The main legal point established in the judgment is that an insurance company cannot reduce the claim amount by charging depreciation within a certain period of the vehicle's purchase, and the insured's acceptance of a settlement must be voluntary and not coerced.

Mr. Jasbir Singh, Member—Being aggrieved by the order of the District Forum, Bathinda dated September 6, 1999, whereby the opposite parties have been directed to pay to the complainant an amount of Rs. 3,60,000/- with interest @ 12% p.a., w.e.f. 1.4.1997 till the date of payment alongwith costs of Rs. 1,000/-, the opposite parties are in appeal before us.

2. The main grouse of the opposite parties is that since the complainant has given a consent letter dated 21.7.1997 voluntarily and with his full consent to accept Rs. 3,27,500/- so he is legally estopped to claim in excess.

3. According to the complainant he had purchased one Tata Sumo Registration No. PB-044-3636 for the sum of Rs. 3,54,759/- after obtaining loan from SRF Finance LTD. The complainant took comprehensive insurance policy including theft of the said Tata Sumo for a sum of Rs. 3,60,000/- from opposite party No. 1 vide Cover Note No. 88263 for the period from 19.12.1996 to 18.12.1997. On the intervening night of 31.12.1996 and 1.1.1997 at 9.00 p.m. he parked the vehicle at Hotel Panj Rattan. When he came out of the hotel on 1.1.1997 at 1.30 a.m. he did not find his Tata Sumo, as the same was stolen away. He intimated to the opposite party No. 1 regarding the theft of the vehicle and fulfilled all the formalities. The opposite parties failed to release the payment of the claim. Hence the complaint before the District Forum was filed on 14.1.1998.

4. The opposite parties contested the complaint and raised the only legal objection raised that since the complainant had given consent letter dated 21.7.1997 voluntarily and with his full consent to accept Rs. 3,27,500/- after taking into consideration the market value of the Tata Sumo.

5. The parties led their evidence on affidavits and documents, which resulted in passing the impugned order by the District Forum.

6. We have heard the Counsel for the appellant and gone through the records.

The vehicle was insured equivalent to its price including accessories. As per terms and conditions of the policy (Section-I), the depreciation to be charged from the complainant is nil in case there was any loss to the vehicle within the period of six months of its purchase. In the case in hand the Tata Sumo was stolen within 50 days. Thus the opposite parties could not reduce the claim of the complainant by reducing the depreciated value.

7. Annexure No. 1 is policy, which was issued by the opposite parties, at the time of taking the policy. The sum assured is Rs. 3,66,000/- and the interest covered is described in the policy as under :

“Section-I : Loss or Damage :

The Company will indemnify the insured against loss of or damage to the motor car and/or its accessories whilst thereon :

(a) by fire explosion, self-ignition or lightening;

(b) by burglary house-breaking or theft;

(c) by riot and strike;

(d) by earthquake (fire and shock damage);

(e) by flood, typhoon, tempest hurricane, storm inundation, cyclone, hailstorm, frost;

(f) by accidental external means;

(g) by malicious act;

(h) by terrorist activity;

(i) whilst in transit by road, rail, inland waterway, lift elevator or air.

Subject to a deduction for depreciation at the rates mentioned below in respect of parts replaced :

1.

For all rubber, nylon, plastic parts tyres and battery

5

2.

For all parts made of glass

Nil

3.

For all other parts

Age of Car

% of Depreciation

Upto 6 months

Nil

Between 6 months and 1 year

5%

Between 1 year and 2 years

10%

Between 2 years and 3 years

15%

Between 3 years and 4 years

25%

Between 4 years and 5 years

35%

Between 5 years and 10 years

40%

Over 10 years

50%.

8. As per terms and conditions of the policy referred to above, it was incumbent upon the opposite parties not to charge depreciation from the complainant, as according to Section I - Loss or Damage, upto the age of car upto 6 months percentage of depreciation is nil. So the Insurance Company cannot reduce the claim of the complainant by deducting depreciation. An insurer cannot escape its