F.A.No.110/2010  to 112/2010 against C.C.Nos.79/2008, 82/2008 & 83/2008 District Forum, NELLORE

Between:

1. National Insurance Co. Ltd., rep. by the Regional

    Manager, Regional Office, Whites Road,

    Chennai-600 006, Tamilnadu State.

2. National Insurance Co. Ltd., rep. by its Senior

    Divisional Manager, Divisional Office at 10,

    No.37, Pantheon Road, Egmore, Chennai-600 008

    Tamilnadu State.

3. M/s.National Insurance Co. Ltd., rep. by its

    Senior Branch Manager, Divisional Office No.10,

    No.37, Pantheon Road, Egmore, Chennai-600 008

    Tamilnadu State.

4. M/s.National Insurnace Co. Ltd., rep. by its

    Branch Manager, Branch office, near Sunday,

    Market Gandhinagar, Nellore 524 001 (A.P.)

    Represented by its local office and Deputy

    Manager (law)                                                                 Appellants/Opp.parties

                                                                                         in FAs.110/10 to 112/10

And

1. M/s.S.K.L.S.Lorry Service, rep. by its Sole

    Proprietor, K.Damodaran, S/o.Krishna

    Swaminaidu, Hindu, Businessman, aged

    About 52 years, Flat No.308, R.K.Towers,

    Dargamitta, Nellore, A.P.                                                   Respondent/Complainant

                                                                                         in FAs.110/10 & 111/10

2. D.Muthu Kumar S/o.Damodaran,

    Aged about 30 years, Flat No.308,

    R.K.Towers, Dargamitta, Nellore, A.P.                                   Respondent/Complainant

                                                                                                in FAs.112/10

Counsel for the Appellants                   : Mr.Nisaruddin Ahmed Jeddy

(common in all appeals)

Counsel for the Respondents              :Mr.P.Sridhar Reddy.

(common in all appeals)

QUORUM: THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT

AND

SMT.M.SHREESHA, MEMBER.

MONDAY, THE THIRTIETH DAY OF JANUARY,

TWO THOUSAND TWELVE

( Typed to the dictation of Smt.M.Shreesha Hon’ble Member )
                                                          *****

These appeals are disposed of by a common order, since the facts are similar in all these appeals.

F.A.No.110/2010:

Aggrieved by the order in C.C.No.79/2008 on the file of District Forum, Nellore, the opposite parties preferred this appeal. 

The brief facts as set out in the complaint are that the complainant insured his lorry with opposite party No.3 under policy bearing No.501902/31/04/6300017 valid from 02-4-2005 to 01-4-2006.  While so the lorry met with an accident on 22-12-2005 and the complainant intimated the same to opposite party No.3 and submitted the claim immediately.  Opposite party No.3 got the vehicle surveyed at the accident spot and also conducted final survey at workshop and the surveyor submitted his report to opposite party No.3.  The complainant further submitted relevant papers including bills claiming Rs.1,40,345/- to opposite party No.3 and made several requests to settle the claim and addressed a letter dated 04-12-2007 to the Grievance cell and as there was no response he addressed another letter dated 11-2-2008 and thereafter he got issued a legal notice dated 04-3-2008 to opposite parties 1 to 3 but they did not settle the claim.  Hence the complaint for a direction to the opposite parties to pay Rs.1,40,345/- with interest @ 24% p.a. from the date of claim together with compensation of Rs.1,00,000/-.

Opposite party No.4 filed counter which was adopted by opposite parties 1 to 3 denying the allegations made in the complaint and also deficiency in service on their part.  Opposite party No.4 submitted that they gave a reply dated 5-6-2008 to the notices issued by the complainant dated 4-3-2008 is self explanatory where the reasons for delay in settlement are explained.  In the said reply, opposite party No.4 sent an offer to settle the claim at net liability on repair basis as established by bills and receipts subject to a condition that the offer so made hereby would be open to the complainant for two weeks from the date of receipt of that reply and if no acceptance of such offer for settlement by returning the enclosed blank vouchers duly stamped and signed by the complainant within time, if not the offer would automatically stand withdrawn if there was no action from the complainant.  Opposite party No.4 submitted that the delay in settlement of the claim was due to delay in receipt of  the bills from the complainant.

Opposite party No.4 submitted that soon after the intimation of accident, a surveyor, Mr.N.Vinay Kumar, was appointed to verify the vehicle on the spot and accordingly he visited  the accident spot and filed his report dated 28-12-2005 and then the final surveyor was appointed and they too verified and assessed the loss and filed their report dated 30.1.2006 assessing the loss at Rs.86,090/- as against the estimate of Rs.3,54,420/- and final re-inspection was done by Sri P.Saravanan who filed his report dated 8-2-2006 and at last Golden Eye detectives were appointed to verify the genuineness of the claim and accordingly they have investigated the case by visiting Autonagar and personally verified different people and different shops and filed their reports dated 4-6-2008 and submitted that one Janaki Ramaiah, an insurance consultant, who was running office at Autonagar, Vijayawada from whom the complainants obtained bills are receipts has been playing a key roll in preparation of estimate of repairs, bills and receipts with ulterior motives and making inflated insurance claims.  Opposite party No.4 submitted that the submission of survey report was delayed mainly due to non submission of original records of the vehicle such as R.C. permit Trip sheet and Driving license as pointed out by the surveyor.  No FIR was lodged in respect of the accident though the estimation of the complainant is for an amount of Rs.3,54,420/- and has not produced proper bills and receipts  and almost all the bills no carbon copies are available with the concerned automobiles. The R.K.Tinkering works from which a cash receipt dated ‘nil’ typed on white sheet for Rs.29,000/- towards tinkering charges  and also the bill from M/s Sri Mahavishnu body building works for Rs.37,000/- towards carpentry material and labour charges was produced by the complainant throw doubts over the bills.  Opposite party no.4 submitted that it is the complainant that is responsible for non settlement of the claims as he submitted exaggerated bills and submitted that there is no deficiency in service and prayed for dismissal of the complaint with costs.

Based on the evidence adduced i.e. Exs.A1 to A8 and B1 to B7 and the pleadings put forward, the District Forum allowed the complaint in part directing the opposite parties to pay to the complainant Rs.1,40,345/- with interest at 9% p.a. from the date of filing of the complaint i.e. from 26-4-2008 together with costs of Rs.2,000/-.

Aggrieved by the said order, opposite parties preferred this appeal.

The facts not in dispute are that the complainant had taken three policies for his lorries with the opposite parties and the said lorries met with an accident on 22-12-2005, 01-2-2006 and 19-9-2005 respectively.  This complaint is with respect to the lorry that met with an accident on 22-12-2005 and the same was intimated to the opposite parties and a claim was made vide Ex.A2 dated 30-12-2005 for an amount of Rs.1,40,345/-. It is the case of the complainant that he submitted all the relevant papers and bills to the opposite parties but the opposite parties have not chosen to settle the claim.  Thereafter the complainant got issued a letter dated 04-12-2006 to the opposite parties furnishing all the details and requesting for early settlement of the claim, even then there was no response.  Then he got issued a legal notice vide Ex.A5 dated 4-3-2008 requesting the opposite parties to settle the claim but there was no response. 

The appellant also filed written arguments.  It is the case of the appellants/opposite parties that as per Section 2 of the policy conditions, they shall not be liable to make any payment in respect of consequential loss, depreciation, wear and tear, mechanical or electrical break down, failure or breakages nor for damage caused by over loading or strain of the insured vehicle nor for loss of or damage to accessories by burglary, house breaking or theft unless such insured vehicle is stolen at the same time b) damages to tyres and tubes unless the vehicle  insured is damaged at the same time in which case the liability of company shall be limited to 50% of the cost of replacement.  The learned counsel for the  appellants further contended that as per the age of the vehicle, the percentage of depreciation should also be considered, which the District Forum did not consider.  The age of the vehicle and percentage of depreciation as per the policy is as follows:

AGE OF VEHICLE                                    % OF DEPRECIATION

Not exceeding 6 months                                               Nil

Exceeding 6 months but not exceeding 1 year                 5%

Exceeding 1 year but not exceeding 2 years                    10%

Exceeding 2 years but not exceeding 3 years                   15%

Exceeding 3 years but not exceeding 4 years                   25%

Exceeding 4 years but not exceeding 5 years                   35%

Exceeding 5 years but not exceeding 10 years                 40%

Exceeding 10 years                                                      50%

The learned counsel further contended that as per the final survey report, the net loss was assessed at Rs.86,090/- and that the vehicle is more than four years old and without taking this into consideration, the District Forum ordered payment of the entire claim amount of Rs.1,40,345/-.  We also observe from the record that the first survey was done by Sri N.Vinay Kumar evidenced under Ex.B1 dated 28-12-2005 and the second survey as evidenced under Ex.B2 dated 30-1-2006 by Shanmugam Associates. A re-inspection was done vide Ex.B3 dated 8-2-2006 by one Sri P.Saravanan was also done vide Ex.B3 dated 8-2-2006.  Thereafter another confidential report of Golden Eye Detectives dated 4-6-2008 was also filed by the opposite parties.  It is not in dispute that the accident of the said vehicle took place on 22-12-2005 and Exs.B1 to B4 evidence that the opposite parties have conducted one survey after another along with inspection and also re-inspection from the year 2005 till 2008 more than  3 ½ years after the date of accident.  The learned counsel for the appellants has further contended that as per investigation reports, the cash bill No.78 dated 23-5-2006 for Rs.1900 is fake one and was taken from a petty shop, another bill for Rs.1600/-, bill No.4 dated 26-5-2006 was taken from one Mr.Prabhakar Rao,  of M/s.Venkata Jayalakshmi Glass works, who did not co-operate.  M/s.Pal Auto Stores from whom cash bill bearing No.23 did not show the office copy of the bill.  M/s.R.K.Tinkering Works gave cash receipt for Rs.29,000/- dated nil and M/s.Sri Mahavishnu Body Building Works from which a cash receipt dated nil on white paper for Rs.37,000/- towards carpentarymaterials and labour charges was produced and the investigators found that no such concerns were in the given address and M/s.Sri Mahavishnu Body Building Works was fond to be shed belong to one Mr.Nagaraju, M/s.Sri Saradhi Mechanical works from whom cash receipt dated nil typed on white sheet for Rs.25,000/- towards mechanical/blacksmith/glasses/wiring/foundry/tinkering was produced by the complainant, who could not produce the office copy of such receipt.  The learned counsel for the  appellant submitted that the investigators have expressed that one Mr.Janaki Ramaiah, an insurance consultant, who was running an office in Autonagar, Vijayawada-7 in which all the concerns from whom bills and receipts are shown to be have been obtained by the respondent has been playing a key role in preparation of estimates of receipts

We find this contention of the appellants/opposite parties unsustainable as the accident took place in the year 2005 and to expect small mechanic workshops to furnish office copies after almost three years would be difficult.  Though, we find the repudiation by the opposite parties unjustified, we are of the considered view that depreciation at 10% can be considered to meet the ends of justice.

It is also pertinent to note that the first surveyor’s report, Ex.B1 is dated 28-12-2005 and the second surveyor report by Ex.B2 is dated 30-1-2006 and he assessed an amount of 86,090/- after deduction of depreciation.  Ex.B3 is dated 0-2-2006 and again an insurance surveyor had re-inspected it and gave a report that all the spare parts were replaced as per the final report of Mr.N.Shanmugan Associates.  Ex.B4 is the confidential report of Golden Eye Detectives, dated 04-6-2008 stating that the claim of the complainant cannot be admitted and settled on account of non availability of bills.  This contention of the appellants/opposite parties is unsustainable since this report is dated 04-6-2008 i.e. almost 3 ½ years after the date of accident and it is most unlikely to verify the bills with the respective sellers and it is difficult that these spare part sellers would keep a copy or record of all the bills for the parts sold by them 3 ½ years before.   The learned counsel for the  appellants contended that the depreciation should be deducted as per the schedule of depreciation given in the Commercial Vehicles Package Policy (Ex.B7).  This schedule of depreciation is with respect to fixing of the IDV. (insured declared value, ‘IDV’ for short of the vehicle which in the instant case is Rs.8,00,000/-.  The IDV., is decided by the opposite parties before the issuance of the policy basing on the age of the vehicle.  Therefore, the point for consideration here is whether the depreciation needs to be deducted on the spare parts.  We observe from the surveyor’s report, Ex.B2, that 10% depreciation has been deducted on replacement of parts. 

We rely on the decision of the NEW INDIA ASSURANCE COMPANY v. SHREE SHYAM COTSPIN LTD., reported in I (2009) CPJ 110 (NC) held that insurance company cannot appoint another surveyor without valid reasons.

‘We also like to observe that under Section 64 UM of the Insurance

Act, if the insurance company is not satisfied with the assessment of

loss made by an approved surveyor then they can request the IRDA for appointment of another surveyor whose report would have processed by the ‘Authority’ and then direction was to be given by them to insurer to pay a given amount.  This was not done at all”.

From the aforementioned Section, it is very clear that appointment of one surveyor after another without giving valid reasons and that too not settling the claim for a period of 3 ½ years constitutes deficiency in services.  We rely on the judgement of Delay in settling the claim amounts to deficiency of service rendering the insurance company to pay compensation for the same as held in 1999 NCJ (NC) 3 42.  To meet the ends of justice and keeping the aforementioned facts in view and also as the appellants could not establish that the bills were fabricated by way of documentary evidence, we are of the considered view that the complainant is entitled to the claim amount of Rs.1,40,345/- less 10% depreciation while we see no substantial grounds  to interfere with the rest of the order of the District Forum.

In the result this appeal is allowed in part and the order of the District Forum is modified by deducting 10% towards depreciation from the awarded amount while confirming the rest of the order of the District Forum i.e. interest and costs.  Time for compliance four weeks.

F.A.Nos.111/2010 & 112/2010:

        For the same reasons as stated in F.A.No.110/2010, these appeal are also allowed in part and the order of the District Forum is modified by deducting 10% towards depreciation from the awarded amount while confirming the rest of the order of the District Forum i.e. interest.  Time for compliance four weeks.

                                                                        Sd/-PRESIDENT.

                                                                        Sd/-MEMBER.

Jm                                                                            Dt.30-1-2012