SINGUREDDY RAMANA MURTHY Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) This appeal is directed against the order of the State Conusmer Disputes Redressal Commission, Andhra Pradesh, rejecting the complaint filed by the appellant herein. The facts in brief are that appellant had insured his fishing boat No. KKD 1606 with the respondent Insurance Co. for a sum of Rs. 3,40,000/- for the period 21.10.1988 to 20.10.1989 which sunk on 12.12.1988 due to heavy and high velocity cyclone winds. Appellant informed the respondent Insurance Company on the very next day, i.e. 13.12.1988. The vessel could not be refloated in spite of all efforts. The salvage operations were conducted in the presence of the officers of the Insurance Company and they could bring to shore only some wood pieces and the engine could not be brought as it is, and hence it was dismantled and some parts of it were brought to shore. The Insurance Company appointed Surveyors, M/s. J.B. Boda, Surveyors Pvt. Ltd. who submitted their report on 26.6.1989, assessing the damage as per cost assessement and computing the total assessed loss at Rs. 2,82,700/-. It was found that Rs. 21,500/- for the salvage charges were paid by the complainant. It is to be mentioned here that the Insurance Company settled the claim at Rs. 1,95,633/- and the complainant accepted the amount under protest. The complainant, immediately, after receipt of the amount, wrote a letter to the Insurance Company informing them the amount of Rs. 1,95,633/- being accepted under protest, which letter was replied to by the Insurance Company vide letter dated 23.4.1990 mentioned therein that they are accepting the claim for Rs. 3,40,000/-. In view of this development, the complainant filed a complaint before the State Commission seeking a direction to the Insurance Company to make the balance payment with interest at the rate of 18% p.a. with damages of Rs. 1 lakh.

(2.) Before the State Commission, the Insurance Company has taken the stand that the Complainant is not entitled to Rs. 3,40,000/- as the policy could not be settled on total loss basis, as the complainant failed to effect repairs, and after negotiations the matter was fully and finally settled by paying an amount of Rs. 1,95,633/-. This plea of the Insurance Company was rebutted by the complainant by stating that the consent letter for full and final settlement from him was obtained by misrepresentation, fraud or coercion or by exercising undue influence. The State Commission on examination of various documents produced before, the letters referred to in course of hearing, returned the finding that there was no evidence on record to show that the complainant signed the settlement due to any misrepresentation, fraud or corecion or undue influence, and hence, there was no deficiency in service, and dismissed the complaint. Now, the compalainant has come in appeal before us. It appears the State Commission lost sight of the principle of Insurance which is to indemnify and not to try to bargain after ascertainment of the extent of loss. The Insurance Company must give good reasons to the insured for depriving him of the amount of loss ascertained by the Surveyor or part thereof. No such correspondence is brought to our notice.

(3.) Heard Counsel for both sides and liberty was given to the parties to file their written submissions. We have also gone through the written submissions accompanied by the judgments of this commission. In the light of the law on the subject as discussed hereunder the impugned order cannot be upheld. In fact, there appears to be no evidence of any alleged negotiations, before the State Commission, which has come to that conclusion. The relevant portion of which reads as under :