Southern States - Tamil Nadu-Chennai   

Insurance firm asked to pay interest on compensation

By K.T. Sangameswaran

CHENNAI DEC. 29. The State Consumer Disputes Redressal Commission has directed the New India Assurance Company to pay nine per cent interest on the compensation awarded by a consumer forum to a city resident towards damages sustained by her vehicle in an accident.

In her complaint to the District Consumer Disputes Redressal Forum, Chennai (South), Ambika of Chintadripet said the lorry she owned met with an accident in June 1995 in Prakasam district, Andhra Pradesh, and was heavily damaged. She made a claim by producing bills and vouchers to the tune of Rs. 61,111.40. However, the surveyor fixed the damages at Rs.14,625. The insurance company repudiated her claim stating that the driver did not have an effective licence to drive the vehicle in question at the time of the accident.

The forum recorded a finding that the act of the insurance company in repudiating the complainant's claim would amount to deficiency in service. It directed the company to pay the claim amount and to pay Rs.1,000 as costs. The insurance company filed an appeal.

The complainant filed an appeal stating that the forum had committed a grave error in not granting interest on the compensation awarded and also in not granting compensation for the mental agony she suffered.

Partly allowing the complainant's appeal, a bench of the State commission, consisting of the president, Justice M.S. Janarthanam, and Member, Vanaroja, in its common order said the driver possessed a licence to drive a heavy passenger transport vehicle at the time of the accident. And the vehicle driven by him was a heavy goods vehicle — a lorry.

Citing Section 10 (2) of the Motor Vehicles Act and the amendment to it, the Commission said the amendment played a major role with respect to the factual matrix of the case and that the driver possessed an effective licence to drive the vehicle in question. Hence, the repudiation of claim by the insurance company amounted to deficiency in service.

The surveyor simply quantified the damages on estimation without considering the realities.

The Commission said it was inclined to grant interest on the compensation.

Quoting a Supreme Court decision, the Commission fixed the interest to be paid at nine per cent.

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