Orissa

Debagarh

CC/22/2020

Siba Prasad Maharana, aged about 43 years, S/O- Basanta Kumar Maharana - Complainant(s)

Versus

The Manager, Indus Finance Co. Limited, Talcher - Opp.Party(s)

17 Dec 2021

ORDER

 IN THE COURT OF THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, DEOGARH

C.C NO-22/2020

Present-Sri Dipak Kumar Mahapatra, President, Smt. Arati Das, Member.

Siba Prasad Maharana, aged about 43 years,

S/O- Basanta Kumar Maharana,

At-Balita,P.O- Barkote,

P.S-Barkote,Dist-Deogarh.                                                                                                        …. Complainant.

                                                                                        Vrs.

1.          The Manager,

              Indus Ind Finance Co. Ltd., Talcher,

              At/P.O- Talcher, Dist-Angul.

2.          The Branch Manager ,

Cholamandalam MS General Insurance Company Limited,

Bhubaneswar Office,

Ground Floor,No-A/167,Saheed Nagar,

                  Bhubaneswar-751007.                                                                                           …. O.Ps.

COUNSELS

For the Complainant           :-         Self

For the O.P-1                                    :-         Sri A.K.Sahu, Advocate & Associates.

For the O.P-2                                    :-         Sri B.K.Purohit, Advocate & Associates.

                                                 DATE OF HEARING : 05.11.2021, DATE OF ORDER : 17.12.2021

SRI DIPAK KUMAR MAHAPATRA,PRESIDENT:- Brief facts of the case is that,  the Complainant on dt. 02.09.2019 has purchased a New Tata LPT 3718 CR BS-IV 10X2 (14 wheeler) having Engine No- ISBE591804091F63798309 and Chassis No-MAT541068K1F13092 from the dealer, through finance from the O.P-1 without down payment. The Ex-showroom price of the said Truck was Rs,30,00,000/- and the EMI was fixed at Rs. 1,06,000/-and the Complainant has paid Rs.78,228/- as Insurance premium. The finance amount was of Rs. 30,78.228/-. The Complainant got the Truck registered on dtd. 09.10.2019 with a payment of Rs.45,000/- as  Registration fees and avail registration no-OD-14-T-0755. The Complainant has paid Rs.4,50,000/- for body building from his pocket.  On dtd. 15.10.2019 at about 4.00 p.m while the truck was proceeding from Tileibani to Kuchinda, met an accident with a motorcycle for which the motorcycle was pulled by the truck and suddenly caught  fire as a result both the  truck and motorcycle were completely burnt and the pillion rider died at the spot. FIR was lodged at Deogarh P.S. The matter was informed to the Insurance Company on the same day. The Insurance and finance surveyor had visited the spot and made required inquiry about the accident. The Complainant on dtd .19.10.2019 wrote a requesting letter to the O.P-1 to close the loan account and reimburse the money which he has spent towards body building as he is now not in a position to pay installments.  But after 4-5 months the O.P-2 sold the burnt Truck in as it is condition to a scrap dealer for amount of Rs.6,50,000/- and the Scrap dealer lifted the burnt truck from the spot to his scrap yard at Kolkata. The O.P-2 paid Rs. 6,00,000/- to the O.P-1 and promised to pay the rest amount of Rs. 50,000 after the Complainant submits the “No Due Certificate” with the O.P-1 after obtaining it from the O.P-2. The O.P-2 has neither yet issued “No Dues Certificate” to the Complainant  nor settle the matter with him (The Complainant) for which the Complainant if facing a lot of financial setback due to the harassment committed by the O.Ps.

As per the O.P-1 he was to Finance a vehicle TATA LPT 3718 CR BS IV 10X2 and agreed to sanctioned Rs.30,79,000/- to the Complainant for commercial purpose. Accordingly the Complainant executed the vehicle loan cum hypothecation agreement vide contract no-OST01275D and the loan was disbursed. As per the terms and conditions of the said agreement the Petitioner had agreed to liquidate the entire loan amount of the vehicle in total 48 monthly EMIS starting from Dt: 07.11.2019 and thereby ending on Dt:07.08.2023 as per the repayment schedule. That any delay or default in making payment of any such installments would attract overdue and such other charges as more fully set out there under and the OP Company will be entitled to take the possession of the said vehicle as per right and remedies of the Agreement. The complainant is not a 'consumer' as the complainant is engaged in Transport Business and he has purchased another vehicle in his name vide Registered No. OD-14-E-8510 vide contract No- OSS00625D and also a defaulter against the same. The complainant is a habitual defaulter and substantial amount is due from the commercial vehicle in question as under as per the account statement dated 03.12.2021. There is an installment Outstanding of Rs 8,39,454.43 against the vehicle no-OD-14-T-0755 and up to the loan closure the future outstanding is calculated to Rs.14,47,450/-. It is further evident that the vehicle is being used for the purpose of commercial gains which denotes that the said vehicle was purchased and being used for the commercial purpose and not for earning of the livelihood of the complainant. He cited a decision of The Hon'ble Supreme Court of India in Laxmi Engineering Works -Ve- P.S.G. Industrial Institute reported in (1995) 2 SCC 583-has categorically explained the object, meaning and purport of the Explanation of Section 2(4) of the 1986 Act to conclude in paragraph 21 of the judgment that-“A person to s goods and uses them him so exclusively for the purpose of earning his livelihood, by means of self employment is within the definition of the expression 'consumer'." It is further evident that the vehicle is being used for the purpose of commercial gains which denotes that the said vehicle was purchased and being used for the commercial purpose and not for earning of the livelihood of the complainant. There are no averments in the Complainant Petition that the vehicle has been used exclusively for earning livelihood by way of self-employed. In the light of the Judgement passed in Dilip Kumar Singh Vrs. BMCT Crop Finance Ltd. reported in 2017 (4) CPR 39 N.C., the present Complaint Petition is not maintainable, since there is no specific averment that the vehicle was purchased by Complainant for the purpose of earning his livelihood by way of self-employment.

As per the O.P-2 the Insurance Policy was issued by the O.P.No.2 to the complainant covering the risk of the vehicle at Rs.31,50,000/-, subject to terms and conditions of the contract of insurance. The vehicle was under the hypothecation agreement with the Indus Ind Finance Co. Ltd. So, as per the terms and conditions of the Policy, during the period of hypothecation, whatever may be the claim under the Policy except the third-party risk, the amount has to be reimbursed to the financier but not to the complainant in person. Be it mentioned here that the Policy is subject to 'depreciation' as per the contract of insurance, so also the 'Policy Excess', which means the Insurance Company is not liable to pay any claim up to Rs.1500/-, which has to be deducted from any claim payable under the Policy much less the salvage amount. During the period of insurance, the vehicle was subjected to fire and claim was lodged by the complainant-insured, which was duly surveyed and loss was assessed. In the process of settlement of the claim, the claim is discussed with complainant and after obtaining consent in the form of Affidavit from the Complainant, this OP company settled the claim for Rs 23,50.000 (23,51,500 Policy excess of Rs. 1500] on the basis of cash loss basis by retaining Salvage by Complainant himself. This OP Company arranged a salvage buyer to whom damaged wreck was handed over upon agreed terms between the complainant and salvage buyer for Rs.6,50.000/and the salvage buyer has paid Rs.6 Lakhs and the rest of Rs.50.000/-would be paid by Salvage Buyer to complainant on providing Form-35 & NOC from financier. As regards this OP company paid Rs.5 Lakhs on 31.12.2019 and Rs.18.50 Lakh on 31.3.2020 to the financier i.e.. OP No.1 through NEFT. Accordingly, this OP-2 company settled the claim as per the agreed terms between Complainant. Hence, there is no deficiency in rendering services by the O.P.No.2-Insurance Company, as the entire matter rests on the complainant and the O.P.No.1. Again he added that since the OP.No.2 is not at all liable for settlement of insurance claim and no allegation whatsoever is made regarding the same, the Insurance Company cannot be saddled with any liability.

POINTS OF DETERMINATION:-

1. Whether the Complainant is comes under the purview of Consumer Protection Act-2019?
2. Whether the O.Ps has committed any Deficiency in Service to the Complainant?

                                     

From the above discussion and materials available on records we inferred that the Complainant comes under the purview of Consumers as he has purchased a truck for his livelihood by means of self employment. The Complainant is consumer as per the C. P Act-2019. AS the Truck of the Complainant was completely burnt in the road accident it not reparable and considered to be a total loss by the Insurer. But the Insurer has failed to calculate the exact value of compensation to be given to the Insured as per the terms and condition of the Insurance.  In case of a constructive total loss of the vehicle, the total cost of retrieval of the vehicle exceeds its current market value. In such cases, it is practically not feasible for the insurance company to go for the retrieval and they treat the claim as a total loss. The policyholder in case of a constructive total loss gets the current IDV of the vehicle as reimbursement from the insurance company. Basing on the above contentions it is seen that the IDV of the Truck as per the Insurance Copy is Rs.31,50,000/- and the vehicle was just only one month old on the date of accident(Date of Registration-11.09.2019 & date of accident-15.10.2019). If we go through the calculation of IDV, the depreciation is charged based on the age of the vehicle on the following basis:

 

Age of the Vehicle	Depreciation Rate for Calculating IDV
New Vehicle (Before purchase)	5%
Below 6 months	5%
6 months to 1 year	15%
1 year to 2 years	20%
2 years to 3 years	30%
3 years to 4 years	40%
4 years to 5 years	50%
Above 5 years (model is obsolete)	determined mutually between vehicle owner and insurance company

 Basing on the above the above chart the Insurer should have calculated the depreciation at 5% as the age of the Truck is less than six months.  This matter has been well settled in the matter of “Dharmendra Goel Vs. Oriental Insurance Company” reported in (2008) 8 SCC 279 by the Hon’ble Supreme Court .But the Insurer has calculated the value at RS. 23,50,000/- and transferred the amount to the Financier(O.P-1) for which the O.P-1 is claim a huge amount as outstanding in the name of the borrower(Complainant). Again the O.P-2 has sold the body (Dala) of the said Truck which was built by the Complainant separately from his own expenses of Rs.4,50,000/- which was not included in the IDV of the Truck. Hence we order as under:-

                                                                                                ORDER

The Complaint petition is allowed. The O.P-2 directed to settle the claim of the Complainant/ Insured on Insured Declare Value (IDV) of the said Truck and the value of the Dala and pay the same to the O.P-1 financier and get the loan account closed by the O.P-1.  Further the O.P-1 is directed to calculate the loan outstanding amount till the date of accident i.e dt. 15.10.2019 and close the loan account after receiving the compensation towards the constructive total loss of the Truck and close the account and issue “NO Due Certificate” in favour of the Complainant/Borrower.  Again the O.P-2 is further directed to pay Rs.30,000/-(Rupees Thirty Thousand) towards the cost of litigation. All the above orders are to be carried out within 30 (Thirty) days of receiving of this order, failing which, the complainant is at liberty to proceed in due process of law.         

Order pronounced in the open court today i.e, on 17^th day of December-2021 under my hand and seal of this Commission.

Office is directed to supply copies of the Order to the parties free of costs receiving acknowledgement of the delivery thereof.

I agree,

            MEMBER.                                                                              PRESIDENT.

                                                         Dictated and Corrected

                                                                       By me.

 

      PRESIDENT