New India Assurance
Co. Ltd. Vs. Pradeep Kumar [2009] INSC 713 (9 April 2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3253 OF 2002 New India
Assurance Company Limited..Appellant Versus Pradeep Kumar ..Respondent
JUDGEMENT R.M. LODHA, J.
1.
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 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 November
8, 1997 to November 7, 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
notice is also said to have been sent by the complainant to the insurance
company but of no avail. The complainant then approached the District Forum
alleging deficiency in service by the insurance company and claimed an amount
of Rs.1,58,409/- along with interest at rate of 18% per annum.
4.
The
insurance company in its reply to the complaint, stated that after receipt of
intimation regarding the accident, vehicle was surveyed by Surveyor, Manoj
Kumar Aggarwal and was taken to Himalaya Motor Workshop, Dehradun by the owner.
The vehicle was again surveyed by approved surveyor Vivek Arora as the
complainant had complained that earlier Surveyor, Manoj Kumar Aggarwal, had not
made thorough investigation. The survey was then conducted by Vivek Arora. As
the insurance company was not satisfied with the survey report submitted by
Vivek Arora, it got the vehicle surveyed again by another approved surveyor,
B.B. Garg. B.B. Garg had estimated the damages to the vehicle to the extent of
Rs.63,771/-. The insurance company, then, approached the complainant for
payment of this amount but he refused to accept the same.
5.
It
appears that before the District Forum, the complainant had filed the
affidavits of the persons from whom the spare parts were purchased, repair work
was got done and charges paid to them. The complainant also submitted the
vouchers and bills of various spare parts and the payment made towards labour
charges. On the other hand, on behalf of the insurance company, affidavit of
one Pradeep Ghai was filed along with survey reports of Vivek Arora and B.B.
Garg.
6.
The
District Forum, upon consideration of the matter, held that there was
deficiency in service on the part of the insurance company and ordered them to
pay a sum of Rs.1,58,409/- along with interest at the rate of 12% per annum
with cost of Rs.1,000/-. The District Forum also gave an option to the insurance
company that it may pay the insured amount of Rs.6 lakhs to the complainant
after transferring the vehicle in its name, if it so desired.
7.
The
insurance company carried the order of the District Forum in appeal to the
State Commission but without any success. The concurrent orders of the consumer
fora were challenged by the insurance company, as noticed above, to the
National Commission but there also they failed.
8.
We
heard Mr. P.K. Seth, learned counsel for the insurance company and Mr. N.S.
Jain, learned counsel for the complainant.
9.
Mr.
P.K. Seth, learned counsel for the insurance company heavily relied upon
Section 64-UM(2) of The Insurance Act, 1938 (for short, `the Act 1938') and
submitted that the loss assessed by the approved surveyors appointed in view of
the provisions of Section 64-UM was binding, more so, in the absence of any
evidence on record to establish that the loss assessed by the approved
surveyors was not correct and justified. He would submit that as per the scheme
of the insurance, the loss caused to the vehicle has to be first assessed by
approved surveyor and only thereafter the vehicle could have been repaired by
the owner. He submitted that the complainant failed to make out any case as to
why the survey reports of the Approved Surveyors Vivek Arora and B.B. Garg
should be rejected. The learned counsel for the insurance company would also
urge that the insurance company was not 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 that the
aforementioned damages to the said vehicle would have occurred in that mishap.
Vivek Arora 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. Curiously,
the spot survey report conducted by Manoj Kumar Aggarwal has been withheld by the
insurance company. At Item No.11, under the Head "summary of
assessment" in the survey report by Vivek Arora, original estimate is
recorded thus:
"Original
Estimate Total Labour Charges Rs.1,30,440/- Total cost of spare parts
Rs.0,36,090/- ------------------------ Total 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. The vehicle was removed by the
complainant to the workshop only after the survey was conducted by Manoj Kumar
Aggarwal (approved surveyor nominated by the insurance company for spot
survey).
11.
However,
Vivek Arora in his survey report made the following assessment for the reasons
best known to him: "Total Labour Charges: Rs.52,000.00 Total cost of spare
parts Rs.11,874.37 Less:Depreciation No.10% & 50% Rs. 3,669.58 Excess if
any - Salvage value (Appx.) Rs. 1,000.00 Appx. Net Loss Rs.59,304.82"
12.
The
insurance company got the survey done again through B.B. Garg (Approved
Surveyor) who made an additional assessment of Rs.3,512.72 to the assessment
made by Vivek Arora.
13.
On
the face of the vouchers and bills for parts as well as labour charges
submitted by the complainant, all the three consumer fora accepted the
complainant's claim and did not accept these survey reports. Pertinently, the
vehicle was not even 2 year old at the time of accident.
14.
Section
64-UM(2) of the Act 1938 reads:
"No claim in
respect of a loss which has occurred in India and requiring to be paid or
settled in India equal to or exceeding twenty thousand rupees in value on any
policy of insurance, arising or intimated to an insurer at any time after the
expiry of a period of one year from the commencement of the Insurance
(Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be
admitted for payment or settled by the insurer unless he has obtained a report,
on the loss that has occurred, from a person who holds a licence issued under
this section to act as a surveyor or loss assessor (hereafter referred to as
"approved surveyor or loss assessor"):
Provided that nothing
in this sub-section shall be deemed to take away or abridge the right of the
insurer to pay or settle any claim at any amount different from the amount
assessed by the approved surveyor or loss assessor."
15.
The
object of the aforesaid provision 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). In other words
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.
16.
So
far as the case in hand is concerned, 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. At the first blush, we had some doubt whether the interest paid
by the complainant to the bank could have been awarded, but 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 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/-.
......................
J
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