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J&K High Court · body

2009 DIGILAW 674 (JK)

National Insurance Co. Ltd. v. Nazir Ahmad Shah

2009-12-23

B.L.Saraf, G.D.Sharma

body2009
G.D. Sharma, J. 1. Through the medium of this appeal order dated 16.02.2006 passed by the Learned Divisional Forum Jammu (hereinafter to be referred as `Forum') has been challenged. The Forum has directed the appellants to pay an amount of Rs. 1,03,500/- alongwith interest @ 6% per annum payable after three months from the date of the submission of the surveyor's report to the Appellant. Litigation expenses have been granted in the sum of Rs. 2000/-. The appeal was filed on 31.01.2007 which was time barred by 319 days. Application was made for the condonation of delay. Sufficient ground was found to condone the delay and vide Order dated 23.12.2008 the delay was condoned and the appeal was registered in the concerned register on that date. The order has been challenged inter-alia on the following grounds:- a. As per condition No. 4 of the Insurance Policy in question the appellant was liable to pay the lowest assessment made by the surveyor in respect of the actual loss suffered by the respondent out of the other two assessed losses. b. The interest to be charged on the assessed amount is of penal nature. 2. Heard the arguments. 3. Mr. Sunil Malhotra, the Learned Counsel of the appellant has laid great stress on condition No. 4 of the Insurance Policy which according to him mandates that the Insurance Company has the option to reimburse the actual loss to the insured either by repairing, reinstating or replacing the Motor Vehicle or part thereof and/or its accessories or may pay in cash the amount of the loss or damage whichever is less. Elucidating his arguments, he has further submitted that the surveyor and loss assessor namely M/s Sharma surveyors had assessed the loss at the market value basis minus the salvage value of the insured truck in question at Rs. 1,03,500/- whereas, on the basis of repair basis he has assessed the liability at Rs. 56665/-. The lowest loss assessed was the amount of indemnification to be paid to the respondent. In support of his contention, he has cited the case of United India Insurance Co. Ltd. v. Harchand Rai /Chandan Lal (2004)-8 Supreme Court Cases 644. Mr. Bari Abdullah the learned counsel appearing for the respondent has rebutted the argument of Mr. Malhotra by submitting that M/S Sharma Surveyors has assessed total loss on insured basis in the sum of Rs. 2,28,500/-. Ltd. v. Harchand Rai /Chandan Lal (2004)-8 Supreme Court Cases 644. Mr. Bari Abdullah the learned counsel appearing for the respondent has rebutted the argument of Mr. Malhotra by submitting that M/S Sharma Surveyors has assessed total loss on insured basis in the sum of Rs. 2,28,500/-. He has assessed the loss on market value basis at Rs. 1,03,500/-. He has assessed the loss on repair basis at Rs. 57,465/-. According to the Counsel the arguments advanced by Mr. Malhotra advocate do not apply to the facts of the case because the surveyor has not taken into account the expenses incurred by the respondent to bring the damaged vehicle from the site which was located in district Anantnag to the place situated at Nawabad, Jammu where the vehicle was stationed and the surveyor inspected the same on 18.08.2000 while the accident had taken place on 13.07.2000. The respondent has incurred extra expenses for the carriage of the vehicle from the site of accident to the site of its dumping in Nawabad area of Jammu where he had to pay the rent as well. The surveyor had also not inspected the damaged engine part of the insured vehicle. In these circumstances, the assessment of loss arrived at on repair basis is not a fair and acceptable assessment of the loss because the respondent is entitled as per the terms and conditions of the Policy to the actual loss suffered by him. While concluding his assessment, the best mode for proper indemnification of the damaged vehicle is total loss market value basis which was arrived at Rs. 1,03,500/- and the Learned Forum had granted that sum in a just and fair manner. 4. We have considered the respective submissions of the Learned Counsel appearing for the parties and gone through the record of the case. Condition No. 4 of the contract of the Insurance Policy in clear terms mandates that insurer has the option for the indemnification of the actual loss by adopting any of the modes mentioned therein as we have reproduced above. The liability of the insurer is limited to the actual value of the parts damaged or loss less depreciation plus the reasonable cost of fitting. It is the discretion of the insurer to indemnify the insured for the loss of damage whichever is less. The liability of the insurer is limited to the actual value of the parts damaged or loss less depreciation plus the reasonable cost of fitting. It is the discretion of the insurer to indemnify the insured for the loss of damage whichever is less. The Hon'ble Supreme Court in the case of Harchand Rai Chandan Lal (supra) has held that the terms of the insurance policy shall govern the contract between the parties and they have to abide by the definition given therein, and all those expressions appearing in the policy have to be considered as it is and something cannot be added, subtracted or substituted. We find in the surveyors report that he had taken into account the spirit of Rule 4 of the contract of insurance as he has mentioned that the liability on total loss basis is higher than the liability on repair basis. It is why he has recommended net loss in the sum of Rs. 57,465/-. The parties are bound by the terms and conditions of the contract of the insurance and the expert surveyor has assessed the loss on repair basis at Rs. 57,465/-. We cannot add or subtract any amount from the above assessed loss. The actual expenses suffered by the respondent must have been taken into account by the surveyor in case he was apprised of that factual position and now it is too late in the day to orally contend that expenses for carriage of the vehicle and rent paid has not been taken into account. In this view of the matter, we allow the appeal and direct the appellants to indemnify the respondent to the extent of assessed loss in the sum of Rs. 57,465/- alongwith interest at the rate of 6% per annum after three months from the date of submission of the surveyor's report to the appellants. The rate of interest in no way is penal. Besides this litigation expenses in the sum of Rs. 2000/- as ordered in the impugned order are also payable. The appeal is consigned to record and the record of the Forum be returned at once.