20,000/- on 23-12-04, is also not acceptable. The old policy was due for renewal on 5-01-04. The complainant visited the office of O.P.1 on 23-12-04 for renewal and as per evidence of R.W.1 P.P.Naik and R.W.1 Ajit Krishnan, they asked one of their surveyor, who was present in the office named Guruswamy (R.W.3), and endorsed on the earlier certificate, that complainant should obtaining policy only for Rs.20,000/- or opt for 3rd party policy (Act policy). As the time for renewal was fastly approaching the complainant paid the premium and obtained the policy from 5-01-05 to 4-1-06, which is in force at present. The above facts are sufficient to prove that complainant is a Consumer, and the dispute between the parties regarding the IDV of his car can be treated as Consumer dispute.<br /> <br /> 13. The Divisional Manager of O.P. Sri.P.B.Nayak states during cross-examination that if there is any variation between the two reports of the surveyor, ultimately, company will obtain 3rd report of a surveyor and insure the car for such value. This evidence is in conformity with the present tariff modalities. It is clearly mentioned that IDV has to be fixed with an understanding between the insurer and insured, But, the act of Ajit Krishnan R.W.2 is not proper in this respect. O.P.2 admits during cross-examination that he has not offered any opportunity to the complainant to produced documents about the IDV. He further admits that he has not provided a copy of the Guruswamy’s (R.W.3) report to the complainant. It is further clear that R.W.2 acted unilaterally, without providing just and reasonable opportunity to the complainant to say about the report of Guruswamy. By such act of O.P.2, the complainant feels aggrieved and contents that there is deficiency in service in fixing the IDV. There is substance in such contention. We are of the view that O.P.2 has acted unilateral in fixing the IDV at Rs.20,000/-, when policy was issued for the period of 5-1-05 to 4-1-06. <br /> <br /> 14. O.P. has produced valuation / inspection report given by Guruswamy.M.S., dated 22-12-04, whereas the complainant has filed valuation report of M.P.Appachu dated 26-6-05 that it just prior to the argument. Guruswamy (RW3) has valued the vehicle at Rs.20,000/- whereas Sri.M.P.Appachu has valued the vehicle at Rs.35,000/-. During cross-examination R.W.3 Guruswamy states that he knows Appachu, who is valuer and he is a nice gentlemen. We have to see whether the report of Guruswamy dated 22-12-04 was based on comprehensive facts, and consideration of all relevant factors? Guruswamy has taken into consideration, the condition of chassis, bodycell, glasses, engine performance, transmission mirror, staring system, brake system, electrical system, suspension upholstery, paintings, the conditions of tyres and locking system. All conditions were shown as “Good”. Thereafter, R.W.1 summarizes the valuation in one sentence, which reads as under:-<br /> <br /> “The market value of the above vehicle in its present condition will be around Rs.20,000/-“<br /> <br /> He has not given any reason for fixing such value. He has not stated that he has taken into consideration various other factors, which are material for the purpose of fixing valuation. Whereas, Sri.M.P.Appachu has stated in his report that he has confirmed the invoice value of the vehicle from M/s Sudaram Motors, Mysore, who are the dealers for this model, and he has also noted the market value of the vehicle by consulting with local automobile dealers. These are the important factors, which are required to be considered at the time of fixing the IDV.<br /> <br /> 15. Apart from the above facts, it is important to note that complainant is “Single user of the vehicle” from the year 1988 upto 2005. There is no dispute that the vehicle is “Accident free” vehicle and complainant never claimed any amount from the O.P. This factor also adds to the IDV of the vehicle.<br /> <br /> 16. As the contract between the parties is concluded contract up to 4th Jan.2006, we do not intend to interfere in the policy, which is already issued by the O.P. in favour of the complainant. Any how, suitable direction can be given to the O.P. to modify the IDV when such policy is renewed w.e.f. 5-1-06. We do not intend to allow parties to litigate further in the matter having regard to the age and qualification of the complainant. Having regard to the facts, and circumstances, the reports of two surveyor and the evidence of the parties, the just and reasonable IDV of the complainant’s vehicle can be fixed at Rs.30,000/- as on today. As both parties have not understood the scheme properly, the differences between the parties arose. Hence, the parties to bear their own cost. For the above reasons, we proceed to pass following order:-<br /> <br /> ORDER<br /> <br /> Complaint is allowed as under:-<br /> 1. O.P.s 1 and 2 are directed to renew the vehicle of the complainant “Premier Padmini” having registration No.KA-109-M-6176 w.e.f. 5-1-06 with IDV of Rs.30,000/-.<br /> 2. The office is directed to send a xerox copy of the report of M.P.Appachu along with copy of this order to the O.P.s for the purpose of records. <br /> 3. The complainant shall pay the required premium as per the tariff at the time of obtaining the renewal of the policy for the year 2006 – 07.<br /> 4. Both parties to bear their costs.<br /> 5. Send the copy of this order to O.P. by R.P.A.D. and to the complainant under C.O.P.<br /> Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open court on this day the 3RD Aug. 2005.<br /> <br /> <br /> (Ashok Kumar J.Dhole)<br /> President<br /> <br /> <br /> (M.Mahadevi)<br /> Member<br /> <br /> <br /> (G.V.Balasubramanya)<br /> Member<br />