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SUPREME COURT OF INDIA
Abhay S. Oka, Rajesh Bindal, JJ.
Bajaj Allianz General Insurance Co.Ltd. - Appellant
Versus
Mukul Aggarwal & Ors. - Respondents
Civil Appeal No.1544 of 2023
With
BMW India Private Ltd. - Appellant
Versus
Mukul Aggarwal & Ors. - Respondents
Civil Appeal No.1545 of 2023
Decided On : 20-11-2023
(A) Insurance Act, 1938 – Section 45 – Liability of Insurance Company – Insured cannot claim anything more than what is covered by insurance policy – Terms of contract have to be construed strictly without altering nature of contract – Clauses of insurance policy must be read as they are – Terms of insurance policy which determine liability of insurance company, must be read strictly – Rule of contra proferentem is not applicable to a commercial contract like a contract of insurance – Rule of contra proferentem contemplates that if any clause in contract is ambiguous, it must be interpreted against party that introduced it – For contract of insurance, applicability of said concept is ruled out – Insurance contract is bilateral and mutually agreed upon, like any other commercial contract. (Para 17)
(B) Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Insurance – Total loss of car in accident – In case of total loss/constructive total loss, instead of paying amount, Insurer has an option available to replace vehicle with a new one – It is not right of insured under policy conditions to always claim replacement of car – It is at option of Insurer – Under BMW Secure, there was no provision for replacement of vehicle by BMW in the event of complete loss or total constructive loss of vehicle – Question of liability under BMW Secure arises only when liability of insured under new motor vehicle policy is established – It must be established that Insurer has accepted the case regarding total loss of insured vehicle – Liability of Insurance Company will be to the extent of IDV value minus cost of wreck – BMW should have pleaded whether a car of exactly similar make was available on the date of accident, and if so, what was price of vehicle – However, BMW remained completely silent – Adverse inference will have to be drawn against BMW – There is deficiency in service rendered by insurer BMW – Owner is entitled to compensation from both of them – Sum of Rs.7 lakhs can be a reasonable estimate of amount payable under BMW Secure in facts of the case – Total liability of Insurer is Rs.25,83,012/- – Interest @ 6% per annum will be payable on amounts payable by insurer and BMW from date of filing of complaint before State Commission. (Paras 19, 22, 31, 36, 37, 39 and 40)
Facts of the case:
Being aggrieved by judgment of State Commission, separate appeals were preferred by BMW and Insurer before National Commission. By impugned judgment, National Commission rejected contention that State Commission at Delhi had no jurisdiction to entertain complaint. National Commission dismissed appeals on merits by the impugned judgment.
Findings of Court:
Direction of State Commission, confirmed by National Commission, is to replace car. It cannot be sustained for reasons already discussed, and same will have to be substituted by a direction to pay monetary compensation.
Result : Appeals partly allowed.
JUDGMENT :
ABHAY S. OKA, J.
FACTUAL ASPECTS
1. These appeals arise from a claim made by the first respondent, Mr Mukul Aggarwal (the owner), on account of damage caused to his BMW 3 Series 320D car (the car). The damage was caused due to an accident which took place near DLF Square at Gurgaon on 29th July 2012 between 12.30 am and 2 am. The impact of the accident was so much that the car was completely damaged and was beyond repair. The owner of the car was a Director of Dassault Systems India Pvt. Ltd., Gurgaon (Dassault). As the owner was desirous of acquiring a BMW car for his personal use, he applied to Dassault for a grant of loan. Accordingly, a loan of Rs. 26,92,229/was granted by a car financing company in the name of Dassault. On 17th May 2012, the owner purchased the car in the name of Dassault from M/s Bird Automotive Pvt. Ltd. (the Dealer), an authorised dealer of BMW India Pvt. Ltd. (BMW). While acquiring the car, the owner took two protections: the first was a motor insurance policy of Bajaj General Insurance Company Ltd. (the insurer), and the second one was the BMW Secure Advance Policy (the BMW Secure) of BMW. The owner paid a premium of Rs.59,158/for the first policy. He paid a premium of Rs.24,831/-for the second policy. The Insured Declared Value (IDV) of the car was Rs.29,46,278/-. According to the case of the owner, a conjoint reading of the two policies shows that where the car suffers damage of more than 75% of IDV, a new car must be provided to the insured.
2. After the car met with the accident, the spot was immediately visited by the police and officials of the National Highway Authority of India (NHAI). The NHAI recorded the accident in its Daily Accident Report of 29th July 2012. Immediately after the accident, as the car could not be kept on a busy highway, it was shifted to BOSCH Car Workshop. According to the case of the owner, though he attempted to contact the Dealer, he did not get any response, therefore, the car was shifted to BOSCH Car Workshop. On 30th July 2012, the damaged car was carried to the workshop of the Dealer. On 30th July 2012, according to the owner, he and Dassault filled up a Claim Form in the prescribed format and submitted it to the Dealer, who in turn submitted it to the insurer. While filling up the Claim Form, it was discovered that the Engine and Chassis numbers in the insurance policy issued by the insurer were incorrect. On 30th July 2012, the driver appointed by the owner who was driving the car went to the jurisdictional Police Station and lodged a complaint. The insurer corrected the Engine and Chassis numbers in the policy of insurance on 9th August 2012 and a fresh Claim Form was filed by the owner/ Dassault on 9th August 2012, making a claim under the general motor insurance policy as well as the BMW Secure.
3. The insurer appointed a surveyor who, after a Preliminary Survey, submitted a Report on 17th August 2012 which stated that the accident occurred as a truck proceeding in front of the car suddenly applied brakes, as a result, the car dashed against the truck. He estimated an approximate loss of Rs.25,00,000/-. The Dealer also got the damaged car surveyed and submitted a Repair Estimate Report concluding that the loss was to the extent of Rs.38,34,730/-. The Surveyor appointed by the insurer submitted his Final Survey Report on 7th January 2013, assessing the loss at Rs.25,83,012/- which could be regarded as a total loss.
4. As the claim under the policy was not dealt with, the owner filed a complaint before the State Consumer Disputes Redressal Commission, Delhi (the State Commission). An order was made by the State Commission directing the insurer to take a decision on the claim of the owner within one month and forward a copy of the said decision to BMW.
5. It must be noted here that apart from getting the Final Survey Report from the Surveyor, the insurer, without notice to the owner, appointed SHAPT professional services for the purpose of carrying out the
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