Date: 22-05-2015

Sri Debasis Bhattacharya

This appeal emanates out of the Order dated 30-05-2013, passed by the Ld. District Forum, Malda in C.C. No. 39/2011, by which the complaint case has been allowed in part on contest against the OPs.  Being aggrieved by and dissatisfied with the same, the Complainant thereof has preferred this appeal.

To narrate in short, case of the Complainant is that his insured car met with a road accident on 23-11-2010 and due intimation in this regard was given to the police station on 25-11-2010.  He also asked the OP No. 2 to inform the OP No. 3 forthwith, but after a considerable period of time, they issued a job slip on 27-12-2010 and also sent a claim to the OP No. 3 on the very same day.  The OP No. 3, however, took inordinate time to depute their Surveyor and inspected the car on 05-05-2011. Thereafter, the Complainant sent demand notice through his Advocate when his personal perseverance did not yield any positive reply.  However, the OP No. 3 has not settled his claim.  Hence, the case.

Case of the OP No. 1, in brief, is that the dispute arises over non-settlement of Complainant’s claim by the Insurance Company for which they are in no way liable.  In fact, the Complainant has also not prayed for any relief against them in his petition of complaint. 

Case of the OP No. 2, in short, is that the Complainant never informed them about the so called accident on or before 27-12-2010 and after that, they issued a job slip and also sent a claim to the OP No. 3 on that day.  So, there is no deficiency in service on their part.

The OP No. 3 took the defence that the Complainant is not entitled to any relief for specific violation of the terms and conditions of the insurance policy.  The claim has been reported to the Insurance Company after a delay of 42 days although as per condition no. 1 of the policy it was obligatory on the part of the Complainant to give immediate intimation in writing to them.  The delay occurred solely due to the Complainant and his preferred workshop.  They caused proper survey into the claim and duly intimated the Insured to give consent to initiate repairing job as aggravation of loss is not payable under the term and conditions of the policy, but the Complainant never gave the consent to the workshop for repairing the vehicle in spite of repeated requests of the OP No. 3.  They have no legal liability to pay any amount to the Complainant against the claim.

The Ld. District Forum allowed the case in favour of the Complainant directing the OP No. 3 to pay Rs. 2,00,000/- to the Complainant.

Point for determination is whether the impugned order warrants our intervention on account of any legal and/or factual lacunae

Decision with reasons

Ld. Advocate for the Appellant has contended that he has been most diligent in the matter of compliance of terms and conditions of the insurance policy.  Apart from intimating the police, he also asked the Respondent No. 2 to cause due intimation about the occurrence of accident to the Respondent No. 3 immediately.  However, the Respondent No. 2 has been most casual in its conduct and complied with his direction after nearly 34 days on 27-12-2010.  Thereafter, the Respondent No. 3 took inordinate time to depute their Surveyor, who conducted the survey only on 05-05-2011.  Due to such lackadaisical attitude on the part of the Respondents, the insured car has become totally irreparable.  He purchased the car after taking loan from the bank for which he has to pay EMI @ Rs. 15,000/-.  Most unfortunately, however, against an estimated repairing cost of 4,95,729/-, the Surveyor allowed only Rs. 2,00,000/- though the car was insured under total coverage for a sum insured of Rs. 4,69,211/-.  The Ld. District Forum did not appreciate that the value of the car was Rs. 6,06,101/-, but granted only Rs. 2,00,000/- as assessed by the Surveyor. As such, in the interest of justice, the impugned order be modified and direction be given to the Respondent No. 3, either to replace the damaged car with a new one of same model or to pay the value of the car being Rs. 6,06,101/- and compensation to the tune of Rs. 2,00,000/-.  In support of his contention, the Ld. Advocate has referred to eight decisions of the Hon’ble National Commission reported in IV (2011) CPJ 378 (NC), III (2013) CPJ 517 (NC), I (2013) CPJ 698 (NC), III (2011) CPJ 90 (NC), III (2014) CPJ 108 (NC), 2012 (2) CPR 279 (NC) and 2012 (2) CPR 290 (NC) and a decision of the Uttar Pradesh State Commission reported in III (2014) CPJ 71 (U.P.).   

Ld. Advocate for the Respondent No. 3, on the other hand, has submitted that the policy document is unequivocal in its content that intimation about occurrence of peril has to be communicated to the Insurer by the Insured immediately in writing.  In the instant case, however, the intimation was communicated to them after 42 days, which is a gross violation of expressed terms and conditions of the insurance policy.  Therefore, the Appellant is not entitled to any relief on this ground only.  In any case, despite belated intimation about the occurrence of peril in respect of the insured vehicle, they deputed a Surveyor, who after thoroughly inspecting the condition of the vehicle, assessed the loss at Rs. 2,00,000/- and accordingly, asked the Appellant to go ahead with necessary repairing job.  Even they too repeatedly requested the Appellant in this regard.  However, the Appellant has not complied with said directive for the reasons best known to him.  It is clear, therefore, that despite their wholehearted co-operation in the matter, only because of the adamant attitude of the Appellant, the present impasse has arisen.  So, they cannot be held responsible for the alleged deficiency in service in any manner and as such, the present appeal be dismissed in limine.

The Surveyor has acknowledged in his survey report that the claim was bona fide and that the damages were found to have been caused purely by accident and also that all the damages were consistent with the cause and nature of accident.  So, there can be no manner of doubt as to the fact that the claim lodged by the Appellant is a bona fide claim.  It has been held by the Hon’ble National Commission that “Bona fide insurance claim cannot be dismissed on hyper-technical ground’ [reported in 2012 (2) CPR 279 (NC)]. 

It is a fact that notwithstanding the claim of the Appellant as regards timely intimation to the Insurer, he has not placed on record any cogent documentary proof and even stopped short of specifying the exact date when he intimated such fact to the Respondent No. 2.  That apart, as per the policy condition no. 1, it was his responsibility and not that of the service centre to communicate due intimation to the Insurer forthwith in writing. Having said that, we must not forget that he gave due intimation to the police within two days of occurrence of the accident and although no cogent document is forthcoming to support his claim about giving prompt intimation to the Insurer through the Respondent No. 2, it has been tacitly admitted by the Appellant in their W.V. filed before the Ld. District Forum that the delay occurred solely due to the Complainant/Appellant and his preferred workshop, i.e., the Respondent No. 2. So, in our considered opinion, the Appellant does deserve benefit of doubt in the matter of delayed intimation to the Respondent No. 3, as alleged by them, after all, by giving delayed intimation to the Insurer, he has nothing to gain. 

Clause 9(1) of the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002 runs as follows:-

‘An insured or the claimant shall give notice to the insurer of any loss arising under contract of insurance at the earliest or within such extended time as may be allowed by the insurer. On receipt of such a communication, a general insurer shall respond immediately and give clear indication to the insured on the procedures that he should follow. In cases where a surveyor has to be appointed for assessing a loss/ claim, it shall be so done within 72 hours of the receipt of intimation from the insured’.

It is clear from the above that incorporation of the word ‘immediate’ in the terms and conditions of the policy has got no regulatory sanctity. It is always desirable of Insurance Company that they would evaluate every claim with an open mind, in a pragmatic manner and settle the same on merit instead of being hyper-technical so as to ensure that justice is not denied to a bona fide consumer. Also, in terms of the above referred clause, the Insurer was supposed to appoint an assessor within 72 hours of receipt of intimation, but in the instant case, the Respondent No. 3 appointed the Surveyor after 15 days in case we accept the assertion of the Respondent No. 3 that they got necessary intimation about the happening of accident after 42 days. However, if we are to believe the claim of the Respondent No. 2 that due intimation about the accident was communicated to the Respondent No. 3 on 27-12-2010, then that means the Surveyor was appointed after a gap of 23 days.  Whatever be the case, we find serious breach of regulatory directive on the part of the Respondent No. 3 in the matter of appointment of Surveyor. 

Be that as it may, since it is admitted by the Respondent No. 3 that they have given their consent to the Appellant to carry out the repairing of the damaged vehicle, it goes to show that on principle they have agreed to settle the claim of the Appellant.

On perusal of the Survey Report, we find that the Surveyor assessed the loss from three aspects – (a) Total Loss basis, (b) Net of Salvage Loss basis and (c) Cash Loss basis.  However, he recommended to settle the claim on cash loss basis for a sum of Rs. 2,00,000/- as against the estimated repairing cost of Rs. 4,95,729/-.  On thorough scrutiny of the said report, however, we observe several flaws as per details appended hereunder.

First, it is opined by the Surveyor that as per policy condition, the insured vehicle is deemed to be a Cash Loss.  On going through the terms and conditions of the policy document placed on record, we, however, do not find any such stipulation over there.  It is indeed baffling on what basis he derived at such conclusion.

Secondly, he has recommended 25% cut for Cash Loss basis settlement though nowhere in the said policy there is any such provision to make any deduction on this score.

Thirdly, as per policy conditions, the insured vehicle should be treated as Constructive Total Loss if aggregate cost of retrieval and/or repair of the vehicle exceeds 75% of the IDV.  In this regard it is noteworthy that from his calculation the Surveyor found that the repairing cost exceeded 75% of the IDV.  Then, why did he recommend settlement of claim on Cash Loss basis is not understood.

It is mentioned in the survey report that, ‘The workshop mechanics were observed to have carried out the repairs in the conventional manner, and accordingly stripped off the damaged and replaceable parts…..’  Also observed by the Surveyor that, ‘Finding the details in order, the undersigned assessor consented and the repair work was conducted accordingly.’  On the other hand, it is stated by the Appellant in paragraph no. 11 of his petition of complaint that the car was lying in a damaged conditions for the last six months.  In this regard, it is alleged by the Respondent No. 3 in paragraph no. 8(v) of the W.V. that they duly intimated the Insured to give consent to initiate the repairing job, but the Insured never gave the consent to the workshop for repairing the vehicle in spite of their repeated requests.  In view of such contradictory assertions of the parties concerned, no clear picture about the actual state of the vehicle is emerging.

The policy conditions stipulate that the Insured may authorize repair of the vehicle necessitated by damage provided the estimated cost of such repair, including replacements, if any, does not exceed Rs. 500/-.  Condition No. 2 of the policy further stipulates that, ‘No admission offer promise payment or indemnity shall be made or given by or on behalf of the Insured without the written consent of the Company….’.  We have, however, not come across any written consent advice/letter from the side of the Respondent No. 3 although it is claimed by them that they asked the Appellant to carry out necessary repairing job in this regard. There is no reason why an Insured would refrain from repairing his vehicle despite having necessary approval/nod from the side of the Insurer.  Further, Clause No. 3 of the policy stipulates that the Company may at its own option repair, reinstate or replace the vehicle or part thereof and/or its accessories or may pay the amount of the loss or damage.  Then question remains, why they did not repair/reinstate the vehicle on their own instead of asking the Appellant to give due consent to the Respondent No. 2 to carry out necessary repairing work.  The assertion of the Respondent No. 3 is not at all believable in absence of any cogent document in this regard.  Without any consent letter from the side of the Respondent No. 3, as per policy conditions, quite naturally, the Appellant was not in a position to ask the Respondent No. 2 to carry out necessary repairing work.  So, the Respondent No. 3 cannot evade their liability for the loss suffered by the Appellant.

The accident took place on 23-11-2010 and since then the car is lying unattended for the last five years.  As per terms and conditions of the policy, it was the responsibility of the Respondent No. 3 to give due consent in writing to the Appellant to carry out necessary repairing work, but instead of discharging their contractual obligation under the insurance policy, the Respondent No. 3 choose to sit tight over the claim of the Appellant.  It is quite obvious that because of non-repair/non-use of the said vehicle for such a long period of time, condition of the car has deteriorated considerably and it is but natural that the same is not no longer in a road-worthy condition for which the Respondent No. 3 cannot evade their responsibility.  So, in our considered opinion, the Appellant is entitled to the value assessed by the Surveyor on Total Loss basis, i.e., Rs. 4,69,211/-.

In the result, the appeal succeeds in part.

Hence,

ORDERED

That the appeal be and the same is allowed in part on contest against the Respondent No. 3 and dismissed ex parte against other Respondents.  Respondent No. 3 is directed to pay Rs. 4,69,211/- to the Appellant within 40 days from the date of order, i.d., they shall be liable to pay interest @ 9% p.a. over Rs. 4,69,211/-  from this day till full and final payment is made.  The impugned order is modified accordingly.