RAKS FOOD INDUSTRIES vs NEW INDIA ASSURANCE CO LTD

-THE complainant in this case is a private limited company which manufactures a dairy product known by the name of "dairy Fresh Ice-cream". Smt. Anita Sharma is the Managing Director of the said firm. Through her attorney holder namely, Mr. Sushil Mahajan she has filed the complaint against the OP with the allegations that for supplying the finished ice-cream to various consumers the said firm had got manufactured a truck with special design and its registration number was JK02p-1719 (hereinafter to be referred to as the truck ). The truck had been got insured with the OP vide Policy No. 350760/31/02/06586 which had been in currency from 28. 2. 2003 to 27. 2. 2004. The insurance cover for the risk of the truck was to the extent of Rs. 8. 80 lakh (wrongly stated as correct insured value is Rs. 6,80,000 ). The said truck after making the delivery of the ice-cream in Srinagar was on its way back to Jammu and on 24. 4. 2003 on the national Highway met with an accident at a place known as ''peera''. The incident was reported in the concerned police station. The OP deputed the Surveyor Mr. Arun Kumar and Co. to assess the loss who inspected the truck on 9. 5. 2003. The Surveyor vide his letter dated 17. 6. 2003, asked the complainant to get the truck repaired. The letter was replied by the complainant vide letter dated 28. 6. 2003 by stating that the damage suffered by the truck was beyond repairs. However, the complainant made inquiries on his own from the manufacturer namely, Sandlas Air-Con Systems (P) Ltd. , Jalandhar. The repairer vide his letter dated 29. 5. 2003 informed the complainant that the repairs would be more costly than fitting a new fabricated unit in the truck. This fact was brought into the notice of the Surveyor but it had no affect on him. Thereafter, vide his letter dated 31. 7. 2003, the complainant brought the fact into the notice of the OP about non-settlement of the claim. The Surveyor submitted his report before the OP and after acting upon that report, the OP vide its letter dated 1. 9. 2003 asked the complainant to send the acceptance letter for Rs. 5. 00 lakh for final settlement of the claim. Accordingly, the acceptance letter was sent. The matter was not initially settled for about three months and after that letter dated 2. 3. 2003 was sent whereby the complainant was asked to settle his claim for Rs. 3,49,900. The complainant did not accept this offer and finally has approached the Commission and has prayed for the following reliefs: (i) Direction to the OP to pay the full insured amount of the truck in question on account of total loss to the tune of Rs. 8. 80 lakh along with interest @ 14% per annum from the date of accident till final realization. (ii) An amount of Rs. 1. 00 lakh for loss caused to its business. (iii) Rs. 50,000 as damages for harassment.

A preliminary objection has been taken by the OP regarding the maintainability of the complaint on the plea that correct provision of relevant law has not been disclosed in the complaint and the deed of attorney holder namely Mr. Sushil Mahajan is neither registered by the concerned Sub-Registrar nor has been notorised. In this manner, the complaint has been filed by an incompetent person. On facts, it is denied that the vehicle in question was insured for a sum of Rs. 8. 80 lakh but it had been insured for a sum of Rs. 6. 80 lakh. It is also pleaded that at the representations of the complainant, the OP had agreed to act upon the report of the Surveyor and the amount offered to the extent of Rs. 5. 00 lakh included the value of the salvage and that salvage was not produced before the insurer so the net amount payable had become to the tune of Rs. 3,49,900. This payment was offered on cash-loss basis. That instead of accepting the offer on the basis of cash-loss basis, unnecessarily the complaint has been filed. It was a false defence put up by the complainant that the truck could not be repaired. Heard the arguments.

The learned Counsel of the complainant has referred Annexure ''g'' which is a letter dated 28. 6. 2003 addressed by the Divisional Manager, New India Assurance Company Ltd. , Jammu to the complainant, wherein an offer has been made for the disclosure of a company where damaged truck''s refrigeration capacity could be restored for retaining 200 C temperature of the loaded ice-cream. He had also offered to bear all the costs in case that could be done. This was in reply to the demand made by the insurer for getting the damaged vehicle repaired. He has also referred to Annexure ''h'' which is the reply received by the complainant from "sandlas Air-Con Systems (P) Ltd" wherein a categorical reply has been given to the complainant in response to his communication in the following manner: "looking into the total scenario we feel that bringing up a fresh unit is much more cost affective as compared to repairing the same. Over and above repaired unit will not be under any warranty since most of the components would be repaired. Fresh unit will of course attract full warranty for one year". He has further referred to Annexure ''k'' whereby the complainant had accepted Rs. 5. 00 lakh as settlement of the claim subject to the terms and conditions and exceptions as per the policy terms on the basis of total loss of the vehicle in question. The Surveyor Mr. Arun Kumar''s report at the end has recited: "insurer may settle the loss on net of salvage loss basis for Rs. 5,00,000 less salvage value of the damaged vehicle Rs. 1,35,000 equal to Rs. 3,65,000. In this way, insurer shall avoid other overhead expenses such as storage of vehicle, deterioration of damaged vehicle and advertisement expenses. It is entirely up to the insurer either they may settle the loss on total loss basis for Rs. 5,00,000 less exclusion clause Rs. 500 equal to Rs. 4,99,500 or on net of salvage loss basis for Rs. 3,65,000 less exclusion clause Rs. 500 equal to Rs. 3,64,500 ". The Counsel has also referred to the testimony of complainants'' witness namely, Sardar Baljeet Singh who in his deposition in the Commission has stated that he works as a foreman with the Sandlas Air-Con Systems (P) Ltd. which is a concern dealing in the manufacturing of refrigerated trucks. He supports the contents of the letter dated 29. 5. 2003 (Annexure H) and had inspected the vehicle which was lying in the premises of the complainant. Prior to that he had never inspected the vehicle in question. He was categorical in stating that though the repairs could be affected yet those repairs could not give any warranty for the full working of the repaired unit for refrigeration purposes. He has also stated that the repairs would have been more costly than the substitution of new refrigerated unit. The complainant has lent support to the assertions made in the complaint. The OP has produced the evidence of Mr. Vipan Mehta who was the Divisional Manger of OP. He has deposed that the contents of above stated Annexure ''h'' had not been proved by its author by giving evidence in its support and that witness Sardar Baljeet Singh who had deposed in favour of the complainant has not shown any written authority on behalf of Sandlas Air-Con Systems (P) Ltd. to appear as a witness. That after making a perusal of the letter dated 29. 5. 2003, the possibility of getting the vehicle repaired is not exclusively ruled out. He corroborates the assertions made in the written version that on cash-loss basis an offer had been made to the complainant in the sum of Rs. 3,49,900 as full and final settlement of his claim as the repair cost of the vehicle in question is less than 75% of the Insured Declared Value (IDV) which is Rs. 6,80,000. In cross-examination, he has stated that in case of total loss it is only affective if the repair cost is more than 75% of the sum insured value. Concluding his arguments in rebuttal, Mr. Rupinder Singh Advocate has stated that the evidence led by the complainant does not conclusively prove that the vehicle in question was beyond repairs and thus the offer made on the basis of cash-loss basis was the just settlement of the claim which can be paid to the complainant because the repair cost of the vehicle is less than 75% of the insured declared value.

WE have considered the respective contentions of the Counsel for the parties. The moot question for consideration and determination in this case is whether the insured vehicle could be fully repaired or not. Before adverting to the other evidence led by the parties we go through the report of the Surveyor Mr. Arun Kumar who has stated that on the basis of his meeting with the repairer (Sandlas Air-Con Systems (P) Ltd.) it was found out that the damaged refrigerated assemblies were beyond repair. It was technically being pleaded by the said repairer that it was not feasible to repair it. He also discussed the matter with the complainant who insisted that the vehicle could not be fully repaired. On such an admitted position found in his report itself, we have failed to understand how the Surveyor has assessed the damaged value of the insured truck to the extent of Rs. 4,66,721. 94 and then valued the salvage material at Rs. 1,35,000. The Counsel of the complainant has also contended that the truck had been purchased about three years ago and its insured value was Rs. 6,80,000. As per the terms of the policy in question only 15% depreciation could be made from the total sum assured which comes to Rs. 5,78,000. That complainant who had been facing financial crunch had foreclosed his right over Rs. 78,000 and accepted the offer of Rs. 5. 00 lakh towards the full and final settlement of the claim and refusal had caused injustice and that complainant now should be given just claim upto the extent of Rs. 5,78,000. In order to appreciate this contention we directed our attention on the admission made by the OP in its written version that it had forwarded the acceptance of the claim to the extent of Rs. 5. 00 lakhs to their higher authorities who did not agree to the proposal for the settlement of the claim. The approach adopted by the higher authorities is found not subjective and just but casual and arbitrary. The Surveyor had given his opinion that the settlement of the claim could be made either on the basis of total loss or on repair loss evaluations. Annexure ''h'' which is a letter dated 29. 5. 2003 written by the repairer (Sandlas Air-Con Systems (P) Ltd.) stands corroborated from the oral version given by its employee Sardar Baljeet Singh who has even inspected the vehicle. The oral version given by OP''s witness namely, Mr. Vipan Mehta does not deface the evidentiary value of the evidence led by the complainant which is in the nature of credible oral version as well as in the documentary form. Moreover, the testimony of the Surveyor Mr. Arun Kumar has also supported the view of the complainant after having discussed the matter with the repairer and stated in his report that as per the version of the repairer the vehicle in question was not practically repairable. On such a nature of the factual position, the higher authorities of the OP should not have forced the complainant to resort to litigation. The admitted offer at Rs. 5. 00 lakh by the complainant only required approval by the OP and because of that fact we do not accept the fresh demand of the complainant to increase his claim upto Rs. 78,000 over and above of Rs. 5. 00 lakh. He is bound by his own admission. We do not find any legal substance in the preliminary objections raised by the Counsel of the OP regarding the non-maintainability of the complaint. We find a notorised power of attorney on the record of the case. Such type of technical objections are of no legal substance in a Consumer Forum where the primary function is to administer cheap and substantial justice in a summary manner. In this view of the matter, we accept the complaint of the complainant and direct the insurer to make the payment of Rs. 5. 00 lakh to the complainant within one month from today failing which interest shall become payable @ 8% per annum from the date of expiry of three months period from the date of submission of the report of the Surveyor Mr. Arun Kumar to the OP. The OP shall also bear the cost of litigation which is quantified in the sum of Rs. 6,000 complaint allowed.