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Judgment
Dr. Sadhna Shanker, Member
The present appeal has been filed under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act”) by IFFCO Tokio General Insurance Company Ltd. assailing the Order dated 14.10.2020 of the State Consumer Disputes Redressal Commission, Rajasthan (hereinafter to be referred to as ‘State Commission’) in Complaint No. 62 of 2019 whereby the complaint was allowed.
We have heard the learned counsel for the appellant (hereinafter referred to as the ‘insurance company’) and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and perused the record including the State Commission’s impugned Order dated 14.10.2020 and the memorandum of appeal.
The relevant facts, in brief, are that the complainant insured the vehicle in question for the sum insured of Rs. 30 lakh with the insurance company for the period from 01.03.2017 to 28.02.2018. The insurance company provided the complainant with a single-page insurance cover and the complete insurance contract, inclusive of all terms and conditions, was not provided before the State Commission.Top of Form
On 26.07.2017, the vehicle met with an accident near Moukhampura on Jaipur-Ajmer Highway and suffered severe damage. The information was given to the insurance company. The insurance company appointed a spot surveyor, whoTop of Form inspected the vehicle at the spot. The complainant got an estimate of Rs.13,51,127.82/- for the necessary repairs from an authorized Tata Motors repairer in Moukhampura. The final surveyor also evaluated the damage at Rs.13,51,127.82/-. Immediately after handing over the vehicle to the authorized repairer for repair, the complainant informed the insurance company providing copies of various documents such as Registration Certificate, Fitness Certificate, Insurance Cover, Road Permit, and the Driver's License. The complainant submitted all the documents and completed all the formalities as requested by the insurance company. Despite this, the legally justified claim of the complainant, who had informed the insurance company that the vehicle was purchased by raising loan from HDFC Bank, remains unsettled. Top of Form
The complainant contended that it was the insurance company's responsibility to settle claim within 90 days of being notified about the vehicle's accident but the insurance company has failed to honour the claim. Consequently, on Top of Form thereafter, 05.03.2019 legal notice was served upon insurance company. Despite this, the insurance company has not settled the justified claim till filing of the complaint before the State Commission.
The complainant filed a complaint before the State Commission with the following prayer:-
I. That be pleased to get award to Complainant from Opponent Insurance Company total amount Rs.27,11,127.82/- with interest thereon @ 12 % per annum from date of said accident i.e. from date 26.07.2017 till date of payment.
II. That be pleased to get award to Complainant from Opponent Insurance Company Rs.1,00,000/- for his mental and physical harassment and Rs.50,000/- as litigation cost.
III. That be pleased to get award to Complainant from Opponent Insurance Company any other relief, which Hon'ble Court deems just and proper.
The insurance company contested the complaint by filing reply stating that the State Commission has no pecuniary jurisdiction to adjudicate the matter as the total estimate for repair of the vehicle is Rs.13,51,127/-. Also, the insurance company asserted that since the complainant does not fall in category of ‘consumer’ under provisions of the Act, the complaint is liable to be dismissed being not maintainable. The insurance company also alleged that the complainant has not provided the crucial documents despite repeated requests by the insurance company, therefore, the claim of the complainant could not be processed.
After appreciation of the facts of the case, the State Commission partly allowed the complaint and held as under:-
“So allowing the Complaint of Complainant, the Opponent is ordered to pay Rs.8,29,777/- [Eight Lakh, Twenty Nine Thousand, Seven Hundred and Seventy Seven] with interest @ 9 % per annum from date of presentation of Complaint i.e. from date 15 April, 2019 and to pay Rs.50,000/- [Fifty Thousand] as compensation for mental agony and Rs.25,000/-[Twenty Five Thousand] as litigation cost within two months from date of passing of this order. In case of not payment within two months on these amounts also interest @ 9% per annum from date of presentation of Complaint i.e. from date 15 April, 2019 shall be payable.”
The insurance company has filed the present appeal before this Commission with the following prayer:
a. Allow the present FIRST APPEAL;
b. Set aside the order of the Ld. State Consumer Dispute Redressal Commission, Jaipur, Rajasthan dated 14.10.2020 passed in Complaint No. 62 of 2019 and allow the Appeal of the Appellant;
c. Pass any further order(s) as this Hon'ble Court may deem necessary.
The learned counsel for the insurance company has contended that the complainant is not a ‘consumer’ and he does not fall within the ambit of ‘consumer’ as defined under the Act as the vehicle in question is a commercial vehicle and hence is excluded from section 2(7)(ii) of the Act. He further contended that the insurance company had reached the complainant through communications dated 03.05.2018, 10.06.2018 and a final letter on 01.08.2018, specifically requesting for providing the necessary and pertinent documents crucial for the claim processing. Despite multiple attempts, the complainant did not provide any document. He furthermore contended that the State Commission erred in awarding Rs. 8,29,777/- against repair basis while the surveyor has assessed the loss of Rs.7,75,000/- against repair basis and hence, the Order of the State Commission is liable to be set aside.
The question which falls for our consideration is whether there is deficiency in service on part of insurance company or not.
It is seen from the pleadings of the complainant in the complaint that vehicle was purchased for livelihood and maintenance of self and not for commercial purposes. The relevant portion of complaint before the State Commission is reproduced under:
“11. …. Said vehicle was purchased for livelihood and maintenance of self of his own family and said vehicle was sole source for livelihood and maintenance of self and of his own family.”
In so far as the question whether or not the complainant is ‘consumer’ is concerned, we may refer to the Hon’ble Supreme Court’s judgment in the Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers & Ors. IV (2019) CPJ 65 (SC) case wherein the Hon’ble Court has held as under:
To summarize from the above discussion, though a straight- jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is ‘for a commercial purpose’:
(i) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, ‘commercial purpose’ is understood to include manufacturing/industrial activity or business-to-business transactions between commercial entities.
(ii) The purchase of the good or service should have a close and direct nexus with a profit-generating activity.
(iii) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary.
(iv) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any commercial activity, the question of whether such a purchase was for the purpose of ‘generating livelihood by means of self-employment’ need not be looked into.
(emphasis supplied)
It is seen that no evidence of use of vehicle for profit generation activity has been brought on record by the insurance company. Therefore, the complainant is a ‘consumer’ within the definition under Section 2(7)(ii) of the Act.
On perusal of the documents available on record it is clear that the vehicle in question was insured for sum insured of Rs.30,00,000/- for period from 01.03.2017 to 28.02.2018 and an accident occurred on 26.07.2017 on Ajmer Highway near Moukhampura. Repairing estimate of said vehicle was Rs.13,51,127.82/- but the claim of complainant was not settled by the insurance company. As per records, as clearly mentioned in State Commission order the complainant had submitted all the requisite documents for processing of the claim as against the contention of the insurance company. It is seen that till date the insurance company has not formally rejected the claim of the complainant in any manner. Even the legal notice sent to insurance company prior to filing this complaint was never replied to. As per the IRDA guidelines the insurance company has timelines within which decisions on proper and complete insurance claims have to be made. The insurance company could not sleep over the matter indefinitely. Hence the action of the insurance company in not deciding the claim of the insured amounts to deficiency in service.
In view of the discussion above, we are of the considered view that the Order of the State Commission is a well-reasoned Order and does not suffer from any illegality or irregularity.
The appeal being devoid of merit is dismissed. All pending applications, if any, stand disposed of.