Mr. Vishan Narain vs The Oriental Insurance Company ...
2002 Latest Caselaw 354 Del

JUDGMENT

Usha Mehra, J.

1. Admit.

2. Since the point involved is very short, therefore, with the consent of counsel for the parties the appeal is taken up for disposal.

3. Appellant (plaintiff before the trial Court) was owner of a vehicle Maruti Van which he got insured with respondent No. 1 vide Policy No. 31/00956/97 effective from 16th August, 1996 to 15th August, 1997. During the currency of the policy the said vehicle was stolen on 24th December, 1996. An FIR was got registered with Police Station Sabzi Mandi, Delhi. On 26th December, 1996 the appellant lodged a claim with respondent No. 1. When in spite of repeated requests the respondent failed to make the payment of the claim the appellant sent a legal notice. On 25th June, 1997 appellant received a letter from respondent indicating that respondent was prepared to pay Rs. 70,000/- because that was the market value of the vehicle assessed by the respondent. Being dis-satisfied with this offer the appellant herein filed a suit for recovery of an amount of Rs. 1,42,000/- i.e. the sum insured plus interest and damages. This suit was contested by respondent No. 1 and on the basis of respondent's admission, the appellant sought order of the court for payment of the admitted amount which he was prepared to accept without prejudice to his right in the suit. On 26th March, 1998 the learned Trial Court passed a partial decree of Rs. 70,000/- in favor of appellant pursuant to which respondent No. 1 made payment of Rs. 70,000/- on 13th July, 1998.

4. Parties led evidence. On behalf of respondent No. 1 Mr. Achyut Jhingran, Surveyor and loss Assessor was examined and this appellant examined his son Vinod Kumar as PW-1 and a Surveyor Mr. Rakesh Kumar as PW-2. By the impugned judgment the learned Trial Court confirmed the interim decree passed and held that the appellant was not entitled to any further relief. The reason for confirming the interim decree was that as per the Survey conducted by the respondent No. 1, the market value of 7 years, 7 months old vehicle was approximately Rs. 65,000/- plus-minus 5%. Since the vehicle was of 1989 model and that being a second-hand car the market value continuously declined over the years. Therefore, relying on the report of Mr. Achyut Jhingran Ex.DW-1/1 the Court confirmed its interim decree.

5. The question for consideration is; whether value of the Maruti Van, the vehicle in question is to be taken as the insured value or the market value? It is an admitted case that the vehicle in question was stolen, thus it is a case of total loss. Hence the question of assessing market value of the vehicle in question did not arise as it was a total loss case. Therefore, we are left with only the contractual value i.e. Rs. 1,00,000/- for which amount the vehicle was insured. On this amount the respondent No. 1 charged the premium. Now the respondent No. 1 cannot be allowed to say that the appellant would be paid on the basis of market value of the vehicle, particularly when the vehicle was not available for assessment. If at all the market value was to be assessed, it was at the time of insurance of the vehicle. Insurance Company must have noted that the vehicle was 7 years 7 months old and was of 1989 model still insured it for rupees one lakh. In spite of this information when the Insurance Company insured the vehicle for Rs. 1,00,000/- it means the Insurance Company knew that in case of total loss it would have to reimburse the amount for which vehicle was insured. Take for example if there had been an accident and the vehicle got damaged then of course the market value could have been assessed and compensation paid accordingly. But that is not the case in hand.

6. Now since it is a case of total loss the question of depreciation or of assessing the market value does not arise. Therefore, we feel that the learned Trial Court did not appreciate the difference between two set of cases i.e. of total loss and another of damage and allowed the compensation on the erroneous belief as if the vehicle was available and its market value got assessed. Even the Insurance Policy was not produced by the respondent to show that as per the terms of the policy the Appellant even in case of total loss was entitled to market value of the vehicle. In the absence of there being a clause to the contrary, the Appellant was entitled to get the amount for which the vehicle was insured. In fact Insurance Policy is a contract and the parties are bound by the terms of the same. We cannot loose sight of the fact that it was the duty of the respondent who was in possession of the document which would be helpful in doing justice to produce the same. This duty is greater in case of an instrumentality of the State such as the Insurance Company who are under an obligation to act fairly. Supreme Court has emphasised this aspect in the case of National Insurance Co. Ltd., New Delhi v. Jugal Kishore wherein it is held that in all such cases where the Insurance Company concerned wishes to take a defense in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defense.

7. Mr. L.K. Tyagi, learned counsel for the respondent strenuously argued that the term of the policy was duly incorporated in para 2 of the preliminary objection in the written statement. That para having been admitted by the appellant in the replication it was not necessary to produce the insurance policy. We have perused para 2 of preliminary objections and find the following assertion:-

"As per policy the defendant has to pay the sum insured on the market value of the vehicle, which ever is less. The defendant No. 1 got the value assessed at Rs. 70,000/- as the vehicle was 1989 model."

8. This para nowhere mentions any terms of the policy nor does it indicate that it case of total loss the market value will be assessed. The fact of the matter is that this appellant got his vehicle insured for rupees one lakh which value of the vehicle was accepted by the respondent and, therefore, insured for that value. Hence, on that vehicle being lost the respondent cannot be permitted to take shelter on the ground that market value of 1989 model Maruti Van was Rs. 70,000/-.

9. For the reason stated above the impugned judgment cannot be sustained. The same is accordingly set aside. We hold that the appellant is entitled to the sum insured. Beside he will also be entitled to interest on the amount so awarded at the rate of 9% p.a. pendentelite and future till realisation subject to the adjustment of the amount already received by him. The interest will be calculated on diminishing basis.