[REPORTABLE]

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. ……………….. OF 2008 (arising out of SLP© No. 14054 of 2006 )

Dharmendra Goel …..Appellant

                             Versus

Oriental Insurance Co. Ltd.   ….Respondent

J U D G M E N T  

HARJIT SINGH BEDI, J.  

1. Leave granted.

2. This  appeal  by  way  of  special  leave  arises  out  of  the

following facts:

3.      On 4th January, 2000, the appellant herein purchased a

new Tata  Sumo vehicle  for  a  sum of  Rs.  4,30,000/-.   The

vehicle was comprehensively insured on 19th January, 2000

with the Oriental Insurance Company (hereinafter referred to

as ‘the Company’  )  on its  purchase  value  of  Rs. 4,30,000/-

and a premium of Rs. 10,436/- was paid.  This policy expired

on 18th January, 2001 and on the very next day the said policy

was renewed for a year by the company assessing the value of

the  vehicle  at  Rs.3,59,000/-.   This  policy  expired  on

18th January,  2002  but  was  again  renewed  on

13th February, 2002 up to 12th March, 2003 on a premium of

Rs.  8498/-  on  the  value  assessed  by  the  Company  at

Rs.3,54,000/-  The  vehicle  met  with  an  accident  on

10th September,  2002  on  which the  appellant  informed  the

company as to what had transpired. The vehicle was removed

to  Chambal  Motors,  Kota,  Rajasthan,  an authorized  service

station of Tata Motors, for repair.  Chambal Motors submitted

an estimate of Rs.3,37,246.59/-for the repair of the vehicle.

The appellant then submitted a claim for Rs. 3,37,246.59 /-

on  11th October,  2002  alongwith  a  bill  of  Rs.4,000/-  for

removing  the  vehicle  to  the  workshop  from  the  place  of

accident.  The company, however, appointed a Surveyor, M.N.

Chaturvedi Associates on 14th December, 2002 to assess the

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loss  and  to  submit  a  report.   The  surveyor   in  his  report

determined a total loss of Rs. 1,80,000/- after assessing the

value of the salvage at Rs.85,000/- whereas the assessment

on  cash  loss  basis  was  made  at  Rs.1,04,433.53/-.   The

company,  however,  declined  to  defray  any  amount  to  the

appellant  on  the  plea  that  the  driver  did  not  have  a  valid

driving  licence  on  the  date  of  the  accident.   The  appellant

thereupon  filed  a  complaint  before  the  District  Consumers

Forum  praying   that  the  sum  of  Rs.3,37,246.59  /-,  the

estimate  given  by  Chambal  Motors  with  some  additional

charges,  be paid to the appellant.  After the completion of the

pleadings,  the  District  Forum,  by  its  order  dated

19th January, 2004, dismissed the complaint on the ground

that the question as to whether the driver of the vehicle had a

valid  driving  licence  on  the  date  of  the  accident  involved

complicated questions of fact which could be decided only by

a Civil Court.  Aggrieved by this order the appellant filed an

appeal  before  the  M.P.  State  Consumer  Disputes  Redressal

Commission,  Bhopal.  The  Commission  in  its  order  dated

28th July, 2004 held that the driver did have a valid driving

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licence on the date of the accident and accordingly directed

the Company to pay to the appellant a sum of Rs. 1,04,043/-

with  interest  @  6% p.a.  from  the  date  of  the  filing  of  the

complaint  till  payment.   Dissatisfied  by  the  inadequate

compensation  awarded  by  the  State  Commission,  the

appellant  preferred  a  revision  petition  before  the  National

Consumer  Disputes  Redressal  Commission,  New  Delhi

(hereinafter  called   “the  National  Commission”),  claiming  a

sum of  Rs.  3,54,000/-towards  compensation.   The  National

Commission, by its order dated 20th April, 2006 partly allowed

the appeal and granted a compensation of Rs.1,80,000/- with

interest  @12% p.a.  The  claimant  is  before  us  in  appeal  in

these circumstances.

4.       The learned counsel for the appellant has raised only

one argument in the course of hearing.  He has submitted that

the company itself had issued an insurance policy in a sum of

Rs.3,54,000/- effective from 13th February, 2002 to            12th

March, 2003 and had also accepted a premium on that basis

and as such to claim that the appellant was entitled to a figure

below  that  amount  was  wholly  unjustified.  He  has  also

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submitted in elucidation, that there was absolutely no basis

for the surveyor’s conclusion that the appellant was entitled

to a sum of Rs.1,80,000/- on total loss basis in the face of the

estimate  made  by  the  Chambal  Motors  for  a  much  larger

amount.

5. The learned counsel for the Company – Respondent has ,

however, pointed out that the appellant’s counsel, had in his

arguments  before  the  National  Commission,  given  up  his

claim to Rs.3,54,000/- as now contended, and had limited the

same  to  Rs.1,80,000/-  and  this  amount  had  in  fact  been

allowed and in this view of the matter, any claim for a  further

sum was  not  justified.   It  has  also  been  pleaded  that  the

appellant had led no evidence to challenge the value put on

the vehicle by the surveyor so as to substantiate his claim.

6. We have heard the learned counsels for the parties and

have  gone  through the  record  very  carefully.   The  facts  as

narrated  above  remain  uncontroverted.   Admittedly,  the

accident had happened on 10th September, 2002 during the

validity of the Insurance Policy taken on 13th February, 2002

insuring  the  vehicle  for  Rs.3,54,000/-  on  a  premium  of

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Rs.8498/- It is also the admitted position that the vehicle had

been declared to be  a total loss by the surveyor appointed by

the  company  though  the  value  of  the  vehicle  on  total  loss

basis  had  been  assessed  at  Rs.1,80,000/-  We  are,  in  the

circumstances, of the opinion that as the company itself had

accepted  the  value  of  the  vehicle  at  Rs.3,54,000/-  on

13th February, 2002, it could not claim that the value of the

vehicle on total loss basis on 10th September, 2002 i.e., on the

date  of  the  accident  was  only  Rs.1,80,000/-.    It  bears

reiteration that the cost of the new vehicle  was  Rs.4,30,000/-

and  it was insured in that amount  on 19th January, 2000

and  on the expiry of this policy on 18th January, 2001,  was

again  renewed  on  19th January,  2001  on  a  value  of

Rs.3,59,000/-  and  on  the  further  renewal  of  the  policy  on

13th February, 2002 the value was reduced by only Rs.5,000/-

to  Rs.3,54,000/-.   We  are,  therefore,  unable  to  accept  the

company’s  contention  that  within  a  span  of  seven  months

from 13th February 2002 to the date of the accident, the value

of  the  vehicle  had  depreciated  from  Rs.3,54,000/-  to

Rs.1,80,000/-. It must be borne in mind that  Section 146 of

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the  Motors  Vehicles  Act,  1988  casts  an  obligation  on  the

owner of a vehicle to take out an insurance policy as provided

under Chapter 11 of the Act and any vehicle driven without

taking such a policy invites a punishment under Section 196

thereof.   It  is  therefore,  obvious  that  in  the  light  of   this

stringent  provision  and  being  in  a  dominant  position  the

insurance  companies  often  act  in  an unreasonable  manner

and after  having accepted the value  of  a  particular  insured

good  disown that very figure on one pretext or the other when

they  are  called  upon  to  pay  compensation.  This  ‘take  it  or

leave it’ attitude is clearly unwarranted not only as being bad

in law but ethically indefensible. We are also unable to accept

the  submission  that  it  was  for  the  appellant  to  produce

evidence to prove that the surveyor’s report was on the lower

side in the light of the fact that a price had already been put

on the vehicle by the company itself at the time of renewal of

the policy.  We accordingly hold that in these circumstances,

the company was bound by the value put on the vehicle while

renewing the policy on 13th February, 2002.

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7. The  learned  counsel  for  the  respondent,  has  however,

argued  that  in  the  course  of  hearing  before  the  National

Commission,  the  appellant  had  limited  his  claim  to

Rs.1,80,000/- and having been awarded that amount, could

not claim anything beyond that figure.  We,  however, notice

from a bare reading of the order of the National Commission

that the primary claim made by the appellant was for a sum of

Rs.3,54,000/- and in the alternative for Rs.1,80,000/-.  This

fact is made more explicit from the grounds of revision filed

before  the  National  Commission  wherein  a  sum  of

Rs.3,50,000/- had been repeatedly claimed.  Even otherwise,

we believe that in such matters, the court must take a realistic

view and if  a particular  claim to compensation is possible on

the  material  on  record,   it  should  not  be  denied  on  hyper

technical  pleas,   as  has  been  argued  by  the  respondent’s

counsel.  

8. The learned counsel  for  the  respondent  company has

finally  submitted  that  as  the  vehicle  had  been  insured  for

Rs.3,54,000/- on 13th February, 2002 and the accident had

happened  about  seven  months  later  (on  10th September,

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2002), some depreciation in the value of the vehicle ought to

be made and the compensation determined on that basis.  We

accept this prayer of the learned counsel and keeping in view

that about seven months of the policy had expired, order that

the value of the vehicle should be reduced by Rs.10,000/-

9.           We accordingly allow the appeal and direct that the

appellant should be paid a sum of Rs.3,44,000/- with interest.

in the manner determined by the National Commission.  The

appellant  shall  also  have  his  costs  which are  quantified  at

Rs.25,000/-.       

………………………………J ( ALTAMAS KABIR)

………………………………J (HARJIT SINGH BEDI)

New Delhi Dated:   July 30,  2008

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