KAMALA DEVI KANKANI vs UNITED INIDA INSURANCE CO. LTD.

THIS is petitioner''s appeal against the order of dismissal dated 17.12.1997. The petitioner is the owner of a vehicle bearing No. WGV-6215, which was insured for a sum of Rs. 2 lakhs beginning from 24.9.1990 to 23.9.1991. According to the petitioner the policy was never handed over to her even on the date of hearing of the appeal. She states that the coverage was for loss resulting from fire, theft, robbery, riot, etc. The said vehicle while proceeding towards Siliguri Police Station suddenly caught fire on 21.9.1991 near Fire Brigade Station resulting in substantial damage to the engine and body. Immediately an FIR was lodged. On her request the Insurance Company engaged a Surveyor to assess the loss. After repeated requests the Insurance Company settled the claim at Rs. 7,439/- only against the total claim of Rs. 92,263.70. On inquiry the petitioner was told that the truck caught fire because of mechanical failure, which was not covered under the policy. According to the petitioner the original policy has not been furnished to her nor were the terms and conditions of the said policy disclosed to her. She alleges that the Insurance Company took more than 39 months in communicating their decision. She states also that there was no expert report that the vehicle caught fire due to mechanical failure and for no other reason. So she claims the entire amount.

THE Forum noticed that the cause of accident was mechanical breakdown which is not covered under the policy. It appears that the Insurance Company produced the Insurance Policy during hearing. THE petitioner wanted to examine the same on the allegation that she was not furnished with the original policy before it was produced before the Forum on the date of hearing. It appears that the Forum ignored the objection of the petitioner on the ground that she could look into it then and there. THE Forum rejected the claim of the petitioner on the ground that there is no challenge from the complainant that the policy did not provide a clause excluding mechanical breakdown. The Insurance Company is respondent here. It has been urged on their behalf that the appeal is barred by limitation having been filed beyond the statutory period of limitation. The judgment was delivered on 17.12.1997 but the appeal was filed on 27.2.1998. The certified copy of the impugned judgment was delivered on 18.12.1997. The learned Counsel for the appellant submits that the copy of judgment was not furnished to them and as such there was some delay in filing the appeal. He makes a verbal prayer for condonation of delay if there be any. This plea of the learned Counsel for the appellant is strongly opposed by the learned Counsel for the respondent. However, considering the fact that the petitioner is a resident of Siliguri and the present claim arose out of an incident, which happened in January, 1991 and in the interest of justice we are inclined to condone the delay.

Now we come to the merit of the case. It is admitted that the petitioner is the owner of the vehicle, which was involved in an accident, which occurred on 21.9.1991. There was insurance coverage for the vehicle and it was valid at the time of the accident. On request of the petitioner a Surveyor was appointed by the opposite party. The said Surveyor submitted his report on 15.3.1991. According to the Surveyor the damages caused to the engine was the result of mechanical failure. The Surveyor assessed the damage at Rs. 35,907/-. The Insurance Company has however settled the claim at Rs. 7,438/- through their letter dated 24.5.1994. There is no material to support the amount thus offered to the petitioner towards compensation. It is not explained as to why the Surveyor''s report could not be accepted and acted upon. There is also no material to challenge the assessment of compensation arrived at by the Surveyor. The Insurance Company has also not offered any explanation as to why they took more than 3 years to settle the claim. According to the learned Counsel appearing for the respondent this fact betrays deficiency in service on the part of the Insurance Company. During hearing the Insurance Company wants to bank upon the exclusion clause and urges that since the loss occurred due to mechanical breakdown no compensation could be granted. It is of course true that any loss, which may occur due to mechanical breakdown hence cannot be compensated. But there is no expert evidence that the fire which broke out was a result of mechanical breakdown and in that case the exclusion clause did not apply. Learned Counsel appearing for the appellants submits that the complainant was never furnished with a copy of the Insurance Policy covering the vehicle. It appears from the body of the judgment that it was produced on the date of hearing and even on that day no copy thereof was furnished to the appellant. The learned Counsel for the appellant submits that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties ought to know. The insured has a duty to disclose and likewise it is the duty of the Insurance Company to disclose all material facts in their knowledge since obligation of good faith applies to both equally. In support of his submission he has drawn our attention to a case reported in I (2000) CPJ 1 (SC). It is the definite assertion of the complainant that the terms and conditions of the Insurance Policy were not disclosed to her. There is no material worth the name to show that the attention of the petitioner was drawn to these terms and conditions of the policy. The policy was produced only on the date of hearing and even on that date it was not shown to the complainant. Be that as it may the Insurance Company took more than 3 years to settle the claim at a smaller amount. This amount of compensation, which has been offered to the petitioner, has no basis. We have noticed earlier that Insurance Company has not come out with any explanation or not accepting the report of the Surveyor. In view of the facts and circumstances of the case we cannot support the judgment. In our view the Forum ought to have allowed the case. For the reasons aforesaid we allow the appeal and set aside the impugned judgment. The Insurance Company is directed to make payment of the sum as assessed by the Surveyor in his report dated 15.3.1991. Be it mentioned here that the Surveyor assessed the loss at Rs. 35,907/- and this amount is required to be paid by the Insurance Company to the petitioner from the date of submission of report by the Surveyor on 15.3.1991 together with interest @ 10% per annum from 15.3.1991 till full payment. The Insurance Company is directed to make payment of this amount within 3 months from this date. The appeal be disposed of accordingly. Appeal disposed of.