Complainant/petitioner is the owner of the tractor in question.  He got the tractor insured from the respondent for a sum of Rs.96,000/-.  The said tractor was stolen from his residence on the night intervening 29 – 30.11.1994.  Petitioner filed insurance claim with the respondent.  The respondent offered to pay Rs.48,000/- to the petitioner by way of full and final settlement which was not accepted by the petitioner.  The petitioner filed a complaint before the District Forum.

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District Forum allowed the complaint and directed the respondent to pay a sum of Rs.89,500/- after deducting 10% towards depreciation and out of this sum of Rs.89,500/-, Rs.26,000/- was ordered to be paid with interest at the rate of 14% per annum w.e.f. 01.2.1996 till realization. 

Respondent being aggrieved filed an appeal before the State Commission.  The State Commission reduced the amount of compensation to Rs.63,500/- after taking the depreciated value of the vehicle as had been assessed by the Surveyor, and the interest was also reduced to 6% per annum .

In a recent judgment of Supreme Court in “Dharmendra Goel Vs. Oriental Insurance Co. Ltd. III (2008) CPJ 63 (SC)”  it has been observed that after having accepted the value of the particular insured good and receiving the premium for the same, cannot disown that very figure and defray inadequate compensation on one pretext or the other when they are called upon to pay the compensation; that ‘take it or leave it’ is clearly unwarranted not only as being bad in law but ethically indefensible.  The relevant observations are as under:

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“It must be borne in mind that Section 146 of the Motor Vehicles Act, 1988 casts an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter XI of the Act and any vehicle driven without taking such a policy invites a punishment under Section 196 thereof.  It is, therefore, obvious that in the light of this stringent provision and being in a dominant position the insurance companies often act in an unreasonable manner and after having accepted the value of a particular insured good disown that very figure on one pretext or the other when they are called upon to pay compensation.  This ‘take it or leave it’ attitude is clearly unwarranted not only as being bad in law but ethically indefensible.  We are also unable to accept the submission that it was for the appellant to produce evidence to prove that the surveyor’s report was on the lower side in the light of the fact that a price had already been put on the vehicle by the Company itself at the time of renewal of the policy.  We accordingly hold that in these circumstances, the Company was bound by the value put on the vehicle while renewing the policy on 13.2.2002.”     

(Emphasis Supplied)

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In our considered view, the State Commission has erred in reducing the amount of compensation to Rs.63,500/-.

For the reasons stated above, the order of the State Commission is set aside and that of the District Forum is restored except that the interest payable will be at the rate of 9% per annum instead of 14% per annum.

Revision petition is disposed of in above terms.