NEW INDIA ASSURANCE COMPANY LIMITED v. PRADEEP KUMAR

Citation: [2009] 16 S.C.R. 508

Court: Supreme Court of India

Bench: D.K. JAIN, RAJENDRA MAL LODHA

Case summary

NEW INDIA ASSURANCE COMPANY LIMITED v. PRADEEP KUMAR.pdf

Judgment text

[2009] 16 (ADDL. ) S. C. R. 508 NEW INDIA ASSURANCE COMPANY LIMITED v. PRADEEP KUMAR (Civil Appeal No. 3253 of 2002) APRIL 9, 2009 [D. K. JAIN AND R. M. LODHA, JJ. ] Consumer Protection - Insurance claim for vehicle ' damaged in accident - Insurance company offering lesser than the claimed amount on the basis of approved surveyor's report - Insured getting the vehicle repaired from the loan amount taken from Bank - Claim of amount spent towards repair and the interest on loan amount - Non-payment - Complaint before consumer forum alleging deficiency in service-Consumer fora with concurrent finding accepting the claim - On appeal, held: Claim of the insured was rightly accepted - Insurer could have deviated from surveyor's report .. - Surveyor's report may only be basis for settlement of claim, and it is not conclusive - Insurance Act, 1938- s. 64-UM (2).

A heavy motor vehicle (open body truck), owned by the respondent-complainant and insured with the appellant-Insurance Company, met with an accident. Respondent got the vehicle repaired by taking loan from the Bank. Thereafter, he claimed the expenses incurred for repair and the interest paid to the Bank on the loan '. amount from the appellant-insurer. He then filed a complaint before consumer forum alleging deficiency in service by the Insurance Company and claimed an amount of Rs. 1, 58, 409/-. The stand of the Insurance Company was that initially the spot survey was conducted and thereafter survey of the vehicle was conduced by two different approved surveyors. As per '. the estimate of the last survey, Rs. 63,771/- was offered "' to the complainant, which he refused. Consumer forum PRADEEP KUMAR • awarded the claim of the appellant. The order was confirmed to State Consumer Commission and National Consumer Commission. Hence the present appeal.

Dismissing the appeal, the Court HELD: 1. The object of s. 64-UM (2) of Insurance Act, 1938 is that where the claim in respect of loss required to be paid by the insurer is Rs. 20,000/- or more, the loss " must first be assessed by an approved surveyor ( or loss assessor) before it is admitted for payment or settlement by the insurer. Proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor). Although the . assessment of loss by the approved surveyor is a pre- '\requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct ·that it cannot be departed from; it is not conclusive.

The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor 'insured. [Para 15) [516-B-E] ' . - 2. The survey reports of the two approved surveyors, upon which reliance has been placed by the Insurance Company show that the vehicle got extensively damaged in this accident. Its Assembly, Bonnet, Cabin, Tool Box, Body, Chasis, Diesel Tank, Pressure Regulator, Pressure Pipe, Brake Booster, Steering Wheel, Head Lights, Main J-eaf LHS Front, Front shockers, Steering Worm, Air Cleaner, Cross Member Rear 2nd, Propeller Shafts, Front Axle, Silencer, Engine Chamber etc. had sustained major damage. The approved surveyors in their reports have • recorded their satisfaction that the aforementioned damages to the said vehicle would have occurred in that mishap.

One of the approved surveyors, in his survey report also noted that the damages noticed to the said vehicle were in conformity with the description of the accident mentioned in the claim form and details of damages noted by the spot surveyor. The spot survey report has been withheld by the Insurance Company. In the survey report by this surveyor, original estimate is " recorded to be Rs. 1,66,580/-. The enclosures with the survey report at item No. 2 records: "Estimate: Original and Suppl. 3 pages". But this enclosure has been suppressed by the Insurance Company. [Para 10) (514- A-DJ 3. The claim of the complainant has been accepted by the consumer fora as it was duly supported by original .. " vouchers, bills and receipts. It has been held that the actual expenses incurred by the complainant comes to Rs. 1,39,438/- in getting the truck repaired apart from the expenses on account of haulage of truck and carrying it to the workshop.

Taking into account actual expenses incurred and the interest that the complainant had to pay to the Bank from which the loan was obtained for that amount, the District Forum awarded a sum of Rs. 1,58,409/ - to the complainant and Insurance Company was .. directed to make that payment along with interest at the rate of 12% per annum. The interest paid by the complainant to the bank could have been awarded, as no such ground has been set up in the appeal. As a matter of fact, this aspect was not even raised before the National Commission. [Para 16] [516-F-H; 517-A] 4. The insurance company should not have spent \ public money unnecessarily on avoidable and wholly frivolous litigation such as the present one. [Para 17) [517-B] PRADEEP KUMAR CIVIL APPELLATE JURISDICTl()N : Civil Appeal No. 3253 of 2002. From the Judgment & Order dated 14. 9. 2001 of the National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 1496 of 2001. P. K.

Seth, Sudhir Kumar Gupta for the Appellant. :> . • N. S. Jain, S. C. Gupta, Balraj Dewan for the Respondent. The Judgment of the Court was delivered by R. M. LODHA, J. In this appeal, by special leave, the appellant, New India Assurance Company Ltd. (for short, 'insurance company') has challenged the order dated September 14, 2001, passed by the National Consumer ·;. Disputes Redressal Commission (for short 'National I, Commission'). By its order the National Commission dismissed the revision petition filed by the insurance company under Section 21 (b) of The Consumer Protection Act, 1986 (for short, 'Act 1986') and affirmed the concurrent orders of State Commission for Redressal of Consumer Disputes, Uttar Pradesh, Lucknow (for short, 'State Commission') and Resident Consumer Disputes Redressal Forum, Uttarkashi, (for short 'District Forum') whereby the insurance company has been .... directed to pay a sum of Rs.

1,58,409/- along with interest at the rate of 12% per annum to the respondent Pradeep Kumar (for short 'complainant'). 2. The complainant is the owner of a heavy motor vehicle (open body truck) bearing registration no. UP-07 F-9095. The vehicle was registered on January 2, 1997 and was insured vide Policy No. 31/04825 effective for the period from ,l. November 8, 1997 to November7, 1998. The said vehicle • loaded with potatoes met with an accident on September 29, 1998, at Suman Kayari, near Nain Bagh, District Tehri (Garhwal). The vehicle fell down into khud 300 feet deep below the road. As a result of the accident, Murari Rawat, driver of the truck, died. The accident was reported at Police Station Patwar, Kharsot on September 30, 1998. 3. The complainant claimed the expenses incurred by him for repair of the truck from the insurance company and the interest paid by him to the State Bank of India, Uttarkashi as he obtained loan from that bank for repair of the truck. A legal .

liable to indemnify for new parts. 10. We are unable to accept the contentions of the learned counsel for the insurance company. That the vehicle that was insured with the insurance company met with an accident and • fell down into the khud 300 feet deep below the road is not in dispute. The survey reports of Vivek Arora as well as B. B. Garg, upon which reliance has been placed by the insurance company show that the vehicle got extensively damaged in this accident. Its Assembly, Bonnet, Cabin, Tool Box, Body, Chasis, Diesel Tank, Pressure Regulator, Pressure Pipe, Brake Booster, Steering Wheel, Head Lights, Main Leaf LHS Front. Front shockers, Steering Worm, Air Cleaner, Cross Member Rear '· 2nd, Propeller Shafts, Front Axle, Silencer, Engine Chamber etc. had sustained major damage. The approved surveyors in their reports have recorded their satisfaction th .. the complainant has been accepted by the consumer fora as it was duly supported by original vouchers, bills and receipts.

It has been held that the actual expenses incurred by the complainant comes to Rs. 1,39,438/- in getting the truck repaired apart from the expenses on account of haulage of truck and carrying it to the workshop. Taking into account actual expenses incurred and the interest that the complainant had to pay to the bank from which the loan was obtained for that amount, the District Forum awarded a sum of Rs. 1,58,409/- to the complainant and insurance company was directed to make that payment along with interest at the rate of 12% per annum. At the first blush, we had some doubt whether the interest paid PRADEEP KUMAR (RM. LODHA, J. ] by the complainant to the bank could have been awarded, but A on deeper scrutiny we found that no such ground has been set up in the appeal. As a matter of fact, this aspect was not even raised before the National Commission. 17. The appeal is devoid of any substance.

The insurance 8 company would have been well advised in not spending public money unnecessarily on avoidable and wholly frivolous litigation such as this. 18. The appeal has no merit and is liable to be dismissed and is dismissed with costs which we quantify at Rs. 15,000/-. C K. K. T. Appeal dismissed. - ... Y.