The Insurance Company must adopt the declared value of the vehicle for determining compensation, as per the ruling in Dharmendra Goel v. Oriental Insurance Company Ltd.

ORDER :

D.K. Jain, President

These two cross-revision petitions have been preferred by the National Insurance Company Ltd. (for short “the Insurance Company”) and the complainant, under Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) assailing the common order passed by the State Consumer Disputes Redressal Commission, UP at Lucknow (for short “the State Commission”) in Appeal Nos. 2409/SC/04 and 137/SC/05. By the impugned order the State Commission, modifying the order passed by the District Consumer Disputes Redressal Forum, Bulandshahr, (for short “the District Forum”) has directed the Insurance Company to pay to the complainant an amount of Rs. 3,90,675 with interest @ 9% p.a. from 30.6.2003 i.e. after the expiry of three months from the date of surveyor’s report. It has also been directed that if the said amount is not paid within the specified period, interest @ 15% p.a. shall be payable.

2. The complainant, a financier, advanced loan of Rs. 5,00,000 to one Jai Singh for purchase of Ashok Leyland truck on hire-purchase basis. The truck was registered on 6.12.1996. The complainant insured the truck with the Insurance Company declaring its value at Rs. 6,00,000. It was a comprehensive policy covering the period from 9.3.2000 to 8.3.2001. A premium of Rs. 10,759 was paid. On the intervening 3 and 4 July, 2000 night the vehicle was stolen. The police was informed. Information regarding theft was also given to the Insurance Company on 6.7.2000. Final untraceable report in respect of the vehicle, filed by the police, was accepted by the Magistrate on 23.12.2002.

3. Thereafter, the complainant lodged its claim for compensation with the Insurance Company. The Insurance Company appointed a surveyor to assess the loss for the vehicle. It appears that on receipt of the surveyor’s report, the Insurance Company offered to pay to the complainant a sum of Rs. 2,85,000, though the loss assessed by the surveyor on the basis of the market value of the vehicle at the time of theft was Rs. 4,88,344. The said amount seems to have been accepted by the Complainant. Being dissatisfied with the amount of compensation received, seemingly under pressure, the complainant filed a complaint before the District Forum under Section 12 of the Act praying for compensation of Rs. 6,00,000. The District Forum directed the Insurance Company to pay to the complainant, as compensation, an amount of Rs. 6,00,000 with interest @ 12% p.a. from 1.7.2003 and cost of proceedings, quantified at Rs.1,000.

4. Both the Insurance Company as well as the complainant preferred appeals against the said order before the State Commission. The complainant’s grievance was that the interest had been awarded for a shorter period, whereas the Insurance Company contested the quantum of compensation. Allowing both the appeals, the State Commission has modified the order of the District Forum to the extent indicated above. Hence, the present Revision Petitions.

5. We have heard learned Counsel for the parties.

6. In the Revision Petitions, both the parties have questioned the correctness of the impugned order on several grounds but before us, only two issues have been raised viz., (i) basis for determination of the market value of the vehicle for assessment of loss and (ii) the period and rate of interest, payable on amount of compensation. It was urged by learned Counsel for the Petitioner Insurance Company that loss to the vehicle has to be assessed on the basis of its market value as on the date of accident or theft as the case may be, which would be directly relatable to the age of the vehicle. It is asserted that the rate of interest awarded is highly excessive. The stand of learned Counsel for the respondent/complainant, on the other hand, is that having accepted the declared value of the vehicle for the purpose of premium, the Insurance Company is bound to adopt the same base value for determining the compensation. Learned Counsel submitted that interest @ 15 p.