Per Mr.Justice S.B.Mhase, Hon’ble President

Heard Mrs.Anita Marathe-Advocate for the appellant and Mr.S.Shenoy-Advocate for respondents.

This appeal takes an exception to an order passed by the District Consumer Disputes Redressal Forum, Ratnagiri on 12/7/2006 in consumer complaint no.16/2006.  Complaint filed by the complainant has been rejected and, therefore, complainant has filed this appeal.  Vehicle in question is Toyoto Qualis Jeep having no.MH-08-C-3032.  The said vehicle was purchased approximately on 20/2/2001.  We are concerned with the insurance period from 12/8/2002 to 11/8/2003.  For this period vehicle was insured for an amount of Rs.4,07,425/-.

The said vehicle was purchased by the complainant by availing finance from Vita Merchants Co-op.Bank, Branch Chiplun of Rs.6,99,000/- and vehicle was hypothecated with the said bank. The said vehicle met with an accident on 20/4/2003 during the period of insurance.  It is to be noted that since the vehicle was purchased in 2001, taking into consideration that it is an old vehicle and when the insurance was issued on 12/8/2002, the said vehicle was valued to Rs.4,07,425/- and, thus, comprehensive policy was issued by the respondent.  Therefore, depreciated value of the said vehicle at the time of insurance and during the period of insurance was Rs.4,07,425/- and in case of any obligation arisen from the said insurance policy, respondent/ insurance company was under obligation to indemnify and/or compensate the complainant/appellant to the extent of Rs.4,07,425/-.  It appears that after the accident when the information was given, thrice the surveyor was appointed and, ultimately, there was an offer given by the Insurance company that the Insurance company is ready to pay an amount of Rs.89,000/- to the complainant with a further direction to the complainant that the total salvage shall be given to the Insurance company with no objection from the Financing agency namely Vita Merchants Co-op. Bank.  Insurance company settled the said claim for the following reasons.  According to the surveyor, the salvage was valued to Rs.3,17,000/- and, accordingly, quotation was obtained from a person who is interested in purchase of such a salvage.  So out of Rs.4,07,425/- taking into consideration the salvage of Rs.3,17,000/-, Insurance company offered an amount of Rs.89,000/-.  Thus, total claim settled comes to Rs.4,06,000/-.  Thus, on giving no objection certificate from the financing agency, appellant could have got the amount of Rs.4,06,000/-.  However, appellant has not given the No Objection Certificate of the Financing agency because according to appellant, outstanding amount of the bank was more than the amount settled by the Insurance company.  Taking into consideration all these facts, District Consumer Disputes Redressal Forum has rejected the complaint.

Now, the Ld.counsel appearing for the complainant submitted that when the loan is outstanding, it is a financial agency which will give no objection for the salvage.  Therefore, insistence of the Insurance company for No Objection Certificate from financing agency is unwarranted and unjustifiable.  We are not in agreement with the Ld.counsel.  The complainant was aware that the loan is/was outstanding as against the vehicle and even though assuming that he was regular in payment of loan, still unless the loan is repaid, financial agency will not give no objection.  Apart from that whenever the vehicle which is hypothecated with the financial agency is to be insured then the Insurance company will always take into consideration the depreciated value of the vehicle and not the amount of the loan as against the vehicle.  Therefore, amount of the outstanding loan has no rational in any way with the issuance of insurance policy.  What is important is that if the insurance is not issued then in that circumstances the complainant or any person who desires to have insurance will not be able to ply the vehicle on road and then in that circumstances the persons taking the loan from the financial agencies for the purchase of vehicle will land into difficulty.  Namely if the insurance company insists on the first day itself that No objection certificate should be given in case of accident to settle the claim, it will be difficult to borrower persons like complainant to get insurance.  Therefore, when the contingency has arisen, namely accident has taken place and, now, the vehicle cannot be repaired and the claim is required to be settled, they have asked for the No Objection Certificate.  In fact under these circumstances, when it is noticed that the vehicle cannot be plied on road and cannot be repaired, then it is wiser on the part of the complainant to settle the amount with the financial agency and to see that the claims of the Insurance company and financial agency are settled.  How to settle is for him.  We are only considering in the present case whether respondent namely Insurance company has failed to discharge their obligations under the Insurance contract and thereby has rendered deficient service. 

Under the insurance contract, they were under obligation to pay an amount of Rs.4,07,425/- .  Out of that after appointing three surveyors and taking a quotation from the salvage purchaser, they have settled the claim at Rs.4,06,000/- and out of the said amount they have shown readiness to offer an amount of Rs.89,000/- by way of cash component.  Only amount of Rs.3,17,000/- was kept by the Insurance company in order to get the salvage in their possession with no objection from the finance agency and if the said No Objection Certificate was produced, Insurance company would have paid Rs.3,17,000/- to the complainant.  However, having found that they are offering Rs.89,000/-, complainant has rushed to the District Consumer Disputes Redressal Forum  and continued with the litigation. 

Apart from that same offer was reflected in the written version.  At that time wiser steps should have been taken by the complainant, but for the best reasons known to him he has not taken any steps to settle the case at that stage.  One thing is certain that in order to get an amount of salvage, Insurance companies must get salvage in their custody.  In absence of salvage being not given to them, claim in respect of salvage cannot be paid by the Insurance company and said liability cannot be avoided by the complainant, only because loan exists/claim sanctioned.  No financial agency will give such a certificate unless the claim of financial agency is satisfied.  On the contrary under these circumstances, it is for the complainant to take appropriate steps to persuade either to financial agency and/or to pay their dues and obtain the No Objection Certificate in favour of Insurance company.  Nothing has been done in the case by complainant.  Under these circumstances, at least we do not find any deficiency in service on the part of the Insurance company.  Complaint has been rightly rejected.  Hence the order:-

                                      ORDER

Appeal is rejected.

No costs in the facts and circumstances of case.

Copies of the order be furnished to the parties.