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THE STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, DELHI
Hon’ble Mr. Justice R.N. Mittal, President;
Miss S. Brar, & Dr. A.N. Saxena, Members
VINOD KUMAR NAGRATH—Complainant
versus
ORIENTAL INSURANCE CO. LTD.—Opp. Party
C-N 72 of 1992—Decided on 4.2.1994
Counsel for the Parties :
For the Complainant : In person.
For the Opposite Parties : None.
An insurance company is liable for the damages suffered by the insured due to the negligence of its surveyors in processing the claim.
Headnote:
CONSUMER PROTECTION ACT - SECTION 2(1)(o) - INSURANCE - DELAY IN SETTLEMENT OF CLAIM - LIABILITY OF INSURANCE COMPANY - INTERPRETATION OF POLICY CONDITIONS - ASSESSMENT OF DAMAGES.
Fact of the Case:
The complainant's truck met with an accident, causing extensive damage to the vehicle and serious injuries to the complainant. The complainant filed a complaint with the State Commission, claiming damages for the vehicle, loss of earnings, and other losses suffered due to the accident. The respondent insurance company raised preliminary objections, arguing that the complaint did not fall within the definition of 'service' under the Consumer Protection Act and that their liability could not exceed the amount for which the vehicle was insured.
Finding of the Court:
The State Commission held that the complaint fell within the definition of 'service' under the Consumer Protection Act and that the insurance company was liable for the damages suffered by the complainant. The Commission found that the insurance company had been negligent in processing the claim and that the delay in settlement was attributable to the conduct of the insurance company's surveyors. The Commission also held that the insurance company was liable to pay the full amount of the claim, as per the policy conditions.
Issues: 1. Whether the complaint falls within the definition of 'service' under the Consumer Protection Act? 2. Whether the insurance company is liable for the damages suffered by the complainant? 3. Whether the insurance company is liable to pay the full amount of the claim, as per the policy conditions?
Ratio Decidendi: 1. The term 'service' under the Consumer Protection Act includes services rendered by professionals, including insurance companies. 2. An insurance company is liable for the damages suffered by the insured due to the negligence of its surveyors in processing the claim. 3. An insurance company is liable to pay the full amount of the claim, as per the policy conditions, unless there is a specific exclusion or limitation in the policy.
Final Decision: The State Commission allowed the complaint and directed the insurance company to pay Rs. 2,05,000/- to the complainant, along with interest and costs.
Dr. A.N. Saxena, Member—Briefly the facts of the case are that the complainant Shri Vinod Kumar Nagrath had purchased a Swraj Mazda Truck No. DBI-6438 in the year 1987 which was financed by the Delhi Financial Corporation. The truck was insured with the Oriental Insurance Co. for a sum of Rs. 2,20,000/- under a Comprehensive Insurance Policy which was valid for 1991-92.
2. The said vehicle of the complainant met with an accident on G.T. Road on 18.12.91 when the complainant was driving the vehicle from Jagdishpur towards Delhi in Distt. Bulandshahar. Extensive damage was caused to the vehicle and the complainant was also injured and remained confined to bed from 18.12.91 to 24.6.92. Immediately after the accident an FIR was lodged with the Police Station Sikandrabad on 19.12.91. Complainant further informed the respondent Co. Branch Office in Bulandshahar on 24-12-91. It has been stated that on receipt of this information, the respondent-Insurance Company appointed a Surveyor M/s. S.C Tayal, to inspect the damaged vehicle. A spot survey was carried out by him on 25-12-91 when necessary documents were also produced by the brother of the complainant. The vehicle was brought to Delhi towed by the crane and a sum of Rs. 1,600/-was spent towards the towing charges. Complainant had to further incur an expenditure of Rs. 470/- for getting the vehicle released. Another amount of Rs. 275/- was spent for removing the vehicle from the residence of the petitioner to the authorized repairer M/s. Intercoms Motors (Pvt.) Ltd. It is contended by the complainant that since the claim of the complainant was not being expedited by the respondent, he wrote a letter to the respondent on 27-4-92 requesting an early settlement of the claim without any further delay. It is further alleged by the complainant that inspite of protracted correspondence and personal requests the respondent did no>t settle his claim. He, therefore, filed the complaint before the State Commission on 9-10-93. In his complaint he has claimed the following damages : —
(a) Damages caused to the vehicle due to the accident. Rs. 01,70,675/-
(b) For loss of earning suffered by the complainant on account of vehicleNo. DBL-6438 remaining unused from 18-12-91 till 18-9-92 Rs. 00,90,000/-
(c) Losses suffered and likely to be suffered after the accident due to continuous standing and remaining unused vehicle
No. DBL-6438 :
(i) Seats damaged Rs. 00,04,250/-
(ii) Rear dalla and chains got rusted and need replacement Rs. 00,48,000/-
(iii) Tyres spolied due to constant standing (Rs. 3600 x 4) Rs. 00,14,000/-
(iv) Damages to engine and head due to non-use Rs. 00,25,000/-
(v) Taxes liability and National permit liability Rs. 00,15,000/-
(vi) Penalty on taxes Rs. 00,10,000/-
Total Rs. 04,17,325/-
3. The respondent-Company in their reply have raised the preliminary objections that the complaint does not fall within the definition of the term ‘service’ under the Consumer Protection Act. They have further state that there is no stipulation in the insurance policy that their liability can be fixed higher than the amount for which the vehicle was insured. The Insurance Company is, therefore, liable to examine the claim as per the policy documents. As to the facts the respondent-Company have taken the plea that the contention of the complainant is that he had informed the Branch Office of the respondent in Bulandshahar on 24-12-91 is not correct, since the communication sent to the respondent’s Company did not specify the date when this was done. It has been averred by the respondent that the spot survey report of Mr. S. C. Tayal was given on 14-12-91 in which he has stated that the registration book and permit etc. were not produced. It is further stated that the spot survey report of Mr. S.C. Tayal was delivered to Mr. Deepak Anand and Associates dated 10.7.92. Any delay in the submission of report was due to the injury sustained by the complainant and the conduct of the insured. Even in the report of
