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HIMACHAL PRADESH STATE CONSUMER DISPUTES REDRESSAL COMMISSION
SURJIT SINGH, PRESIDENT, CHANDER SHEKHAR SHARMA, PREM CHAUHAN, MEMBERS
Shriram General Insurance Company Ltd. — Appellant
Versus
Dagi Ram — Respondent
First Appeal No. 30 of 2013
Decided on : 05-08-2013
Advocate Appeared:
For the Appellant :Mr. Jagdish Thakur, Advocate
For the Respondent:Mr. Vikrant Chandel, Advocate
Interest should not be punitive and should be payable in accordance with civil law.
Headnote:
Interest Payment - Insurance Claim - The court modified the order to make the appellant liable to pay interest on the insurance amount from the date of the District Forum's order, rather than from the date of filing of the complaint.
Fact of the Case:
The respondent's vehicle was insured and met with an accident. The insurance company noticed a break in insurance and did not clear the claim. The respondent filed a complaint under the Consumer Protection Act, and the District Forum ordered the appellant to pay the insurance money with interest from the date of filing the complaint.
Finding of the Court:
The court found that the interest should not be payable from the date of filing of the complaint, as it would be punitive and not permitted by civil law. The court modified the order to make the appellant liable to pay interest from the date of the District Forum's order.
Issues: The issue was whether the appellant should be liable to pay interest on the insurance amount from the date of filing of the complaint or from the date of the District Forum's order.
Ratio Decidendi: The court held that making the appellant liable to pay interest from the date of filing of the complaint would be punitive and not permitted by civil law.
Final Decision: The court modified the order to make the appellant liable to pay interest on the insurance amount from the date of the District Forum's order, rather than from the date of filing of the complaint.
ORDER :
Surjit Singh, President
A very small issue has been raised in the present appeal by the appellant-Insurance Company. The same arises out of the direction for payment of interest on the insurance money from the date of filing of the complaint, in case default is made in paying the said sum of money within the stipulated period.
2. Respondent, Dagu Ram owned a vehicle, which was insured with the appellant for the period from 21.12.2010 to 20.12.2011.Vehicle met with an accident on 24.01.2011 and was damaged. It (vehicle) was insured for Rs. 3,50,000/-, which was the insureds declared value. Intimation of the accident was given to the appellant. A surveyor was deputed, who reported that the loss was to the tune of Rs. 3,02,487/-, on repair basis. Since the loss assessed on repair basis, was equivalent to an amount exceeding 75% of the sum assured, respondent-complainant claimed that he was entitled to the entire sum of Rs. 3,50,000/-, for which the vehicle was insured. When the claim was being processed, appellant allegedly noticed that there was break in insurance. The claim was, therefore, not cleared.
3. Respondent then filed a complaint, under Section 12 of the Consumer Protection Act, 1986. Appellant filed reply, in which, it was stated that when during the course of processing the claim, it was noticed that there was break in insurance and this fact was brought to the notice of the respondent-complainant, he filed an affidavit, withdrawing the claim and that is why, nothing was paid to him.
4. Learned District Forum allowed the complaint, holding that the affidavit, which the complainant allegedly filed for withdrawal of the claim, had not been proved. Learned District Forum then passed the order that appellant shall pay a sum of Rs. 3,50,000/-, on account of insurance money to the respondent, in case the latter deposited the salvage of the vehicle within 15 days of the passing of the order. Insurance money, as aforesaid was ordered to be paid, within 7 days of the deposit of the salvage. The order further said that in case salvage was not deposited, then a sum of Rs. 3,02,487/- would be payable by the appellant within 7 days from the expiry of the aforesaid period of 15 days and in case the said amount of money was not paid within stipulated period, interest at the rate of 9% per annum shall be payable from the date of filing of complaint.
5. Appellant is aggrieved by the direction for payment of interest at the rate of 9% per annum from the date of filing of the complaint, in case the insurance amount of Rs. 3,02,487/- had not been paid within stipulated period. According to it, learned District Forum at the most could have ordered the payment of interest from the date of passing of the impugned order.
6. We have heard learned counsel for the parties and gone through the record.
7. The only submission made on behalf of the appellant is that interest ought not to have been made payable from the date of filing of the complaint, in case of default to pay the insurance amount of Rs. 3,02,487/- within the stipulated period. Admittedly, the respondent has not delivered the salvage to the appellant. Therefore, only a sum of Rs. 3,02,487/- is payable by the appellant. Appellant did not pay this amount of money within stipulated period, but deposited the same with this Commission, partly in the month of February 2013, to the extent of Rs. 25,000/- at the time of filing of the appeal and rest of it in April 2013, in compliance with our order dated 01.03.2013 passed on the stay application.
8. Looking to the background of the case, viz., the respondent allegedly filed an affidavit, withdrawing the claim when he was confronted with the fact of break in insurance, which he had concealed, as also the fact that when in view of the facts and circumstances of the case, learned District Forum felt that appellant was not liable to pay any interest, in case the money was paid within stipulated period, which was approximately 22 days, order fo
