United INDIA Insurance Company Limited vs. Uma Polymers LTD

Held

The Court held that the Permanent Lok Adalat did not commit any error in directing the petitioner to pay the repair charges incurred by the respondent. The Court found no substance in the petitioner's submission that the surveyor's report was not given due weightage. The Court noted that the petitioner had not produced any evidence to prove that the vehicle was used or an effort was made to move it after it stopped in the water, and that the surveyor's report was based on surmises and conjectures regarding the driver's alleged forceful driving. The Court found that the insurance policy itself provided for indemnifying the insured against loss or damage in certain contingencies, and the exclusion clause dealt with consequential loss. The Court distinguished the present case from the Apex Court's decision in Sikka Papers Limited, stating that if there are legitimate reasons for departing from a surveyor's report, courts can draw inferences. The Court concluded that the surveyor's report could not be treated as the last word as it did not specify damage to particular engine parts or provide evidence of the owner's attempt to force the car, and thus, the report was based on assumption. The writ petition was dismissed.

Facts

The petitioner, United India Insurance Company Limited, challenged an award dated November 19, 2018, passed by the Permanent Lok Adalat, Jodhpur. The Lok Adalat directed the petitioner to pay a claim amount of Rs. 19,99,637/- to Uma Polymers Ltd. (respondent No. 1), after deducting GST of Rs. 4,28,872/-, and to pay the remaining Rs. 15,70,765/- with interest. The claim arose from damage to a car insured by the petitioner between October 15, 2016, and October 14, 2017. The car was damaged due to heavy rain and water accumulation on June 27, 2017. The petitioner's appointed surveyor assessed the loss at Rs. 7,34,349/-, excluding consequential damages due to alleged driver negligence. Respondent No. 1 claimed the full repair cost of Rs. 19,99,637/-.

Key Issues

1. Whether the Permanent Lok Adalat erred in holding the petitioner liable to pay the full repair charges incurred by the respondent-insured for the damaged vehicle, considering the terms and conditions of the insurance policy and the surveyor's report? (Question of law and fact, turning on general exceptions and loss/damage clauses of the policy). Petitioner's Arguments: The petitioner contended that the surveyor's report, which assessed the loss at Rs. 7,34,349/-, should have been given due weightage. They argued that consequential damages due to the driver's alleged negligence in continuing to drive the vehicle in deep water were not payable under the general exclusion clause of the policy. Reliance was placed on the Apex Court's decision in Sikka Papers Limited regarding wear and tear and the importance of surveyor reports. Respondent's Arguments: The respondent argued that the damage was due to inundation, which was covered under the package policy, and there was no justification to reject the claim for necessary parts replaced. They relied on the Permanent Lok Adalat's interpretation of the policy clauses and the National Consumer Disputes Redressal Commission's decision in Tata AIG General Insurance Co. vs. M/s. Ambience Leasing Pvt Ltd. & Ors.