KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACADU THIRUVANANTHAPURAM APPEAL NO: 512/2009 JUDGMENT DATED:06..07..2010. PRESENT SMT.VALSALA SARANGADHARAN : MEMBER SRI. M.V. VISWANATHAN : JUDICIAL MEMBER 1. M/s National Insurance Company Ltd., Branch Office, Thiruvalla. 2. The Divisional Manager, M/s National Insurance Company Ltd., Divisional Office, Kollam. : APPELLANTS 3. The Regional Manager, M/s National Insurance Company Ltd., Regional Office, Ernakulam. (By Adv: Sri.Prasannakumaran Nair) Vs. Sumesh Devadas, Adarsa. Konni.P.O, : RESPONDENT Pathanamthitta. JUDGMENT SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER Appellants were the opposite parties and the respondent was the complainant in OP.41/2005 on the file of CDRF, Pathanamthitta. The complaint therein was filed alleging deficiency of service on the part of the opposite parties/National Insurance Company Ltd in settling the insurance claim made by the complainant with respect to the insured Hyundai Santro Car. The opposite parties entered appearance and the 1st opposite party the branch office (Thiruvalla) filed written version through the Branch Manager for on his behalf and on behalf of the opposite parties 2 and 3 denying the alleged deficiency of service. It was contended that the opposite parties/National Insurance Company Ltd deputed competent surveyor to assess the loss and that he submitted the report. It was further contended that the opposite party/Insurance company has not repudiated the insurance claim preferred by the complainant/insured and that the complainant failed to co-operate with the surveyor and the insurance company to settle the insurance claim. The complainant was requested to carry out the repairs and to produce the bills for finalizing the insurance claim. But the complainant failed to submit the bills. Thus, the opposite parties prayed for dismissal of the complaint with cost. Before the Forum below, the power of attorney holder of the complainant was examined as PW1. Exts.A1 to A9 documents were also produced and marked on the side of the complainant. The Assistant Branch Manager of the 1st opposite party was examined as DW1. Exts.B1 and B2 documents were also marked on the side of the opposite parties. On an appreciation of the evidence on record Forum below passed the impugned order dated:23rd July 2009 allowing the complaint and thereby making the opposite parties liable to pay a sum of Rs.3.lakhs being the declared value of the insured vehicle and also to pay interest at the rate of 8% per annum from the date of the complaint till the date of the impugned order with compensation of Rs.5000/-. The time stipulated for payment of the decree amount was stipulated as 2 months and failing to pay the same the opposite parties are also made liable to pay interest at the rate of 9% per annum. No cost was ordered. Hence the present appeal by the opposite parties therein. We heard both sides. The learned counsel for the appellants/opposite parties submitted his arguments based on the grounds urged in the memorandum of the present appeal. He argued for the position that the complainant failed to co-operate with the surveyor for an effective settlement of the insurance claim; that the complainant failed to inform the Insurance Company about the accident and due to the said failure the insurance company could not make any spot survey. It is further submitted that as per Ext.B1 letter dated:30/12/2004 the complainant was requested to carry out the repairs to the damaged vehicle and to produce the bills for the purpose of settling the insurance claim; but the complainant failed to produce the final bills after effecting repairs. It is further submitted that the complainant insisted for the insured amount of Rs.3.lakhs. The learned counsel for the appellants/opposite parties also prayed to allow the I.A.1076/09 filed by the appellants to receive additional documents at this appellate stage and further submitted that the acceptance of additional documents at this appellate stage is just and necessary for an effective settlement of the dispute involved in the case. It is also argued that the Forum below cannot be justified in directing the opposite party/National Insurance Company Limited to pay the insured amount of Rs.3.lakhs without any order regarding the salvage or its value. The learned counsel for the appellants has also pointed out the fact that the appellant/Insurance Company has not repudiated the insurance claim and the complaint in OP.41/05 was premature. Thus, the appellants prayed for setting aside the impugned order passed by the Forum below. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below and requested for dismissal of the present appeal. The points that arise for consideration are:- 1. Whether I.A.1076/09 filed by the appellants for receiving additional documents (7 in number) at this appellate stage can be allowed? 2. Whether there was any deficiency of service on the part of the appellants/opposite parties in settling the insurance claim preferred by the respondent/ complainant? 3. Whether there was any delay on the part of the respondent/complainant (insured) in intimating the appellant/opposite party/National Insurance Company Limited about the damage caused to the insured vehicle? 4. Whether the case of the appellants/opposite parties that the insurance company could not settle the insurance claim because of the non co-operation of the respondent/complainant can be upheld? 5. Whether the respondent/complainant can be justified in insisting for the insured value of the vehicle which was damaged in a road traffic accident? 6. Is there any legally sustainable ground to interfere with the impugned order dated:23/07/2009 passed by CDRF, Pathanamthitta in OP.41/05? Points:1 to 6:- There is no dispute that the respondent/complainant insured his Hyundai Santro Car with the 1st opposite party/National Insurance Company Ltd, Branch office Thiruvalla. Ext.A2 is the insurance policy issued by the 1st opposite party in favour of the complainant insuring the Hyundai Santro car bearing Registration No.KL-03-G-7612. The said insurance coverage was for the period from 24/04/2003 to the midnight of 23/04/2004. The insured declare value of the vehicle was shown as Rs.3.lakhs. Issuance of A2 policy is not disputed by the opposite parties. Ext.A3 is photocopy of the certificate of registration with respect to the insured vehicle. Admittedly the aforesaid vehicle met with an accident on 4/2/2004 at Kalluvathukkal and the police registered a case as crimeNo.47/04 of the Parippally Police station of Kollam district. The aforesaid case was registered against the driver of the lorry bearing registration No.KL-3-B-723. That crime was registered based on the first information statement furnished by the complainant. The FIS was recorded at 12.30 hours on 5/2/2004 from Bishop Benzigar Hospial. It would show that the complainant was driving the vehicle at the time of the accident and in the said road traffic accident the complainant and a co-passenger sustained injuries and they were taken to Bishop Benzigar Hospital. Thus, the complainant gave first information statement to the police from the hospital. Ext.A4 is the FIR in the aforesaid crime No.47/04 of the Parippally police station. A4 FIR was filed before the Judicial First Class Magistrate Court, Paravoor. The FIS is also incorporated in A4 FIR. The appellants/opposite parties have got a case that there occurred delay in intimating the opposite parties (insurance company) about the accident involving the insured vehicle. But it is admitted by the opposite parties that they got the intimation regarding the accident involving the insured vehicle on 19/3/2004. It is to be noted that the accident occurred on 4/2/2004. Even according to the appellants/opposite parties they got the intimation about the accident on 19/3/2004. So, there was delay of 45 days in intimating the opposite parties/insurance company. The case of the complainant is that he informed the office of the insurance company over phone and the lady staff who received the intimation took voluntary retirement and the intimation was missing. The complainant in his letter dated:21/4/2004 addressed to the approved surveyor with notice to the opposite parties mentioned about the intimation given to the staff of the National Insurance Company, Divisional Office, Kollam. At any rate it can be seen that the complainant/insured informed the accident involving the insured vehicle on 19/3/2004. It is also to be noted that the complainant/insured was in the hospital due to the injury sustained by him. So, the aforesaid delay of 45 days can be treated as reasonable and justifiable one. It is to be noted that the appellants/opposite parties have not produced the policy conditions. There is nothing on record to show that the said delay of 45 days would adversely affect the insurance claim. So, the ground urged by the appellants/opposite parties that there was delay on the part of the respondent/complainant in intimating the insurance company cannot be accepted. Appellants/Opposite parties/Insurance Company deputed a surveyor to assess the loss sustained by the insured vehicle. It is the definite case of the appellants/opposite parties that the surveyor submitted his report. But the opposite parties failed to produce the aforesaid survey report before the Forum below. No sufficient reason or ground is stated for the failure on the part of the opposite parties in producing the aforesaid survey report which was submitted by the approved surveyor before the opposite party/Insurance Company. There can be no doubt about the fact that the survey report was a necessary document for the just and proper consideration of the dispute involved in OP-41/05. The opposite parties did not give the opportunity to the Forum below to evaluate the correctness of the survey report submitted by the approved surveyor. The aforesaid omission on the part of the opposite parties in producing the survey report would give an indication that the opposite parties were negligent in defending the case before the Forum below. The aforesaid inaction can be treated as a sort of deficiency of service on the part of the opposite party/Insurance company. It is also to be noticed that the opposite parties also failed to furnish copy of the survey report to the complainant/insured. The appellants/opposite parties filed I.A.1076/09 for receiving additional documents at this appellate stage. The first document sought for acceptance is copy of the survey report dated:14/12/2004 filed by the approved surveyor Mr.K.C.Muraleedharan Nair. The remaining 6 documents are the correspondence between the surveyor Muraleedharan Nair and the complainant and also between the surveyor and the authorized service centre of Hyundai Vehicles Viz, MGF Motors Ltd, Kottayam. It is noted that out of the 6 correspondence (letters) 5 of them had been produced from the side of the complainant and marked as Ext.A6 series. The only letter that was not produced is the copy of the letter dated:9/12/2004 issued to the complainant. It is without going through the documents available on record the appellants again produced those letters with request to accept those documents. It can be seen that there was failure on the part of the appellants/opposite parties in producing those documents before the Forum below and that no sufficient reason or ground is stated for the said omission to produce those documents. Any how, the survey report is a necessary document for a just and proper disposal of this case. So, this commission is pleased to allow the aforesaid I.A.1076/09 for receiving the aforesaid 7 documents at this appellate stage. It is also to be noted that no prejudice will be caused to the respondent/complainant by accepting those documents at this appellate stage. Hence the said I.A.1076/09 is allowed in the interest of justice. The insured vehicle was manufactured by Hyundai Company, The MGF Motors Ltd, Kottayam is the authorized dealer and service centre of Hyundai Vehicles. The insured vehicle was manufactured in the year 2002. The accident occurred on 4/2/2004. So, at the time of the accident the insured vehicle was just 2 year old vehicle. The case of the complainant is that at the time of the accident the insured vehicle would fetch market value of Rs.3,25,000/-. Admittedly the insured declared value of the vehicle was Rs.3.lakhs. So, the insurer, the National Insurance Company Ltd has got the liability to indemnify the insured by payment of the insured value of Rs.3.lakhs. The surveyor who submitted the survey report dated:14/12/2004 has not mentioned anything about the market value of the insured vehicle at the time of the accident. It was incumbent upon the approved surveyor to assess the market value of the insured vehicle. It is to be noted that the approved repairer and service centre of Hyundai vehicles viz, MGF Motors Ltd, Kottayam submitted an estimate for repairing the damaged insured vehicle. Ext.A9 is the estimate dated:23/3/2004 submitted by MGF Motors Ltd, Kottayam. As per the A9 estimate the total cost of repair would come to Rs.5,32,163/-. There can be no doubt about the fact that a brand new Hyundai Santro Car would cost less than Rs.5,32,163/-. The complainant himself has stated in paragraph 8 of the written complaint that he purchased the said brand new vehicle in the year 2002 on a purchase price of Rs.3,75,000/-. This A9 repair estimate would show that the total cost for repairing the damaged insured vehicle was far higher than the price of a brand new Santro car. In that situation, it was incumbent upon the approved surveyor to assess the market value of the insured vehicle at the time of the accident. The omission or failure on the part of the approved surveyor to give the market value of the insured vehicle can be treated as a serious lapse on the part of the approved surveyor who submitted the survey report dated:14/12/2004. The surveyor was deputed to conduct the survey, on 2/4/2004. He first inspected the damaged vehicle on 3/4/2004 and finally on14/04/2004. But the survey report was submitted only on 14/12/2004. The approved surveyor had taken 8 months time to submit the aforesaid survey report. Whatever may be the reason, the aforesaid delay of 8 months in submitting the survey report would reflect the negligence and lapse on the part of the approved surveyor. There is nothing on record to show that the appellants/opposite parties insisted the surveyor or requested the surveyor to submit the survey report. This would in turn give an indication that the appellants/opposite parties were also negligent in the matter. They also adopted a delaying tactics in settling the insurance claim preferred by the complainant. It was incumbent upon the appellants/opposite parties to insist the approved surveyor to submit his survey report without further delay. Thus, there was deficiency of service on the part of the appellants/opposite parties in getting the loss assessed by the approved surveyor. The surveyor as per the survey report dated:14/12/2004 estimated the cost for repairing the damaged vehicle as follows:- He assessed the labour charge at Rs.40,774/-. Cost of the spare parts at Rs.88,092/- + 26,470 =1,14,562/-. Thus, the total cost was assessed at Rs.1,55,336/-. From the aforesaid sum of Rs.1.55.336/- the surveyor deducted a sum of (Rs.8,809.20 + 13.208.50)=22.017/70 by way of depreciation and a sum of Rs.750/- as policy excess and salvage value at Rs.1,500/-. The net liability is assessed at Rs.1,38,535/-. In the survey report it is also reported that the total estimate submitted by the approved repairer would come to Rs.5,32,163/-. It is against the aforesaid estimate of more than Rs.5.lakhs, the approved surveyor assessed the cost of repair at Rs.1,50,000/-. It is to be noted that the approved surveyor was not having any facility to get the repair work carried out. The surveyor has no case that the approved repairer agreed to carry out the repair work for the insured vehicle at Rs.1.50,000/-. The surveyor did not get any endorsement from the approved repairer expressing their readiness to carryout the repair works at Rs.1,50,000/-. The appellants/opposite parties could not produce any letter from the approved repairer (MGF Motors Ltd, Kottayam) to show that the repairer agreed to carry out the repair works at Rs.1,50,000/-. On the other hand, A9 estimate would show that the repairer submitted the estimate for effecting the repair works at Rs.5,32,163/-. It is to be noted that the repairer had also given the list of spare parts require replacement. According to A9 estimate the cost of the spare parts which require replacement would come to Rs.4,63,163/-. The labour charge has been estimated at Rs.69,000/-. The surveyor did not get the consent of the repairer to carry out the repair work at the labour charge of Rs.40,774/-. It is further to be noted that the approved repairer MGF Motors Ltd is having the spare parts with them. They are also fully aware of cost of the spare parts. So, the estimate given by the repairer showing the cost of the spare parts is to be accepted. There is no meaning in making another list of spare parts by the approved surveyor stating that only so much spare parts are required for replacement. It is for the repairer to say what are the spare parts required for replacement. It is pertinent to note at this juncture that the surveyor who submitted the survey report dated:14/12/2004 is not in a position to carry out the repairs. He is not having the infrastructure or facility to carry out the repair works. The surveyor has not taken the undertaking to carry out the repair works at the cost mentioned in his survey report. Thus, it was incumbent upon the surveyor to get the consent of the repairer for effecting the repairs at the cost assessed by the surveyor in his survey report. In the absence of any such consent, it can only be concluded that the repair of the damaged insured vehicle could not be carried out at the cost assessed by the surveyor. The appellants/opposite parties have got a case that the respondent/complainant failed to take necessary steps to get the damaged vehicle repaired and in producing the bills after effecting repairs. The materials available on record would show that the approved repairer estimated the cost of repair at Rs.5,32,163/-. The insured amount was only Rs.3.lakhs. So, there is no question of allowing the claim for Rs.5,32,163/-. Appellants/opposite parties have the liability to indemnify the insured (complainant) to the tune of Rs.3.lakhs, the insured amount. Thus, the respondent/complainant (insured) preferred not to repair the vehicle but to claim the insured amount on total loss basis. The complainant/insured is perfectly justified in opting the aforesaid course of getting his loss compensated by receiving the insured amount and surrendering the damaged vehicle as salvage to the insurance company. Copy of the lawyer notice dated:13th December 2004 would show the intention of the complainant by demanding the insured amount of Rs.3,lakhs with interest. The said lawyer notice is marked as Ext.A6. It is specifically stated the readiness and willingness of the complainant/insured to surrender the damaged vehicle on getting the insured amount. In the said lawyer notice it was also stated about the attitude of the surveyor in estimating the cost of repair and also about the view of the surveyor that the estimate prepared by the authorized service centre of M/s Hyundai Motors is a boosted one. In another letter dated:21/4/2004 issued by the complainant to the approved surveyor it was stated that the authorized service centre of Hyundai Motors viz. MGF Motors, Kottayam estimated the cost of repair and that the surveyor was not prepared to accept the same. In the said letter it was asked as to whether the surveyor is ready to take the responsibility of getting the vehicle repaired in the pre accident condition. The complainant has also stated that the complainant was not in a position to verify the condition of the vehicle subsequent to the accident as he was taken to the hospital in a bad shape. It is further stated that the spare wheel and jack of the insured vehicle are in the custody of the complainant, as the same had been handed over to the complainant. The aforesaid letter addressed to the approved surveyor would make it clear that the complainant/insured was very much apprehended as to whether the vehicle can be repaired with the cost of repair estimated by the surveyor. The approved surveyor prepared a list of spare parts required for replacement. It is stated in his letter dated:27/4/2004 addressed to the approved repairer, MGF Motors Ltd, Kottayam. There is nothing on record to show that such a letter dated:27/4/2004 was served on the repairer, MGF Motors Ltd. It is to be noted that no consent letter has been produced by the approved surveyor showing the consent of the repairer to carry out the repair works of the insured vehicle with the spare parts shown in the letter dated:27/4/2004. On the other hand, the estimate submitted by the repairer would show that more parts are required for effecting he repairs to the insured vehicle. The mere fact that the approved surveyor prepared a list of spare parts cannot be taken as a ground to hold that the repairing of the insured vehicle could have efficiently effected with those spare parts. But no such evidence is forthcoming from the side of the approved surveyor or from the side of the appellants to that effect. So, it can very safely be concluded that it was not possible to carry out the repairing of the damaged insured vehicle at the cost estimated by the surveyor. The surveyor has also mentioned in his Report that the shell of the damaged insured vehicle need not be replaced; but the same can be repaired. But the approved repairer, MGF Motors Ltd, Kottayam never consented for the aforesaid suggestion of the approved surveyor. So, the aforesaid suggestion made by the approved surveyor regarding the damage caused to the shell of the vehicle cannot be accepted or upheld. The approved surveyor in his communication has stated that no damage was caused to the insured vehicle at its rear side. The approved surveyor much relied on the report of the Motor Vehicles Inspector. It is to be noted that the motor vehicle inspector examined the damaged vehicle in connection with the criminal case. He submitted the report not for the purpose of assessing the damages to the insured vehicle. He was not concerned with the assessment of the damages for the purpose of insurance claim. The details in A8 report submitted by the Motor Vehicles Inspector cannot be treated as a detailed report regarding the entire damage to the insured vehicle. Even in A8 report it is mentioned against the column 7 regarding the damage caused to the front right and rear right door of the vehicle. It is stated that rear right door is twisted. But the approved surveyor was of the view that no damage was caused to the rear side of the insured vehicle. The A8 report would make the aforesaid finding of the approved surveyor unacceptable. This circumstance would make it clear that the approved surveyor was very much interested in finding fault with the complainant in claiming the insured amount. Thus, the respondent/complainant can be justified in deciding not to repair the damaged vehicle because of the fact that the repair cost will be more than the price of a brand new vehicle. The materials available on record would also make it clear that the insured vehicle sustained extensive damage and repairing the said damaged vehicle to the pre-accident condition would cost more than the price of a brand new vehicle. It was just and fair on the part of the approved surveyor to estimate the loss to the vehicle on total loss basis. If that be so, the respondent/complainant is justified in demanding the insured amount of Rs.3.lakhs. There is no contra evidence forthcoming from the side of the appellants/opposite parties to show that the price of the insured vehicle at the time of the accident was less than Rs.3.lakhs. The additional documents produced from the side of the appellants would not improve their case. On the other hand, the aforesaid correspondence between the approved surveyor and the complainant would make it clear that the approved surveyor was unnecessarily insisting the complainant to carry out the repairs and thereby to invite further loss. The approved surveyor could not give any guarantee that the insurance company will be ready to meet the entire cost of repair so as to make the damaged vehicle to the pre-accident condition. No such guarantee or assurance was given by the approved surveyor or the insurance company. Thus, the respondent/complainant being the insured is perfectly justified in limiting his claim to the insured amount of Rs.3.lakhs. The complainant/insured was also very reasonable in his approach by expressing his readiness to hand over the damaged vehicle to the insurance company. The accident involving the insured vehicle occurred on 4/2/2004. Even according to the opposite party/insurance company they were intimated about the accident involving the insured vehicle, on 19/3/2004. The complainant submitted his claim in the prescribed form in April 2004. The complainant repeatedly requested the opposite party/insurance company to settle the insurance claim; but they failed to settle the insurance claim. The surveyor who was deputed to assess the loss submitted the survey report only on 14/12/2004. It is only because of the inordinate delay in settling the claim, the complainant filed the complaint in OP.41/05. Even after the institution of the said complaint, the opposite party/insurance company was not prepared to settle the claim. It can also be seen that the opposite parties were insisting for production of the bill after effecting repairs. The aforesaid demand was practically impossible for the complainant/insured because of the fact that the cost of repair would be more than the insured amount. The authorized service centre of Hyundai vehicles estimated the cost of repair at Rs.5,32,163/-. In such a situation, the complainant opted for not repairing the vehicle and to claim the insured amount and to surrender the salvage to the insurer. The mere fact that the opposite party/insurance company has not repudiated the insurance claim cannot be taken as a ground to hold that the claim made by the complainant is premature. It is only because of the inaction or lapse on the part of the opposite party/insurance company to settle the insurance claim, the complaint in OP.41/05 was filed. So, the aforesaid delay on the part of the opposite party/insurance company in settling the insurance claim can be treated as deficiency of service. It has been held by the Hon’ble Supreme Court that delay in repudiating the claim would amount to deficiency of service. It was further held that two months can be treated as reasonable period for settling the insurance claim [III (1996) CPJ 8 (SC)]. The approach and attitude of the appellants/opposite parties in causing delay would show that there was deficiency of service on their part in settling the insurance claim preferred by the respondent/complainant. The foregoing discussions and the findings thereon would make it clear that the respondent/complainant being the insured of the damaged vehicle was entitled to get the insured amount of Rs.3.lakhs. The Forum below has rightly directed the opposite parties to pay the insured amount of Rs.3.lakhs to the complainant with interest at the rate of 8% per annum from the date of the complaint in OP.41/05. But the Forum below omitted to direct the complainant/insured to surrender or hand over the damaged vehicle to the insurance company. The omission on the part of the Forum below in ordering surrender of the damaged vehicle can be rectified by modifying the impugned order. The Forum below has also ordered further compensation of Rs.5000/-. Considering the facts and circumstances of the case, the further compensation of Rs.5000/- ordered by the Forum below can be considered as unwarranted. It is to be noted that the complainant has been adequately compensated by ordering payment of the insured amount of Rs.3.lakhs with interest at the rate of 8% per annum from the date of the complaint. So, this commission is pleased to delete the compensation of Rs.5000/- ordered by the Forum below. Thus, the impugned order passed by the Forum below is modified to the extent as indicated above. In all other respects the impugned order is confirmed. These points are answered accordingly. In the result the appeal is disposed of as indicated above. The impugned order dated:23/7/09 passed by CDRF, Pathanamthitta in OP.41/05 is modified and thereby the appellants/opposite parties are directed to pay a sum of Rs.3.lakhs being the insured amount to the respondent/complainant (insured) with interest at the rate of 8% per annum from the date of the complaint in OP.41/05. The order passed by the Forum below awarding further compensation of Rs.5000/- to the complainant is deleted. The respondent/complainant (insured) is further directed to surrender possession of the damaged insured vehicle to the appellants/opposite parties as salvage and also to give necessary papers with respect to the said vehicle for effecting transfer of ownership of the vehicle. The parties are directed to suffer their respective costs through out. M.V. VISWANATHAN : JUDICIAL MEMBER VALSALA SARANGADHARAN : MEMBER VL. | 
