ORDER
Mr. Justice J.K. Mehra, Member
1. This first appeal arises out of the order of the State Consumer Disputes Redressal Commission, Haryana, whereby the State Commission allowed the appeal. The facts in brief which led the complainant to approach the State Commission are as follows :
2. The complainant got his vehicle, Ford Escort Diesel car, insured with the respondent Insurance Company for a sum of Rs. 6 lakhs and paid a premium of Rs. 19,903/-. The vehicle met with an accident on 22.1.1999 which fact was brought to the notice of Insurance Company on the same day. The opposite party asked the complainant to take the vehicle to a
workshop in Chandigarh for proper survey which the complainant did at his own cost where the Surveyor examined the damaged vehicle and asked the workshop people to prepare an estimate of the damaged vehicle. The workshop people submitted the estimate at Rs. 7,17,511/-. The complainant thereafter submitted the claim with the Insurance Company for payment of the insured amount of Rs. 6 lakhs. As is clear from the order of the State Commission, the Insurance Company neither repaired the vehicle nor paid the insured amount for getting the vehicle repaired. Dissatisfied with the attitude of the Insurance Company the complainant approached the State Commission.
3. In response to the notice, the Insurance Company filed its reply and denied any deficiency on its part. The contention of the Insurance Company is that it had insured the vehicle for Rs. 6 lakhs and the liability of the Insurance Company was based on law of indemnity and also that the sum insured was not the benchmark for payment of the claim. It is also contended before the State Commission that no spot survey was conducted by the insured in spite of heavy damages suffered by the vehicle during the accident. However vide letter dated 13.3.2000 the Insurance Company approved the claim for Rs. 3,50,000/- subject to deposit of salvage with the Insurance Company, registration certificate of the vehicle to be transferred in the Company’s name, original policy of the vehicle was to be submitted by the complainant, discharge voucher duly signed by the complainant are to be deposited with the Insurance Company.
4. Upon hearing both sides the State Commission observed that the Insurance Company had not disputed that the vehicle in question was insured with them for a sum of Rs. 6 lakhs and that the vehicle in question was badly damaged and was brought to Chandigarh by the complainant on the instructions of the opposite party. Since the factual position regarding insurance of the car, validity of the insurance policy, occurrence of the accident
during the validity of the insurance cover, the assessment of the loss by the Surveyor have been established as well as admitted, the State Commission on the basis of the documentary evidence produced by the complainant and keeping in view the fact that the car was insured for Rs. 6 lakhs and the damage to the vehicle was assessed at Rs. 7,12,511/- the State Commission awarded a sum of Rs. 5,50,000/- with interest @ 12% p.a. from the date of filing of the complaint till realisation. With these observations the State Commission allowed the appeal. Feeling aggrieved by the order of the State Commission the opposite party-Insurance Company has come appeal before us.
5. We have heard the learned Counsels for the parties. We have also gone through the order of the State Commission. Since the vehicle which was of 1996 model met with accident on 22.1.1999, the value of the compensation will depend on the value of the vehicle after reducing from its price the depreciation. Under the income tax laws, the depreciation available for a vehicle is 20% for each year. But in the present case there is a specific agreement. Under the policy the table of depreciation has been set out which provides as under :
Table for assessing Depreciation Prescribed in Policy.
Age of car % of
Depreciation
Upto 6 months NIL
Between 6 months and 1 year 5%
Between 1 year and 2 years 10%
Between 2 years and 3 years 15%"
6. The vehicle was, however, according to survey report, registered on 15th May, 1998. As such under the contract of insurance depreciation @ 10% was to be allowed, i.e. 6 lakhs less Rs. 6,000/- as depreciation. The Surveyor found that the market value of the vehicle was reduced to Rs. 3,50,000/-. But, after calculating the charges, depreciation and other costs including labour charges, he assessed at Rs. 3,91,000/- on repair basis out of which Rs. 15,000/- was deducted as expected value of the salvage. The
insured did not accept this valuation. Insurance Company gave an offer to settle the claim on market value i.e. Rs. 3,50,000/- which was also not acceptable. In the light of this that the State Commission has taken into account the depreciation and fixed value as Rs. 5,50,000/-. We are unable to understand how this depreciation has been worked out. In fact, it should be reduced by 10% out of Rs. 6 lakhs, that will bring down the value to Rs. 5,40,000/-. The interest should also be not more than 10%. So, we modify the impugned order award a sum of Rs. 4,80,000/- which should be paid within one month from the date of receipt of this order together with interest at the rate of 10% p.a. The complainant shall also be liable to surrender the salvage and in the event of its keeping the salvage, a sum of Rs. 15,000/- will be deducted from the above amount. Both the parties are left to bear their own costs. The
appeal is disposed of in the above terms.