Consumer penal asks insurer to pay 25 lakh for burnt truckSCDRC orders insurer to pay 25 lakh for burnt truck claim

Raipur: The Chhattisgarh State Consumer Disputes Redressal Commission (SCDRC) has directed an insurance company to jointly and severally pay a total of Rs 25,05,500 to a complainant for a burnt truck, setting aside the earlier order of a district commission which had considered the claim on a non-standard basis.SCDRC, comprising president Justice Gautam Chourdiya and member Pramod Kumar Varma, pronounced the order on October 9, allowing the appeal filed by Nishank Shukla of Surajpur district. Shukla's truck was insured from 10 July 2019 to 9 July 2020 for an insured declared value (IDV) of Rs 29,07,000. The truck was completely damaged after it caught fire due to a short circuit on 27 Dec 2019. The insurance company repudiated the claim on 24 March 2023, stating that the national permit authorisation was not valid on the date of the accident, which it alleged was a violation of policy terms. Shukla subsequently filed a complaint with the district consumer disputes redressal commission in Ambikapur, Surguja. The district commission partly allowed the complaint, directing the insurer to pay Rs 15,81,375 along with an annual simple interest of 6%. Aggrieved by the reduced compensation, Shukla moved the state commission for an enhancement of the award to the full IDV of Rs 29,07,000. state commission found that the district commission erred in considering the claim on a non-standard basis. SCDRC cited a ruling by SC in the case of Binod Kumar Singh Vs. National Insurance Co. Ltd. The apex court had held that when a vehicle is registered in a state and is involved in an accident within the same state, the authorisation fee for the national permit is not required, as it is only necessary when the truck moves out of that state. Applying this precedent, the SCDRC observed that the national permit for Shukla's vehicle was valid till 25 July 2023, and the accident took place on 27 Dec 2019 while the vehicle was running in Chhattisgarh itself. The SCDRC concluded that the insurer's ground for repudiation was unjust and illegal and the claim should have been considered on a standard basis. The Commission noted that the surveyor's report, dated 24 Nov 2020, had opined that a settlement on a repair basis was out of scope as the net liability of Rs 22,75,729 exceeded the limit for repair settlement, thereby recommending a total loss settlement. The commission held that the surveyor was not entitled to reduce the IDV to Rs 25,60,000 during assessment when the underwriter had already determined the IDV as Rs 29,07,000 and collected the corresponding premium. The SCDRC modified the district commission's order, directing the Oriental Insurance Company Limited to pay: Rs 25,05,500 (IDV of Rs 29,07,000 less salvage value of Rs 4,00,000 and compulsory policy excess of Rs 1,500) if Shukla retains the salvage of the vehicle.

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