NDLI: Sumit Kumar Saha Vs. Reliance General Insurance Company Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Consumer Protection Act basis 1986 Loss sum insured Calculation of
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Consumer Protection Act, 1986 (68 of 1986)
Case(s) Referred	Referred Case 0
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Consumer Protection Act, 1986 – Loss – Calculation of, basis – Appellant purchased an Excavator in the year 2007 for a total purchase value of Rs.51.74 lacs and immediately got it insured – Insurance policy was renewed for the period 22.7.2009 to 21.7.2010 and the sum insured was Rs.46.56 lacs – The Excavator was hired and was used at a different location and the change of location was duly intimated – On 3.6.2010, the Excavator was badly damaged in a fire while it was at such changed location – Surveyor of Insurer assessed the loss and damage at Rs.25.24 lacs – Complaint filed by appellant before the State Commission – Appellant submitted that the Excavator was a total loss and that he was entitled to insured amount of 46.56 lacs along with interest and compensation – Appellant’s surveyor assessed loss on “total loss basis” at Rs.41.90 lacs – State Commission allowed the complaint and directed to pay Rs.41.90 lacs with interest – National Commission partly allowed respondent’s appeal and directed it to pay Rs.34.17 lacs – On appeal, held: It was common ground that as a result of fire, the Excavator was a “total loss” – Both the sides had arrived at a particular figure to be the real value of the subject matter of insurance – It was not open to any party to dispute said sum and contend that the real value was something different from what was declared by the parties to be the sum insured – If the parties had agreed and arrived at an understanding, which understanding was otherwise not vitiated by any misrepresentation, fraud or coercion, the parties must be held bound by such figure – The Surveyor of the Insurer worked out depreciation by starting with the figure of Rs.51 lakhs as the cost of a new Excavator and then deducting 32.5% by way of depreciation assuming the life of Excavator to be 10 years – The Surveyor of the Insurer disregarded the figure stipulated as ‘sum insured’ – Depreciation has to be always computed keeping the figure of “sum insured” in mind – The starting figure, therefore, in this case had to be the figure which was stipulated as “sum insured” – Since Excavator, after the policy was taken out was used for eleven months, some reasonable depreciation ought to be deducted from the “sum insured” – The surveyor appointed by the insured was right in deducting 10% and in arriving at the figure of Rs.41.90 lacs – The decision of the National Commission is dismissed and the judgment and order passed by the State Commission is restored.
Judge	Honble Mr. Justice Uday Umesh Lalit
Neutral Citation	2019 INSC 114
Petitioner	Sumit Kumar Saha
Respondent	Reliance General Insurance Company Ltd.
SCR	[2019] 1 S.C.R. 763
Judgement Date	2019-01-30
Case Number	1299

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