Oriental Insurance Co. Ltd. vs BHAGAT RAM

THE appellant was the opposite party before the State Commission, where the respondent/complainant had filed a complaint alleging deficiency in service on the part of the appellant Insurance Company.

VERY briefly the facts of the case are that the respondent/complainant was a owner of a Swaraj Mazda Truck which was insured with the appellant for the period from 15.5.1992 to 14.5.1993 for an amount of Rs. 3,11,000. The vehicle met with an accident on 20.10.1992. The matter was reported to the police as also to the Insurance Company, who appointed a Surveyor and found that there were two unauthorised persons who were sitting in the truck. It is on this ground that the claim was repudiated. Thus, alleging deficiency in service on the part of the appellant, a complaint was filed before the State Commission, who after hearing the parties, allowed the complaint and directed the appellant to pay a sum of Rs. 2,80,000 along with interest @ 18% p.a. from the date of accident till the actual payment, along with Rs. 75,000 on account of loss of earning with the same rate of interest from 3.7.1993 till the date of payment along with cost of Rs. 2,000. Aggrieved by this order, this appeal has been filed before us. We heard the learned Counsel for both the parties. Learned Counsel for the appellant was candid enough to admit that in view of the several judgments of the Hon''ble Supreme Court, carrying two passengers could not have been made the ground for repudiation. But it was his case that the reliefs granted are not as per record. According to him, the Surveyor had assessed the loss at Rs. 2,45,000 but the State Commission has granted Rs. 2,80,000 along with other reliefs enumerated earlier. The only ground agitated before us, in view of the fact that the ground of repudiation is not being pressed, is the reliefs granted by the State Commission.

As per record, upon filing of the appeal vide order dated 11.6.1997, this Commission had directed the appellant to pay the decreed amount except Rs. 75,000 as well as interest thereon, which was stayed.

WE have very carefully gone through the material on record. It needs to be stated that report of the Surveyor had not been produced before us. The State Commission has clearly recorded that the cost of the new vehicle was Rs. 3,27,000. But since the sum assured was Rs. 3,11,000 after catering for the salvage which was assessed at Rs. 18,000, the State Commission has rightly directed the appellant to pay Rs. 2,80,000 along with interest @ 18% p.a., which in our view, does not call for any interference as this is as per settled law. However, we are unable to sustain the grant of Rs. 75,000 on account of loss of earning along with interest @ 18% p.a., for the simple reason that the principle of indemnity relates to restoring the status-quo ante, vis-a-vis, the insured which has been done by compensating him with the price of the vehicle. Interest granted is towards compensation to cover the loss during the interregnum period. In view of this, the order passed by the State Commission cannot be sustained, which is set aside. Hence the appeal is allowed only in above terms. The appellant is directed to pay the other reliefs granted vide its order dated 4.3.1997, if not already paid to the respondent in terms of our order dated 11.6.1997. Appeal partly allowed