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JAMMU AND KASHMIR STATE CONSUMER DISPUTES REDRESSAL COMMISSION
G.D. Sharma, President and Khalid Hussain, Member
RAKS FOOD INDUSTRIES - Appellant
Versus
NEW INDIA ASSURANCE CO. LTD. - Respondent
Complaint No. 2612 of 2004
Decided on : 05-02-2008
Mr. Ajay Vaid, Advocate, for the Appellant; Mr. Rupinder Singh, Advocate, for the Respondent
The main legal point established in the judgment is the emphasis on the primary function of the Consumer Forum to administer cheap and substantial justice in a summary manner, and the rejection of technical objections regarding the maintainability of the complaint.
Headnote:
Insurance - Claim Settlement - Consumer Protection - [Dairy Fresh Ice-cream] - [Consumer Protection Act, 1986 - Section 21, Section 24] - The court discussed the provisions of the Consumer Protection Act, 1986, particularly Section 21 and Section 24, which govern the maintainability of complaints and the power of the Consumer Forum to administer justice. The court emphasized the primary function of the Consumer Forum to administer cheap and substantial justice in a summary manner, and rejected technical objections raised by the OP regarding the non-maintainability of the complaint. The court directed the insurer to make the payment of Rs. 5.00 lakh to the complainant within one month failing which interest shall become payable at 8% per annum.
Fact of the Case:
The complainant, a private limited company, filed a complaint against the OP for not settling the insurance claim for a truck used to transport its dairy product. The OP disputed the claim amount and raised objections regarding the maintainability of the complaint.
Finding of the Court:
The court found that the insured vehicle could not be fully repaired based on the evidence presented, and criticized the casual and arbitrary approach of the OP's higher authorities in rejecting the settlement proposal. The court rejected the technical objections raised by the OP and directed the insurer to make the payment of Rs. 5.00 lakh to the complainant within one month failing which interest shall become payable at 8% per annum.
Issues: The issues revolved around the maintainability of the complaint, the assessment of the damaged vehicle, and the rejection of the settlement proposal by the OP's higher authorities.
Ratio Decidendi: The court emphasized the primary function of the Consumer Forum to administer cheap and substantial justice in a summary manner, and rejected technical objections raised by the OP regarding the non-maintainability of the complaint. The court also found that the insured vehicle could not be fully repaired based on the evidence presented and criticized the casual and arbitrary approach of the OP's higher authorities in rejecting the settlement proposal.
Final Decision: The court accepted the complaint of the complainant and directed the insurer to make the payment of Rs. 5.00 lakh to the complainant within one month failing which interest shall become payable at 8% per annum. The OP was also ordered to bear the cost of litigation in the sum of Rs. 6,000.
ORDER
G.D. Sharma, President - The complainant in this case is a private limited company which manufactures a dairy product known by the name of "Dairy Fresh Ice-cream". Smt. Anita Sharma is the Managing Director of the said firm. Through her attorney holder namely, Mr. Sushil Mahajan she has filed the complaint against the OP with the allegations that for supplying the finished ice-cream to various consumers the said firm had got manufactured a truck with special design and its registration number was JK02P-1719 (hereinafter to be referred to as the truck). The truck had been got insured with the OP vide Policy No. 350760/31/02/06586 which had been in currency from 28.2.2003 to 27.2.2004. The insurance cover for the risk of the truck was to the extent of Rs. 8.80 lakh (wrongly stated as correct insured value is Rs. 6,80,000). The said truck after making the delivery of the ice-cream in Srinagar was on its way back to Jammu and on 24.4.2003 on the national Highway met with an accident at a place known as Peera . The incident was reported in the concerned police station. The OP deputed the Surveyor Mr. Arun Kumar and Co. to assess the loss who inspected the truck on 9.5.2003. The Surveyor vide his letter dated 17.6.2003, asked the complainant to get the truck repaired. The letter was replied by the complainant vide letter dated 28.6.2003 by stating that the damage suffered by the truck was beyond repairs. However, the complainant made inquiries on his own from the manufacturer namely, Sandlas Air-Con Systems (P) Ltd., Jalandhar. The repairer vide his letter dated 29.5.2003 informed the complainant that the repairs would be more costly than fitting a new fabricated unit in the truck. This fact was brought into the notice of the Surveyor but it had no affect on him. Thereafter, vide his letter dated 31.7.2003, the complainant brought the fact into the notice of the OP about non-settlement of the claim. The Surveyor submitted his report before the OP and after acting upon that report, the OP vide its letter dated 1.9.2003 asked the complainant to send the acceptance letter for Rs. 5.00 lakh for final settlement of the claim. Accordingly, the acceptance letter was sent. The matter was not initially settled for about three months and after that letter dated 2.3.2003 was sent whereby the complainant was asked to settle his claim for Rs. 3,49,900. The complainant did not accept this offer and finally has approached the Commission and has prayed for the following reliefs:
(i) Direction to the OP to pay the full insured amount of the truck in question on account of total loss to the tune of Rs. 8.80 lakh along with interest @ 14% per annum from the date of accident till final realization.
(ii) An amount of Rs. 1.00 lakh for loss caused to its business.
(iii) Rs. 50,000 as damages for harassment.
2. A preliminary objection has been taken by the OP regarding the maintainability of the complaint on the plea that correct provision of relevant law has not been disclosed in the complaint and the deed of attorney holder namely Mr. Sushil Mahajan is neither registered by the concerned Sub-Registrar nor has been notorised. In this manner, the complaint has been filed by an incompetent person. On facts, it is denied that the vehicle in question was insured for a sum of Rs. 8.80 lakh but it had been insured for a sum of Rs. 6.80 lakh. It is also pleaded that at the representations of the complainant, the OP had agreed to act upon the report of the Surveyor and the amount offered to the extent of Rs. 5.00 lakh included the value of the salvage and that salvage was not produced before the insurer so the net amount payable had become to the tune of Rs. 3,49,900. This payment was offered on cash-loss basis. That instead of accepting the offer on the basis of cash-loss basis, unnecessarily the complaint has been filed. It was a false defence put up by the complainant that the truck could not be repaired.
3. Heard the arguments.
4. The learned Counsel of the c
