Unless fraud is detected, there is no reason for repudiation of the claim against the insurance policy. The market value of the vehicle shall be assessed by way of depreciation from the date of insurance cover, and interest can only be awarded if there is a term of contract between the parties.

Mr. Justice J.D. Kapoor, President—One Maruti Van bearing Registration No. DL-1C-B-4563 was purchased by the respondent in the month of February, 1996 and it was insured with the appellant for the period 5.2.1998 to 4.2.1999 for the amount of Rs. 1,70,000 on payment of requisite premium. On account of total loss of the said vehicle, the appellant company has been directed to pay Rs. 1,70,000 with 12% interest and Rs. 2,000 as cost of litigation vide impugned order dated 27.4.2002 passed by the District Forum.

2. The appellant company has directed this appeal mainly on the premise that the manner in which the occurrence of theft was reported with the police was such that it was not possible to investigate other than by way of detailed examination of the witnesses and other relevant material. This plea has been raised in spite of the fact that Surveyor had assessed the loss at Rs. 1,10,000 for whicht the respoondent had sent its consent under protest. The fact remains that right of investigation was vested with the police as the Surveyor was not equipped with any experience or qualification to investigate the matter nor was it his function under any law to investigate the criminal offence.

3. Consumer insured the vehicle against the policy obtained on payment of premium. Until and unless there is fruad which is detected subsequently in order to claim the policy there is no reason for repudiation of the claim against the insurance policy. If the appellant/Insurance Companies start investigating into such offences, the whole purpose of insuring the vehicle with these insurance companies will stand defeated. Clearly the repudiation of the claim of the respondent was unjustified and without any jurisdiction.

4. As regards the loss of the vehicle, it is settled that the market value of the vehicle shall be assessed by way of depreciation from the date of insurance cover as the Insurance Companies cannot assess fresh market value which may be much lower than the policy amount. If such liberty is given to the Insurance Companies, the purpose of receiving the requisite premium shall loose its meaning. The object of indemnification is with regard to the amount of insurance policy.

5. The vehicle was insured with the appellant company on 5.2.1998 whereas it was stolen when the respondent was out of station upto 13.8.1998 i.e., during the intervening period. At the most the appellant company was entitled to claim depreciation @ 10% p.a. from the amount of the insurance amount firstly because the theft had taken place after six months of the policy and secondly because the vehicle in question was purchased in the year 1996. As regards the award of interest @ 12% p.a., District Forum is not empowered to award interest. Only compensation can be awarded. Until and unless there is a term of contract between the parties for the award of interest, no interest can be awarded.

6. In the result, we partly allow the appeal by modifying the impugned order by reducing the amount of Rs. 1,70,000 to Rs. 1,53,000 (@ 10% depreciated value) and substituting the interest with lumpsum compensation of Rs. 10,000 inclusive of the cost of litigation. The respondent shall transfer the Registration Certificate in favour of the appellant on receipt of the aforesaid amount which shall be payable within one month.

6. FDR/Bank Guarantee, if any, submitted by the appellant shall be returned to the appellant forthwith under proper receipt.

7. A copy of this order, as per the statutory requirements, be forwarded to the parties, free of charge and also to the concerned District Forum and thereafter the file be consigned to the Record Room.

Appeal partly allowed.

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