Full Judgment Text
2023 INSC 1005
NonReportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1544 OF 2023
Bajaj Allianz General Insurance Co.Ltd. … Appellant
Versus
Mukul Aggarwal & Ors. … Respondents
with
CIVIL APPEAL NO.1545 OF 2023
BMW India Private Ltd. … Appellant
versus
Mukul Aggarwal & Ors. … Respondents
J U D G M E N T
ABHAY S. OKA, J.
FACTUAL ASPECTS
1. These appeals arise from a claim made by the first
respondent, Mr Mukul Aggarwal (the owner), on account of
damage caused to his BMW 3 Series 320D car (the car). The
damage was caused due to an accident which took place near
th
DLF Square at Gurgaon on 29 July 2012 between 12.30 am
Signature Not Verified
Digitally signed by
Anita Malhotra
Date: 2023.11.20
16:31:35 IST
Reason:
and 2 am. The impact of the accident was so much that the
car was completely damaged and was beyond repair. The
1
owner of the car was a Director of Dassault Systems India
Pvt. Ltd., Gurgaon (Dassault). As the owner was desirous of
acquiring a BMW car for his personal use, he applied to
Dassault for a grant of loan. Accordingly, a loan of Rs.
26,92,229/ was granted by a car financing company in the
th
name of Dassault. On 17 May 2012, the owner purchased
the car in the name of Dassault from M/s Bird Automotive
Pvt. Ltd. (the Dealer), an authorised dealer of BMW India Pvt.
Ltd. (BMW). While acquiring the car, the owner took two
protections: the first was a motor insurance policy of Bajaj
General Insurance Company Ltd. (the insurer), and the
second one was the BMW Secure Advance Policy (the BMW
Secure) of BMW. The owner paid a premium of Rs.59,158/for
the first policy. He paid a premium of Rs.24,831/ for the
second policy. The Insured Declared Value (IDV) of the car
was Rs.29,46,278/. According to the case of the owner, a
conjoint reading of the two policies shows that where the car
suffers damage of more than 75% of IDV, a new car must be
provided to the insured.
2. After the car met with the accident, the spot was
immediately visited by the police and officials of the National
Highway Authority of India (NHAI). The NHAI recorded the
th
accident in its Daily Accident Report of 29 July 2012.
Immediately after the accident, as the car could not be kept
on a busy highway, it was shifted to BOSCH Car Workshop.
According to the case of the owner, though he attempted to
contact the Dealer, he did not get any response, therefore, the
2
th
car was shifted to BOSCH Car Workshop. On 30 July 2012,
the damaged car was carried to the workshop of the Dealer.
th
On 30 July 2012, according to the owner, he and Dassault
filled up a Claim Form in the prescribed format and
submitted it to the Dealer, who in turn submitted it to the
insurer. While filling up the Claim Form, it was discovered
that the Engine and Chassis numbers in the insurance policy
th
issued by the insurer were incorrect. On 30 July 2012, the
driver appointed by the owner who was driving the car went
to the jurisdictional Police Station and lodged a complaint.
The insurer corrected the Engine and Chassis numbers in the
th
policy of insurance on 9 August 2012 and a fresh Claim
th
Form was filed by the owner/ Dassault on 9 August 2012,
making a claim under the general motor insurance policy as
well as the BMW Secure.
3. The insurer appointed a surveyor who, after a
th
Preliminary Survey, submitted a Report on 17 August 2012
which stated that the accident occurred as a truck proceeding
in front of the car suddenly applied brakes, as a result, the
car dashed against the truck. He estimated an approximate
loss of Rs.25,00,000/. The Dealer also got the damaged car
surveyed and submitted a Repair Estimate Report concluding
that the loss was to the extent of Rs.38,34,730/. The
Surveyor appointed by the insurer submitted his Final Survey
th
Report on 7 January 2013, assessing the loss at
Rs.25,83,012/ which could be regarded as a total loss.
3
4. As the claim under the policy was not dealt with, the
owner filed a complaint before the State Consumer Disputes
Redressal Commission, Delhi (the State Commission). An
order was made by the State Commission directing the
insurer to take a decision on the claim of the owner within
one month and forward a copy of the said decision to BMW.
5. It must be noted here that apart from getting the Final
Survey Report from the Surveyor, the insurer, without notice
to the owner, appointed SHAPT professional services for the
purpose of carrying out the survey. The said agency
rd th
submitted a report on 3 January 2013. By a letter dated 9
January 2013, the insurer repudiated the claim on the
grounds that (a) there was a delay in submitting the claim, (b)
the owner failed to reply to the letters of the insurer, (c) there
was a difference in the description of the accident between the
Claim Form and the Police Report, and (d) there was
suppression of material facts as blood stains were found in
the vehicle. However, there were no reasons recorded for
coming to the said conclusions. As a result of the repudiation
of the claim by the insurer, even BMW did not honour its
commitments under the BMW Secure.
6. Therefore, the owner and Dassault filed a fresh
complaint before the State Commission at Delhi. The prayer
in the complaint was for issuing a direction to the insurer and
BMW to either replace the completely damaged car with a new
one or to pay the replacement onroad value of the equivalent
4
model of the car. The value was quantified at Rs.34,10,516/.
Apart from that, there was a prayer made for a grant of
compensation of Rs.5 lakhs on account of mental torture, etc.
The State Commission held that the insurer was under an
obligation to indemnify the insured for the amount of
Rs.29,46,278/ by replacement of the car in accordance with
the BMW Secure Advance. Therefore, the State Commission
directed both the insurer and BMW to indemnify the owner
for a total loss of the BMW 3 Series 320D car by replacing the
car with a new car of the same make/model. In addition, a
direction was issued to the insurer and BMW to pay a sum of
Rs.50,000/ towards compensation and Rs.10,000/ for
litigation charges.
Being aggrieved by the judgment of the State
7.
Commission, separate appeals were preferred by the BMW
and the insurer before the National Commission. By the
impugned judgment, the National Commission rejected the
contention that the State Commission at Delhi had no
jurisdiction to entertain the complaint. The National
Commission dismissed the appeals on merits by the
impugned judgment.
8. Civil Appeal No.1544 of 2023 has been preferred by the
insurer, and BMW has preferred Civil Appeal No. 1545 of
2023.
5
SUBMISSIONS
The learned counsel appearing for BMW submitted that
9.
there was no cause of action available to the owner to file a
complaint against BMW. The reason is that the insurer had
th
repudiated the insurance policy by a letter dated 9 January
2013. Unless the insurer was liable, there was no liability of
BMW. He submitted that settlement of the claim under the
policy issued by the insurer has not happened. He further
submitted that neither the State Commission nor the National
Commission had come to the conclusion that there was any
deficiency in the service rendered by BMW.
He submitted that both the Commissions have
10.
completely misconstrued the terms of the BMW Secure policy.
His submission is that under the BMW Secure Policy, the
insurer was entitled to a difference between IDV (Insured
Declared Value) and the price of the new vehicle of the same
model and in case the new vehicle of the same model was not
available, the liability of BMW was restricted to 1% of IDV. He
submitted that as there was no documentary evidence to
show that the insurer accepted the claim of the owner, there
was no question of processing the claim under BMW Secure.
His submission is that the policy did not provide for the
replacement of the car. Hence, the impugned Judgments are
erroneous.
6
11. The submission of the insurer is that the fact remains
that the insured did not immediately inform the insurer about
th
the incident of the accident. He submitted that till 9 August
2012, the insurer had no information about the incident. He
pointed out that there was a suppression of material facts by
the owner about the nature of the accident. He submitted
that in the Forensic Investigation Report, blood stains were
found on the dashboard of the car and driver’s seat, and there
were beer bottles found in the vehicle. He, therefore,
submitted that there was every justification for repudiation of
the policy on the grounds stated in the letter of repudiation.
The learned counsel appearing for the insurer after
12.
inviting our attention to the terms of the insurance policy
submitted that before removing the damaged car to the
garage, the insured ought to have informed the insurer. He
pointed out that it is not mandatory for the insurer to replace
the vehicle if there is a total loss. Therefore, the direction
issued by the State Commission to replace the car is
completely contrary to the terms of the policy.
13. The learned counsel appearing for BMW relied upon a
decision of this Court in the case of National Insurance
1
on
Company Ltd. v. Chief Electoral Officer and Others
the interpretation of the policy of the insurance. The learned
counsel appearing for the insurer relied upon a decision of
1 2023 SCC Online SC 115
7
this Court in the case of Gurshinder Singh v. Shriram
2
General Insurance Co Ltd. . The submission is that the
failure of the insured to inform the insurer about the accident
immediately after the accident can be a ground for
repudiating the claim under the policy.
14. The learned counsel appearing for the owner submitted
that there are concurrent findings of fact recorded by the
State and the National Commissions, and therefore, this
Court should not interfere with the findings of fact. The
learned counsel supported the reasons recorded by the State
Commission for coming to the conclusion that the repudiation
of the policy was illegal. He supported the impugned
judgments.
ISSUE OF TERRITORIAL JURISDICTION
15. Before the State and National Commissions, an issue
was raised of territorial jurisdiction of the State Commission
at Delhi to deal with the complaint, especially when the
accident had occurred at Gurgaon, which was not within the
territorial jurisdiction of the State Commission at Delhi.
However, the State as well as the National Commission, have
rejected the said contention. By referring to clause (b) of sub
section (2) of Section 17 of the Consumer Protection Act, 1986
(the 1986 Act), the Commissions found as a matter of fact
that the insurer as well as the dealer were carrying on
business from their offices in Delhi. The National
2 (2020) 11 SCC 612
8
Commission observed that the State Commission, by
entertaining the complaint, granted permission for filing the
complaint as contemplated by clause (b) of subsection (2) of
Section 17. Therefore, on that count, we cannot find fault
with the impugned judgments.
OUR FINDINGS ON MERITS
16. Now, firstly, we deal with the issue of the liability of the
insurer. There is some controversy about whether the owner
was the registered owner of the vehicle inasmuch as the car
was registered in the name of Dassault, and even the policy of
the insurance was issued in the name of Dassault. When the
car was purchased, the owner was working as a Director of
Dassault, which is a private limited company. There is a
finding of fact recorded by both the State and National
Commissions that the car was purchased for the benefit of
the owner, and in fact, equated monthly instalments of the
loan were paid through the salary of the owner. Under sub
clause (i) of Clause (d) of subsection (1) of Section 2 of the
1986 Act, it is provided that any user of the goods other than
the person who buys the goods is also a consumer for the
purposes of the 1986 Act. Moreover, there is no dispute
between the owner and Dassault about the claim of
ownership made by the owner over the said vehicle.
17. As far as the interpretation of an insurance policy is
concerned, in the case of National Insurance Company Ltd.
1
v. Chief Electoral Officer and others , this Court reiterated
9
that an insured cannot claim anything more than what is
covered by the insurance policy. The terms of the contract
have to be construed strictly without altering the nature of
the contract. Moreover, the clauses of an insurance policy
must be read as they are. The terms of the insurance policy,
which determine the liability of the insurance company, must
be read strictly. This Court also held that the rule of c ontra
| proferentem | is not applicable to a commercial contract like a |
|---|
| contract of insurance. The rule of | contra proferentem |
|---|
contemplates that if any clause in the contract is ambiguous,
it must be interpreted against the party that introduced it.
For the contract of insurance, the applicability of the said
concept is ruled out. The reason is that the insurance
contract is bilateral and mutually agreed upon, like any other
commercial contract.
18. Now, we turn to the policy of insurance issued by the
insurer. The IDV of the car mentioned in the policy was
Rs.29,46,278/. There are various items which are covered by
the policy. It also includes general and special exemptions.
Clause (4) of the policy provides that, firstly, in case of an
accident, the vehicle shall not be left unattended without
proper precautions. Secondly, it is provided that a notice in
writing shall be immediately given to the insurer upon the
occurrence of the accident. Whether such intimation was
given is an issue which is dealt with separately. As far as the
liability of the insurer is concerned, clause (3) of the policy is
important, which reads thus:
10
“The company may at its own option
repair reinstate or replace the vehicle
or part thereof and/or its accessories
or may pay in cash the amount of the
loss or damage and the liability of the
Company shall not exceed:
a) for total loss/constructive total loss
of the vehicle – the Insured’s
Declared Value (IDV) of the vehicle
(including accessories thereon) as
specified in the Schedule less the
value of the wreck.
b) for partial losses, i.e. losses other than
Total Loss/Constructive Total Loss of
the vehicle – actual and reasonable
costs of repair and/or replacement of
parts lost/damaged subject to
depreciation as per limits specified.”
(emphasis added)
One of the earlier clauses provides that the insured vehicle
shall be treated as constructive total loss (CLT) if the
aggregate cost of retrieval and/or repair of the vehicle exceeds
75% of the IDV of the vehicle.
19. On a plain reading of clause (3), an option is available to
the insurer to repair the vehicle or replace the vehicle. It is
further provided that in case of the total loss of the vehicle or
the constructive total loss of the vehicle, the insurer is liable
to pay IDV less the value of the wreck. Therefore, assuming
that the repudiation of the policy was illegal, the entitlement
of the insured in case of total loss of the insured vehicle or
11
constructive total loss of the vehicle is the amount equivalent
to IDV of the vehicle (including accessories thereon) as
specified in the Schedule less the value of the wreck. In case
of total loss/constructive total loss, instead of paying the
amount as aforesaid, the insurer has an option available to
replace the vehicle with a new one. Thus, it is not the right of
the insured under the policy conditions to always claim
replacement of the car. It is at the option of the insurer.
20. Now, we come to the policy issued by BMW. Firstly,
reliance was placed on what is provided in the BMW Secure
Certificate. It reads thus:
“BMW Secure offers you the protection
in case of total loss within one year
of purchase of your vehicle or upon
its renewal wherein your car will be
replaced with a new one of the same
type inclusive of all costs of
registration, tax and insurance
thereby incurred. This benefit will also
continue for the new replaced vehicle as
well.”
(emphasis added)
On a plain reading of the said BMW Secure Certificate, it is
apparent that what is mentioned therein cannot be taken as
the policy condition. The BMW Secure Certificate only gives
information about the features of the policy, and lastly, it is
specifically mentioned therein that the insured must spare a
few minutes to go through the terms and conditions of the
12
policy. This indicated that the terms and conditions of the
policy have been separately provided. Though it is styled as a
‘BMW Secure Certificate’, it only contains information about
BMW Secure and not the terms of policy.
21. Now, we turn to the BMW Secure policy itself. Clause
(3) of the policy deals with scope and coverage under BMW
Secure. Clause (3) of the policy clarifies that the liability
under BMW Secure will arise only in the case of an event
giving rise to a motor insurance claim under the motor
insurance policy pertaining to the insured vehicle. Section (I)
of Clause (3), which lays down entitlements, is important
which reads thus:
“
Section – I
a. Cost of contracting a new Motor
Insurance Policy for insurance of the
replaced BMW Vehicle identical to the
Insured Vehicle in case of Total Loss
or theft.
b. Cost of Registration and Road Tax for
the replaced BMW Vehicle identical to
the Insured Vehicle in case of Total
Loss or theft.
c. Actual difference between the IDV
of Insured Vehicle and the current
exshowroom price of new vehicle
of exactly same make, model, age,
features and specifications in case
of a Total Loss or theft as per the
guidelines of IRDA. Wherever such
vehicle is out of production then
13
our liability will be restricted to
max.1% of IDV.”
(emphasis added)
22. No doubt, clauses (a) and (b) do talk about replacing the
insured vehicle with a new vehicle identical to the insured
vehicle. Even paragraph 10 of the affidavit, by way of
evidence of one Stephen Rausch filed by BMW before the
State Commission, suggests that there was such a liability to
replace the vehicle. However, we find that there is no specific
provision in the policy for the replacement of a vehicle in case
there is a total loss or constructive total loss or theft of the
vehicle. Clauses (a) and (b) will apply when the insurer,
under the motor insurance policy, replaces the vehicle.
Clause (c) of Section (1) is important, which provides that the
liability of BMW under the policy in case of total loss or theft
of the vehicle is to pay the actual difference between the IDV
of the insured vehicle and the current exshowroom price of a
new vehicle of exactly the same make, model, age, features
and specifications. Where a similar vehicle is out of
production, the liability of BMW is restricted to a maximum of
1% of IDV. Thus, there is no provision in the BMW Secure
which directly provides that the car will be replaced. The
provision is that under BMW Secure, BMW will pay the
difference between the IDV of the insured vehicle and the
current exshowroom price of the new vehicle of the same
make. It is the only liability of BMW in case of the total loss
or theft of the vehicle. Thus, in substance, a reasonable
14
amount is made available to the insured to acquire a new car
as the insured gets the IDV minus the cost of the wreck from
the insurer, and under the BMW Secure, the insured gets the
difference between the value of the new car of the same type
and IDV. Hence, we hold that under the BMW Secure, there
was no provision for replacement of the vehicle by BMW in the
event of complete loss or total constructive loss of the vehicle.
The question of liability under the BMW Secure arises only
when the liability of the insured under the new motor vehicle
policy is established. Therefore, it must be established that
the insurer has accepted the case regarding the total loss of
the insured vehicle. As per the policy of motor insurance
issued by the insurer, in this case, the constructive total loss
happens when the aggregate cost of repair of the vehicle
exceeds 75% of IDV. Even under the BMW secure, the same is
the concept of the total loss. Therefore, BMW can be held
liable under the BMW Secure when it is established that the
insurer under the motor insurance policy has accepted the
case of total loss or constructive total loss of the vehicle.
23. Therefore, we turn to the issue of whether the
repudiation of the insurance policy by the insurer was valid.
th
The first ground of repudiation in the letter dated 9 January
2013 is that there has been a considerable delay in providing
intimation of the accident to the insurer and that the vehicle
was removed from the spot without providing an opportunity
to verify the facts relating to the damage of the vehicle and the
circumstances leading to loss. This ground is in the context
15
of the policy condition that a notice shall be immediately
given in writing to the Company upon the occurrence of any
accident. As far as this ground is concerned, there is material
on record to show that the accident occurred near DLF
th
Square in Gurgaon between 12.30 a.m. and 2.00 a.m. on 29
July 2012. There are supporting documents in the form of a
record of Daily Accident Reports maintained by the National
Highway Authority of India. There is an entry at 01.15 am on
th
29 July 2012 in the said Reports, which records the accident
of the insured vehicle. It records that the accident occurred
as it was hit by a truck from the rear side, as a result of
which the car driver lost control and was toppled down. It is
mentioned that no one was injured. It is also noted that the
car was moved aside from the road, and safety cones were
th
placed. Moreover, at 3 p.m. on 29 July 2012, the complaint
of the driver of the car was recorded by SHO, DLF PhaseII,
Police Station, Gurgaon. So, there is no dispute about the
occurrence of the accident. At this stage, we may note that it
is not the case of the insurer that the accident occurred due
to rash and negligent driving of the driver of the vehicle. It is
not the case that the driver was prosecuted for rash and
negligent driving.
24. Now, we come to the issue of giving intimation. As per
Condition No.4 of the Insurance Policy, it was the duty of the
insured to secure the vehicle after the accident so that it did
not suffer further damage. The accident took place on
National Highway No.8, which is a very busy Highway. The
16
owner immediately requested the Dealer to shift the vehicle to
th
their garage. As 29 July 2012 was Sunday, the Dealer
expressed inability to move the vehicle as it was a holiday for
its staff. That is how, at the instance of the owner that the
vehicle was shifted to BOSCH Workshop, which was
th
admittedly taken to the garage of the Dealer on 30 July,
2012.
25. There is a finding of fact recorded by the State as well as
the National Commission that the Dealer immediately
informed the insurer. However, it was found that in the
policy of the insurance, the Engine and Chassis numbers of
the vehicle were incorrectly mentioned. The National
Commission has held that it is an admitted position that the
insurer made necessary corrections in the policy, and
th
thereafter, on 9 August 2012, a fresh claim was submitted to
the insurer. Thus, the insurer accepted the errors in the
policy. We may note here that the first claim form dated 30th
July 2012 was placed on record of the State Commission. In
the written statement filed by the insurer before the State
Commission, it is accepted that the police authorities reached
the spot at 1.20 a.m. In fact, in paragraph 5(a), the insurer
th
has referred to the claim form dated 30 July 2012. The
th
accident took place in the wee hours of 29 July 2012, and on
th
30 July 2012, a claim form was filled in by one Deepak
Yadav. This is apart from the case made out by the Dealer
that it had informed the insurer about the accident.
Moreover, within a few days of the accident, the surveyor
17
appointed by the insurer surveyed the vehicle, as can be seen
th
from the preliminary survey report dated 17 August 2012.
Therefore, the first ground taken for the repudiation cannot
be sustained as held by the Commissions.
26. The second ground of repudiation is the failure to reply
rd
to the letters dated 23rd August 2012, 3 September 2012,
th th
27 September 2012, and 7 December 2012. On this, there
is a concurrent finding of fact recorded by the Commissions
that the insurer failed to place on record the proof of service
rd th
of letters dated 3 September 2012, 17 September 2012, and
th
7 December 2012. In fact, in the Complaint, there was a
specific grievance made that the said three letters were not
rd
received. The finding is that only one letter dated 23 August
2012 was received by the insured, and it was immediately
replied to by the insured (the owner). Therefore, even the
second ground cannot be sustained.
27. The third ground is that in the claim forms and the
accident reported to the police, there are discrepancies about
the manner in which the accident happened. The fact that
the accident happened is not disputed. As mentioned earlier,
it is not the case of the insurer that there was any negligence
on the part of the driver of the car. Moreover, it is not the
case of the insurer that any of the general or specific
exceptions in the policy of insurance apply to this case.
Hence, the policy could not have been repudiated on account
of alleged discrepancies.
18
28. The last ground is also relating to the alleged
discrepancy. After engaging a surveyor, the insurer engaged
another Agency, which found blood stains on the steering and
dashboard of the vehicle. Again, this fact is irrelevant as the
factum of the accident cannot be disputed. It is not the case
of the insurer that the damage was caused to the car due to
any activity covered by the exceptions incorporated in the
policy. Therefore, none of the grounds of repudiation have
any substance.
th
29. A Circular dated 20 September 2011 of the Insurance
Regulatory and Development Authority has been placed on
record. It is stated that, for the benefit of the nonlife
insurers, the condition of reporting the occurrence within a
specified time should not prevent the settlement of genuine
claims, particularly when there is a delay in intimation or
submission of documents due to unavoidable circumstances.
In fact, in the said Circular, it is mentioned that rejecting
genuine claims on purely technical grounds in a mechanical
fashion will result in policyholders losing confidence in the
insurance industry. This supports the finding that the
rejection on the ground of delay in reporting was completely
unfounded.
30. Now, coming to the assessment of the damage caused to
the vehicle, Mr Avinash Kumar, the surveyor appointed by the
th
insurer, submitted a preliminary report dated 17 August
2012 estimating the extent of loss at Rs.25 lakhs on a
19
th
provisional basis. He submitted a final report on 7 January
2013. In the final report, the assessed amount, after making
deductions, is Rs.25,83,012.45. Thus, in terms of the policy,
the loss exceeded 75% of the IDV of the vehicle. The loss is
equivalent to 86% of IDV. Hence, there was a constructive
total loss of the vehicle. We must also note here that in the
final report, the extensive damage caused to the vehicle has
been noted.
31. Therefore, coming back to the policy of insurance of the
insurer, the liability of the Insurance Company will be to the
extent of the IDV value minus the cost of the wreck. It must
be noted here that the cost of the wreck is not brought on
record by the insured. By making a reasonable allowance for
the cost of the wreck, we can take the cost of repairs of
Rs.25,83,012.45 as the amount payable under the motor
insurance policy.
32. Now, we come to the liability of the BMW. This was a
case of a constructive total loss of the vehicle, and therefore,
the liability of BMW under the BMW Secure was to pay the
actual difference between the IDV of the insured vehicle and
the current exshowroom price of the new vehicle of exactly
the same make. If it was shown that such a vehicle was out
of production, then the liability would be restricted to a
maximum of 1% of IDV.
20
33. We have carefully perused the reply of BMW to the
complaint. In paragraph 8 of the reply, it is stated thus:
“Para 8 is denied for want of knowledge.
It is specifically denied that the vehicle
was damaged to a total loss condition.
It is submitted that as per definition
given under BMW Secure, total loss
condition occurs only where the net
liability of the Insurance Provider under
the Motor Insurance Policy exceeds 75%
of Insured Declared Value as per the
report of a surveyor approved by the
Insurance Provider. Thus, there must
be a surveyor report to establish the
total loss, which has not been provided
to the answering Opposite Party.”
34. In the entire reply, there is no specific contention raised
that the production of a similar type of car was stopped on
the date of the accident or that when the accident occurred,
the vehicle of the exactly same make was not available. We
have also perused the affidavit in view of the evidence of Mr
Stephan Rausch filed before the State Commission by BMW.
The Affidavitinlieu of examinationinchief is the replica of
the reply fled by BMW. What is material is paragraph 10 of
the evidence, which reads thus:
“As stated above, under BMW Secure
the Opposite Party No.2 is liable to give
a new car only when there is a
surveyor’s report to confirm the total
loss of the vehicle and the Insurance
Company reimbursing 75% of the
Insured Declared Value (sum incurred)
of the insured Vehicle under the Motor
21
Insurance Policy. Since this has not
been done in the present case, and
insurance claim of the complainant has
been repudiated by the Opposite Party
No.1, the Opposite Party No.2 is not at
all liable to give a new car to the
Complainant under the terms of BMW
Secure.”
35. Thus, the only defence was that BMW is not liable
under the BMW Secure as the insurer had repudiated the
insurance claim.
The BMW should have pleaded whether a car of exactly
36.
similar make was available on the date of the accident, and if
so, what was the price of the vehicle. However, BMW
remained completely silent. These facts were within the
special knowledge of BMW, which should have been brought
on record by BMW. Hence, an adverse inference will have to
be drawn against BMW.
37. Hence, for the reasons recorded earlier, there is a
deficiency in service rendered by the insurer and BMW within
the meaning of clause (g) of Section 2 of the Consumer
Protection Act,1986. Therefore, the owner is entitled to
compensation from both of them.
Now, coming to the final relief, as per clause (3) of the
38.
Motor Insurance Policy, it is provided that for the constructive
total cost of the vehicle, the liability of the insurer shall not
exceed the IDV of the vehicle minus the value of the wreck. As
22
held earlier, the amount payable by the insurer will have to be
quantified at Rs.25,83,012.45.
As it is not pleaded by BMW that the vehicle of the same
39.
make was not available or, if it was available, what was the
cost of the vehicle on that day, a reasonable amount will have
to be granted on account of the difference in the value of the
vehicle involved in the accident and the value of a new car of
the same make. It is brought on record that in terms of the
th
order dated 11 March 2013 of the National Commission, a
sum of Rs.7 lakhs has been deposited by BMW with the State
Commission. We find that a sum of Rs.7 lakhs can be a
reasonable estimate of the amount payable under the BMW
Secure in the facts of the case. Therefore, the same amount
with interest accrued can be paid to the complainants. The
insurer has deposited a sum of Rs.22,09,000/ in this Court in
terms of the order dated 28th February 2023. The total liability
of the insurer is Rs.25,83,012.45, which is rounded off to
Rs.25,83,012/. Thus, the insurer will have to pay a difference
of Rs.3,74,012/.
Interest will be payable on the amounts payable by the
40.
insurer and BMW from the date of filing of the complaint
before the State Commission. The interest can be quantified
at 6% per annum. The interest accrued on the amounts
deposited will have to be considered for that purpose.
23
41. As held earlier, the direction of the State Commission,
confirmed by the National Commission, is to replace the car.
It cannot be sustained for the reasons already discussed, and
the same will have to be substituted by a direction to pay
monetary compensation.
42. Therefore, the appeals succeed partly, and we pass the
following order:
a. The operative part of the impugned order of the State
Commission is set aside;
b. We permit the owner to withdraw a sum of
Rs.22,09,000/ deposited by the insurer in this Court
th
on 24 April 2023, together with interest accrued
thereon. In addition, the insurer shall pay simple
interest on the amount of Rs.22,09,000/, at the rate of
6% per annum from the date of filing of the complaint
th
before the State Commission till 24 April 2023;
c. The insurer shall pay a sum of Rs. 3,74,012/ to the
owner with simple interest thereon at the rate of 6% per
annum from the date of filing of the complaint before
the State Commission till payment. The amount shall be
paid within three months from today;
d. The owner shall be entitled to withdraw the sum of Rs.7
lakhs deposited by BMW with the State Commission,
together with interest accrued thereon. In addition,
BMW shall pay simple interest at the rate of 6% per
24
annum on the amount of Rs.7 lakhs to the owner from
the date of filing of the complaint before the State
th
Commission till 11 March 2015. The said amount of
interest shall be paid within a period of three months
from today;
e. The order of costs made by the State Commission is
maintained in view of the findings recorded in this
judgment; and
f. There will be no order as to costs in these appeals.
The appeals are partly allowed on the above terms.
43.
..……….……………J.
(Abhay S. Oka)
..………….…………J.
(Rajesh Bindal)
New Delhi;
November 20, 2023.
25