State Consumer Disputes Redressal Commission, New Delhi

J D Kapoor, President and Ms Rumnita Mittal, Member

National Insurance Co. Ltd – Appellant

Versus

Kusum Sharma – Respondent

Appeal No. 725 of 2008

Decided on 12.9.2008

Consumer Protection Act, 1986 - Section 2(I)(g)(o) - Insurance claim - Theft of vehicle - Revaluation of the vehicle to be done by depreciating value by 5% in case of passenger vehicle and 10% in case of commercial vehicle per year - Appellants directed to indemnify the loss depreciating the value 10% p.a. - Respondent directed to transfer the vehicle in favour of the Appellant. (Paras 4, 6)

Result: Appeal partly allowed.

Important Point

Theft of a vehicle is total loss to owner and insurer is required to indemnify the insured to the extent of revalued amount of the vehicle by depreciating it @ 5% p. a. in case of passenger vehicle and @ 10% in case of commercial vehicle.

Order (Oral)

J D Kapoor, President - This appeal is directed against the impugned order dated 11.2.2008, whereby the Appellant has been directed to indemnify the loss by way of theft in the following terms:

i)	To pay a sum of Rs. 3,50,000 with interest @ 9% from 2.3.2007 till realization.
ii)	To pay a sum of Rs. 5,000 to the Complainant as compensation.
iii)	To also pay a sum of Rs. 2,000 as cost of litigation to the Complainant.
iv)	Feeling aggrieved, the Appellant has preferred this appeal.

 

2. Impugned order has been assailed mainly on the ground that the vehicle in question was not road worthy as it did not have permit, road tax deposit challan was not valid and fitness was only up to 5.3.2005, which was in contravention of provision of Motor Vehicles Act, secondly, that the District Forum has not allowed the depreciation of 10% while assessing the market value of the vehicle against the insured declared value (lDV) and thirdly, the District Forum has also not directed the Respondent to transfer the registration of the vehicle in the name of the Appellant.   3. So far as two contentions are concerned, we find force in it, as in cases of total loss, particularly, loss by way of theft, we have taken a view that the insurance companies can reassess the market value of the vehicle by way of depreciated value by 5% per year in case of passenger vehicle and in case of commercial vehicle 10% per year.   4. As regards the contention of the Appellant that the vehicle was not roadworthy as it was not having lawful permit, etc., we do find any force, as it was the vehicle which was insured and any other aspects are not relevant. This violation may result in prosecution, if the vehicle is brought on road, by the concerned authorities. So far as the indemnification of the vehicle by way of theft, which is total loss against the policy is concerned, it covers only indemnification of loss by way of damage to the vehicle or by way of theft.   5. Foregoing reasons persuade us to partly allow the appeal, by allowing the Appellant to indemnify the loss by depreciating the value of the vehicle @ 10% p.a. and direct the Respondent to take steps to transfer the vehicle in the name of the Appellant.   6. The impugned order shall be complied with, within one month from the date of receipt of this order.   7. Bank Guarantee/FDR, if any, furnished by the Appellant be returned forthwith.