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). While acquiring the car, the owner took two protections: the first was a motor insurance policy of Bajaj General Insurance Company Ltd. 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 car was shifted to BOSCH Car Workshop.
The insurer corrected the Engine and Chassis numbers in the policy of insurance on 9 August 2012 and a fresh Claim 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. 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.
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.
Being aggrieved by the judgment of the State Commission, separate appeals were preferred by the BMW and the insurer before the National Commission. 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. The learned counsel appearing for the insurer after 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. The learned counsel appearing for BMW relied upon a decision of this Court in the case of National Insurance Company Ltd.
The National Commission observed that the State Commission, by entertaining the complaint, granted permission for filing the complaint as contemplated by clause (b) of sub-section (2) of Section 17. 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.
This Court also held that the rule of c ontra proferentem is not applicable to a commercial contract like a contract of insurance. As far as the liability of the insurer is concerned, clause (3) of the policy is important, which reads thus: “The company may at its own repair option 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.
Also Read: https://newslaw.in/supreme-court/extension-of-benefit-of-doubt-in-criminal-convictions/
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. 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. 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.
Actual difference between the IDV of Insured Vehicle and the current ex-showroom 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. 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 ex-showroom price of a new vehicle of exactly the same make, model, age, features and specifications. 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.
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.
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. That is how, at the instance of the owner that the vehicle was shifted to BOSCH Workshop, which was admittedly taken to the garage of the Dealer on 30 July, 2012. We may note here that the first claim form dated 30th July 2012 was placed on record of the State Commission. 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 of letters dated 3 September 2012, 17 September 2012, and 7 December 2012. 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. Now, coming to the assessment of the damage caused to the vehicle, Mr Avinash Kumar, the surveyor appointed by the insurer, submitted a preliminary report dated 17 August 2012 estimating the extent of loss at Rs.25 lakhs on a provisional basis.
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 ex-showroom price of the new vehicle of exactly the same make.
Also Read: https://newslaw.in/supreme-court/vicarious-liability-under-section-34-of-ipc/
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. 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.”
Case Title: BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD. Vs. MUKUL AGGARWAL
Case Number: C.A. No.-001544-001544 / 2023
