An insurer is liable to pay interest for the delay in settling a claim and for the unlawful retention of the claim money.

Mr. Justice S.A. Shah, President — The Complainant is carrying on the transport business and for that purpose, he purchased on June 30,1987, a truck for transporting the public goods on hire. The complainant had purchased Swaraj Mazda Truck at the total cost of Rs. 1,94,000/-.

2. In order to purchase the truck, the complainant had obtained a loan of Rs. 1,48,000/- from the Himatnagar Branch of Dena Bank. The complainant had to pay interest on the said loan amount at 18 per cent per annum. The loan was repayable by instalments spread over three years’ period.

3. The Opposite Party is the United India Insurance Company with whom the complainant had got the truck insured under the comprehensive policy covering the risk upto the limit of rupees two lakhs. The policy with which we are concerned and which is the subject matter of this dispute, has been produced at Annexure-2. Policy was valid for the period between August 4, 1988, upto August 3,1989. The complainant had already paid full premium of Rs. 2,839/- and the estimated value of the motor truck as shown in the policy issued by the insurer is Rs. 2,00,000/-. The Policy also states in terms that the vehicle is of 1987 make.

4. As the complaint shows, the Motor truck so insured with the opposite party, met with an accident on October 3,1988. The Opposite Party on inspection treated the truck as total loss and took possession thereof.

5. It is the case of the complainant that even though the opposite party was informed about the happening of the accident, and even though the Insurance Company treated the truck as total loss, the opposite party took very long time in settling the claim and, ultimately, on October 3,1989, that is to say, after one full year, the opposite party directly remitted an amount of Rs. 1,34,500/- to Dena Bank Himatnagar Branch, without informing the complainant

Since the loan was outstanding, on account of undue delay in settling the claim, the complainant had to pay more interest and the complainant has claimed that amount of interest on account of defective service and non-payment of full amount of rupees two lakhs being the risk covered under the policy in question. The complainant has thus claimed the total amount of Rs. 1,13,500/- by way of damages.

6. In pursuance to the notice issued by the Commission, the Insurance Company appeared and has filed its version by way of written statement. The opposite party, while denying the claim made by the complainant has also raised some preliminary points challenging the jurisdiction of the Commission. On merit, the opposite party has admitted that the truck was insured with them ; that the truck met with the accident, resulting into total loss of the vehicle. However, it has denied the claim made by the complainant mainly on the ground that the delay in making payment was due to the complainant’s fault, and that the payment of Rs. 1,34,500/- was made in full and final satisfaction of the claim. It is further contended that it was false to say that the complainant was kept in the dark. According to the opposite party, it was the complainant who has signed the receipt voucher for the amount in question. The opposite party has admitted that the amount of Rs. 1,34,500/- was transmitted to Himatnagar Branch of Dena Bank, directly.

Having regard to the pleadings of the parties as also the evidence adduced before us, the following points arise for our determination : —

(1) What is the market value of the Truck as on date of the accident?

(2) Whether the value assessed by the Insurance Company is legal and proper?

(3) Whether there was any delay ; if yes, who was at fault for such delay?

(4) Whether the Insurance Company proves that the receipt is signed by the complainant? If yes, what would be its effect?

(5) Whether the complainant is entitled to any interest for the delayed payment as well as the interest on the additional amount, if proved?

(6) What should be the final order?

7. Admittedly, the policy is signed by the aut