The insurer had challenged the finding that the vehicle amounted to a total loss and disputed the compensation awarded to the complainant.
“The conclusion that the vehicle had effectively become a case of total loss, cannot be said to be arbitrary or without basis, especially when the vehicle was found to be in a severely damaged condition and not properly repaired,” the state consumer commission observed while dismissing the appeal on April 30.
Car stolen from residence in 2015
According to the complaint, Bhatti owned a Honda City ZX GXI model of 2004, which was comprehensively insured with an insured declared value (IDV) of Rs 2.4 lakh, including a CNG kit, for the period beginning June 8, 2015.
The vehicle was allegedly stolen from her residence on August 28, 2015, following which a police complaint was lodged and the insurer was informed through a claim dated September 1, 2015.
A few days later, the complainant was informed by a family acquaintance that the car had been spotted near Khirkhidola in Gurgaon, Haryana. Police subsequently recovered the vehicle and brought it back to Delhi.
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The car was released to Bhatti on superdari pursuant to an order dated September 11, 2015. Superdari is a legal process in India, governed by sections 451 and 457 of the Criminal Procedure Code (CrPC), that allows for the temporary release of seized property (such as vehicles or goods) to the rightful owner during a pending case.
It keeps the property in safe custody, often ensuring it isn’t damaged or depreciated while in police custody, allowing the owner to use it while adhering to court-imposed conditions. However, according to the complainant, the vehicle had suffered extensive damage by the time it was recovered.
Bhatti alleged that the insurer directed her to take the vehicle to an authorised workshop for cashless repairs. The vehicle was reportedly sent for repairs on September 12, 2015, and returned on December 24, 2015, after the workshop personnel allegedly charged Rs 45,000 without issuing a receipt.
She maintained that the repairs were unsatisfactory and that the vehicle could not be restored to its original condition.
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After the insurer allegedly refused either to properly repair the vehicle or pay the full IDV, Bhatti approached the district consumer commission seeking compensation.
District commission treated vehicle as total loss
- The district consumer commission, while deciding the complaint in 2019, noted that the insurer had not produced sufficient evidence or policy terms justifying the deductions made towards depreciation.
- It also observed that the surveyor’s report did not specify any clear formula or percentage for the deductions applied to different vehicle parts.
- The consumer commission concluded that the vehicle had effectively become a case of total loss and awarded Bhatti Rs 1.8 lakh after deducting 25 per cent depreciation from the insured value of Rs 2.4 lakh.
- It further granted Rs 20,000 towards harassment, mental agony and litigation expenses, with interest at 6 per cent in case of non-payment within 45 days.
Insurer questioned reliance on complainant’s claims
Challenging the order before the state consumer commission, Reliance General argued that the district consumer commission had improperly disregarded the surveyor’s report prepared by a qualified expert after inspection of the vehicle.
The insurer contended that the complainant had made unsupported claims regarding total loss and had confused “estimated loss” with “assessed loss”. It also argued that the deductions reflected the condition of vehicle parts and were not merely arbitrary depreciation cuts.
The company further maintained that the complainant had failed to produce any evidence challenging the surveyor’s findings and that the award of compensation for harassment and litigation expenses was unwarranted.
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Commission declines to interfere
- The state consumer commission, however, found no merit in the insurer’s objections and held that the district consumer commission had appropriately appreciated the material available on record.
- The commission observed that while the surveyor’s report had not been ignored, the district commission was justified in finding it insufficient to clearly determine the actual loss, particularly because no proper basis for the deductions had been furnished by the insurer.
- It also held that the overall condition and usability of the recovered vehicle were relevant considerations and that the conclusion treating the vehicle as a total loss could not be termed arbitrary, especially when the complainant consistently maintained that the car remained severely damaged and unfit for proper use.
- Observing that appellate forums interfere with factual findings only when they are perverse or unsupported by evidence, the commission held that no such illegality or material irregularity had been demonstrated in the present case.
- Accordingly, the state commission dismissed the insurer’s appeal and upheld the district commission’s order in favour of the complainant.
