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SAROJ SHARMA, CHANDER SHEKHAR SHARMA, ARUN KUMAR GOEL
Oriental Insurance Co. Ltd. – Appellant
Versus
Roshan Lal Khimta – Respondent
The significance of the surveyor's assessment, consent letter, and the absence of contributory factors in determining claim settlement under the Motor Vehicles Act, 1988.
Headnote:
Insurance Claim - Motor Vehicle Insurance - Motor Vehicles Act, 1988 - [Motor Vehicles Act, 1988, Section 146, Section 147] - The court discussed the violation of policy conditions, the assessment of loss, and the significance of the consent letter in the context of the Motor Vehicles Act, 1988. The court emphasized that the presence of extra persons in the vehicle did not contribute to the accident and upheld the complainant's claim based on the surveyor's assessment and the consent obtained.
Fact of the Case:
The complainant's vehicle, insured under a valid policy with the Oriental Insurance Company Ltd., met with an accident. The surveyor assessed the loss at Rs.3,24,000 and recommended claim settlement on a 'net of salvage basis'. The District Forum allowed the complaint, directing the insurance company to indemnify the complainant and pay interest and litigation costs.
Finding of the Court:
The court dismissed the appeal filed by the insurance company and allowed the complainant's appeal, modifying the order to award Rs.3,24,000 along with interest and costs to the complainant.
Issues: Violation of policy conditions, assessment of loss, significance of the consent letter, and the presence of extra persons in the vehicle.
Ratio Decidendi: The presence of extra persons in the vehicle did not contribute to the accident. The surveyor's assessment and the consent obtained were significant in determining the claim settlement. The ambiguous ground of repudiation by the insurance company was not upheld.
Final Decision: The court dismissed the insurance company's appeal and allowed the complainant's appeal, awarding Rs.3,24,000 along with interest and costs to the complainant.
Arun Kumar Goel (Retd.), President— Both the above appeals are directed against the order passed by District Forum, Shimla, in Consumer Complaint No.296/2006 on 7.10.2009, as such both these appeals were heard together and are being disposed of by this common order.
2. Admitted facts giving rise to both these appeals are, that Roshan Lal Khimta, hereinafter referred to as the ‘complainant’, was the owner of vehicle bearing Registration No.HP-63-0674. It met with accident on 24.3.2006 when it was insured under a valid policy of insurance with the Oriental Insurance Company Ltd., hereinafter referred to as the ‘OP’. On receipt of information regarding accident, OP appointed surveyor to assess the loss caused to the vehicle. His report is Annexure R3, dated 1.6.2006. According to this report, net liability on total loss basis was to the extent of Rs.5,00,000 and he recommended claim to be settled on ‘net of salvage basis’ at Rs.3,24,000, as according to him, salvage value of the vehicle was Rs.1,75,000. In this context, it may be appropriate to notice that while submitting his report, Annexure R3, surveyor had also obtained consent from the complainant wherein he had agreed to accept Rs.3,25,000 on net of salvage basis as well as to retain the salvage with him. This consent letter
is Annexure R5, dated 4.5.2006. What is
its significance, we shall deal with it later on.
3. When the claim of the complainant was not settled, he filed Consumer Complaint No.296/2006, which has been allowed in the following terms:
“8. Since, the Loss Assessor in his report Annexure R3, dated 1.6.2006, has assessed the loss at Rs.3,24,000, on net of salvage loss liability. Therefore, his assessment qua loss is, to be accepted, having remained un-repulsed or un-benumbed on behalf of the complainant. Resultantly, in terms of the amount assessed and quantified, by the Loss Assessor, we direct that the OP-Company shall indemnify the complainant to the extent of Rs.3,24,000, i.e. the OP-Company shall pay 75% of Rs. 3,24,000 to the complainant along with interest at the rate of 9% p.a., from the date of filing of the complaint, i.e. 21.4.2008, till actual payment is made. In addition to this, the OP-Company shall also pay litigation cost of Rs.3500. This order shall be complied with, by the OP-Company within a period of forty five days, after the date of receipt of copy of this order.”
4. In the aforesaid background, appeal has been filed by the OP with a view to allow the appeal and consequently dismissing the complaint by setting aside the impugned order; at the same time Appeal No.90/2010 has been filed by the complainant to allow his appeal thereby modifying the impugned order and directing the OP to pay Rs.5,00,000 along with interest, compensation, cost etc.
5. Dr. Sharma in support of the appeal of the OP, as well as while opposing the appeal of the complainant, urged that the vehicle was being used in violation of the terms and conditions of the Insurance policy subject to which it was insured, as there were 5 persons in all travelling in the vehicle against the seating capacity of 2+1. While buttressing this line of argument, Dr. Sharma pointed out that the vehicle in question was meant as well as adapted for carriage of goods, therefore no extra passenger could have travelled in his vehicle other than those authorized as per Registration Certificate and/or whose risk was covered under the policy issued by his client. Further, according to Dr. Sharma, appeal filed by the complainant has no substance, because he has been awarded whatever was legitimately due as the said vehicle was being plied contrary to the provisions of Motor Vehicles Act, 1988. On the other hand, while contesting the claim of the OP, Mr. Rathore pointed out that no advantage can be taken by the OP from the so-called consent. After the accident on 24.3.2006, his client had consented to receive Rs.3,25,000 as per consent letter, Annexure R5, dated 4.5.2006, with the
