ORIENTAL INSURANCE CO LTD vs Sarbari Bibi

ORIENTAL Insurance Co.Ltd. (hereinafter referred to as the ''Petitioner '') has filed the present revision petition against the order of the State Consumer Disputes Redressal Commission, Himachal Pradesh (hereinafter referred to as the ''State Commission '') in Appeal No.250/2005 in favour of Sarbari Bibi and others, Respondents herein who were the original complainant before the District Forum.

THE facts of the case are that Rehmat Ali, deceased husband of the Respondent (Sarbari Bibi) after getting a loan from Central Bank of India purchased a Tata Hitachi EX-100 Excavator in 2001 which was insured for a sum of Rs.22 lakhs under a comprehensive insurance policy for the period 04.12.2002 to 03.12.2003 with the Petitioner/Insurance Company. On 10.11.2003 an accident occurred at Rauli Nalla in Distt. Kullu, H.P. in which the Excavator fell about 40 feet down and got totally damaged. Rehmat Ali (hereinafter referred to as the ''insuree/deceased '') also expired in the said accident. The accident was duly reported to the Petitioner/Insurance Company who appointed a Surveyor to investigate the matter. Respondent being the nominee/wife of the insuree filed the claim and gave all relevant documents to the Surveyor for early settlement of the claim. The Surveyor asked Respondent to retrieve the Excavator from the spot and even though the cost of retrieval was very high, since the Respondent was assured that the retrieving charges will be borne by Petitioner/Insurance Company, a private crane was hired to retrieve the Excavator which charged Rs.2,85,000/- from the Respondent and on payment of this amount gave a receipt to that effect. Thereafter, another Surveyor was appointed for assessment of loss and an estimate of repair to the tune of Rs.19,54,000/- was made available to him as also to the Petitioner/Insurance company. However, despite having submitted all the necessary papers and receipts, the claim was not settled. Being aggrieved, Respondent filed a complaint before the District Forum requesting that the Petitioner/Insurance Company be directed to pay 75% of the total sum assured i.e. Rs.16,60,000/- as also Rs.2,85,000/- spent by Respondent on retrieving the Excavator along with accrued interest on the loan amount from the date of accident till realization. A compensation of Rs.50,000/- towards harassment and mental agony including litigation cost was also sought. Petitioner/Insurance Company while admitting that accident had taken place in which the insuree had lost his life, stated that the partnership firm (M/s Naim Akhtar Contractors) comprising of Naim Akhtar and the deceased/insuree had got dissolved before the institution of the complaint and therefore, there was no contract of insurance of the complainant with Petitioner/Insurance Company. Also there was no deficiency in tendering any services because the claim lodged by the Respondent has been processed and settled and that the complaint cannot be decided in a summary manner.

THE District Forum after hearing both parties allowed the complaint and concluded that since the Excavator had not been totally damaged in the instant case, the Petitioner is directed to pay Rs.8,04,100/- as insurance claim and Rs.1,42,500/- as retrieval charges, totaling Rs.9,46,600/- to the Respondent by depositing the same in the loan account of the insuree in the concerned Bank within two months failing which interest @ 6% per annum would be charged from the date of filing of the claim till the entire amount is realized. Rs.5,000/- was awarded as compensation for harassment.

AGGRIEVED by this order, Petitioner/Insurance Company filed an appeal before the State Commission which allowed the same and directed the Petitioners to pay the retrieval charges of Rs.2,85,000/- minus the amount already awarded by the District Forum i.e. Rs.1,42,500/- and since the Excavator was financed and hypothecated by the Central Bank of India, the interest on the total amount awarded by the District Forum was enhanced from 6% to 12% per annum from the date of filing of the complaint till realization/deposit, whichever is earlier Petitioner was directed to deposit the entire amount before 30.09.2007 failing which interest payable shall be 15% per annum. The compensation of Rs.5,000/- awarded by the District Forum was enhanced to Rs.50,000/- and litigation costs quantified at Rs.20,000/-. Hence, the present revision petition. When this revision petition came-up for admission, this Commission vide its order dated 04.12.2007 directed that the admissibility of this revision petition be limited to retrieval charges and compensation to the Respondent awarded by the State Commission. Counsel for both parties made oral submissions. Counsel for Petitioner contended that while it accepted the order of the State Commission regarding the settlement of the insurance claim, it disputed the order of the State Commission asking the Petitioner to pay Rs.2,85,000/- as retrieval charges since the document stating that the Respondent had made a payment of Rs.2,85,000/- cannot be believed because such a huge amount would either be paid by cheque or bank draft and not in cash. Further, since Respondent was not even in a position to repair the Excavator, she could not have made payment of such a huge amount in cash. Apart from this, the Surveyor who had assessed the loss has not mentioned about any retrieval charges that were paid by the Respondent. Counsel for Petitioner further contended that since the Petitioner/Insurance Company had not been informed by insuree about the change from his being part of a partnership firm to a proprietory concern, it was not legally bound to settle the claim. However, despite this in order to keep the business relationship going, Petitioner agreed to pay Rs.6 lakh as recommended by the Surveyors. Further, Respondent had also agreed to the settlement of the claim on cash loss basis at Rs.6 lakhs and salvage was to be retained by the Respondent. Under these circumstances, enhancement of retrieval charges and compensation amount is not justified.

COUNSEL for Respondent on the other hand stated that even if the Surveyor has not mentioned the retrieval charges, credible evidence in the form of a receipt from the Company which had retrieved the vehicle had been filed before the Fora below which clearly indicated that the retrieval charges were Rs.2,85,000/- and had been paid. Petitioner/Insurance Company has not produced any evidence to controvert the genuineness of this receipt. Keeping in view the harassment caused to the Respondent who is a widow with two minor children and whose claim was genuine, the State Commission had rightly enhanced the compensation as well as the rate of interest and no grounds have been shown by the Petitioner to interfere with these orders.

WE have heard learned Counsel for both parties and have gone through the evidence on record. The facts pertaining to insurance of the Excavator and the accident in which the Excavator was damaged and the insuree killed are not in dispute. In this revision petition the only point that has to be considered is whether the State Commission ''s order enhancing the retrieval charges and compensation was justified. So far as the retrieval charges are concerned, the State Commission apart from being first court of appeal is also the final court of fact and after weighing the evidence before it including the receipt given in acknowledgment of payment of retrieval charges, concluded that this amount had been paid by the Respondent, since she had been assured by the Petitioner ''s Surveyor that these charges would be subsequently borne by the Petitioner/Insurance Company. In our revisional jurisdiction, we see no reason to dispute these findings of the State Commission particularly since Petitioner, apart from alleging that the Respondent was not in a financial position to have paid this amount, has not been able to produce any evidence to controvert these facts or to show that the receipt of Rs.2,85,000/- was not genuine. We, therefore, uphold the order of the State Commission regarding enhancement of retrieval charges. So far as the amount of compensation awarded is concerned, taking into account all the facts in their totality including the fact that the insurance claim has been settled, we are of the view that a compensation of Rs.20,000/- would be adequate under the present circumstances and order accordingly. We also reduce the rate of interest on the total amount awarded by the State Commission from 12% to 9% per annum. To sum-up, Petitioner/Insurance Company is directed to pay retrieval charges of Rs.2,85,000/- with interest @ 9% per annum. Rs.20,000/- are awarded as compensation for mental agony and harassment. The revision petition is disposed of on the above terms with no order as to costs.