LAXMAN DAS vs ORIENTAL INSURANCE CO LTD

THIS appeal, under Section 15 of the Consumer Protection Act, 1986, is directed against the order dated 28.7.2004 in Complaint No. 112/2004 by District Consumer Disputes Redressal Forum, Raipur (hereinafter called the District Forum for short) whereby the complaint was partly allowed. Aggrieved by the order, the complainant has preferred this appeal.

BRIEF facts necessary for disposal of this appeal are that the complainant had purchased a Swaraj Mazda vehicle bearing No. CG -04/A -9210 and got it comprehensively insured with the opposite party vide policy No. 31/8602/2003 for the period from 22.11.2002 to 21.11.2003 for a sum of Rs. 3,00,000. The said vehicle met with an accident on 7.10.2003 at Raipur -Dhamtari Road and it was a case of total loss. Intimation regarding the accident was given to the opposite party on the very next day and spot survey was conducted. As per averments contained in the complaint, the opposite party was obliged to give a sum of Rs. 3,00,000 to the complainant. However, opposite party persuaded the complainant to agree for payment of a sum of Rs. 1,50,000 and the salvage remaining with the complainant. The complainant had agreed to the said proposition only because he wanted that the claim be settled as early as possible. However, as the opposite party did not pay the agreed sum, the consent given by the complainant had become infructuous. It was further averred that the accidented vehicle is still in the workshop and the complainant has to pay a sum of Rs. 1,000 per month towards the same.

OPPOSITE party averred in the written version that the complainant had agreed to payment of Rs. 1,50,000 on cash loss basis. However, subsequently, it was revealed that the complainant had violated the terms of policy, hence was not entitled to recover anything towards the loss. Hence, the claim was repudiated vide letter dated 24.11.2003.

LEARNED District Forum came to the conclusion that opposite party failed to prove any breach of policy condition by the complainant, hence had allowed the claim for a sum of Rs. 1,50,000 as the complainant had agreed for the said amount. Learned Counsel for the parties were heard. Record perused.

LEARNED Counsel for appellant submitted that learned District Forum has failed to appreciate material on record and, as such, has come to a wrong conclusion. Learned District Forum has also failed to appreciate the fact that Surveyor and Loss Assessor Mr. S.K. Khanna in his report dated 24.11.2003 had assessed the loss at Rs. 2,28,720 on repair basis and at Rs. 2,01,000 on cash loss basis after deduction of the scrap value. Even despite the loss being assessed by the Loss Assessors as aforesaid, opposite party did not make the payment and tried to persuade the complainant to agree for a lower sum of Rs. 1,50,000 only on cash loss basis on the conditon that the amount will be immediately paid to the complainant. It was further submitted that as the complainant was in need of money, he had given his consent for the aforesaid amount. However, even after the aforesaid consent of the complainant, the amount was not paid and subsequently the claim of the complainant was repudiated vide letter dated 29.4.2004 by the opposite party under the plea of breach of policy condition as allegedly Vir Singh Verma was travelling in the vehicle as gratuitous passenger. Learned Counsel for the appellant further submitted that the plea of estoppel cannot be raised by the opposite party because the complainant had accepted the proposal of the opposite party for accepting Rs. 1,50,000 on cash loss basis only on the condition of receiving immediate payment. Since the opposite party did not stick to their proposal even after the acceptance being given by the complainant and on the contrary preferred to repudiate the claim, the opposite party can no longer take advantage of conditional consent given by the complainant. Learned Counsel for appellant further submitted that learned District Forum has further erred in holding that the complainant has failed to prove payment of towing charges from the place of accident to RME Workshop, Raipur and submitted that it is clearly mentioned in the Surveyors report that Rs. 2,500 were spent by the complainant towards spot repairing and towing charges. He further submitted that the accidented vehicle/salvage was kept at the garage and the complainant had to pay Rs. 1,000 per month towards the expenses therefor, and is entitled to receive the said amount also.

LEARNED Counsel for opposite party reiterated the stand taken before the District Forum and submitted that the order of the District Forum is just and proper as once the complainant had given his consent for accepting Rs. 1,50,000 in full and final settlement, he is estopped from claiming any further amount. On perusal of the record, it clearly appears that as submitted by learned Counsel for appellant the claim was repudiated by the opposite party only on the ground that Vir Singh Verma was travelling in the vehicle as gratuitous passenger, which was a breach of policy condition and as such the claim was repudiated vide their letter dated 29.4.2004. We fully agree with the observation made in this regard by the District Forum that there is nothing on record to prove that any gratuitous passenger was travelling in the ill -fated vehicle.

SO far as the question of estoppel is concerned, it is noticed that as per Surveyors report it was a case of total loss and the insured/repairer has submitted an estimate of Rs. 2,66,819 towards cost of new parts and labour charges of Rs. 42,000 of R.M.E., thus an aggregate amounting to Rs. 3,08,919. It was observed in the report that ''looking to the extent of damages sustained by the vehicle it was found that it is a fit case of total loss and after detailed observation assessed the loss on cash loss on repair basis which is much more economical for the insurer.'' On page 6 of the said report it is observed ''the loss was assessed on repair basis at Rs. 2,28,720 without dismantling the vehicle on the basis of visible damages and it was further mentioned that there is every possibility that after dismantling, some more items/parts may be found to be damaged and in that case the liability of the insurer may enhance to Rs. 2,40,000. It is further noticed that after making several deductions, the amount on cash loss on repair basis was brought down to Rs. 1,55,150. In the conclusion the Surveyor had stated that ''after going through the above assessment on repair basis, cash loss on repair basis and total loss basis, it was bound economical for the insurer to settle the claim on cash loss on repair basis and as per further discussions held with the insurer, the loss was finally assessed at Rs. 1,50,000 on cash loss on repair basis which is much more economical for the insurer, subject to cancellation of insurance policy with immediate effect and to avoid the disposal expenses. The insured has given his consent for the above amount, which is enclosed for kind perusal and record.

IT is noticed that the accident had taken place on 7.10.2003 and that the Surveyors report is dated 24.11.2003 and the consent letter from the complainant was obtained on prior date as is evident from the report itself. However, even till 25.2.2004 i.e., when the complainant had written letter to the opposite party/insurer seeking instructions relating to salvage as the R.M.E. Garage, Fafadih, Raipur was demanding rent for the last 5 months and was also asking to take the salvage away. Hence it is clear that the claim was pending before the insurer for long period when the aforesaid letter was written. It is further noticed that the Surveyor had submitted his report on 24.11.2003 and even after the aforesaid report, the insurer did not act promptly. It is further noticed that the complainant filed the complaint before the District Forum on 1.5.2004 and it was submitted by the learned Counsel for the complainant that the repudiation letter was never sent to the complainant. However, even if the claim was repudiated vide letter dated 24.10.2003 as submitted by the learned Counsel for the insurer, the same was too belated and it itself amounted to deficiency in service. It clearly appears that it was a case of total loss but as payment of cash loss basis was in the interest of the insurer, the opposite party/insurer persuaded the complainant to agree for cash loss i.e., Rs.1,50,000. Obviously the vehicle was insured for Rs. 3,00,000 and the complainant had agreed to have lesser sum only because he was in dire need of funds. In the circumstances we are of the opinion that as insurer has repudiated the claim of the complainant instead of settling the amount as agreed by the complainant/appellant, now the complainant does not stand bound by the offer and is not estopped from claiming higher sum.

IN view of the above discussion, we are of the opinion that the complainant/appellant is entitled to get a sum of Rs. 2,01,000 as assessed by the Surveyor on cash loss basis.

SO far as submission of the learned Counsel for complainant/appellant for payment of Rs. 2,500 towards spot repair and towing charges is concerned, it clearly appears from item 8 at page 6 of the Surveyors Report that spot repair and towing charges amounted to Rs. 2,500. Hence the complainant/appellant is entitled to receive the said amount from the insurer. So far as the claim of Rs. 11,000 relating to charges for keeping the accidented vehicle/salvage is concerned, it is noticed that the appellant has not filed any receipt in this regard. However, it is noticed that it was clearly stated in the letter dated 25.2.2004 sent by the complainant to the insurer that the scrap of accidented vehicle was kept at R.M.E. Garage, Fafadih, Raipur after the accident and the survey was completed on 15.10.2003 and the accidented vehicle was still kept at the aforesaid garage and the complainant had also sought instructions from the insurer in this regard, it clearly appears that the accidented vehicle was kept at the aforesaid garage. Though no receipt for payment towards the charges for keeping the vehicle has been filed, we think it just and proper to award Rs. 5,000 towards the said charges. In view of the above, we are of the opinion that the order of the District Forum cannot be sustained and the same is modified.

THIS appeal is allowed. The impugned order is modified. It is directed that the complainant shall be entitled to retain the salvage and the opposite party/insurer shall pay to the complainant/appellant a sum of Rs. 2,01,000 (Rupees two lacs one thousand) as assessed by the Surveyor and Rs. 2,500 as spot repair and towing charge as well as Rs. 5,000 towards garage charges for keeping the salvage. The above amount shall be paid by the insurer to the complainant/appellant within 2 months along with interest @ 9% p.a. on the above amounts calculated from the date of complaint. The cost of Rs. 1,500 (Rupees one thousand five hundred) shall also be paid to the complainant/appellant by the Insurer. Appeal allowed.