BEFORE THE  DIST. CONSUMERS DISPUTES REDRESSAL FORUM;  DHARWAD.

DATE: 11^th December 2015        

PRESENT:

1) Shri B.H.Shreeharsha       : President

2) Smt.M.Vijayalaxmi             : Member 

Complaint No.:10/2015    

Complainant/s:       The Managing Director, NWKRTC Central Office, Gokul Road, Hubli Division, Hubli, represented by Sr.Divisional Controller Sri.A.S.R.Namazi.

        (By Sri.L.D.Kulkarni, Adv.)

v/s

Respondent/s:         The Divisional Manager, The Oriental Insurance Co. Ltd., Divisional Office, Enkay Complex, II Floor, Keshwapur, Hubli 580023.

        (By Sri.M.G.Gadgoli, Adv.)

O R D E R

By: Shri. B.H.Shreeharsha : President.

1.     The complainant has filed this complaint claiming for a direction to the respondents to settle OD claim of Rs.19,86,850/- towards the value of the vehicle insured by the complainant, demurrage charges and  mental agony along with interest @18% P.A. by holding deficiency in service on the part of respondent for settling the case on cash loss basis and to grant such other reliefs.

Brief facts of the case are as under:

2.     The case of the complainant is that, the complainant is a corporation constituted under Govt. of Karnataka undertaking the business of transportation of passengers. While respondent is a public limited company of a government of India undertaking registered under Indian Companies Act, 1966 and carrying on business in general insurance. The complainant being the RC owner of passenger carrying bus bearing registration no.KA 01 F-7742 of Volvo India Pvt. India make and was purchased in the month of September 2004 & the same was insured with the respondent under policy 471100/31/2012/6063 covering the risk for the period 26.11.2012 to 25.11.2013 for IDV value of Rs.15,11,850/- covering own damages and 3^rd party liability risks by paying premium of Rs.49,643/-. From the inception of the purchase the said vehicle was insured with the respondent and as the complainant did not claimed any claims under the policy and it was earning 20% bonus. On 18.12.2012 while the said bus was plying from Hyderabad to Hubli at about 6.30 AM near Mundaragi on national highway the driver of the bus lost control over the vehicle and dashed to the left side of the parked trucks bearing no. AP 02 TA 3999 and AP 02 X 7878 & in the said accident the bus was completely damaged and become  unfit to run on the road. The accident in question was informed to the respondent immediately both by orally and through letter dt.18.12.2012. In response the respondent informed the complainant to lift the vehicle from the spot and to shift to service for repair & accordingly shifted to service station for repair to Volvo Buses Latangi Automobiles Pvt. Ltd., Basavanapur, Bommadevanahalli village Begur Hobli, Bengaluru. Thereafter the respondents have informed to submit claim form. Accordingly estimation for Rs.24,34,108/- was prepared and claim was filed along with all related vehicular documents with estimate and police records. The respondent surveyor visited the service station, surveyed and finally submitted the report to the respondent. The surveyor did not furnish the copy of the survey report. No response from the respondent with regard to the claim. Hence, on different dates the complainant wrote 23 letters repeatedly requesting the respondent to settle the claim. For all the correspondence letters through letter dt.19.11.2013 intimated the complainant stating that the claim was under process and on receipt of the approval the claim will be settled & till then kindly to bear.  Except that letter no progress with regard to the settlement of the claim. Again complainant on different dates wrote 2 letters to expedite the process and to settle the claim on total loss basis in earliest. On 20.01.2014 the respondent replied responding the same of its previous letter 19.11.2013. Since the respondent did not settled the claim the complainant compelled to write 7 more letters on different dates. On 07.11.2014 the respondent informed the complainant that claim was approved for Rs.5 lakhs on the basis of cash loss instead of estimate of Rs.24,38,108/-. Hence, the complainant signed the discharge voucher sent for Rs.5 lakhs under protest and sent to the respondent along with letter dt.04.08.2014. Since the respondent did not release the amount as assured complainant got issued legal notice on 09.09.2014. For that the respondent sent reply question of accepting the amount under protest does not arise as the wordings of the settlement itself was voucher was towards full and final settlement. Before settling the claim under cash loss the respondent never met or discussed with the complainant. Complainant never agreed for settlement of claim under cash loss basis. The complainant kept the damaged vehicle idle as it is with a view to surrender the same to the respondent and to get atleast sum assured under the policy as per the terms and conditions of policy on the bass of total loss. Hence, at present complainant is claiming demurrage charges from the date of accident to the date of payment. At any stretch complainant not agreed for settlement of claim on cash loss basis & at any time the respondent did not approached the complainant to discuss with regard to cash loss basis settlement. The respondent is bound to settle the claim on total loss on the basis of surveyor report submitted by the IRDA recommended license holder. Non settlement of the claim amounts to deficiency in service apart from OD claim the complainant entitled for demurrage charges and other incidental charges. Hence, the complainant filed the instant complaint praying for the relief as sought.

3.     In response to the notice issued from this Forum the respondents appeared and filed the written version in detail denying and disputing the complaint averments. Further the respondents taken contention that the very complaint is false, frivolous vexatious in all its material particulars as such not maintainable either in law or on facts & prays for dismissal of the complaint on those grounds. Further the respondent disputes the complaint on the grounds of complainant is a consumer, complaint being a consumer complaint, deficiency in service, limitation point, purview of the jurisdiction, cause of action, nature of the trial and prays for dismissal of the complaint. Further the respondent taken contention that since the respondent had settled the claim on cash loss basis there does not arise deficiency in service as alleged. Among such other admissions and denials the respondent also disputes the maintainability of the complaint on the grounds non joinder of necessary parties, non liability of the claim under the policy & also taken contention that since the complainant is carrying transport business and owning fleet of buses the transaction is a commercial one and hence the present complaint ousts the jurisdiction of the Forum. Further also the respondent taken contention that the complainant suppressing the fact the vehicle in question being an old ought to be treated scrap instead the same was insured. The respondent in overall denied all the complaint averments except which are specifically admitted and puts the complainant to strict proof of the same and prays for dismissal of the complaint with cost.

4.     On the said pleadings the following points have arisen for consideration:

1. Whether complainant has proved that there was deficiency in service on the part of respondents ?
2. Whether complainant is entitled to the relief as claimed ?
3. To what relief the complainant is entitled ?

Both have admits sworn to evidence affidavit and also adduced additional witnesses evidences on their respective sides, relied on documents. Apart from argument complainant filed notes of argument and relied on citations.  Heard. Perused the records.

Finding on points is as under.

1.  Affirmatively
2.  Accordingly  
3.  As per order

Reasons

Points 1 and 2

 5.    On going through the pleadings & evidence coupled with documents of both the parties it is evident that there is no dispute with regard to the fact,  the complainant’s vehicle in question is insured with the respondent covering the risk of OD claim and 3^rd party liability subject to terms and conditions and had valid coverage to the date of accident.

6.     Now the question to be determined is, whether the respondent has committed deficiency in service, if so, for what relief the complainant is entitled.

7.     Since the facts have been revealed in detail which requires no repetition.

8.     The first and foremost contention taken by the respondent is that the present complaint is barred by time limitation alleging the accident in question 18.12.2012 and filing of the present complaint on 09.01.2015. This contention of the respondent is not proper. Though the accident had took place on 18.12.2012 as contended by the complainant the same was informed to the respondent claim was submitted by the complainant to the respondent on 23.01.2011 as per Ex.R1. The letter of discharge voucher Ex.C44 was issued on 07.07.2014.  In reply the complainant sent discharge voucher to the respondent under protest Ex.C45 dt.04.08.2014. The present complaint is filed on 09.01.2015 before this Forum. In between sending of discharge voucher and return of discharge voucher under protest from the date of accident till filing of the complaint the complainant repeatedly approaching the respondent by issuing repeated reminders letters Ex.C-11 to Ex. C-43. By perusal of the document the respondent settled the disputed claim on 04.08.2014 and it was returned with protest letter. Hence, for reckoning limitation & cause of action is only on 04.08.2014. So, the complainant filed the instant complaint within 5 months 5 days from the date of cause of action. Hence, the complaint is within limitation and is maintainable on this point.

9.     The respondent raised another main dispute taking contention that the present complaint is not maintainable as the transaction involved in question is commercial one contending that complainant is a corporate body and carrying on business of public passenger transportation as such complaint is not maintainable. This contention and proposition on this defense by the respondent is not proper and sustainable for the reason as for the claim is concerned to OD on the basis of insurance policy, the insurance claim does not comes within the purview of exclusion clause of commercial business or claim as concerned is not a claim under CP Act. Hence, the present complaint is maintainable on this count for the reason the claim is not a commercial one and not falls under purview of commercial.  

10.   The respondent also taken one more contention that the present complaint as brought is not maintainable as it oust the jurisdiction contending that the accident in question arosed at Mundaragi of Gadag district and it will comes within purview of jurisdiction of Gadag Forum and not at before this Forum. This contention of the respondent is also not sustainable for the reason the present claim of the complainant is that for non settlement of the claim by the respondent is a deficiency in service. The complainant taken the policy from the respondent office situated at Hubli within the jurisdiction of this Forum. Hence, the present complaint filed before this Forum is proper jurisdiction and this Forum has jurisdiction to adjudicate the same.

11.   The respondent also oppose the complaint filed by the complainant contending and relying on document Ex.R4 circular of the complainant corporation contending that as per the said circular the vehicle belongs to the complainant corporation could be rund upto the limit of 13 lakhs kilometers. After expiry of the said kilometers rund those vehicles will be considered and treated scrap. Whereas the vehicle in question rund 1280590 kilometers as per Ex.R8 survey report of the respondent. In the said circular it is also found in the cases of vehicles manufactured by reputed companies viz., Volvo, Volvo multi axle, Mercedes benz and Mercedes benz multi axle vehicle is concerned salvage is limited to 10 years or to an extent of 10 lakh kilometers and could also be rund by replacing the parts as per the terms and conditions of the said circular. The circular Ex.R4 is applicable to the complainant’s corporation and is the internal matter. The complainant has produced Ex.C12 fitness certificate issued by MV authority. The FC is issued till 09.12.2013. The accident in question is on 18.12.2012. Insurance coverage under the policy is for the period 26.11.2012 to 25.11.2013. Vehicle was insured on 26.11.2012 for IDV value of Rs.15,11,850/- a premium of Rs.49,643/- is paid. Though the business of contract of insurance is good faith based on the principle of uberimmafiede and the parties to the contract have to act diligently and suppression if any amounts to  breach of terms and conditions then the contract becomes void abinitio. Whereas in the instant case there is no question of suppression of material facts. It is the bounden duty of the insurer while insuring the vehicle to inspect the FC and to assess the value of the insurable vehicle to the date of proposal and then to issue the policy.  Under those circumstances there does not arise question of suppression of the facts by the insured at the time of proposal is concerned to insurance risk of the vehicle in question. That apart in the present situation though the vehicle has rund for several lakhs kilometers the vehicle in question having valid fitness certificate issued by the proper authority of the MV Act. So also based on the IDV Value the respondent has received the premium of Rs.49643/- and confirmed the contract. As such, being accepting the premium agreeing to the declared IDV value and conditions of the vehicle, at the time of settlement of the claim the insurer shall not take unsustainable defence and repudiate the claim. So also cannot take contradictional defence. Hence, at this juncture of settlement the respondent cannot contend since the vehicle has been rund more than 1200000 kms., as per Ex.R4 contending that value of bus comes to Nil or zero. However in the instant case the respondent has settled the claim to an extent of Rs.5 lakhs on cash loss basis and the same was protested and refused by the complainant.

12.   Now the crux to be determined at present among 3 types of settlement viz., repair basis, total loss basis, cash loss basis as per Ex.C7 policy for which type of claim settlement the complainant is entitled and settlement of the claim by the respondent under cash loss basis to an amount of Rs.5 lakhs amounts to a deficiency in service. So for what type of claim the complainant is entitled.

Loss settlement    :-              As per Motor Insurance manual para.41 Item 7 major claims may be dealt with in one of the following ways.

1. Total loss settlement :- taking over salvage of the vehicle from the insured.
2. Cash loss settlement:- leaving the salvage of the vehicle to the insured.
3. Repair basis :-

13.   As discussed supra the present vehicle in question is insured with the respondent under policy Ex.C7. Wherein the said policy nowhere it is stated what type of method of settlement among the 3 methods to be adopted is not mentioned. Wherein commercial vehicle package policy schedule under the head the schedule of depreciation for fixing IDV of the vehicle it is specifically mentioned, IDV will be treated as the market value throughout the policy period without any further depreciation for the purpose of total loss (TL)/constructive total loss (CTL) claims. It is also mentioned the insured vehicle will be treated as a CTL if the aggregate cost of the retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.

14.   If this proposition is taken into consideration in the present case the vehicle IDV value is Rs.15,11,850/-. The complainant estimates and claims repair charges amounting to   Rs.24,38,108/-. The respondent’s IRDA license holder surveyor submits motor survey report Ex.R8 liability on total loss basis Rs.10,10,350/-. Approximate net loss Rs.11,70,925-21. While complainant’s IRDA license holder surveyor produced survey report Ex.C48 showing the net liability of the insurer Rs.11,40,781/-. Both surveyors have admits sworn to evidence affidavit and have produced the survey reports and who have been examined as witness PW-2 & RW-2 respectively and both have been tendered for cross examination.

15.   The PW-2 is the B.E. Automobile graduate engineer and possessing IRDA license. While RW-2 is Diploma holder and possessing IRDA license. At the time of evidence as well as at the time of argument both counsels disputes with regard to eligibility of PW-2 to conduct survey and to report of value more than Rs.1 lakh submitting that the PW-2 is C-category license holder. For the objections raised by the respondent counsel with regard to the eligibility of PW-2 report PW-2 replies, the said restrictions have been removed by the IRDA and there is no such limitation & extension of the value in between the categories A, B, C license holders. For further objections of respondent to PW-2, could such document be produced, for that the PW2 replied, could be and is also available in the net. But not produced. Even the respondent also not produced in rebuttal to the evidence of PW2. Under those circumstances it is taken no such restriction and PW-2 can also assess the estimation over and above Rs.1 lakh. RW-2 in his cross examination by the complainant specifically admits, the respondent shall have settled the claim in accordance with the terms and conditions of Ex.C7 & as per Ex.C7 there is liability of the respondent to settle the claim. Further RW 2 also depose the IDV value declared Rs.15,11,850/- is correct. Further also admits the Ex.C7 policy is depreciation policy i.e. based on salvage of the parts. Further the RW-2 admits he has shown Rs.20,000/- as salvage and approximate net loss Rs.11,70,925-21 is based on repair basis settlement. Further RW-2 admits while settling the claim under cash loss basis or repair basis the insurer shall consult with the insured and to discuss and then have to arrive for settlement & depose. In the present case also there was discussion, accordingly settlement was made, but RW2 did not produced any document pertaining to meetings and discussion made in between insured and insurer. Further the RW-2 admits while estimating the wreck value quotation was called and 5 different participants participated accordingly wreck value of Rs.5 lakhs was fixed, but no such quotation is placed on record. During the period of discussion in between the insured and insurer when it is arrived for total loss basis, the insured told recently the engine and gear box were changed, after that the vehicle has not been rund and reached minimum kilometers of 2 lakhs. Hence, they are not returning engine, gear box, suspension gear and agrees to deliver other parts. So, total loss could not be considered then only the respondents have to settle the claim on cash loss basis. Further the RW2 admits Ex.R11 discharge voucher do not have details with regard to settlement on cash loss basis.

16.   So, the evidence PW2 and RW2 were analyzed the assessment of both surveyors are quite similar and the amount will not much difference. The learned counsel for complainant relied upon Ex.C7 policy & commercial vehicle package policy schedule & insist their claim will comes within the purview of the said schedule item, depreciation for fixing IDV value of the vehicle and to consider their claim as CTL. In support of this contention the learned counsel for complainant relied on 2014 NCJ 402 NC- National insurance co. vs. Mr.Abraham M.P. Mascarenhas wherein it is held, surveyors report – authenticity – a report of survey which is accompanied by an affidavit should carry more weightage as compared to other reports. Also held - total loss   - determination – a vehicle suffered an extensive damages which is unrepairable, hence the case falls under the category of total loss. In the instant case both have led the evidence of surveyors. Both have deducted salvage depreciation and have arrived and fixed final liability. The RW2 in his report summary specifically mentioned the amount of the liability based on 3 categories, repair basis Rs.11,70,925/-, total loss basis Rs.10,10,350/-, cash loss basis Rs.5 lakhs. Even PW2 also shown repair basis amount liability to an extent of Rs.11,40,781/-. On the basis of the claim of the complainant supported with evidence, report and case laws the complainant’s case is fit for consideration of claim under CTL.  

17.   Apart from claim under CTL the complainant also claims demurrage charges of Rs.75,000/-. When it is the specific case of the complainant claim under CTL the complainant is not entitled for demurrage charges as claimed. Further the complainant claims Rs.4 lakhs towards mental agony, whereas in the instant case as per the own admission of the complainant respondent settled the claim under cash loss basis and issued discharge voucher for Rs.5 lakhs the complainant protested the same. Since there arose dispute in between the parties with regard to consideration of the claim settlement finality of the settlement could not arrived and complainant disputes the settlement and approached the Forum and filed the complaint. In Ex.C7 policy and its schedule there is a specific terms and procedure with regard to how settlement to be arrived. Inspite of specific directions disputes arise and the matter approached the Forum. Under those circumstances the complainant is entitled for claim and cost as prayed. Since claim is allowed under CTL with interest complainant is not entitled for additional compensation except cost of the proceedings.  

18.  In view of the above discussions the complainant established his case of deficiency in service against the respondent with appulsive and cogent evidence.

19.   By the discussions and findings arrived we inclined to proceed to held issue.1 and 2 in affirmatively and accordingly.

20.   Point.3: In view of the finding on points 1 and 2 proceeded to pass the following 

O R D E R

        The complaint is partly allowed with a direction to the respondent to pay IDV of Rs.15,11,850/- considering the claim as CTL based on the surveyors report along with interest @6% P.A from 07.07.2014 till 11.12.2015 along with Rs.5,000/- towards cost of the proceedings within 60 days from the date of receipt of copy of this order.  Failing to comply the order the claim amount shall carry interest @ 9% P.A from thereon till realization.

(Dictated to steno, transcribed by him and edited by us and pronounced in the open Forum on this day on 11^th day of December 2015)

(Smt.M.Vijayalaxmi)                                      (Sri.B.H.Shreeharsha)

Member                                                           President

Dist.Consumer Forum                                    Dist.Consumer Forum

MSR