ORIENTAL INSURANCE CO LTD Vs. SURESH ARJUN KARANDE

JUDGEMENT

(1.) We find that there is substance in the contention raised by the Appellant that the State Commission was in insurer a holding that the Insurance Company, while settling the claim based on a Motor Vehicle insurance policy, was liable to pay to the insured in the event of 'total loss' of the vehicle the actual amount stated in the policy as the value of the vehicle estimated by the insured, irrespective of what was the actual market value of the vehicle on the date of its loss. 1. A policy of insurance is a contract for indemnification against loss and the Insurance Company is liable only to indemnify the insured against the loss actually suffered by him. This legal position is incorporated in condition No. 4 in the Insurance Policy which specifically states that the liability of the Company shall in no case exceed the insured's estimate of the value of the motor vehicle (including the accessories thereon) as specified in the schedule or the value of the Motor Vehicle (including the accessories thereon) at the time of loss or damage, whichever is less. We accordingly hold that the Stale Commission was not right in awarding to the complainant the full amount mentioned in the policy as the insured's estimate of the value of the vehicle.

(2.) In the light of what is stated above, it is necessary for us to determine what exactly the value of the vehicle in question was as on the date when it got involved in the accident resulting in its total loss to the insurer. The vehicle was purchased in 1981 being a "Premier Road-Master" Transport Vehicle (1981 Model) (Lorry). It was in good running condition at the time when the accident took place on 30.5.1989. The point to be determined is what was the market value of a vehicle of this make and model (1981) as on 30.5.1989. There are no materials on the record which can help us to determine such market value. Though a Surveyor had been appointed by the Insurance Company and a report had been made to the Company by him which is part of the record, we find that the entire approach made by the surveyor was totally wrong. What he has done is to mention the value of the different spare parts as on the date he submitted his report, total up the cost of the all those parts, and make a flat reduction of 50% as depreciation. The Surveyor should have ascertained what was the value in the market of a second hand (used) vehicle of the particular make and model as on the date when the accident took place. This will be quite different from the value of different parts put together. The Surveyor's report is thus of absolutely no assistance to us.

(3.) In the circumstances we consider that the best course to be adopted is to direct the General Insurance Corporation, Bombay to appoint two independent surveyors within three weeks from today for separately ascertaining the market value of a Premier Road Master 1981 Model (Transport Vehicle) (Lorry) in good running condition as on 30.5.1989. The Surveyors should give notice to the complainant and consider all the materials which may be produced by him and also any representation made by him before they finalise their reports. The surveyors should submit their separate and independent reports to the General Insurance Corporation within six weeks of the date of receipt by them of the intimation of their appointment by the General Insurance Corporation. The General Insurance Corporation should thereafter forthwith forward the reports to this Commission.