Chandigarh

DF-I

CC/19/2023

JITENDER KUMAR AGED ABOUT 48 YEARS S/O SH RAM SARUP SHARMA - Complainant(s)

Versus

NEW INDIA ASSURANCE COMPANY LTD. THROUGH REGIONAL MANAGER - Opp.Party(s)

PAWAN KUMAR SHARMA AND SHUBHAM SHARMA

05 Feb 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/19/2023
Date of Institution	:	26/12/2022
Date of Decision	:	05/02/2024

Jitender Kumar aged about 48 years s/o Sh. Ram Sarup Sharma, resident of Village Kakrali, Mubarikpur, SAS Nagar (Punjab).

… Complainant

V E R S U S

New India Assurance Company Ltd., through its Regional Manager, Regional Office, SCO No.37-38, Sector 17, Chandigarh 160017.

… Opposite Party

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Pawan Kumar Sharma, Advocate for complainant
	:	Sh. Nitin Gupta, Advocate for OP

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Jitender Kumar, complainant against the aforesaid opposite party (hereinafter referred to as the OP).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the complainant is the registered owner of truck bearing registration No.HR-69-A-0388 (hereinafter referred to as “subject truck”), which was got insured from the OP vide insurance policy/certificate (Annexure C-1) valid w.e.f. 22.5.2018 to 21.5.2019 for an IDV of ₹7,40,000/-.  On the early morning of 30.8.2018, around 4:00 a.m. when the subject truck, being driven by Sanjeev Kumar, driver alongwith the cleaner, Mohender, was on the way from Dera Bassi to Muzzafar Nagar and reached in front of Hotel Milan, District Saharanpur, Police Station Deoband, the same met with an accident, which resulted in causing death of both the aforesaid driver and cleaner.  The dead bodies of the deceased were brought to SBD Saharanpur for postmortem. In the said accident the subject truck was badly damaged and was thereafter towed from the spot to Manimajra Market where M/s Bawa Motors calculated the repair estimate to the tune of ₹11,47,350/-. The surveyor was deputed by the OP who visited the spot and also assessed the loss and assured the complainant that the entire repair amount will be paid after the repair of the subject truck.  Since then, complainant has been contacting the OPs by making telephone calls and even by making personal visits, but, till date nothing has been done by the OP. The OP deliberately and willfully forced the complainant to run from pillar to post to get the claim reimbursed, but, nothing has been done till date.  Accordingly, the complainant was compelled to send a legal notice to the OP on 22.4.2019. Despite of the fact that the repair estimate to the tune of ₹11,47,350/- was given by the repairer vide Annexure C-5, OP, at its own, assessed the claim to the tune of ₹2,28,500/- only as per IMT.7 Vehicle subject to hypothecation agreement. The complainant has already paid the loan amount which he had hired from Kotak Mahindra Bank Ltd. and the financier has already issued No Objection Certificate in cancelling the hypothecation. Earlier the complainant had filed a consumer complaint No.876 of 2019 in the learned District Commission-II, UT, Chandigarh which was disposed of vide order dated 5.9.2019 by directing the OP to decide the claim within two months as per IRDA guidelines from the date of receipt of copy of the order, but, that order has also been disobeyed by the OPs.  The complainant had also filed execution application against the OP in pursuance to the earlier order, but, the same was also disposed of vide order dated 26.10.2022 with no relief to the complainant. In this manner, the aforesaid act of the OP amounts to deficiency in service and unfair trade practice. OP was requested several times to admit the claim, but, with no result. Hence, the present consumer complaint.
2. OP resisted the consumer complaint and filed its written version, inter alia, taking preliminary objections of maintainability, cause of action, concealment of facts and non-joinder of necessary party by alleging that the OP had approved the claim of the complainant for an amount of ₹2,28,500/- on cash loss basis subject to payment to the financier by asking him to submit particulars of the financier, which have not been submitted by the complainant.   On merits, admitted that the complainant is the registered owner of the subject truck which was insured with the OP for IDV of ₹7,40,000/- vide policy (Annexure R-4).  The factum of the accident of the subject truck on the relevant date, time and place and damage to it has not been disputed by the answering OP.  It is further alleged that, in fact, the complainant has consented through his affidavit dated 27.3.2019 (Annexure R-6) for the aforesaid amount of ₹2,28,500/- and has wrongly filed the instant consumer complaint.  On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. In rejoinder, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainant is the registered owner of the subject truck, which was insured with the OP at the relevant time, as is also evident from the subject insurance policy/ certificate (Annexure R-4) and the same met with an accident on the relevant date, time and place and was badly damaged, as is also evident from the copy of GDD (Annexure C-2) and in the said accident both the driver and the cleaner of the subject truck died, as is also evident from the copies of post mortem reports (Annexure C-3 & C-4) and the OP has assessed its liability to the tune of ₹2,28,500/- in pursuance to the survey report (Annexure R-5), the case is reduced to a narrow compass as it is to be determined if the OP is unjustified in not settling the claim of the complainant being total loss and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the OP has rightly not settled the claim due to non-submission of account details of the financier by the complainant to the OP and also on the ground that the complainant has consented for the final submission of the amount of ₹2,28,500/- and the consumer complaint of the complainant is liable to be dismissed, as is the defence of the OP.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the documentary evidence placed on record by them and the same is required to be scanned carefully to determine the real controversy between the parties.
   3. Admittedly, the IDV of the subject truck is ₹7,40,000/-, as is also evident from the subject policy (Annexure R-4).  Perusal of the survey report (Annexure R-5) further indicates that the surveyor had made assessment of the claim on repair basis as well as on cash loss basis.  The assessment made by the surveyor on repair basis is extracted as under for ready reference :-

COST OF PARTS	758235.00
COST OF LABOUR	112000.00
LESS EXCESS	1500.00
LESS DEPRECIATION	379117.50
LESS SALVAGE VALUE	34551.75
NET AMOUNT PAYABLE	455065.75

Similarly the assessment on cash loss basis is extracted as under for reference :-

PRE TAX VALUE OF PARTS
PRE TAX VALUE OF PLASTIC PARTS	52500.00
PRE TAX VALUE OF METAL PARTS	539872.00
TOTAL PARTS ALLOWED	592372.00
LESS DEP	296186.00
LESS SALVAGE	26993.60
ADD LABOUR	112000.00
	381192.40

4. Both the afore-extracted assessments made by the surveyor clearly indicate that the surveyor had made different depreciation while making the assessment since in assessment on repair basis, he had assessed the depreciation to the tune of ₹3,79,117.50 whereas while making assessment on cash loss basis, he had shown depreciation to the tune of ₹2,96,186/-.  Not only this, even the salvage value has also been mentioned different by the surveyor while making the aforesaid assessments as on repair basis he had shown the salvage value to the tune of ₹34,551.75 whereas while making assessment on cash loss basis the salvage value is shown as ₹26,993.60.  In this manner, it is clear that the report of the surveyor, which itself is contradictory, cannot be made the basis for assessment/settlement of the claim by the OP, especially when it has come on record that the cost of parts and labour assessed by the surveyor on repair basis comes to ₹8,70,235/- i.e. cost of parts and labour (₹7,58,235 + ₹1,12,000) which is more than 75% of the IDV and the surveyor was required to declare the subject truck as total loss and to assess the claim as per the terms and conditions of the subject policy, which has not been done in the present consumer complaint either by the surveyor or by the OP.  In this manner, it is safe to hold that the OP is unjustified in not settling the claim on total loss basis and the said act of OP certainly amounts to deficiency in service and unfair trade practice on its part.
5. No doubt OP has come with the defence that the complainant had submitted his affidavit dated 27.3.2019 (Annexure R-6) through which he had agreed to accept an amount of ₹2,28,500/- and to retain the wreck of vehicle i.e. the subject truck and after the filing of the aforesaid affidavit, present consumer complaint is not maintainable, but, to counter the same, complainant has relied upon the order passed by the Hon’ble National Commission in the case titled as United India Insurance Co. Ltd. Vs. M/s Curewel Packaging Pvt. Ltd., R.P. No.2124 of 2017 decided on 16.10.2023 in which the IRDA circulars dated 24.9.2015 and 7.6.2016 have been discussed regarding the use of discharge vouchers or settlement intimation voucher or in some other name and the relevant portion of the order is reproduced below for ready reference :-

“13.    Insurance Regulatory and Development Authority of India (IRDA) vide its Circular No. IRDA/NL/CIR/Misc/ 173/09/2015 dated 24.09.2015 have advised all General Insurance Companies regarding Discharge Vouchers in Settlement of Claim as follows:-

“The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been receiving complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.

                             While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.

                             Accordingly insurers are hereby advised as under:

                             Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law.

                             All insurers are directed to comply with the above instructions.”

                 Subsequently vide Circular No.IRDA/NL/CIR/MISC/ 113/06/2016 dated 07.06.2016, IRDA has issued further directions as follows, relevant portion of which is reproduced below: 

“The Authority has reviewed the matter taking in to consideration the provisions of the Contract Act, PPI Regulations and Apex Court Judgements. Taking equal cognizance of the legal rights of the policy holders and insurers, the Authority hereby further directs that-

(i) Wherever there are no disputes by the insured/s or claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.

(ii) If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.

(iii) Under no circumstances the Discharge vouchers shall be collected       under duress, by coercion, by force or compulsion.”

6. In the case in hand, as it stands proved on record that the subject truck was a total loss, said affidavit cannot be treated as a discharge voucher as per the circular dated 7.6.2016 and further as the OP has not settled the claim of the complainant on total loss basis, till date, the said act of OP certainly amounts to deficiency in service and unfair trade practice on its part and the present consumer complaint deserves to succeed.
7. So far as the quantum of amount to be granted to the complainant is concerned, when the IDV of the subject truck is ₹7,40,000/- and the cost of repair was assessed by the surveyor to the tune of ₹8,70,235/- i.e. cost of parts and labour (₹7,58,235 + ₹1,12,000), which is higher than IDV, as discussed above, it is safe to hold that the OP/insurer is liable to pay the IDV amount i.e. ₹7,40,000/- minus ₹1,500 (i.e. less policy clause) = ₹7,38,500/- to the complainant alongwith interest and compensation etc. for the harassment suffered by him on account of total loss basis of subject truck.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and the OP is directed as under :-

1. to pay ₹7,38,500/- to the complainant alongwith interest @ 9% per annum w.e.f. 3.4.2020 (i.e. one month after the order dated 3.3.2020 passed by the learned District Commission-II) onwards. The wreck/salvage of the subject truck shall, however be retained and disposed of by the OP/insurer.
2. to pay ₹20,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by the OP within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. It is, however, made clear that the bank/financier shall have first charge over the aforesaid awarded amount, to the extent the same is due to be paid by the complainant towards the discharge of loan liability, if any.  
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

05/02/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Suresh Kumar Sardana] Member