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RAJASTHAN STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, JAIPUR
Hon’ble Mr. Justice S.K.M. Lodha, President; Mr. Damodar Thanvi, Member
NATIONAL INSURANCE CO. LTD.—Appellant
versus
SMT. LAHRI BAI—Respondent
A.P. No. 162 of 1992—Decided on 20.8.93
Counsel for the Parties :
For the Appellant :Mr. Sunil Nath, Advocate
For the Respondent: None
An insurer is liable to pay the amount recommended by the final survey report in the absence of evidence suggesting its incorrectness or unreliability.
Headnote:
CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(g) - INSURANCE - COMPREHENSIVE INSURANCE - CLAIM SETTLEMENT - SURVEY REPORT - LIABILITY OF INSURER - INTERPRETATION OF INSURANCE ACT, 1938 - SECTION 54 VM CLAUSE (2) - CONSUMER DISPUTE REDRESSAL COMMISSION - JURISDICTION - SECTION 14(1) - PENALTY UNDER SECTION 27 - APPLICABILITY.
Fact of the Case:
The complainant's bus, insured with the appellant insurance company, met with an accident. The insurer appointed surveyors to assess the loss. The final survey report recommended a payment of Rs. 28,556/-. However, the insurer disputed the amount and offered to pay only Rs. 16,300/-. The complainant filed a complaint before the District Forum, which ordered the insurer to pay Rs. 28,256/- along with interest and costs. The insurer appealed against the order.
Finding of the Court:
The National Commission upheld the order of the District Forum. It held that the insurer was liable to pay the amount recommended by the final survey report, as there was no evidence to suggest that the report was incorrect or unreliable. The Commission also held that the District Forum had jurisdiction to decide the complaint, as the dispute involved a consumer dispute as defined under Section 2(1)(g) of the Consumer Protection Act, 1986. However, the Commission deprecated the practice of incorporating a direction for imposition of penalty under Section 27 of the Act in the order passed under Section 14(1), as it unnecessarily embarrassed the party against whom the order was passed.
Issues: 1. Whether the insurer was liable to pay the amount recommended by the final survey report? 2. Whether the District Forum had jurisdiction to decide the complaint?
Ratio Decidendi: 1. The insurer was liable to pay the amount recommended by the final survey report, as there was no evidence to suggest that the report was incorrect or unreliable. 2. The District Forum had jurisdiction to decide the complaint, as the dispute involved a consumer dispute as defined under Section 2(1)(g) of the Consumer Protection Act, 1986.
Final Decision: The appeal was dismissed, and the insurer was directed to pay Rs. 28,256/- along with interest and costs to the complainant.
Mr. Justice S.K.M. Lodha, President—This appeal by the opposite party-insurer is directed against the order dated 27.4.1992 passed by the District Forum, Udaipur in Complaint Case No. 170/90. The District Forum ordered that the insurer-appellant should pay a sum of Rs. 28,256/- as compensation to the complainant respondent. A direction was also given that the opposite party-appellant shall be liable to pay interest on the aforesaid sum @ 12%% p.a. in case the amount is not paid by 28.6.1990. Rs. 250/- were awarded as costs to the complainant. In the impugned order it was incorporated that for non-compliance of the order the opposite party-appellant will render itself liable for imposition of penalty under Sec. 27 of the Consumer Protection Act, 1986 (“the Act” herein).
2. The complainant-respondent got her bus No. RSG 3961 insured with the opposite party-appellant. The period of insurance was from 29.6.1989 to 28.6.1990. The vehicle was comprehensively insured. The sum assured was Rs. 1,50,000/-. Policy No. 63103012 and cover note No. 322134 were issued. The said bus met with an accident at about 1 p.m. between the night of 10th and 11th Dec. 1989. The accident was with truck No. RNY 6126. On account of the accident the complainant’s bus was badly damaged. The information about the accident was lodged at the Police Station, Kurabad. Intimation was also given to the Insurance Company. Mr. N.S. Sinani, Surveyor was appointed to conduct the spot survey. Its final survey was done by Shri R.C. Sharma. The complainant submitted the permit, license, fitness certificate, registration certificate and quotations of the damaged parts and bills to the opposite party-appellant. She submitted estimate for repair of the vehicle amounting to Rs. 79,382/-. This was the estimate submitted by her. The Surveyor after making the necessary deductions assessed the loss at Rs. 28,556/-. From this sum, a sum of Rs. 300/-was deducted on account of value of salvage and therefore, he recommended for Rs. 28,256/-. The Insurance Company failed to settle the claim. Therefore the complaint was filed praying that the opposite party-appellant may be directed to settle the claim and pay the amount and if it fails to make the payment, interest on the amount may also be awarded. Compensation was claimed on account of mental tension.
3. The opposite party submitted the version of the case raising various objections about jurisdiction etc. It was pleaded that a letter was sent by the complainant which was received on 12.12.1989 stating that vehicle No. RSG 3961 had met with an accident. In that it was not stated that when the accident had taken place. Mr. Manohar Sainani was appointed as Surveyor to conduct the spot survey who conducted the survey on 12.12.1989. The complainant did not submit the fitness certificate, tax token, driving licence etc. to him so they could not be verified by Mr. Manohar Sainani and his report remained incomplete. The complainant submitted exaggerated quotations to the opposite party. It appointed Shri. R.C. Sharma for final survey report who prepared the survey report for high amount whereas in fact the loss was less. It was alleged that the complainant had colluded with the Surveyor Shri R.C. Sharma and got the report prepared for Rs. 28,556/- which was of exaggerated amount. The Insurance Company was not bound by the recommendations made by Shri R.C. Sharma. As there was difference between spot survey report and final survey report, papers were sent to Senior Surveyor, M /s. Mehta & Sons and they were asked to submit an independent report. They submitted the report on 16.5.1990 mentioning the defects and shortcomings of the report of Shri Sharma. They stated that loss to the extent of Rs. 16,300/-was only caused. The opposite party was ready to make payment of Rs. 16,300/-. But the complainant refused to take it. The opposite party in still ready to make payment to the complainant if the District Forum orders. An objection as take
