BEFORE THE TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
CC 213 of 2015
Between:
M.Thirupathi Reddy S/o Bhoom Reddy
Aged 42 years, Occ: Business,
R/o Plot No.7, Kammaguda, Thurkayamjal
R.R.District-83
*** Complainant
A N D
- Bajaj Allianz General Insurance Company Ltd.,
GE Plaza, Airport Road, Yerawada
Pune-411006, rep. by its Authorized Signatory
- Bajaj Allianz Gneeral Insurance Company Ltd.,
Through its Regional Off: at 2nd Floor, Far East Plaza
Himayathnagar, Hyderabad-500029
Rep. by its Authorised Signatory
*** Opposite Parties
Counsel for the complainant: Sri A.Anandachari
Counsel for the Opposite parties M/s MVR Suresh
QUORUM :
HON’BLE SRI JUSTICE B.N.RAO, PRESIDENT
&
SRI PATIL VITHAL RAO, MEMBER
MONDAY THE SEVENTEENTH DAY OF APRIL
TWO THOUSAND SEVENTEEN
Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, Hon’ble President)
***
This is a complaint filed under section 17(a)(i) of the Consumer Protection Act, 1986 by the Complainant to direct the opposite parties 1 and 2 to pay Rs.25,20,947/- jointly and severally towards the cost of the repair of the vehicle and damage of the load with interest @ 18% per annum together with compensation of Rs.5,00,000/- and costs of the complaint.
2. The brief facts as stated in the complaint are that the complainant was the owner of the Tata DCM Vehicle bearing Registration No.AP 29TB 2136 which was insured with the opposite party-Insurance Company. It is the case of the complainant that on 12.05.2012 at about 01.00 hrs, while coming from Nuzeveedu to Hyderabad with the load of Mangoes the vehicle in question caught fire due to self ignition and due to the said fire the said vehicle along with load of mangoes was burnt beyond repair. The driver immediately made a report to the Hayathnagar Police which was registered as case under crime No.292/2012 dated 12.05.2012. Thereafter an intimation of this accidental fire was made to the opposite party-Insurance Company on 12.05.2012. With the said intimation, the complainant also lodged a claim with the opposite party-Insurance company for payment of damages. The complainant with an intention to get the vehicle repaired, has approached Aditya Auto Engineers & Technicians for estimation, they had given an estimation dated 15.05.2012 to the extent of Rs.22,20,947/-. The Insurance Company as per its letter dated 06.07.2012 repudiated the said claim of the complainant on the ground that as per Section 1(2)(a) of the Policy, the coverage is restricted to the damages caused due to the electrical breakdown which is not covered under the policy and the damages to the engine internal parts does not fall under the purview of the insurance contract. The complainant submitted that owing to self-ignition the vehicle was burnt and not due to the electrical breakdown. The opposite party-insurance company should have invoked Section 1(1)(i) of the policy condition. The complainant gave reply to the repudiation letter of the opposite party-insurance company requesting to consider the claim of the complainant but the opposite party no.1 again repudiated the claim reiterating its stand taken in earlier repudiation letter. The complainant submitted that in the fire accident, the load of mangoes was also burnt and that the complainant was to pay the amount of Rs.3,00,000/- to the farmer. Therefore, the complainant estimated cost of repairs to the said vehicle to the extent of Rs.22,20,947/- along with loss of mangoes of Rs.3,00,000/- totaling to Rs.25,20,947/-. Hence, the complaint.
3. The opposite parties resisted the case contending that the complainant is not a consumer as he himself stating that he is running Motor Transport Business. So the complainant cannot take the shelter under the C.P.Act. The insured vehicle was hypothecated with Cholamandalam Investment and Finance Co., Ltd., and the policy in question was issued with endorsement of IMT 7. Without prejudice and without admitting any liability it is submitted that in case of total loss of Insured Vehicle, financier is entitled to get the claim of the vehicle. The complainant has neither produced NOC from the financier nor impleaded it in the present complaint. Hence, the present complaint was barred by non-joinder of necessary party. As per Contract of Insurance the insured declared value of the vehicle in question as Rs.11,02,456/- and hence the pecuniary rights and liabilities flowing from the contract cannot go beyond this amount. This is the less than the pecuniary jurisdiction vested before this Commission. The complaint is barred by limitation. The claim was repudiated by the opposite parties on 6.7.2012 and the complaint was filed on 31.08.2014. It is settled position of law that the period of limitation commences from the date of repudiation and no further communication will extend the same. Under the policy, the opposite parties maximum liability, in case of admissible claim was Rs.11,02,456/- but the complainant seeking Rs.25,20,947/- with interest and compensation. It is necessary to adduce voluminous evidence, documentary as well as oral, to adjudicate the technical issues involved in the present case. That only a civil court is competent to adjudicate the case after a full-fledged trial. It is alleged by the opposite parties that as per Sec.1-2(a) of the Policy the company shall not be liable to make payment in respect of consequential loss, depreciation, wear and tear, mechanical or electric break down failures or breakages. To prove regarding mechanical/electrical breakdown, the opposite party relied upon the findings in Survey Report of an independent IRDA Licensed surveyor in support of its repudiation. There is no deficiency of service on the part of the opposite parties and they justified their repudiation of the claim.
4. The complainant in proof of his case filed his affidavit evidence reiterating the facts mentioned in the complaint and got Exs.A1 to A6 marked. While the insurance company filed the affidavit evidence of its Assistant Manager and got Exs.B1 to B4 marked.
5. The points that arise for consideration are :
- Whether the claim is barred by limitation?
- Whether the vehicle had been purchased for commercial purpose, and if so, whether the complainant is a ‘consumer’ within the meaning of Section 2(1)(d)(i) of the Act?
- Whether the complaint is barred by non-joinder of necessary party?
- Whether the accident that occurred is due to consequential loss?
- To what relief?
6. Point No.1: The learned counsel for the opposite parties contended that the claim was repudiated on 6.7.2012 but the complaint was filed on 31.08.2014 after the expiry of two years limitation period. The fire accident took place on 12.05.2012 and claim was submitted on 15.05.2012. The opposite parties repudiated the claim on 06.07.2012 on the ground that damage caused to the vehicle was due to electrical breakdown which is not covered under the policy. The complainant gave reply dated 15.09.2012 to the repudiation letter dated 06.07.2012. To the reply of the complainant again the opposite parties responded by way of their letter dated 8.10.2012 reiterating the contents mentioned in the repudiation letter. The complaint was filed on 29.09.2014 which is within the period of limitation. Hence, this point is answered in favour of the complainant against the opposite parties.
7. Point No.2: The learned counsel appearing for the OPs (Insurance Company) has argued that the complainant is not a consumer and the opposite parties (Insurance Company) is not a service provider, therefore, no question arises for committing any deficiency in service by the opposite parties. The transaction held between the parties is commercial transaction and therefore, the complainant is not a consumer. The dispute between the parties does not come within the purview of the consumer dispute, therefore, this Commission, has no jurisdiction to decide the instant complaint.
8. But we do not agree with contention of the opposite parties for the reason that the insurance policy was purchased by the complainant for protection of interest of his property and not for earning profit, therefore, the complainant is a consumer and dispute between the parties comes within purview of consumer dispute.
9. In M/s. Harsolia Motors vs. M/s. National Insurance Co. Ltd. & Ors. 2005 (1) CPR 1 (NC), Hon'ble National Commission, has observed thus :-
"13. In Halabury's Laws of England Vol. 25, 4th Edition, the origin and common principles of insurance is discussed and in paragraph 3 it has been discussed and in paragraph 3 it has been mentioned that it is based on principle of indemnity. Thereafter, relevant discussion is to the effect that most of contract of insurance belong to general category of contracts of indemnity. In the sense that insurers' liability is limited to the actual loss which is , in fact, proved. The contract is one of indemnity and, therefore, insured can recover the actual amount of loss and no more.
14. In this view of the matter, taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose.
We would refer to few relevant judgments :
In Regional Provident Fund Commissioner vs. Shiv Kumar Joshi, (2000) 1 SCC 98, the Apex Court elaborately considered the provisions of Sections 2(1)(d) and 2(1)(o) as well as earlier decisions and held that :-
"The combined reading of the definitions of 'consumer' and 'service' under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words "consumer" and "service" as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall 'be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act."
10. The aforesaid ratio makes it abundantly clear that the services may be for any connected commercial activity, yet it would be within the purview of the Act.
11. On the basis of above cited judgments, it is clear that the dispute between the parties is a consumer dispute and the complainant comes within the purview of "consumer" as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. Hence, this point is answered in favour of the complainant and against the opposite parties. Hence, this point is answered in favour of the complainant against the opposite parties
12. Point No.3: The learned counsel for the complainant contended that the insured vehicle was hypothecated with Cholamandalam Investment and finance Co., Ltd., and the policy in question was issued with endorsement of IMT 7. Hence, the present complaint was barred by non-joinder of necessary party. Non-impleadment of the financier – Cholamandalam Investment is concerned, we do not find any force in the stand of the insurance company that the financier was a necessary party in the present case. The dispute in the present case is between the complainant and the insurance company with regard to the reimbursement of loss sustained by the complainant during the insurance policy on account of damage caused to the vehicle due to fire accident. The Financer was not at all a necessary party in the present case.
13. Moreover Section 2(1)(d)(ii) defines consumer as under:
Consumer means any person who,
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires[or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires 1[or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.
14. As the complainant is a beneficiary he has all rights to prefer the complaint against the opposite party without making financier a party. Hence, this point is answered in favour of the complainant against the opposite parties
15. Points No.4 & 5: The learned counsel representing the insurer submits that under clause 2(a) of section-1 of the policy, which is reproduced below, insurer is not liable for consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages.
2. The company shall not be liable to make any payment in
respect of
(a) consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages nor for damage caused by overloading or strain of the insured vehicle nor for loss of or damage to accessories by burglary, housebreaking or theft unless such insured vehicle is stolen at the same time.
16. Learned counsel submits that the fire took place because of mechanical or electrical breakdown. This is not a case of mechanical or electrical breakdown, but a case of fire and in the case of fire, as already noticed by reference to clause 2 (a) of the terms and conditions of the policy, insurer is liable to indemnify the insured, irrespective of the cause of fire. Any sudden unexpected incident due to any cause is an accident and thus no accident is without any cause. Therefore, even if, the cause of fire may be due to some mechanical or electrical defect in the vehicle, as is being canvassed by the opposite parties, the fact would remain that this was a fire accident. The opposite parties cannot escape liability irrespective of the fact whether cause of fire was due to any defect in the vehicle or some other extraneous cause.
17. Now the next question which arises for consideration before this Commission is as to what amount the complainant is entitled on account of loss suffered by him due to fire accident of the vehicle. The complainant in his complaint had claimed Rs.25,20,947/- as repair charges including load of mangoes and have also filed the estimation given by Aditya Auto Engineers & Technicians and have also placed on record photographs vide Exs.A4 and A5. Ex.B4 is the Surveyor’s Report and as per the opinion of the Surveyor and Loss Assessor, it could not be declared as total loss, as claimed by the complainant. He further submitted that the claim of the complainant could be settled, in such like cases, as per the terms and conditions of the Insurance Policy. He further submitted that even if the estimates, submitted by the repairer, from time to time, were taken into consideration, the loss could be assessed, as per the terms and conditions of the Insurance Policy, the assessed amount on repair basis came to be Rs.17, 07,803/- which was much more than Insured Declared Value, and, as such, the question of paying the assessed value did not at all arise. Even if the vehicle, in question, was a total loss, the liability of the insurer, could not be fixed more than the Insured Declared Value.
18. On the other hand the complainant submitted that the vehicle, in question was extensively damaged in the accident and the engine of the vehicle, in question, was also damaged, and the estimate of repairs issued by Aditya Auto Engineers & Technicians was to the tune of Rs.22,20,947/- which was exceeding the IDV of Rs.11,02,456/-. As such, the claim of the complainant was required to be treated on total loss basis. As the Opposite Parties No.1 and 2, did not settle the claim of the complainant, on total loss basis. According to Section I under Clause 2 (The Schedule of Depreciation For Fixing IDV of the Vehicle) of Private Car Package Policy, Ex.B3 the IDV of the vehicle ( and accessories if any fitted to the vehicle) is to be fixed on the basis of the manufacture’s listed selling price of the brand and model as the insured vehicle at the commencement of insurance/renewal and adjusted for depreciation as per the schedule therein. When the final estimate as per Surveyor’s report Ex.B5 on repair basis was of Rs.17,07,803/-, which was more than 75% of the IDV, the insurer was required to treat the vehicle as total loss. According to GR 8 of the Indian Motor Tariff, the vehicle would be considered to be a case of CTL (Constructive Total Loss), where the aggregate cost of retrieval and/or repair, subject to the terms and conditions of the Insurance Policy exceeds 75% of the IDV. Even, according to GR 8 of the Indian Motor Tariff, when the total repair cost of the vehicle, as per the repairer was more than 75% of the IDV, it was required to be treated as a case of total loss, and no deductions, whatsoever, on account of glass, plastic, metal parts etc. etc., could be made.
19. Coming to the report of the Surveyor, it may be stated here, that it is settled principle of law that the same is neither binding on the parties nor the Consumer Foras. Though the report of the Surveyor has got evidentiary value, yet, it cannot be said to be the final word. The Surveyor and Loss Assessor, in his report, could not assign any reason, as to why, the vehicle, could not be treated as total loss. He also could not assign any reason, as to why, he made deductions, in relation to various parts, referred to above, while assessing the loss, when the repair cost was more than 75% of the IDV of the vehicle. By not declaring the vehicle, as total loss, Opposite Parties No.1 and 2, were certainly deficient, in rendering service.
20. It may be stated here, that since it has been held above, that it was a case of total loss, Opposite Parties No.1 and 2, were required to indemnify the complainant, to the tune of Rs.11,04,853/-. The Opposite Parties No.1 and 2, shall have the vehicle and become owner thereof.
21. Since Opposite Parties No.1 and 2 were directed to indemnify the complainant, to the extent of IDV, in our considered opinion, compensation should commensurate with the facts and circumstances of the case. It should neither be too high, nor too inadequate. In the instant case we award interest @ 6% per annum on the IDV amount, by way of compensation. Hence, these point are answered in favour of the complainant against the opposite parties
In the result the complaint is allowed directing the opposite parties no.1 and 2 to indemnify complainant, to the extent of Rs.11,02,456/- i.e. the IDV of the vehicle, in question, along with interest @ 6% per annum from the date of complaint till realization together with costs of Rs.5,000/-. On such payment the complainant is directed to take possession of the subject vehicle. Time for compliance four weeks.
PRESIDENT MEMBER
Dated: 17.04.2017
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
NIL
EXHIBITS MARKED
For Complainants :
Ex.A1 Copy of Certificate cum Policy Schedule
Ex.A2 Office copy of reply notice dated 15.09.2012 of the complainant
Ex.A3 Original letter dated 08.10.2012 issued by the opposite party no.1
to the complainant
Ex.A4 Original estimation of Aditya Auto Engineers &
Technicians dated 15.05.2012
Ex.A5 Original photographs
Ex.A6 Copy of First Information Report of PS Hayathnagar
For the opposite parties
Ex.B1 Original Motor Insurance Claim Form
Ex.B2 Copy of Certificate cum Policy Schedule
Ex.B3 Copy of claim rejection letter dated 06.07.2012
Ex.B4 Copy of FIR
Ex.B5 Copy of Surveyor’s report.
PRESIDENT MEMBER
Dated : 17.04.2017
