IMPORTANT POINT
In an Insurance claim for repair and replacement of certain parts which were damaged in accident when vehicle was an old model, depreciation value of parts, will have to be considered.

Mrs. Caroline Collasso, Member—The appeal seeks to challenge order dated 6.6.2006 passed by the District Forum, South Goa at Margao. Appellant herein was original opposite party, while Mr. Anand Y. Bandekar was original complainant. Parties shall be referred to as arraigned in the complaint.

2. Facts are that complainant was owner of Leyland bus No. GA 02-T-4268 which was insured with the opposite party under Policy No.1999 /04751 for the period 21.4.2001 till 20.3.2002. The bus met with an accident on 10.12.2001. Complainant said to have repaired the bus and incurred an expenditure of Rs. 33,000. As such, he claimed the same from the opposite party who instead informed that they had sanctioned an amount of Rs. 14,000 which has been estimated according to their valuers.

3. Dissatisfied by the amount offered by the opposite party, the complainant approached the District Forum and prayed that he be paid the entire claim of Rs. 33,000 alongwith interest @ 22% p.a. from 25.2.2002 till final payment.

4. The District Forum on going through the pros and cons, opined that the complainant had established his case on the principle of preponderance of probabilities. The District Forum has discounted the claim of the opposite party that in coming to the assessment of any loss it would be necessary to take into consideration adjustment due to depreciation. Be that as it may, the District Forum finally ordered the opposite party to pay an amount of Rs.33,000 with interest @ 18% p.a. thereon from 25.2.2002 till actual payment; and further directed to pay costs of Rs. 2,500 to the complainant.

5. The appellant has challenged the impugned order on a very narrow ground in so far as in arriving at any compensation arising out of loss and damage, the Court would have to take into consideration the deduction due to depreciation, which the impugned order has failed to recognize.

6. On this issue we are in agreement with the opposite party/appellant insofar as the liability of the Insurance Company would be restricted to the actual value of the parts damaged or loss, less depreciation plus reasonable costs of fitting and labour charges.

7. Admittedly, in the present case, the bus was a 1995 model and had undergone wear and tear during its years of use and resulting in depreciation in its value. In other words, the individual value of the said parts, including those that had to be replaced would have depreciated in their respective values. Hence, the Insurance Company would be liable to pay the actual value of the new parts minus a certain percentage for depreciation. Keeping the above principle in mind, even if we accept the claim of the complainant that he spent Rs.33,000 on purchase of parts and labour, still he would not be entitled to the entire amount as claimed by him. There would have to be a certain amount deducted as an adjustment for the lower value of the original parts replaced due to depreciation. The appellant/opposite party in their reply have claimed that their valuation is correct as it takes into consideration this deduction due to depreciation.

8. The amounts we are dealing with are not exorbitant. On the one hand the claim is Rs. 33,000 by the Complainant and as against this the opposite party has come up with a figure of Rs.14,143.

9. In the interest of justice, we are of the opinion that in the peculiar facts and circumstances of the case, some figure midway will meet the ends of justice and award Rs.18,000.

10. In the circumstances, there is no question of interest being paid to the complainant. The appeal is partly allowed.

ORDER

The appellant/opposite party is directed to pay to the respondent/complainant an amount of Rs.18,000 within one month from the date of this order failing which it will carry an interest @ 9% p.a. thereafter .Impugned order is modified to the extent above.

Appeal allowed partly.

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