RAVINDER KUMAR AGGARWAL Vs. ORIENTAL INSURANCE COMPANY LIMITED

JUDGEMENT

(1.) Ravinder Kumar Aggarwal and his father Lekh Ram, hereinafter referred to as complainants, purchased a new open bodied truck from Pearey Lal and Sons (E. P.) Ltd. on 11.2.91 for Rs.3,38,635/- They got built a cabin for Rs.65,000/-. The complainant had raised a term loan from Nainital Bank Limited and the truck was hypothecated in favour of the Bank. The truck met with an accident on 17.7.91 at Pratappur, District Meerut (U. P.) at 11.00 a. m. F. I. R. was lodged at the police station and the Insurance Company informed on 18.7.91. M/s. Naveen and Co. Surveyors carried out a preliminary survey and noted in their report that the truck had been extensively damaged. The complainants requested for treating the case as total loss which was not accepted and it was decided that repairs be carried out. The truck was towed to the workshop of Pearey Lal and Sons (E. P.) Limited on 30.7.91. Alongwith a detailed estimate, claim was submitted by the complainants. By his report dated 21.12.91, Mr. B. K. Rahan, Surveyor recommended settlement of the claim by payment of Rs.1,78,288.08 including rebuilding of the cabin and towing charges. The truck was re-inspected on 17.1.92 by S. N. Singh, Surveyor who reported that except for certain parts and the cabin, the other repairs had been carried out and salvage was in order. A cheque for Rs.91,800/- was released by the Insurance Company in favour of the repairer on 17.12.91. In a later report dated 17.10.92 the Surveyor Mr. S. N. Singh stated that the truck had been duly repaired and cabin also rebuilt. The claim was ultimately settled for Rs.1.43.000/- on 28.7.92. A cheque for Rs.49,500/- was released by the Insurance Company on 15.12.92. The repairer did not release the truck unless it had received the total cost of repairs. The balance amount was paid by the complainants themselves and the vehicle was delivered to the complainants on 22.12.92.

(2.) The grievances of the complainants are: (i) That the second instalment of Rs.49,500/- was released 12 months after the payment of the first instalment of Rs.91,800/- on 17.12.91 and 17 months after the accident when all along the complainants liability was mounting as the term loan carried interest @ 20.25% per annum compounded quarterly. (ii) The truck was ready for delivery by the repairer on 17.12.92, as the complainants could not arrange payment of the repair charges and the Insurance Company took its own time for releasing the balance payment, the delivery of the repaired truck was effected only on 22.12.92. (iii) The complainants were unable to use the truck for earning their livelihood from 17.7.91, the date of accident till 22.12.92 when it was delivered after repairs by Pearey Lal and Sons. During this period, the complainants were not only deprived of the income from the truck, they also incurred heavy interest liability on the term loan due to Nainital Bank Limited. (iv) The amount determined on summary assessment on account of loss was Rs.2,42,350/- vide Column 13 of the Report of Rahan Brothers at page 65 of the paper book ). The Surveyor recommended settlement of the claim on payment of Rs.1,78,288.08/- But the said amount was arbitrarily slashed down to Rs.1,43,000/- for no apparent reason. The complainants have claimed: (a) Rs.78,000/- being the difference of actual expenses incurred for repairs and the amount given by the Insurance Company. (b) Interest @ 22% on the aforesaid amount of Rs.78,000/-. (c) Rs.5,50,399/-on account of loss suffered by the complainants @ Rs.32,000/- per month as they could not ply the truck from 17.7.91 to 22.12.92. (d) Payment of interest on the aforesaid sum of Rs.5,50,399/- @ 22%. (e) Rs.40,000/- on account of harassment and mental agony caused to the complainants. (f) Rs.20,000/- for the efforts made by the complainants for release of the claimed amount. (g) Rs.22,000/- towards cost of the present proceedings.

(3.) In the written version filed by the oppo site party it is admitted that the complainants had obtained insurance policy and the truck was under hypothecation with Nainital Bank Ltd. It was also admitted that in the accident, the truck was very badly damaged. It was admitted that the complainants with their letter dated 21.2.92 submitted a bill or the repairer in the sum of Rs.1,76,400/- and requested the Company to release the payment. In reply dated 23.3.92, the Insurance Company asked the complainants to submit payment receipt of the repairer along with certain other documents. In their letter dated 31.3.92, the complainants stated that the payment receipt would be submitted only after the payment was made and the Insurance Company was, therefore, requested to make the payment to the repairer directly. Normally payment is made to the repairer by the insured himself and a receipt to this effect is submitted alongwith the original bills. In the present case, the insured were unable to make the payment and, therefore, requested the Insurance Company to make an on account payment to the repairer. It has further been stated that the release of on account payment was not within the authority of the Branch/divisional Office and accordingly after getting the vehicle reinspected, the Branch/divisional Office approved the claim for Rs.1,69,653/- and referred the file to the Regional Office recommending on account payment to the repairer. The recommendation was made on 24.4.92. The Regional Office relying on the report of the Surveyor deducted value of the parts which had not been replaced at that time as well as salvage value of axle and approved the claim for Rs, 1,43,000/- on repair basis subject tore-inspection of the cabin after repairs. The Regional Office conveyed its approval by its letter dated 28.7.91 (this date appears to be wrongly typed as 28.7.90 in the written statement ). On receiving the file, the Divisional Office authorised Branch Office to make an on account payment of Rs.91,500/- and accordingly the said payment was made on 17.8.92. The insured by their letter dated 9.10.92 informed the Company that the truck had been fully repaired, parked in the work-shop of Pearey Lal and Sons at Mathura Road, New Delhi and the same be got re-inspected. Accordingly Mr. S. N. Singh, Surveyor re-inspected the repaired truck and submitted his report dated 17.2.92. In pursuance of the letter of the Branch Office dated 4.11.92, the complainants deposited the salvage on 11.11.92 and thereafter the balance payment of Rs.49,500/- was released on 3.12.92. It was not disputed that the truck had been purchased with the financial assistance of Nainital Bank Limited. It was, however, denied that the loan amount carried interest @ 20.25%. The claim on account of loss in income during the period the truck remained with the repairer was denied as not covered by the policy.