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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Ashok Bhan, President and Vineeta Rai, Member
REKHA JAIN - Appellant
Versus
NATIONAL INSURANCE CO. LTD. - Respondent
Revision Petition No. 4239 of 2007 from Order dated 23.8.2007 in Appeal No. 442 of 2001 of State Consumer Disputes Redressal Commission, Rajasthan
Decided on : 17-05-2012
Mr. Manish Kumar Sharma, Advocate, for the Appellant; Mr. Abhishek Kumar, Advocate, for the Respondent
The main legal point established in the judgment is that insurance companies are bound by the value put on the insured vehicle while renewing the policy and cannot disown that figure when called upon to pay compensation.
Headnote:
Insurance Claim - Insurance Law - Section 146 of the Motors Vehicles Act, 1988 - [Section 146] - The court discussed the obligation of the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act and the unreasonable behavior of insurance companies in disowning the value of insured goods when called upon to pay compensation. The court emphasized that the insurance companies are bound by the value put on the vehicle while renewing the policy.
Fact of the Case:
The petitioner's car was stolen, and the insurance company offered to settle the claim at a lower amount than the insured value. The District Forum initially awarded the full claim amount, but the State Commission reduced the compensation based on the market value of the vehicle.
Finding of the Court:
The court found that the insurance company was bound by the value put on the vehicle while renewing the policy and could not disown that figure when called upon to pay compensation.
Issues: The main issue was the determination of the compensation amount for the stolen vehicle, considering the insured value and the market value based on the vehicle's age.
Ratio Decidendi: The court held that the insurance company was obligated to pay the Insured Declared Value (IDV) at the time of taking the policy after deducting depreciation, emphasizing the company's binding to the value put on the vehicle while renewing the policy.
Final Decision: The Revision Petition was allowed, and the court directed the respondent to pay Rs. 1,60,000 to the petitioner along with interest at 9% p.a. from the date of filing of the complaint till realization after adjusting the amount already paid.
ORDER
Ashok Bhan, President - Petitioner/Complainant has filed this Revision Petition against the judgment and order dated 23.8.2007 passed by the State Consumer Disputes Redressal Commission, Rajasthan (in short, the State Commission ) in appeal No. 442/01 whereby the State Commission modifying the order of the District Forum reduced the amount of compensation to Rs. 87,500 from Rs. 1,75,000 with interest @ 9% p.a. instead of 12% from the date of filing of complaint till realization.
Facts:
2. Complainant/Petitioner got her Ambassador Car bearing registration No. RJ-03 C-0137 compressively insured with the Respondent Insurance Company for a sum of Rs. 1,75,000 by paying the premium of Rs. 6,375. Respondent issued the cover note No. 97/6103081 dated 31.12.1997 to the Petitioner which was valid for the period from 30.12.97 to 28.12.98. On the intervening night of 29/30.8.1998 the car was stolen from the house of the Petitioner. An FIR was lodged with the Police Station, Kotwali, Banswara on 30.8.1998. After investigation, Police submitted untraceable report which was accepted by the Chief Judicial Magistrate, Banswara. Thereafter, Petitioner lodged the claim of Rs. 1,75,000 with the Respondent Insurance Company. However, the Insurance Company offered to settle the claim at Rs. 80,000 as against the claim amount of Rs. 1,75,000. Complainant, being aggrieved, filed the complaint before the District Forum.
3. Respondent, on being served, entered appearance and filed its written statement resisting the complaint, inter alia, on the grounds; that the value of the car was not assessed by a valuer appointed by it; that the amount of Rs. 80,000 was offered as per the market value of the car since it was a model of 1984; that there was no deficiency in service on their part and complaint was liable to be dismissed.
4. District Forum allowed the complaint and directed the Respondent to pay a sum of Rs. 1,75,000 to the Petitioner along with interest @ 12% p.a from the date of filing of complaint till realization. Rs. 6,000 were awarded as compensation for mental agony and Rs. 4,000 towards costs of litigation.
5. Respondent, being aggrieved, filed the appeal before the State Commission. State Commission held that since the car was of 1984 model and the theft took place on 29.8.1998, the market value of the vehicle could not exceed 50% of the sum assured and thus the Respondent was not entitled to Insured Declared Value (IDV) of Rs. 1,75,000. That the Respondent was entitled to get 50% of the IDV, i.e. 87,500. Accordingly, State Commission partly allowed the appeal and directed the Respondent to pay Rs. 87,500 in place of Rs. 1,75,000 to the Petitioner with interest @ 9% p.a. in place of 12% p.a.
6. Petitioner, being aggrieved, has filed the present Revision Petition.
Counsel for the petitioner, relying upon the judgment of the Supreme Court in Dharmendra Goel v. Oriental Insurance Co. Ltd., (2008) 8 SCC 279, contends that the petitioner was entitled to receive the amount for which the vehicle was insured minus the depreciation. We find substance in this submission. In the aforesaid judgment, the Supreme Court held that the Insurance Company, after having accepted the value of a particular vehicle, could not disown that very figure on one pretext or other when they are called upon to pay compensation. The take it or leave it attitude was clearly unwarranted not only as being bad in law but ethically indefensible. That the Insurance Company was bound by the value put on the vehicle while renewing the policy. Para-7 of the aforesaid judgment reads as under:
"It must be borne in mind that Section 146 of the Motors Vehicles Act, 1988 casts an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act and any vehicle driven without taking such a policy invites a punishment under Section 196 thereof. It is therefore, obvious that in the light of this stringent provision and being in a dominant position th
