AT HYDERABAD.

F.A. 758/2005 against C.D. 975/2003, Dist. Forum-I, Hyderabad

Between:

Mohd. Siraj,

S/o. Late Mahaboob Hussain

R/o. A-520, Shantibagh Apartments

Begumpet, Hyderabad-500 016.                 ***                         Appellant/

                                                                                                 Complainant

                                                                    And

1. The Regional Manager

6-3-817, Snehalatha

Oriental Insurance Company Ltd.,

Greenland’s Road

Begumpet, Hyderabad.

2. The Divisional Office-IV

Rep. by its Divisional Manager

Oriental Insurance Company Ltd.,

Khairatabad, Hyderabad.                             ***                        Respondents/

                                                                                                 Opposite Parties.           

Counsel for the Appellant:                          M/s. K. V. V. Prasad

Counsel for the Resp:                                 Mr. A. Krishnam Raju

QUORUM:

                          HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

&

                                          SMT. M. SHREESHA, MEMBER

THURSDAY, THIS THE  FOURTH  DAY OF SEPTEMBER  TWO THOUSAND EIGHT

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

                                                          *****

          The appellant is the unsuccessful complainant.

          The case of the complainant in brief  is that  he is the owner of the vehicle bearing No. AP 11T9649  and insured with the respondent insurance company covering the risk of third parties as well as own damages to the vehicle.    While so, on 31.8.1999 while transporting the goods from Hyderabad to Mumbai  and by the time they reached  Valchandnagar  about 100 Kms from  Pune,  it  met  with  an accident.  Immediately the said fact was informed to the

respondent by letter Dt.   3.9.1999.  Mr.  SRN  Kalia  an investigator  was appointed.   He inspected the vehicle,  and place of accident  and sent his report.  One Mr. Vijay Kumar Gadre also inspected the vehicle at Hyderabad.  He also submitted his report.  In spite of  repeated reminders, the claim was not settled.   He got the vehicle repaired through M/s. Trimurti  Container Services.  Spare parts were purchased from  M/s. S. M. Autoparts.  Labour works were done by M/s. Chary Body Works.  He submitted the bills to a tune of Rs. 2,80,000/-.  It was repudiated  on 8.5.2000.  Thereupon he submitted clarifications by his letter Dt. 17.7.2000.   The respondent insurance company repudiated the claim  on 19.2.2001 stating that it cannot re-open the matter. Thereupon he approached the Insurance Ombudsmen  vide complaint Dt. 3.6.2003, who in turn expressed  his inability to entertain his complaint as  it was beyond 12 months.   Therefore, he filed the complaint  claiming  Rs. 2,80,000/- towards repairs, Rs. 50,000/- towards mental agony and costs.

          The respondent insurance company filed counter resisting the case.   While the repudiation was made on  19.2.2001  the complaint was filed on 15.11.2003,  beyond period of limitation of  two years.  Therefore,  it was barred by limitation.   While admitting that  it has issued Ex. B1 policy  covering the risk of third parties  as well as own damages to the vehicle, it denied that the vehicle was having  national permit.  As soon as it received report that the vehicle met with an accident  it has appointed  Sri S.R.N. Kalia, an investigator to investigate  into the accident.  They obtained quotations from M/s.  Jasper Industries Ltd., to conduct repairs to the vehicle.  However, the complainant did not repair the vehicle through them.   It has also appointed  M/s. VKG Engineers & Surveyors to assess the loss.   They  submitted  their  report assessing the loss at Rs. 1,07,198.55.   When the complainant submitted the  bills  issued by  M/s. Trimurthi Container Services, Mumbai for

Rs. 97,000/- towards repairing charges for container, it has appointed  Mr. R.

R. Thampi, an investigator for verification of the bills.  He submitted his report stating that  he  did not find any shop  by name Trimurti Containers.  He also sent a registered cover but it was returned as  ‘not known’.    In regard to the bills for Rs. 54,000/-  issued by M/s. R. Chary Body Works towards repair of cabin  it has  appointed  Sri M. A. Sajid, an investigator for verification of bills. He submitted his report stating that  M/s. R. Chari Body Works  informed that they did not perform any repairs.   For the bill submitted from M/s. S. M. Autoparts  they appointed M/s.  Deshpande & Associates  who investigated and submitted that  M/s. S.M. Autoparts  was not in existence.   Since the bills submitted by the complainant were not genuine they sought for clarification  on  8.5.2000 for which the complainant gave reply vide letter Dt. 17.7.2000.   Thereupon they repudiated the claim on  19.2.2001.   All through the complainant  had kept quiet  and filed a complaint belatedly beyond the period of limitation.    Therefore, it  prayed that the complaint be dismissed with costs.

          The complainant in proof of his case filed  his affidavit evidence  and Exs. A1 to A20, while the insurance company filed Exs. B1 to B24.   The Dist. Forum  after considering the evidence placed on record  opined that though  M/s. Jasper Industries estimated the cost of spares at Rs. 1,47,185/-  the complainant was not entitled to the amount as he has submitted the fake bills.   He ought not to have waited for such a long time after repudiation.   Therefore, it  dismissed the complaint.

          Aggrieved by the said decision, the complainant preferred this appeal contending that  the Dist. Forum did not appreciate the facts or law in correct perspective.  It  ought to have seen that the very surveyor appointed by the insurance company estimated the loss at Rs. 1,07,198.55 and salvage value at Rs. 6,198.55.  The complaint was filed within two years of  the repudiation.  Therefore, he is entitled to the amount claimed under the complaint.

          It is an undisputed fact that the vehicle of the complainant was insured by the insurance company  by issuing Ex. B1 policy covering the risk from  18.5.1999 to 17.5.2000 for Rs. 5 lakhs.  While so on 31.8.1999 it met with an accident  resulting damage to  various parts of the vehicle.  He gave complaint to the police vide Ex. A16 FIR.  Immediately the complainant has informed the insurance company and requested them to furnish claim form under Ex. A2 Dt. 3.9.1999.   One S.R.N. Kalia, a  surveyor was appointed  by the insurance company  and  he on inspection submitted his report under Ex. B6 Dt. 4.9.1999.  He visited the accident spot and was  of the opinion that the complainant was  having national permit entitled to ply the vehicle  in Andhra Pradesh, Maharashtra, Karnataka, Gujarat.   The vehicle was well maintained.  He assessed the loss.   The insurance company filed part of the report and suppressed the remaining part of the report.   This is unholy and unjust.  It  should not have resorted to pernicious  practice of  refuting claim on one ground or the other.   There is no reason or justification  for not filing the report.   In the counter at para 4  the insurance company mentioned that  it has obtained quotation to carry out repairs from M/s. Jasper Industries which gave the estimate for Rs. 1,47,185/- towards the cost of spare parts and Rs. 21,595/- towards labour charges besides transport charges which they have not specified.   If  insurance company entrust the vehicle for repairs it had to spend  Rs. 1,68,670/-.  However, on the sole ground that the complainant did not get the vehicle repaired through M/s.  Jasper Industries, it appointed  another Surveyor by name M/s. VKG Engineers & Surveyors  to assess the loss caused to the vehicle.  By report Dt. 10.12.1999 they assessed the loss at Rs. 1,07,198.55  and  salvage value at Rs. 6,198.55.   

The complainant submitted his  claim enclosing the bills  issued by  M/s.  Trimurthi  Container Service for Rs. 97,000/- towards repair charges of the container, bill for Rs. 54,000/- issued by  R. Chary Body Works for repairing of cabin,  and a bill for Rs. 18,453.97  issued by M/s. S. M. Auto Parts for purchase of  spare parts.   On that  the  insurance company  appointed  Sri M. A. Sajid to investigate into these bills.  On enquiry,  he found that the bills that were submitted by the complainant were not genuine and they were created from  non-existing concerns.  On that the complainant sent letters stating that  Mr. R. Chari  in fact came to their office and has given a letter informing that the bills that were given by them were correct and genuine.   M/s. S. M. Autoparts  which was having shop at  Punjab was closed due   to Blue Star Operation.   Therefore they could not trace it out.  They appointed another investigator M/s. Deshpande & Associates.  It  submitted their investigation report Dt. 8.2.2001 evidenced under Ex. B23 alleging that the claim made by the complainant was not  genuine.  They repudiated the claim  on 19.2.2001  evidenced under Ex. B24.   The complainant sent  notice on  2.4.2001 under Ex. A9 followed by notices Dt. 10.6.2002, 8.1.2003, 29.4.2003 vide Exs. A10 to A12.   Finally under Ex. A13 the insurance company alleged that they had already informed about the repudiation and therefore they cannot entertain the claim.  On that he requested the Insurance Ombudsmen by letter Dt. 3.6.2003  under Ex. A14 to settle the claim.  The Ombudsmen by letter Dt. 4.9.2003  did not entertain the claim  on the ground that it was lodged more than 12 months after the repudiation by the insurer.

          At the earliest when the complainant reported  on 3.9.1999 for the accident  occurred on 31.8.1999 the investigator  Sri SRN Kalia who  visited the spot  found that the vehicle was damaged.   A part of this report  was filed.  His estimate as to the loss  was suppressed.    Admittedly,  M/s. VKG Engineers & Surveyors, they got quotation from M/s. Jasper Industries.  After evaluating  the damage it assessed the estimated loss  at Rs. 2,87,760/- after giving depreciation  and cost of repairs, cost of material  etc., assessed the net loss at Rs. 1,07,198.55.  The insurance company repudiated  the claim solely on the ground that the vehicle was not  repaired through M/s. Jasper Industries.    We do not see why the complainant should get  it repaired through  them.   At any rate, the insurance company ought to have given this

Amount  when its own surveyor  assessed the net loss at Rs. 1,07,198/- .

The complainant, according to him got it repaired through  M/s. R. Chari Body Works, purchased spare parts from M/s. S.M. Autoparts  and also from M/s. Thrimurti Container Service at Mumbai.   He filed his bills and claimed an amount of Rs. 1,39,003/-.  It has come very close to the estimate made by their own  surveyor M/s.   VKG Engineers & Surveyors under Ex. B7.   The claim was repudiated on the ground that  the complainant  has produced false bills. Assuming without admitting  that he has filed false bills, the insurance need not pay the amounts as claimed under the bills.  When the insurance company has confirmed that there was damage to the vehicle,  and their own surveyor valued the net loss at Rs. 1,07,198/- it  could have settled the claim.   Subsequent claim by way of bills claimed by the complainant  on the ground that he got it repaired has no bearing from the original claim which was  admitted by the very insurance company confirmed by their own Surveyor.   The amount as assessed by the surveyor ought to have been given.   There is no reason why it should be denied solely on the ground that complainant  has produced fake bills.   Whether the complainant got the repairs or not, he was entitled to the value of the damages. 

          The insurance company by appointing  three  surveyors one after another intend to repudiate  the claim,  despite the fact that  at the earliest one of their own surveyors   assessed the loss.  This is a classic case where the insurance company has  repudiated the claim in an unjustified manner.  It has been searching some ruse to repudiate the claim.  Therefore, it digressed the matter  and finds fault with the complainant in filing false bills.   

          Learned counsel for the appellant contended that  the insurance company was bound by report of their own surveyor.   The report of second surveyor without any  direction  of any authority  cannot be accepted.  In support of his contention he relied  the decision  United India Insurance Co. Ltd., Vs. Sindhi Sweets & Ors.  reported in  IV (2007) CPJ 322 (NC).  That was a case where the stock and machinery were damaged in the fire accident.  When the first surveyor was appointed he assessed the loss, again another surveyor was appointed who assessed the loss at reduced amount.   In the context it was held that accepting or rejecting the surveyor report is only within the jurisdiction of the authority.  No arbitrary and  unilateral decision to impose the decision of the  insurer on the insured could be imposed.  It cannot reject the report of the first surveyor nor it could appoint second surveyor without any authority.

          He also relied on a decision  in  Hundi Lal Jain Cold Storage & Ice Factory Pvt. Ltd., Vs. Oriental Insurance Company Ltd.,  reported in II (2005) CPJ 17 (NC)  wherein the  proposition was reiterated.  It held  that practice of appointing surveyor one after another is unjustified.  In that case the claim was not settled  despite the fact that first surveyor assessed the loss.  It  was held that the company was liable to pay  assessed loss with interest.

There was lot of exchange of correspondence.  It was a continuing cause of action.  When the insurance company repudiated the claim, he went to  Insurance Ombudsmen  which has also declined to grant any compensation  by endorsement Dt. 4.9.2003  evidenced under Ex. A15.  The complaint was filed on  15.11.2003.   Therefore, it cannot be said that  the complaint was barred by limitation.  

In the light of estimate made by their own surveyor under Ex. B7,  we are of the opinion that  the complainant is entitled to Rs. 1,07,198/-.  The insurance company has unjustly repudiated the claim in spite of their own surveyor report. Since the claim was unjustly  repudiated, in the circumstances of the case, we feel that a compensation of Rs. 25,000/- towards mental agony  could be awarded besides costs of Rs. 5,000/-. The complainant is entitled to interest @ 9%  p.a., from the date of Surveyor Report i.e., 10.12.1999 as he could not have advantage of the amount with which he got the vehicle repaired.

In the result the appeal is allowed setting aside the order of the Dist. Forum  Dt. 18.3.2005.  Consequently the complaint is allowed  in part directing the respondent insurance company to pay Rs. 1,07,198/- to the complainant with interest @ 9% p.a., from 10.12.1999 till the date of realization.  The respondent insurance company is also directed to pay a compensation of Rs. 25,000/- towards mental agony together with costs computed at Rs. 5,000/-.  Time for compliance four weeks.

                    PRESIDENT                                               LADY MEMBER

                                                   Dt. 04. 09. 2008.