# DHARMENDRA GOEL v. ORIENTAL INSURANCE

- **Citation:** [2008] 11 S.C.R. 578
- **Court:** Supreme Court of India
- **Decided:** 2008-07-30
- **Case number:** Civil Appeal No. 4720 of 2008
- **Bench:** Altamas Kabir, Harjit Singh Bedi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dharmendra-goel-v-oriental-insurance-23406
- **Pages:** 8

## Headnote

)
Consumer Protection Act, 1986 - Insurance claim - Renewal of Insurance policy of a vehicle in a sum of Rs 3, 54, 0001
c - on 13. 02. 02 tQ 12. 03. 03 - Accident during the insurance period - Estimate of Rs.3,37,246.591- for repair by Service station - However, Surveyor of Insurance Company assessed
value of vehicle on total loss basis as Rs. 1, 80, 0001- - Claim
of Rs.3,37,246.591- with additional charges - Dismissed by
D District Forum - Award of Rs.1,04,0431- with interest@ 6%
p.a. by State Commission - However, National Commission
awarded Rs.1,80,0001- with interest @12% p.a. - On appeal,
I
held: Insurance company having accepted the value of vehicle at Rs.3,54,0001- on 13.02.02 was bound by it- It could
'
E
not claim that the value of vehicle on total loss basis on date
of accident was only Rs. 1, 80, 0001- - Value of vehicle could
not depreciate from Rs. 3, 54, 0001- to Rs. 1, 80, 0001- from date
of renewal of policy to tbe date of accident - However, on account of some depreciation, during the said period, value of
vehicle reduced by Rs.10,0001- - Claimant to be paid sum of
F
Rs. 3, 44, 0001-.
The appellant purchased a new vehicle for a sum of
Rs. 4,30,000/-. On 19.01.00, the vehicle was comprehensively insured in that amount with the respondent-InsurG ance Company. On expiry of the policy, it was again renewed for a year on 19.01.01 on the value of Rs.3,59,000/
-. It was further renewed on 13.02.02 upto 12.03.03 on the
value assessed at Rs.3,54,000/-. The vehicle met with an
accident on 10.09.02. The service station submitted an
H
578
....
DHARMENDRA GOEL v. ORIENTAL INSURANCE
579
CO. LTD.
estimate of Rs.3,37,246.59/-for the repair of the vehicle. A
The appellant submitted a claim for Rs. 3,37,246.59 /-with
some additional charges. Howevei, the Surveyor appointed by the respondent assessed the total loss as Rs.
1,80,000/-. The appellant filed a complaint before the District Consumer Forum seeking a sum of Rs.3,37,246.59 /-
B
with some additional charges. The District Forum dismissed the complaint. In appeal, the State Commission
directed the respondent to pay the appellant Rs. 1,04,043/
- with interest @ 6% p.a. from the date of the filing of the
complaint till payment. The appellant filed a revision peti- c
tion claiming a sum of Rs. 3,54,000/- as compensation.
The National Commission granted a compensation of
Rs.1,80,000/- with interest @12% p.a. Hence the present
appeal.
Allowing the appeal, the Court
HELD: 1.1 The accident happened on 10.09.02 during the validity of the Insurance Policy taken on 13.02.02
insuring the vehicle for Rs.3,54,000/- on a premium of
D
Rs .. 8498/- It is also the admitted position that the vehicle
had been declared to be a total loss by the surveyor.apE
. pointed by the company though the value of the vehicle
on total loss basis had been assessed at Rs.1,80,000/-.
As the company itself had accepted the value of the vehicle at Rs.3,54,000/- on 13.02.02, it could not claim that
the value of the vehicle on total loss basis on 10.09.02-on
F
the date of accident was only Rs.1,80,000/-. The company's
contention that within a span of seven months from
13.02.02 to the date of the accident, the value of the vehicle had depreciated from Rs.3,54,000/- to Rs.1,80,000/-
cannot be accepted. [Para 6] [583 E-G 584 A-B]
G
1.2 ~ection 146 of the Motors Vehicles Act, 1988 casts
an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act
and any vehicle driven without taking such a policy inH
580
SUPREME COURT REPORTS
[2008] 11 S.C.R.
-1
A
vites a punishment under Section 196 thereof. Therefore,
,,......
it is obvious that in the light of this stringent provision
and being in a dominant position the insurance companies often act in an unreasonable manner and after hav-
!>
ing accepted the value of a particular insured good disB own that very_ figure on one prete.xt or the other when they
are called upon to pay compensation. This 'take it or leave
).
it' att

## Text

[2008] 11 S.C.R. 578
A
DHARMENDRA GOEL
II.
ORIENTAL INSURANCE CO. LTD.
(Civil Appeal No. 4720 of 2008)
B
JULY 30, 2008
[ALTAMAS KABIR AND HARJIT SINGH BEDI, JJ.]
)
Consumer Protection Act, 1986 - Insurance claim - Renewal of Insurance policy of a vehicle in a sum of Rs 3, 54, 0001
c - on 13. 02. 02 tQ 12. 03. 03 - Accident during the insurance period - Estimate of Rs.3,37,246.591- for repair by Service station - However, Surveyor of Insurance Company assessed
value of vehicle on total loss basis as Rs. 1, 80, 0001- - Claim
of Rs.3,37,246.591- with additional charges - Dismissed by
D District Forum - Award of Rs.1,04,0431- with interest@ 6%
p.a. by State Commission - However, National Commission
awarded Rs.1,80,0001- with interest @12% p.a. - On appeal,
I
held: Insurance company having accepted the value of vehicle at Rs.3,54,0001- on 13.02.02 was bound by it- It could
'
E
not claim that the value of vehicle on total loss basis on date
of accident was only Rs. 1, 80, 0001- - Value of vehicle could
not depreciate from Rs. 3, 54, 0001- to Rs. 1, 80, 0001- from date
of renewal of policy to tbe date of accident - However, on account of some depreciation, during the said period, value of
vehicle reduced by Rs.10,0001- - Claimant to be paid sum of
F
Rs. 3, 44, 0001-.
The appellant purchased a new vehicle for a sum of
Rs. 4,30,000/-. On 19.01.00, the vehicle was comprehensively insured in that amount with the respondent-InsurG ance Company. On expiry of the policy, it was again renewed for a year on 19.01.01 on the value of Rs.3,59,000/
-. It was further renewed on 13.02.02 upto 12.03.03 on the
value assessed at Rs.3,54,000/-. The vehicle met with an
accident on 10.09.02. The service station submitted an
H
578
....
DHARMENDRA GOEL v. ORIENTAL INSURANCE
579
CO. LTD.
estimate of Rs.3,37,246.59/-for the repair of the vehicle. A
The appellant submitted a claim for Rs. 3,37,246.59 /-with
some additional charges. Howevei, the Surveyor appointed by the respondent assessed the total loss as Rs.
1,80,000/-. The appellant filed a complaint before the District Consumer Forum seeking a sum of Rs.3,37,246.59 /-
B
with some additional charges. The District Forum dismissed the complaint. In appeal, the State Commission
directed the respondent to pay the appellant Rs. 1,04,043/
- with interest @ 6% p.a. from the date of the filing of the
complaint till payment. The appellant filed a revision peti- c
tion claiming a sum of Rs. 3,54,000/- as compensation.
The National Commission granted a compensation of
Rs.1,80,000/- with interest @12% p.a. Hence the present
appeal.
Allowing the appeal, the Court
HELD: 1.1 The accident happened on 10.09.02 during the validity of the Insurance Policy taken on 13.02.02
insuring the vehicle for Rs.3,54,000/- on a premium of
D
Rs .. 8498/- It is also the admitted position that the vehicle
had been declared to be a total loss by the surveyor.apE
. pointed by the company though the value of the vehicle
on total loss basis had been assessed at Rs.1,80,000/-.
As the company itself had accepted the value of the vehicle at Rs.3,54,000/- on 13.02.02, it could not claim that
the value of the vehicle on total loss basis on 10.09.02-on
F
the date of accident was only Rs.1,80,000/-. The company's
contention that within a span of seven months from
13.02.02 to the date of the accident, the value of the vehicle had depreciated from Rs.3,54,000/- to Rs.1,80,000/-
cannot be accepted. [Para 6] [583 E-G 584 A-B]
G
1.2 ~ection 146 of the Motors Vehicles Act, 1988 casts
an obligation on the owner of a vehicle to take out an insurance policy as provided under Chapter 11 of the Act
and any vehicle driven without taking such a policy inH
580
SUPREME COURT REPORTS
[2008] 11 S.C.R.
-1
A
vites a punishment under Section 196 thereof. Therefore,
,,......
it is obvious that in the light of this stringent provision
and being in a dominant position the insurance companies often act in an unreasonable manner and after hav-
!>
ing accepted the value of a particular insured good disB own that very_ figure on one prete.xt or the other when they
are called upon to pay compensation. This 'take it or leave
).
it' attitude is clearly unwarranted not only as being bad in
law but ethically indefensible. [Para 6] [584 8-E]
1.3 The submission that it was for the appellant to
c produce evidence to prove that the surveyor's report was
on the lower side in the light of the fact that a price had
already been put on the vehicle by the company itself at
the time of renewal of the_ policy cannot be accepted. In
these circumstances, the company was bound by the
D value put on the vehicle while renewing the policy on
13.02.02. [Para 6] [584 D-E]
,,. .... '
1.4 In the course of hearing before the National Commission, the respondent submitted that the appellant had
E limited his claim to Rs.1,80,000/- and having been awarded
that amount, could not claim anything beyond that figure. However, from a bare reading of the order of the Na-
...
tional Commission the respondent submitted that the primary claim made by the appellant was for a sum of
Rs.3,54,000/- and in the alternative for Rs.1,80,000/-. This
F fact is made more explicit from the grounds of revision
filed before the National Commission wherein a sum of
Rs.3,50,000/- had been repeatedly claimed. Even otherwise, in such matters, the court must take a realistic view
and if a particular claim to compensation is possible on
G the material on record, it should not be denied on hyper
technical pleas. [Para 7] [584 F-H 585 A]
1.5 The submission that as the vehicle had been in-
-f
sured for Rs.3,54,000/- on 13.02.02 and the accident had
H
happened about seven months later (on 10.09.02), some
DHARMENDRA GOEL v. ORIENTAL INSURANCE
581
tt·
CO. LTD. [HARJIT SINGH BEDI, J.]
depreciation in the value of the vehicle ought to be made A
and the compensation determined on that basis, is accepted. The value of the vehicle is reduced by Rs.10,000/
-. The appellant is directed to be paid a sum of Rs.3,44,000/
- with interest. [Paras 8 and 9] [585 8-D]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4720 B
..
of 2008
From the Judgment and Order dated 20.4.2006 of the
National Consumer Disputes Redressal Commission, New
Delhi in revision Petition No. 2405 of 2004
c
D.K. Singh, Pradeep Shukla and Abhijit Sengupta for the
•
Appellant.
A.K. Raina and Anil Kumar Jha for the Respondent.
The Judgment of the Court was delivered by
D
......
~
HARJIT SINGH BEDI, J. 1. Leave granted.
2. This appeal by way of special leave arises out of the
followin~ facts:
3. On 4th January, 2000, the appellant herein purchased a
E
new Tata Sumo vehicle for a sum of Rs. 4,30,000/-. The vehicle
was comprehensively insured on 19th January, 2000 with the
Oriental Insurance Company (hereinafter referred to as 'the
Company' ) on its purchase value of Rs. 4,30,000/- and a preF
mium of Rs. 10,436/- was paid. This policy expired on 18th January, 2001 and on the very next day the said policy was renewed
for a year by the company assessing the value of the vehicle at
Rs.3,59,000/-. This policy expired on 181h January, 2002 but
was again renewed on 13th February, 2002 up to 12th March,
2003 on a premium of Rs. 8498/- on the value assessed by the G
Company at Rs.3,54,000/- The vehicle met with an accident on
.,.
1 Oth September, 2002 on which the appellant informed the company as to what had transpired. The vehicle was removed to
Chambal Motors, Kota, Rajasthan, an authorized service station of Tata Motors, for repair. Chambal Motors submitted an
H
582
SUPREME COURT REPORTS
[2008] 11 S.C.R.
A
estimate of Rs.3,37,246.59/-for the repair of the vehicle. The
appellant then submitted a claim for Rs. 3,37,246.59 /-on 11th
October, 2002 alongwith a bill of Rs.4,000/- for removing the
vehicle to the workshop from the place of accident. The company, however, appointed a Surveyor, M.N. Chaturvedi AssociB ates on 14th December, 2002 to assess the loss and to submit
a report. The surveyor in his report determined a total loss of
Rs. 1,80,000/- after assessing the value of the salvage at
Rs.85,000/- whereas the assessment on cash loss basis was
made at Rs.1,04,433.53/-. The company, however, declined to
c defray any amount to the appellant on the plea that the driver
did not have a valid driving licence on the date of the accident.
The appellant thereupon filed a complaint before the District
Consumers Forum praying that the sum of Rs.3,37,246.59 /-,
the estimate give·n by Chambal Motors with some additional
charges, be paid to the appellant. After the completion of the
D pleadings, the District Forum, by its order dated 19th January,
2004, dismissed the complaint on the ground that the question
as to whether the driver of the vehicle had a valid driving licence
on the date of the accident involved complicated questions of
fact which could be decided only by a Civil Court. Aggrieved by
E this order the appellant filed an appeal before the M.P. State
Consumer Disputes Redressal Commission, Bhopal. The Commission in its order dated 28th July, 2004 held that the driver did
have a valid driving licence on the date of the accident and accordingly directed the Company to pay to the appellant a sum
F
of Rs. 1,04,043/- with interest@ 6% p.a. from the date of the
filing of the complaint till payment. Dissatisfied by the inadequate
compensation awarded by the State Commission, the appellant preferred a revision petition before the National Consumer
Disputes Redressal Commission, New Delhi (hereinafter called
G "the National Commission"), claiming a sum of Rs. 3,54,000/-
towards compensation. The National Commission, by its order
dated 20th April, 2006 partly allowed the appeal and granted a
compensation of Rs.1,80,000/- witfi interest @12% p.a. The
claimant is before us in appeal in these circumstances.
H
)
DHARMENDRA GOEL v. ORIENTAL INSURANCE
583
CO. LTD. [HARJIT SINGH BEDI, J.]
'.It4. The learned counsel for the appellant has raised only A
one argument in the course of hearing. He has submitted that
the company itself had issued an insurance policy in a sum of
Rs.3,54,000/- effective from 13th February, 2002 to 12th March,
2003 and had also accepted a premium on that basis and as
such to claim that the appellant was entitled to a figure below B
;ii
that amount was wholly unjustified. He has also submitted in
elucidation, that there was absolutely no basis for the surveyor's
conclusion that the appellant was entitled to a sum of
Rs.1,80,000/-on total loss basis in the face of the estimate made
by the Chambal Motors for a much larger amount.
c
5. The learned counsel for the Company - Respondent
has , however, pointed out that the appellant's counsel, had in
his arguments before the National Commission, given up his
claim to Rs.3,54,000/- as now contended, and had limited the
same to Rs.1,80,000/- and this amount had in fact been allowed D
and in this view of the matter, any claim for a further sum was
;..._. -i
not justified. It has also been pleaded that the appellant had led
no eviderice to challenge the value put on the vehicle by the
surveyor so as to substantiate his claim.
6. We have heard the learned counsels for the parties and
E
have gone through the record very carefully. The facts as narrated above remain uncontroverted. Admittedly, the accident
had happened on 1 Oth September, 2002 during the validity of
the Insurance Policy taken on 13th February, 2002 insuring the
vehicle for Rs.3,54,000/- on a premium of Rs.8498/- It is also
F
~
the admitted position that the vehicle had been declared to be
a total loss by the surveyor appointed by the company though
the value of the vehicle on total loss basis had been assessed
at Rs.1,80,000/- We are, in the circumstances, of the opinion
that as the company itself had accepted the value of the vehicle G
at Rs.3,54,000/- on 13th February, 2002, if could not claim that
the value of the vehicle on total loss basis on 1 oth September,
~
2002 i.e., on the date of the accident was only Rs.1,80,000/-. It
bears reiteration that the cost of the new vehicle was
Rs.4,30,000/- and it was insured in that amount on 19th JanuH
584
SUPREME COURT REPORTS
[2008] 11 S.C.R.
A ary, 2000 and on the expiry of this policy on 18th January, 2001,
was again renewed on 19th January, 2001 on a value of
Rs.3,59,000/- and on the further renewal of the policy on 13th
February, 2002 the value was reduced by only Rs.5,000/- to
Rs.3,54,000/-. We are, therefore, unable to accept the
B company's contention that within a· span of seven months from
13th February 2002 to the date of the accident, the value of the
vehicle had depreciated from Rs.3,54,000/-to Rs.1,80,000/-. It
must be borne in mind that Section 146 of the Motors Vehicles
Act, 1988 casts an obligation on the owner of a vehicle to take
C out an insurance policy as provided under Chapter 11 of the
Act and any vehicle driven without taking such a policy invites a
punishment under Section 196 thereof. It is therefore, obvio.us
that in the light of this stringent provision and being in a dominant position the insurance companies often act in an unreaD sonable manner and after having accepted the.value of .a particular insured good disown that very figure on one pretext or·
the other when they are called upon to pay compensation. This
'take it or leave it' attitude is clearly unwarranted not only as
being bad in law but ethically indefensible. We are also unable
to accept the submission that it was for the appellant to proE duce evidence to prove that the surveyor's report was on the
lower side in the light of the fact that a price had already been
put on the vehicle by the company itself at the time of renewal of
the policy. We accordingly hold that in these circumstances, the·
company was bound by the value put on the vehicle while reF
newing the policy on 13th February, 2002.
7. The learned counsel for the respondent, has however,
argued that in the course of hearing before the National Commission, the appellant had limited his claim to Rs.1,80,000/-
G and having· been awarded that amount, could not claim anything beyond that figure. We, however, notice from a bare reading of the order of the National Commission that the primary
claim made by the appellant was tor a sum of Rs.3,54,000/-
and in the alternative for Rs.1.,80,000/-. This fact is made more
explicit from the grounds of revision filed before the National
H
)
DHARMENDRA GOEL v. ORIENTAL INSURANCE
585
CO. LTD. [HARJIT SINGH BEDI, J.]
Commission wherein a sum of Rs.3,50,000/- had been repeatA
edly claimed. Even otherwise, we believe that in such matters,
the court must take a realistic view and if a particular claim to
compensation is possible on the material on record, it should
not be denied on hyper technical pleas, as has been argued by
the respondent's counsel.
B
8. The learned counsel for.the respondent company has
finally submitted that as the vehicle had been insured for
Rs.3,54,000/- on 13th February, 2002 and the accident had happened about seven months later (on 1Qth September, 2002),
some depreciation in the value of the vehicle ought to be made C
and the compensation determined on that basis. We accept
this prayer of the learned counsel and keeping in view that about
seven months of the policy had expired, order that the value of
the vehicle should be reduced by Rs.10,000/-
9. We accordingly allow the appeal and direct that the
appellant should be paid a sum of Rs.3,44,000/- with interest.
in the manner determined by the National Commission. The
appellant shall also have his costs which are quantified at
Rs.25,000/-.
N.J.
Appeal allowed.
D
E