Dharmendra Goel vs Oriental Insurance Co.Ltd

new Tata Sumo vehicle for a sum of Rs. 4,30,000/-. The

vehicle was comprehensively insured on 19th January, 2000 2

with the Oriental Insurance Company (hereinafter referred to

as `the Company' ) on its purchase value of Rs. 4,30,000/-

and a premium of Rs. 10,436/- was paid. This policy expired

on 18th January, 2001 and on the very next day the said policy

was renewed for a year by the company assessing the value of

the vehicle at Rs.3,59,000/-. This policy expired on

18th January, 2002 but was again renewed on

13th February, 2002 up to 12th March, 2003 on a premium of

Rs. 8498/- on the value assessed by the Company at

Rs.3,54,000/- The vehicle met with an accident on

10th September, 2002 on which the appellant informed the

company as to what had transpired. The vehicle was removed

to Chambal Motors, Kota, Rajasthan, an authorized service

station of Tata Motors, for repair. Chambal Motors submitted

an estimate of Rs.3,37,246.59/-for the repair of the vehicle.

The appellant then submitted a claim for Rs. 3,37,246.59 /-

on 11th October, 2002 alongwith a bill of Rs.4,000/- for

removing the vehicle to the workshop from the place of

accident. The company, however, appointed a Surveyor, M.N.

Chaturvedi Associates on 14th December, 2002 to assess the 3

loss and to submit a report. The surveyor in his report

determined a total loss of Rs. 1,80,000/- after assessing the

value of the salvage at Rs.85,000/- whereas the assessment

on cash loss basis was made at Rs.1,04,433.53/-. The

company, however, declined to defray any amount to the

appellant on the plea that the driver did not have a valid

driving licence on the date of the accident. The appellant

thereupon filed a complaint before the District Consumers

Forum praying that the sum of Rs.3,37,246.59 /-, the

estimate given by Chambal Motors with some additional

charges, be paid to the appellant. After the completion of the

pleadings, the District Forum, by its order dated

19th January, 2004, dismissed the complaint on the ground

that the question as to whether the driver of the vehicle had a

valid driving licence on the date of the accident involved

complicated questions of fact which could be decided only by

a Civil Court. Aggrieved by this order the appellant filed an

appeal before the M.P. State Consumer Disputes Redressal

Commission, Bhopal. The Commission in its order dated

28th July, 2004 held that the driver did have a valid driving 4

licence on the date of the accident and accordingly directed

the Company to pay to the appellant a sum of Rs. 1,04,043/-

with interest @ 6% p.a. from the date of the filing of the

complaint till payment. Dissatisfied by the inadequate

compensation awarded by the State Commission, the

appellant preferred a revision petition before the National

Consumer Disputes Redressal Commission, New Delhi

(hereinafter called "the National Commission"), claiming a

sum of Rs. 3,54,000/-towards compensation. The National

Commission, by its order dated 20th April, 2006 partly allowed

the appeal and granted a compensation of Rs.1,80,000/- with

interest @12% p.a. The claimant is before us in appeal in

these circumstances.

4. The learned counsel for the appellant has raised only

one argument in the course of hearing. He has submitted that

the company itself had issued an insurance policy in a sum of

Rs.3,54,000/- effective from 13th February, 2002 to 12th

March, 2003 and had also accepted a premium on that basis

and as such to claim that the appellant was entitled to a figure

below that amount was wholly unjustified. He has also 5

submitted in elucidation, that there was absolutely no basis

for the surveyor's conclusion that the appellant was entitled

to a sum of Rs.1,80,000/- on total loss basis in the face of the

estimate made by the Chambal Motors for a much larger

amount.

5. The learned counsel for the Company - Respondent has ,

however, pointed out that the appellant's counsel, had in his

arguments before the National Commission, given up his

claim to Rs.3,54,000/- as now contended, and had limited the

same to Rs.1,80,000/- and this amount had in fact been

allowed and in this view of the matter, any claim for a further

sum was not justified. It has also been pleaded that the

appellant had led no evidence to challenge the value put on

the vehicle by the surveyor so as to substantiate his claim.

6. We have heard the learned counsels for the parties and

have gone through the record very carefully. The facts as

narrated above remain uncontroverted. Admittedly, the

accident had happened on 10th September, 2002 during the

validity of the Insurance Policy taken on 13th February, 2002

insuring the vehicle for Rs.3,54,000/- on a premium of 6

Rs.8498/- It is also the admitted position that the vehicle had

been declared to be a total loss by the surveyor appointed by

the company though the value of the vehicle on total loss

basis had been assessed at Rs.1,80,000/- We are, in the

circumstances, of the opinion that as the company itself had

accepted the value of the vehicle at Rs.3,54,000/- on

13th February, 2002, it could not claim that the value of the

vehicle on total loss basis on 10th September, 2002 i.e., on the

date of the accident was only Rs.1,80,000/-. It bears

reiteration that the cost of the new vehicle was Rs.4,30,000/-

and it was insured in that amount on 19th January, 2000

and on the expiry of this policy on 18th January, 2001, was

again renewed on 19th January, 2001 on a value of

Rs.3,59,000/- and on the further renewal of the policy on

13th February, 2002 the value was reduced by only Rs.5,000/-

to Rs.3,54,000/-. We are, therefore, unable to accept the

company's contention that within a span of seven months

from 13th February 2002 to the date of the accident, the value

of the vehicle had depreciated from Rs.3,54,000/- to

Rs.1,80,000/-. It must be borne in mind that Section 146 of 7

the Motors Vehicles Act, 1988 casts an obligation on the

owner of a vehicle to take out an insurance policy as provided

under Chapter 11 of the Act and any vehicle driven without

taking such a policy invites a punishment under Section 196

thereof. It is therefore, obvious that in the light of this

stringent provision and being in a dominant position the

insurance companies often act in an unreasonable manner

and after having accepted the value of a particular insured

good disown that very figure on one pretext or the other when

they are called upon to pay compensation. This `take it or

leave it' attitude is clearly unwarranted not only as being bad

in law but ethically indefensible. We are also unable to accept

the submission that it was for the appellant to produce

evidence to prove that the surveyor's report was on the lower

side in the light of the fact that a price had already been put

on the vehicle by the company itself at the time of renewal of

the policy. We accordingly hold that in these circumstances,

the company was bound by the value put on the vehicle while

renewing the policy on 13th February, 2002. 8

7. The learned counsel for the respondent, has however,

argued that in the course of hearing before the National

Commission, the appellant had limited his claim to

Rs.1,80,000/- and having been awarded that amount, could

not claim anything beyond that figure. We, however, notice

from a bare reading of the order of the National Commission

that the primary claim made by the appellant was for a sum of

Rs.3,54,000/- and in the alternative for Rs.1,80,000/-. This

fact is made more explicit from the grounds of revision filed

before the National Commission wherein a sum of

Rs.3,50,000/- had been repeatedly claimed. Even otherwise,

we believe that in such matters, the court must take a realistic

view and if a particular claim to compensation is possible on

the material on record, it should not be denied on hyper

technical pleas, as has been argued by the respondent's

counsel.

8. The learned counsel for the respondent company has

finally submitted that as the vehicle had been insured for

Rs.3,54,000/- on 13th February, 2002 and the accident had

happened about seven months later (on 10th September, 9

2002), some depreciation in the value of the vehicle ought to

be made and the compensation determined on that basis. We

accept this prayer of the learned counsel and keeping in view

that about seven months of the policy had expired, order that

the value of the vehicle should be reduced by Rs.10,000/-

9. We accordingly allow the appeal and direct that the

appellant should be paid a sum of Rs.3,44,000/- with interest.

in the manner determined by the National Commission. The

appellant shall also have his costs which are quantified at

Rs.25,000/-.

....................................J ( ALTAMAS KABIR)

....................................J (HARJIT SINGH BEDI)

New Delhi Dated: July 30, 2008