Insurance companies are obligated to indemnify the insured for the actual loss suffered, as per the terms of the insurance policy.

Mr. Justice J.K. Mehra, Member—This appeal arises out of the order of the State Consumer Disputes Redressal Commission, Punjab, whereby the State Commission dismissed the complaint. The facts in brief which led the complainant to approach the State Commission are as under :

2. The complainant got his vehicle Tata Safari, insured with the respondent, M/s. United India Insurance Co. Ltd. He got his vehicle parked at his relative’s house in Delhi, when he visited them on 23rd and 24th August, 1999. At about 8.00 p.m. he found his vehicle missing and immediately he lodged a complaint with the police, Anand Vihar, East Delhi. Since the vehicle could not be traced, he lodged a claim with the Insurance Company with the requisite documents. Since the opposite party did not respond to his claim, he approached the State Commission claiming Rs. 7,32,000/- of the insured estimated value of the vehicle with Rs. 50,000/- (Approx.) the enhancement of the price of the vehicle; Rs. 32,575/- the extra expenditure incurred by the complainant on account of his use of taxi service; and Rs. 50,000/- on account of undue harassment, mental agony, and inconvenience faced by the complainant.

3. In response to the notice, the opposite party filed its written version, wherein they asserted that they had already written a letter dated 21.8.2000 to the complainant informing him that his claim for Rs. 6.9 lakhs has been approved; that the complainant had failed to get the registration certificate duly tax paid in the name of the opposite party, to execute the necessary letter of subrogation and undertaking and to submit the ignition keys; that there is no deficiency in service on the part of the opposite party as the claim was settled as per the report of the Surveyor, i.e. at Rs. 6,90,000/-; that the vehicle was financed by M/s. Tata Finance Ltd. and there was an endorsement clause in the policy and the claim cannot paid to the complainant unless and until M/s. Tata Finance Ltd. gives the clearance or also signs the voucher; and lastly that the complainant is not entitled to any other amount except Rs. 6.9 lakhs and that also on the completion of the formalities.

4. The arguments of the Counsel for the complainant before the State Commission was that the present case would fall under the term ‘theft’ and he relied upon Clause 3 of the policy. He has also referred to the columns “Age of car” where certain percentage of depreciation was deductable, and that the opposite party was under obligation to indemnify the complainant for the actual loss suffered by him. The contention of the complainant was that he was entitled to the insured estimate value, i.e. Rs. 7,32,000/- which contention was rejected by the opposite party. It was argued by the opposite party, Insurance Company, that under the policy the opposite party is to indemnify the complainant for the loss suffered by him and, in the present case, the opposite party is not liable to pay more than Rs. 6,90,000/-. The State Commission has observed that, ‘since the bill of the vehicle was not placed on record, obviously we cannot work out the depreciation if all permissible under the above clause against the purchased price and that insured value cannot be taken as a purchase price or loss. The State Commission further observed that since the complainant had failed to produce on record the purchase bill of the vehicle, they have no option but to go by the Surveyor’s report.

5. In view of the above discussion, the State Commission allowed the complaint with costs of Rs. 5,000/- and directed the opposite party to pay Rs. 6,90,000/- within 30 days from the date of receipt of the order. It was also held that since the Insurance Company has taken long time to determine its own liability, it was in this situation the complainant needs to be compensated. Therefore, the interest @ 9% was also allowed by way of compensation from the date of the Surveyor report till the date of payment. The State Commission also dir