Punjab

Ludhiana

CC/19/570

Jaspal Singh - Complainant(s)

Versus

Digit Private Car PackagePolicy Ins.Co. - Opp.Party(s)

Gagandeep Singh Adv.

30 Sep 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:  570 dated 12.12.2019.                                       Date of decision: 30.09.2024. 

 

Jaspal Singh Hansra son of Nachhattar Singh, House No.17, Street No.5, Near Mata Mandir, Village Bijwasan, New Delhi, DL-110061   at present resident of village Kamalpura, Tehsil and District Ludhiana, Punjab.                                                                                                                          ..…Complainant

                                                Versus

The Digit Private Car Package Policy Insurance Company, Through its Manager, S.C.O. No.101/102/103, 2^nd Floor, Batra Building, Sector 17-D, Chandigarh-160017.                                                                                                                                                                       …..Opposite party 

Complaint Under Section 12 of The Consumer Protection Act, 1986 as amended upto date.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Gagandeep Singh Bedi, Advocate

For OP                           :         Sh. G.S. Kalyan, Advocate.

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Briefly stated, the facts of the case are that the complainant is owner of a car bearing No.DL-3-CAY-4531 for which the complainant purchased policy No.B004837798 having validity from 18.04.2019 to 17.04.2020. The complainant stated that unfortunately on 24.06.2019 at about 08.30 PM, the car caught fire/burnt due to which the car got totally damaged/burnt. Call was made to fire brigade and even a GDD was lodged at Police Station Raikot through General Diary No.16.  Fire Station, Jagraon issued a certificate with regard to fire services provided at the time of fire extinguish to the car. The complainant saved his life with great difficulty. He lodged the claim with OP qua loss of Rs.18,40,125/- of his car. The complainant also handed over second key to the OP and completed the formalities by submitting claim form and other relevant documents. However, the OP vide letter dated 24.09.2019 declined the claim of the complainant on the grounds reproduced as under:-

“We draw your attention to the claim lodged with us to the loss caused to your vehicle bearing registration No.DL3CAY453, under policy bearing No.D004837798 registered under claim No.2019900046935. Wherein, we initially had a suspicion about the nature and caused of loss and based upon the relevant facts and observations, have appointed a fire forensic expert to investigate the cause and nature of loss and based on his findings, we have addressed a letter to you dated 22nd august 2019 and sought for clarification. But, having not received your reply, we has repudiated your claim vide letter dated 02nd September 2019. However, vide email dated 18th September 2019, you have tried to give some explanation for our letter dated 22nd August 2019. We have gone through your reply and we regret to reconsider your claim and confirm our stand of repudiation on the following grounds:

1. That, the contract of insurance is contract of indemnity which is basically meant to place the insured on the same place where he was before the loss. But this does not imply that insured shall make profit out the said contract of insurance.

2. That, the contract of insurance is also based on the principle of utmost good faith which casts a duty upon the insured to disclose all material facts which will enable an insurance company to underwrite the risk and further envisages that, at the time of loss the insured shall disclose all true and material facts to process the claim.

3. That on intimation of the claim we have appointed a qualified investigator cum loss assessors, who has made a scientific analysis with respect to cause of loss and nature of damages caused to your vehicle. The cause of loss is not covered under the policy.

4. That, the damages are neither the result of an external impact not a malicious act and does not correlate to the cause and nature of loss.

5. As per the technical report, it can be concluded that, fire has originated from multiple points caused due to external source and it can be caused only when accelerants are applied. As such, the theory of self-ignition and short circuit is ruled out.

6. That, as per the physical inspection of the vehicle, identification of the vehicle as per the policy contract could not be established due to non-availability of chassis as well engine number therefore,, it was requested to provide the manufacturer's technical report, to

establish vehicle identification to confirm that the vehicle in claim is actually the same covered under the policy contract. However, no such technical report is provided.

7. That, you have not submitted the documentary proof for purchase of vehicle, payment transaction and bank statement.

8. You have not provide the second original key to the company.

9. That, looking at the facts and circumstances of the reported loss, it can only be attributed to be a mechanical/electrical breakdown, which is an exclusion under the policy. The relevant portion of the general exceptions are reproduced as under; "Section I- The company shall not be liable to make any payment in respect of: !. consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failure or breakages;"

According to the complainant, dislodging of his claim by the OP is totally against the law and fact. However, the OP once passed the insurance claim regarding change of windshield. The OP failed to pay the claim despite writing letters, emails for which the complainant is liable for interest and compensation. In the end, the complainant has prayed for directing the OP to pay Rs.19,45,328.75.

2.                Upon notice, the OP appeared and filed written statement assailed by complaint by taking preliminary objections on the grounds of maintainability; lack of cause of action; the complainant has not come with clean hands; suppression of material facts etc.
The OP stated that they issued "Digit Private Car Package Policy" to the complainant  having validity from 18.04.2019 to 17.04.2020 for own damage cover and for third party subject to policy terms and conditions for vehicle No.DL-3C-AY-4531 IDV value of  Rs.18,40,125/-.  The OP further stated thatt, the intimation regarding the loss was given to them 25.06.2019 which was immediately registered the claim under claim bearing registration No. 201900046935 for own damage claim and simultaneously appointed Investigator to ascertain the facts and collect necessary documents. The said investigator investigated the matter and submitted his detailed report dated 31.08.2019, which is reproduced as under:

"Conclusion

• Insured Jaspal Singh Hansra was a policy holder of the Go Digit General Insurance Ltd.
• Jaspal Singh Hansra is registered owner of the vehicle
• We visited accidental spot and clicked burnt car photographs, attached with our report.
• At spot, we verify insured burned BMW X5 Car and found many parts are missing from car.
• We visited insured address and meet with insured Jaspal Singh Hansra, his brother in law Jagroop Singh and his brother in law's friend Hardeep Singh and take written statement and click some photographs, Attached with our report.
• insured is doing small business of photography and his earning is very low to purchase BMW X5 car.
• In insured statement, he written that he give his Fortuner car at the time of purchase this BMW X5 Car but he don's provide his Fortuner Car details to us.
• In insured statement he written that he purchased this car second hand in 2016 but insured brother in law Jagroop Singh confirmed us verbally that he purchase this car and registered on his brother in law name.
• There is mismatch in insured brother in law Jagroop Singh and his friend Hardeep Singh statements.
• We visited spot location and verify the spot and found some broken accessories/parts of insured vehicle and broken Safeda Tree and clicked some photographs, attached with our report.
• Insured car last year IDV from previous insurance is 15,00,000/- but in Go Digit Insurance, insured car IDV is higher than last year. We tried to clarify from the insured but he didn't reply to any of our queries.
• Insured didn't Co-operate with us to complete our investigation".

 

The OP further stated that in order to confirm the actual cause of fire a forensic investigation was carried out. The said investigator investigated the matter and submitted his detailed report dated  14.08.2019, which is reproduced as under:-

"ORIGIN OF THE FIRE:

Our study of fire dynamics endorses that fire origin is from multiple places, like underneath of rear driver shaft, underneath of the rear suspension system, where extensive consumption of metal noticed, and underneath of engine compartment.

CAUSE OF FIRE:

We do not find any features and signs on the subject vehicle to determine the cause of fire is accidental, the HRR (Heat Release Rate) is not consistent with available fuel load, melting of window glasses, and melting of metal components, missing components, we are in the opinion that the fire is not accidental in nature. Cause of fire cannot be accidental."

                   The OP further stated that despite these lapses they had given a fair opportunity to the complainant to show cause and submit his clarification on the lapses vide letters dated 22.08.2019, which is reproduced as under:-

"Please refer your reported burnt vehicle claim under above mentioned policy towards vehicle registration number DL3CAY4531 for Claim Number 201900046935. While reviewing your claim file and documents submitted by your good self and details available with us, we have following observations to make:-

• From the report and physical inspection, it is concluded that none of the perils covered under this policy has resulted into the reported loss.
• As per the technical report and the inspection the reported damages are neither the result of an external impact nor a malicious act and does not correlated to cause and nature of loss, thus the reported loss does not fall under purview of insurance.
• As per the inspection and preliminary survey report, the reported damages are neither the result of an external impact nor a malicious act and does not correlated to cause and nature of loss. Therefore, the reported damages can only be attributed to be mechanical/electrical breakdown, or the reasons not covered as per policy terms and condition which states as "Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages" is not covered. It is therefore further evident that the above reported loss does not fall under insurance purview.
• We understand that the market value of the vehicle given the actual condition is estimated to be less than 7.95 lacs as per surveyor report/market value, however, you have opted insurance coverage for Rs.1840125/. Kindly explain reason.
• Kindly submit us the documentary evidence for purchase of your vehicle such as sale agreement, payment transaction, bank statement etc.
• As per the technical and fire forensic report it can be concluded that the fire has originated from multiple points caused due to external source and can only attribute when the accelerants are applied. Therefore any self-ignition or electrical/short circuit is ruled out.
• As per the physical inspection of the vehicle, identification of the vehicle as per the policy contract could not be established due to non-availability of Chassis as well Engine number therefore kindly submit us the manufacturer's technical report, to establish Vehicle identification to confirm that the vehicle in claim is actually the same covered under the policy contract.
• We request you to submit us original Ignition Keys in order to us for further reviewing admissibility of the subject claim.
• During the technical inspection by fire forensic team & appointed surveyor it is observed that many critical parts were missing from the vehicle such Cross beam, steer column and supporting clamps and pedal, crossbeam, front panel metal reinforcement, ABS, spare tire and rim, the battery, battery positive and negative terminals are made of metal both are missing in the subject vehicle, kindly submit documentary evidence to clarify as there are deliberate attempt to mislead insurance company for wrongful gain.
• The cause of loss does not correlate with damages sustained to insured vehicle, we request you kindly provide us the complete and correct details about the actual loss.
• The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk. Kindly keep the vehicle in your safe customer for any further technical investigation required in future.

Please note that we are not liable for any loss to the vehicle/consequential loss, parking charges or rent etc. as the claim has not been yet admitted by us in light of non-disclosure of material facts and breach of utmost good faith. In view of the above kindly clarify with documentary evidence within 7 days from the date of this letter as to why your claim should not be repudiated"

                   According to the OP, the complainant could not provide any satisfactory reply. The OP carefully considered the same, but the reply was not satisfactory as such repudiated the claim of the complainant vide letter dated 24.09.2019, the operative of which is reproduced as under:-

"We draw your attention to the claim lodged with us, to the loss caused to your vehicle bearing registration number DL3CAY4531 under policy bearing number D004837798 registered under Claim Number 201900046935. Wherein, we initially had a suspicion about the nature and cause of loss and based upon the relevant facts and observations, have appointed a fire forensic expert to investigate the cause and nature of loss and based on his findings, we have addressed a letter to you dated 22nd August 2019 and sought for clarification. But having not received your reply, we had repudiated your claim vide letter dated 2nd September 2019. However, vide email dated 18th September 2019, you have tried to give some explanation for our letter dated 22-08-2019. We have gone through your reply and we regret to reconsider your claim and confirm our stand of repudiation on the following grounds:-

1. That the contract of insurance is contract of indemnity which is basically meant to place, the insured on the same place where he was before the loss. But this does not imply that insured shall make profits out the said contract of Insurance.
2. That the contract of insurance is also based on the principle of utmost good faith which casts a duty upon the insured to disclose all material facts which will enable an insurance company to underwrite the risk and further envisages that, at the time of loss the insured shall disclose all true and material facts to process the claim.
3. That on intimation of the claim we have appointed a qualified investigator cum loss assessors, who has made a scientific analysis with respect to cause of loss and nature of damages caused to your vehicle. The cause of loss is not covered under the policy.
4. That the damages are neither the result of an external impact not a malicious act and does not correlate to the cause and nature of loss.
5. As per the technical report, it can be concluded that, fire has originated from multiple points caused due to external source and it can be caused only when accelerants are applied. As such, the theory of self-ignition and short circuit is ruled out.
6. As per the physical inspection of the vehicle, identification of the vehicle as per the policy contract could not be established due to non-availability of Chassis as well Engine number therefore, it is requested to provide the manufacturer's technical report, to establish Vehicle identification to confirm that the vehicle in claim is actually the same covered under the policy contract. However, no such technical report is provided.
7. That you have not submitted the documentary proof for purchase of vehicle, payment transaction and bank statement.
8. You have not provided the second original key to the company.
9. That looking at the facts and circumstances of the reported loss, it can only be attributed to be a mechanical/electrical breakdown, which is an exclusion under the policy. The relevant portion of the general exceptions are reproduced as under, "SECTION I-The company shall not be liable to make any payment in respect of 1. Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages.

 

In view of the above stated grounds, we reconfirm our stand of repudiation."

                   On merits, the OP reiterated the crux of averments made in the preliminary objections. The OP has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

3.                The complainant filed rejoinder to the written statement of the OP reiterating the facts mentioned in the complaint and controverted those mentioned in the written statement of the OP.

4.                In evidence, the complainant tendered his affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents Ex. C1 to Ex. C17 and closed the evidence.

5.                On the other hand, the counsel for the OP tendered affidavit Ex. RA of Sh. Sandeep Mohanty, Employee of the OP as well as affidavit Ex. RB of Mr. Zuber Ali Khan, Forensic Expert along with documents Ex. R1 to Ex. R7, Ex. R4A and Ex. R4B and closed the evidence.

                   Thereafter, the OP filed an application for leading additional evidence which was allowed vide order dated 16.04.2024. In additional evidence, the OP tendered documents Ex. R8 to Ex. R11 and closed additional evidence.

6.                We have heard the arguments of the counsel for the parties and also gone through the complaint, rejoinder, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by the parties. We have also gone through written arguments submitted by the parties.

7.                The complainant is a registered but the owner of a pre-owned vehicle bearing registration No.DL-3C-AY-4531 Ex. C1, had a valid and subsistence insurance policy Ex. C3. On 24.06.2019, at about 08.30 PM, when the vehicle reached in the area of Police Station City Raikot, it was driven by one Hardeep Singh, who was also accompanied by the relative of the complainant namely Jagdeep Singh,  both experienced some smell of burning from the engine of the car. They alighted from the car and were about to examine the reason but the car caught fire. Service of Fire Tender were requisitioned and the matter was also reported to the Police Station City Raikot. The car was practically reduced into ashes. On lodging the claim, surveyor Secure Risk Management & Insurance Services was appointed, who submitted its report dated 31.08.2019 Ex. R3. Further an investigator Mr. Zuber Ali Khan was also appointed by the OP to investigate the matter who also submitted his report dated 14.08.2019 and finally the claim  was declined by the OP vide repudiation letter dated 24.09.2019 Ex. R6. The complainant by filing the present complaint has challenged the repudiation of the claim.

8.                First and the foremost question which arises for consideration of this Commission is whether the genesis of occurrence i.e. catching of fire in the car is genuine or not?

9.                It is decipherable from the record that as soon as the car got caught fire, firstly, the nearest Fire Station at Raikot was requested to reach at the spot. Thereafter, on the request of Jagdeep Singh, fire tender from Jagraon reached at the spot at about 21.25 and extinguished the fire of car No.DL-3C-AY-4531. Further Ex. C7, Report of Fire Station, Jagraon, DDR Ex. C4 and the news item Ex. C8 further corroborates the factum of the car catching fire. At the time of inspection by the investigator, photographs were also taken which shows the burnt condition of the car. So there is sufficient evidence on record which shall persuade this Commission to conclude that on 24.06.2019 the car bearing No.DL-3C-AY-4531 caught fire in the area of P.S. City Raikot.

10.              Further in order to determine the cause of fire, the surveyor Secure Risk Management & Insurance Services as well as Forensic Expert Mr. Zuber Ali Khan were appointed. Both the investigators have highlighted certain discrepancies with regard to the capacity of the complainant to purchase this high-end car, its exaggerated IDV value, non-availability of chassis as well as engine number from the burnt residue of the car and non-cooperation of the complainant during the process but the question remains whether the complainant was instrumental in setting the car on fire. The first investigator namely Secure Risk Management & Insurance Services had ruled out the cause of fire to be self-ignition or the electrical/short circuit and further concluded that the fire in question from multiple points caused due to external source  which attributable to application of accelerants. Both the investigators observed the missing of parts from the car. It can be seen that it took one hour in reaching the spot by the fire brigade in this case which has resulted into extensive damage to the car and the possibility of missing of parts and obliteration of chassis and engine number cannot be ruled out. Both the reports of the surveyor and investigator are tentative with regard to cause of fire but none has specifically attributed that it is the complainant who intentionally set the car on fire and due to negligence of the complainant, the car set on fire. By mere writing that fire took due to mechanical or electrical breakdown or failure is not sufficient to invoke the exclusion clause to deny the claim of the complainant. In this regard, reference can be made to New India Assurance Company Limited Vs Pradeep Kumar (2009) 7 SCC 787 whereby the Hon’ble Supreme Court of India has made the following observations:-

“A. Insurance Act, 1938, Section 64UM – Surveyor’s report – Although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousands rupees or more by insurer, but surveyor’s report is not the last and final word – It is not that sacrosanct that it cannot be departed from; it is not conclusive – Approved surveyor’s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”

11.              The close scrutiny of the documents available on record would reveal that earlier  for the period from 18.04.2018 to 17.04.2019, the car was insured with United India Insurance Co. Ltd. and a Private Car Package Policy Ex. R11 was issued to the complainant wherein the IDV value  of the car as Rs.15,00,000/- was shown in the policy. The counsel for the OP had pointed out that the complainant had obtained the present insurance policy by exaggerating the IDV value to Rs.18,40,125/-. The counsel for the OP has further drawn attention of this Commission towards the document contained in report dated 14.08.2019 showing the market value of the identical model of the car of the complainant which ranges from Rs.7,25,000/- to Rs.9,71,819/-.  Normally, value of any vehicle depreciates with the passing of each year from the date of its manufacturing but strangely in the present case, the IDV value of the vehicle has increased from Rs.15,00,000/- to Rs.18,40,125/-. Also in the policy Ex. R1, the factum of holding of earlier policy is reflected. Further also at the time of availing the previous policy, a premium of Rs.25,311/- was paid by the complainant but now the complainant has also paid the enhanced premium of Rs.41,878/-. Further it is a settled law that the contract of the insurance is issued on the basis of utmost faith and both the parties are bound to abide the terms and conditions of the insurance policy. Further this Commission cannot add, delete or subtract any words thereto. Recently in New India Assurance Co. Ltd. & Ors. Vs M/s. Mudit Roadways in 2023 INSC 1022  the Hon’ble Supreme Court of India has held that “It was unequivocally declared that the precise cause of a fire, whether attributed to a short circuit or any alternative factor, remains immaterial, provided the claimant is not the instigator of the fire. This case underscored the fundamental principle that an insurance company’s obligation to the insured is of much greater import….Moreover, the fire is found to have occurred within the insured warehouse and the appellant’s plea to the contrary is not believable. Therefore, it is a case of wrongful repudiation by the appellants.” It has been further held by the Hon’ble Supreme Court that “The heart & soul of an insurance contract lies in the protection it accords to those who wish to be insured by it. This understanding encapsulates the foundational belief that insurance accords protection & indemnification, preserving the sanctity of trust within its clauses. Effectively, the insurer assumes a fiduciary duty to act in good faith and honour their commitment. This responsibility becomes particularly pronounced when the insured, in their actions, have not been negligent. In light of the vital role that trust plays in insurance contracts, it is important to ensure that the insurer adequately fulfils the duty that has been cast on it, by virtue of such a covenant.”

                   Under the circumstances, this Commission is of the view that the OP is not justified in repudiating the claim of the complainant and as such, it would be just and appropriate if the OP is directed to settle and reimburse the claim of the complainant and to pay a composite costs of Rs.20,000/-.

12.              As a sequel of above discussion, the complaint is partly allowed with direction to the OP to settle and reimburse the claim of the complainant within 30 days from the date of receipt of copy of order failing which the complainant shall be held entitled for interest @8% per annum from the date of order till actual payment. The OP shall further pay a composite cost of Rs.20,000/- (Rupees Twenty Thousand only) to the complainant. Payment of costs shall be made within a period of 30 days from the date of the receipt of the copy of this order. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.         

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

 

Announced in Open Commission.

Dated:30.09.2024.

Gobind Ram.