Rekha Sharma vs Oriental Insurance Co. Ltd.

The present Revision Petitions have been filed under Section 21(b) of the Consumer Protection Act, 1986, challenging the Impugned Order dated 15.05.2017 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (hereinafter referred to as State Commission) in Appeal Nos. 614 & 615 of 2013, whereby the State Commission by setting aside the Order dated 22.05.2013 passed by District Consumer Disputes Redressal Forum, Bhilwara (for short “the District Forum”) dismissing the Complaint Nos. 163 & 164 / 2012 filed by the Complainant, allowed the Appeals filed by the Complainant by directing the Opposite Party Oriental Insurance Company Limited (hereinafter referred to as the Respondent Insurance Company) to pay the loss assessed by the Surveyor to Complainant within 30 days.

Brief facts of the case as mentioned in Complaint No. 163 / 2012 are that the Complainant obtained GCCV Public Carriers Other than Three Wheelers Package Policy No. 242400/31/2011/5618 for Vehicle bearing Registration No. RJ-06-GB-2781 from the Respondent Insurance Company for IDV value of ₹20,00,000/-.  During the currency of the Policy, vehicle met with an accident.  Insurance Company was informed, who appointed spot surveyor.  According to the directions of the Respondent Insurance Company the vehicle was taken for repairs to Mumal Motors.  The Complainant paid a sum of ₹6,14,025/- towards repair of the Vehicle. Bill was submitted to the Respondent Insurance Company for reimbursement of the Claim. Although the Surveyor appointed by the Respondent Insurance Company assessed the loss at ₹3,92,205/- yet the Respondent Insurance Company did not settle the claim.  Being aggrieved Complainant filed Complaint No. 163/2012 before the District Forum.

In Complaint No. 164 / 2012, the Complainant obtained GCCV Public Carriers Other than Three Wheelers Package Policy No. 242400/31/2011/7030 for vehicle bearing registration No. RJ-06-GA-3661 from the Respondent Insurance Company for IDV value of ₹13,00,000/-.  During the currency of the Policy, vehicle met with an accident.  Insurance Company was informed, who appointed Spot Surveyor.  According to the directions of the Respondent Insurance Company the vehicle was taken for repairs to Lotus India Auto Services.  The Complainant incurred an expenditure of ₹5,48,007/- towards repairing and crane service etc. Bills were submitted to the Respondent Insurance Company for reimbursement of the claim. Although the Surveyor appointed by the Respondent Insurance Company assessed the loss at ₹4,90,149/- yet the Respondent Insurance Company did not settle the claim on the ground that the driving licence of the Driver provided by the Complainant was fake one.  Feeling aggrieved the Complainant filed Complaint No. 164/2012 before the District Forum.

The Respondent Insurance Company contested the Complaints before the District Forum.  In reply to Complaint No. 163/2012, it was submitted that after processing the claim, the loss payable was ₹3,88,000/-.  They directed the Complainant to submit the necessary documents for payment of the claimed amount but before that Complainant had filed the Complaint before the District Forum. In reply to Complaint No. 164/2012, it was submitted that initially driving licence No. 2557 / 91 issued by Licensing Authority, Jaunpur, UP was provided by the Complainant, which was found fake one.  After that in order to get his claim settled, the Complainant provided another driving licence issued by Licensing Authority, Hardoi, UP.  Although the second licence was found genuine yet it is not legal and valid because date of birth in both the licenses is different.  It cannot be possible that same driver have two dates of birth, and had obtained two driving licence from two different Licensing Authorities at the same time which is a clear violation of Section 6 of Motor vehicles Act.  Accordingly, the driver was not having valid driving licence at the time of accident, therefore, the Claim was not payable.

After hearing both the Parties and perusal of material on record, the District Forum dismissed both the Complaints by observing as under:-

“In the both disputes the complainant nowhere mentioned as per the consumer protection act 1986 for its section 2(1) that both the vehicles she runs for her livelihood and self employment. Bare perusal of the complete case file and viewing of the documents it revealed that the complainant borrowed loan from ICICI Bank for money of the vehicles. It is clear that she under the M/s. RIDHI SIDDHI LOGISTICS COMPANY does the business, do her profits from there. This cannot be for the self employment and livelihood of the complainant by all means. The Hon’ble National Commission in the case of M/s. Carmart Pvt. Ltd. Versus Dr. Ajay H. Kantharia and others, First Appeal No. 458/99, judgment dated 28.07.2004, it is postulated that any of the person if purchase vehicle and he do so with intent to do business earn profit thereon and running a private company, such person cannot be considered as the consumer. The complainant is also running a transport company and earning profits more and more, she also does not fall under the category of the consumer.

As per the above said analysis, both the complaints filed by the complainant are not maintainable.”

Aggrieved by the Order passed by the District Forum, the Complainant/Petitioner herein preferred Appeals before the State Commission.  The State Commission allowed both the Appeals by observing as under:-

“It is submitted by the Ld. Counsel of the Complainant/appellant that the license which the driver submitted to her, was produced before the insurance company, which found in investigation as fake, when it was enquired from the driver then he produced his valid license, which had been verified by the insurance company, in such circumstances the claim was not liable to be rejected. In reply to submission of Respondent Insurance Company that under section 06 of the Motor vehicle Act any persons cannot hold at a time more than one license, the Ld. Counsel for the appellant relying upon IV(2014)CPJ 751 (NC) Sultan Singh Vs. New India Assurance Co. Ltd.), argued that once the earlier license was fake then the same cannot be conserved as valid license as per law whereas the another license was valid and the same was verified by the Insurance Company.

The Ld. Counsel for the Insurance Company relied upon the judgment passed by Hon’ble National Commission, titled as II(2010) CPJ 183 (NC) (Jai Prakash Goyal Vs. United India Insurance Co. Ltd.). He submitted the Section 06 of the motor vehicle Act for my observations, according to which at a time a person cannot hold two licenses at a time. In this case the driving license of the driver which was produced and by verification found fake by the insurance company, thereafter the complainant produced the second license which was issued from the Licensing Authority, Zunheboto (Nagaland). In this license the address of the driver is mentioned as Village Bhutana, District Sonepat. In this case it was considered that the earlier license was fake and the second license also cannot be true because the driver of the complainant is the resident of District Sonepat (Haryana) and making his license from the Nagaland, so, both the license were not accepted.

Similarly, in the case IV (2009) CPJ 168 (United India Insurance Company Ltd. Vs. Jitender Kumar), the driver was having two driving license. In this case the first license was issued from the Jagadhari licensing Authority, and second one was issued from the Licensing Officer, Agra, the license of the Agra was found correct but the license issued from Jagadhari. In this case it was considered that u/s 06 of Motor Vehicle Act in one time a person cannot hold more than one license and the claim was found dismissed. On this point another judgment of the Haryana State Consumer Forum was produced by the Ld. Counsel of the Insurance Company.

The reference of the case of Sultan Singh was submitted as base by the Ld. Counsel of the Appellant /Complainant that is passed by the Hon’ble National Consumer Commission, although in this judgment mentioned for Jaiprakash Goyal vs. United India Insurance Co. Ltd. II (2010) CPJ 183. But as per my opinion in the case of Jai Prakash Goyal the second license was also treated as suspicious, because the driver is the resident of Sonepat (Haryana) and the license was issued form Ngaland. The reference taken the case of Sultan Singh is observed by me much of logical and able to follow. As per section 06 of the Motor Vehicle Act, a person cannot hold two licenses. The intention in this case may be that both the license must be valid or issued by the appropriate officer. If the first license found fake which is not issued by any authorized officer, then cannot be categorized for the category that in one time there are two licenses under section 06, in this case the second license was found as valid, the insurance company investigated and found valid.  In such circumstances it cannot be considered that on the day of incident the driver was not holding the valid license. I prefer to follow the case of Sultan Singh.  Thus, the appeal of the appellant is accepted.

Resultantly, both the Appeals are allowed.  Order passed by the Ld. District Forum in CC No. 163/2012 and 164/2012 are set aside.  Insurance Company is directed to pay the loss assessed by the Surveyor to the Complainant within 30 days”

Being not satisfied by this order, the Petitioner has filed the present Revision Petitions before this Commission on the ground that she has incurred expenditure of ₹5,48,007/- towards repair of Vehicle No. RJ-06-GA-3661 and ₹6,14,025/- towards repair of Vehicle No. RJ-06-GB-2781.  Despite having obtained ‘Nil Depreciation GCCV Package Policy Add-on Endorsement’ by paying extra premium to the Respondent Insurance Company on both the Policies, the Surveyor has wrongly assessed the loss of ₹4,90,149/- in respect of Vehicle No. RJ-06-GA-3661 and ₹3,92,205/- in respect of Vehicle No. RJ-06-GB-2781, whereas she is entitled for full repair expenditure as per ‘Nil Depreciation GCCV Package Policy Add-on Endorsement Wordings’ mentioned on the Website of the Respondent Insurance Company, which reads as under:

“Notwithstanding anything to the contrary contained in the policy, and provided additional premium has been paid, it is hereby understood and agreed that in the event of a Partial Loss Claim for damages to the vehicle insured under the policy where liability is admitted, the insurer will indemnify the insured the full value of expenses incurred for replacement of damaged parts of insured vehicle without application of depreciation thereon.

However, an excess of 1% of admissible claim amount or 0.5% of the IDV of the vehicle whichever is less subject to a minimum of ₹* (as per class of vehicle given below) will be deducted from the claim at the time of settlement in addition to any other excess / deductibles applicable under the policy.

Minimum additional excess as per class of vehicle:

Private Car  ₹2500/-

Two Wheeler

(Private and Commercial)  ₹250/-

All Commercial vehicle  ₹5000/-

Subject otherwise to the terms, conditions, limitations & exceptions of the policy.”

It was stated that the State Commission has failed to appreciate that the Policies were NIL Depreciation Policies and passed a wrong Order by directing the Respondent Insurance Company to pay the amount assessed by the Surveyor whereas she is entitled for total repair expenditure incurred by her.  Although she is also entitled for mental agony and compensation yet the State Commission has not awarded any compensation towards mental agony.

We have heard Mr. Vikas Jain, learned Counsel appearing on behalf of the Petitioner, Ms. Amrreeta Swaarup, learned Counsel appearing on behalf of the Respondent Insurance Company, perused the material available on record and have given a thoughtful consideration to the various pleas raised by them.

The Impugned Order dated 15.05.2017 passed by the State Commission has attained finality qua the Respondent Insurance Company as they did not chose to challenge the same by filing Revision Petition before this Commission.

The main issue for consideration before us is whether the Petitioner is entitled for full amount incurred towards repair charges paid to the Workshops authorised by the Insurance Company or for the amount assessed by the Surveyor as directed by the State Commission.

A bare perusal of both the Policies makes it crystal clear that both the Policies are covered under ‘Nil Depreciation Cover’.  As per ‘Nil Depreciation GCCV Package Policy Add-on Endorsement Wordings’ mentioned on the Website of the Respondent Insurance Company (reproduced earlier), the Respondent Insurance Company is liable to indemnify the Petitioner for the full value of expenses incurred for replacement of damaged parts of insured vehicle without application of depreciation thereon subject to deduction of excess of 1% of admissible claim amount or 0.5% of the IDV of the vehicle, whichever is less.

We may mention here that the Hon’ble Supreme Court in the case of M/s. Oswal Plastic Industries vs. Manager, Legal Department, N.A.I.Co.Ltd., Civil Appeal No. 83 of 2003 (SLP(C) No. 9049 of 2021) decided on January 13, 2023 (MANU/SC/0030/2023 : 2023 Live Law (SC) 34) has laid down that if in the Insurance Policy the Insured has to get the reinstatement value of the goods and not the depreciated value, then the Insurance Company has to pay the reinstatement value of the goods to the Insured.  For ready reference paragraph 5, 5.1, 5.2 and 6 of the Judgment/Order passed by the Hon’ble Supreme Court in the case of M/s. Oswal Plastic Industries (supra) is reproduced below:-

“5. The short question which is posed for consideration of this Court is whether in the facts and circumstances of the case and on true interpretation of relevant Clause of insurance policy, in case of damage of the plant and machinery due to fire, the complainant shall be entitled to the reinstatement value or the depreciated value?

5.1. While dealing with the aforesaid issue, relevant Clause 9 of Section 2 of the policy is required to be considered, which reads as under:

If the Company at its option, reinstate or replace the property damaged or destroyed, or any part thereof, instead of paying the amount of the loss or damage, or join with any other Company or Insurer(s) in so doing the Company shall not be bound to reinstate exactly or completely but only as circumstances permit and in reasonably sufficient manner, and in no case shall the Company be bound to expend more in reinstatement than it would have cost to reinstate such property as it was at the time of the occurrence of such loss or damage nor more than the sum insured by the Company thereon. If the Company so elect to reinstate or replace any property the insured shall at his own expense furnish the Company with such plans, specifications, measurements, quantities and such other particulars as the Company may require, and no acts done or caused to be done, by the Company with a view to reinstatement or replacement shall be deemed an election by the Company to reinstate or replace.

If in any case the Company shall be unable to reinstate or repair the property hereby insured, because of any municipal or other Regulations in force affecting the alignment of streets or the construction of buildings or otherwise, the Company shall, in every such case, only be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition.

5.2. On true interpretation and on fair reading of above clause, firstly the option is given to the insurance company to reinstate or replace property damaged or destroyed instead of paying the amount of loss or damage. If the insurance company exercises the option of reinstatement or replaces the property damaged, the company shall not be bound to reinstate completely or partly but only as circumstances permit and in reasonably sufficient manner, and in no case shall the company be bound to expend more in reinstatement than it would have cost to reinstate such property as it was at the time of the occurrence of such loss or damage not more than the sum insured by the company thereon. However, in any case the company is unable to reinstate or repair the property insured, because of any municipal or other Regulations in force affecting the alignment of streets or the construction of buildings or OTHERWISE, in that case, the company shall be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition. Present is the case dealing with second eventuality, namely, the company was unable to reinstate or repair the property. The surveyor in its report determined the loss on the basis of reinstatement value at ₹ 29,17,500/- and on the basis of depreciated value at ₹12,60,000/-. Though, the complainant claimed ₹ 76,64,000/- being the value of the new machinery, however, as rightly observed by the State Commission as well as the NCDRC, the complainant shall not be entitled to the said amount. However, at the same time considering second part of Clause 9 reproduced hereinabove, in case company is unable to reinstate or repair the property insured, the insurance company shall be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition. For the aforesaid purpose, the report of surveyor wound be relevant evidence to consider the sum required to reinstate or repair. Therefore, as per second part of Clause 9 of Section 2 of the policy, the complainant shall be entitled to the reinstatement value and not the depreciated value. The NCDRC has mis-interpreted and mis-read the Clause 9. The NCDRC has seriously erred in observing and holding that the insurance company shall be liable to pay the depreciated value only and not the reinstatement value. The State Commission was absolutely justified in awarding the reinstatement value. The impugned judgment and order passed by the NCDRC awarding the depreciated value and not the reinstatement value is unsustainable for the reasons stated hereinabove.

In view of the above and for the reasons stated above, the present appeal succeeds. The impugned judgment and order passed by the NCDRC is hereby quashed and set aside. The order passed by the State Commission is hereby restored. The complainant shall be entitled to ₹29,17,500/- being the reinstatement value with interest @ 7% from the date of order of the State Commission i.e., 10.11.2014 till the actual payment. The present appeal is accordingly allowed. No costs.”

Undisputedly, the Petitioner had incurred an expenditure of ₹5,47,007/- towards repair charges of Vehicle bearing registration No. RJ-06-GA-3661 and ₹6,14,025/- towards repair charges of Vehicle bearing registration No. RJ-06-GB-2781 at the service stations authorised by the Respondent Insurance Company.  After deducting ₹5,470/- and ₹6,140/- towards excess of 1% of admissible amount (being less than 0.5% of the IDV), in Policy No. 242400/31/2011/7030 and Policy No. 242400/31/2011/5618 respectively, the Respondent Insurance Company is liable to pay a sum of ₹5,41,537/- towards settlement of the claim under Policy No. 242400/31/2011/7030 issued for Vehicle bearing registration No. RJ-06-GA-3661 and ₹6,07,885/- towards settlement of the claim under Policy No. 242400/31/2011/5618 for Vehicle bearing Registration No. RJ-06-GB-2781 to the Petitioner.

For the reasons stated herein above, the Order passed by the State Commission is modified to the extent that the Respondent Insurance Company is directed to pay ₹6,07,885/- towards settlement of the claim under Policy No. 242400/31/2011/5618 issued for Vehicle bearing Registration No. RJ-06-GB-2781 and ₹5,41,537/- towards settlement of the claim under Policy No. 242400/31/2011/7030 issued for Vehicle bearing registration No. RJ-06-GA-3661 to the Petitioner.  The Respondent Insurance Company is also directed to pay interest @9% p.a. on the aforesaid amount w.e.f. 09.07.2012, i.e., the date of filing of the Complaints before the District Forum till the date of realization, within 30 days from today. Keeping in view the peculiar facts and circumstances of the case, there shall be no order as to costs.  Both the Revision Petitions stand disposed off in above terms.