Appeared at the time of arguments through video conferencing

For the Petitioner          : Ms. Anjalli Bansall, Advocate

For the Respondent - 1   : Mr. Bharat Swaroop Sharma, Advocate 

For the Respondent - 2   : Mr. Dhruv Wahi & Mr. Daniel George, Advocates 

For the Respondents - 3 & 4 : NEMO

 

Pronounced on:  21st December 2021

ORDER

PER DR. S.M. KANTIKAR, MEMBER

1. The present Revision Petition is preferred by Tata AIG General Insurance Co. Ltd. (hereinafter referred to as the “Petitioner/Insurance Company”) under Section 21 (b) of the Consumer Protection Act, 1986 against the impugned Order dated 09.07.2013, passed by the Chandigarh State Consumer Disputes Redressal Commission (hereinafter referred to as the “State Commission”) in First Appeal No. 114/2013, wherein the Appeal was dismissed.  

2. The issue in the instant revision petition relates to payment of insurance claim against the repairs of the vehicle. 

3. The brief facts of the case are that the Complainant -Dr. Navneet Agnihotri’s Honda Coty Car was insured for the period from 22.06.2011 to 21.06.2012 by the Petitioner / Tata AIG General Insurance Co. Ltd who issued a cover note but the insurance policy was never supplied to the complainant. On 24.07.2011 due to some defects in the engine of the car there was loud noise and smoke coming out of the engine; therefore  immediately the engine was turned off and car was towed to the service center of the dealer - Respondent No. 3. Initially towards the cost of its repair  estimate of Rs.17,836/- was given by Respondent No. 3, but after the Surveyor’s report a fresh estimate of Rs. 2,05,947/- was prepared by Respondent No. 3 and the vehicle was promised to be delivered on 30.07.2011. Accordingly, the Complainant approached the Respondent No. 3 to take her car, she was informed that since the engine of the car was damaged because of water/hydrostatic lock, neither the Insurance Company nor the Honda Manufacturer were ready to pay the repair charges. Therefore, under compelling circumstances on 07.09.2011, the Complainant paid Rs. 2,05,947/- and took her car. However, while test drive, she noticed noise in the engine which on enquiry with Respondent No. 3 who informed   that the tension bearing of the belt was not working properly and it could not be replaced due to unavailability. Consequently, the car was again called back on 08.09.2011, and delivered on 19.09.2011 by collecting repair charges of Rs. 1,236/-. Because of negligent and deficient act of the Opposite Parties, the Complainant on 12.09.2011 served a legal notice upon the Insurance Company as well as other Respondents. However, on 10.10.2011, the Insurance Company repudiated the insurance claim of the Complainant. Being aggrieved by the deficiency in service and unfair trade practice, the Complainant filed a Complaint before the District Forum, Chandigarh seeking refund of Rs. 2,05,947/- with interest @ 18% p.a.; Rs.2,00,000/- as compensation for mental agony and Rs.43,000/- towards litigation costs.

4. In the written submission filed by the manufacturer Honda Siel Cars India Ltd. (Respondent No. 2), the maintainability of the Complaint on the ground that the car was purchased for commercial purposes. The   relationship between Manufacturer -Respondent No. 2 and the dealer -Respondent No. 3 was strictly on a principal-to-principal basis. It was denied the car was insured with the Insurance Company through Respondent No. 3. It was further stated that Respondent No. 2 had nothing to do with the repairs carried out by Respondent No. 3. It was further denied allegations about huge difference in the both estimates of repairs and the Complainant was forced to make the payment by her own. 

5. The Respondent No. 3, in its written version, submitted that it had not committed anything about expenses towards repairs. As such the Respondent No. 3 had rightfully charged for the repair of the vehicle. It was submitted that after inspecting the engine, it was found that there was ingress of water into the engine which contributed to the damages due to a phenomenon called hydrostatic lock. Thus, the damages were due to external reasons and the repair of the engine did not fall under the standard/extended warranty.  

6. The Insurance Company- Petitioner herein, in its written version, submitted that on receipt of claim intimation, Sh. Pukhraj Singh of Protech Engineers & Loss Assessors (Respondent No. 4) was appointed to assess the claim and submit his report. The surveyor visited the workshop for assessment and after inspecting the car found that the underbody damages and the damage to the engine cannot occur by ingress of water unless there is a mechanical breakdown or when trying to start/run the engine when in contact with water which could lead to seizure of engine. Surveyor in his report stated that the loss occurred due to consequential loss due to violation of Condition No. 1 (2) (a) of the policy. Therefore, the claim was repudiated vide letter dated 10.10.2011.

7. On hearing the parties and appraisal of evidence the District Forum held that the repudiation made by the Insurance Co. was not justified. The District Forum partially allowed the Complainant and Ordered as below:

(a) To refund the amount of Rs. 2,07,182/- i.e. (Rs. 2,05,947/- + Rs. 1236/-) which the Complainant was forced to pay to the Opposite Party No. 2, after deducting applicable depreciation, as per the terms & conditions of the policy;

(b) To pay Rs. 25,000/- on account of deficiency in service and causing mental and physical harassment to the Complainant;

(c) To pay Rs. 10,000/- as cost of litigation

8. Being aggrieved, the Ins. Co. filed the First Appeal before the State Commission, wherein the Appeal of the Opposite Party was dismissed and the District Forum Order was affirmed.  

9. Hence this Revision Petition.

10. We have heard the learned Counsel for the Parties, perused the material on record, inter aila, the Orders passed by the District Forum and the State Commission.

11. The District Forum’s relevant observations are as below: 

20. The argument that there was consequential loss, was also subjective and without any supportive evidence in terms of report/expert opinion of any independent expert/engineer of Opposite Party No.3, in the field. The policy taken by the complainant, was cashless policy, and if the claim .was to be declined on technical or frivolous grounds, such a policy was of no use to the complainant. In fact, Opposite Party No. 3, even did not supply the complete policy with terms and conditions and only a cover note was supplied. In absence of terms and conditions having been supplied to the complainant, the question of explaining the exclusions to the complainant did not at all arise. 

21- To sum up, there was a wide variation in two repair estimates (Annexures C-2 and C-3). As per the contents of both the estimates, the vehicle was promised to be delivered to the respondent No. 1/complainant on 30.7.2011 and despite her undertaking, which the complainant was coerced to give in, the vehicle was delivered on 30.9.2011. The deficiency was not only in repairing the vehicle timely but also wrongly repudiating the claim, which was admissible. The appellant/Opposite Party No. 3, has failed to establish that repudiation of the claim was on just and logical grounds. The facts and circumstances clearly establish that the repudiation was illegal and invalid.

12. In the Appeal filed by the Insurance Co. was dismissed by the State Commission with following observations:

13. Interestingly, initially Opposite Party No. 3 in its communication to the Complainant had claimed that the episode of accident as intimated by the Complainant did not in any manner relate with the loss suffered by the vehicle, hence, the same being objectionable, is not payable. However, at a later stage, when the engine of the vehicle was opened, it was revealed on inspection that the engine had suffered the damage due to the ingress of water causing hydrostatic lock leading to the extensive damage to the engine parts. The reply of Opposite Party No.3, as well as Opposite Party No.2 confirms this factor, as they have annexed the copy of repudiation letters which are Annexure OP1/5 and Annexure R-3/3 respectively, which are the same documents dated 10.01.2011, as annexed at Annexure C-15 by the Complainant. We understand that as the episode of water lock of the engine has occurred due to the ingress of water, as confirmed by the Opposite Party No.2, but at the same time, the opinion of Opposite Party No.3, that the loss due to this factor, is not payable, being consequential loss, is not understandable, as no fault Is attributable to the Complainant for the happening of this loss. None of the Opposite Parties have been able to make out that the ingress of water in the engine, was in the knowledge of the Complainant, and that even though being in know of ingress of water, she continued to drive the vehicle, causing such an extensive damage to its engine. 

14. The Opposite Party No.3 in its claim that the damage to the engine of the vehicle in question due to hydrostatic lock is actually a consequential loss, has failed to clearly demarcate as to what was the initial loss, and after the happening of such a loss, the further loss that was caused to the engine, was a consequential loss. Meaning thereby that the consequential loss would only happen, after the completion of an event, and the loss having occurred during this event is quantified: as well as the Complainant was in the knowledge of the damage which had occurred to the vehicle in the first episode. Our own Hon'ble State Consumer Disputes Redressal Commission, U.T. Chandigarh, in First Appeal No. 34 of 2012, decided on 09.02.2012, in the case titled as "Tata AIG General Insurance Company Limited V/s M/s Ayushveda Informatics (India) Pvt. Ltd. & others" too has opined that any damage to the engine due to hydrostatic lock on account of ingress of water in the engine is actually an incidental loss and not a consequential loss. Therefore, we feel that Opposite Party No.3 is liable to make good the loss suffered by the Complainant on account of hydrostatic lock of the engine and having denied this genuine claim of the Complainant, amounts to deficiency in service on its part. 

14. …xxx…

15. It is also worth mentioning here that the Complainant who had been regularly subscribing for a comprehensive policy from Opposite Party No.3, had suffered harassment at the hands of Opposite Party No.2 when a demand of Rs.2,05,947/- was made from her after initially having assessed loss of Rs.17,836/- and that she had made the payment of entire repair charges under compelling circumstances to take her vehicle from Opposite Party No.2. Such a situation, to our mind, definitely means harassment, which was on account of refusal of her genuine claim by Opposite Party No. 3. 

16. Since we did not find any deficiency in service on the part I of Opposite Parties No. 1, 2 and 4, therefore, the present complaint qua j them Is dismissed, with no order as to costs. 

 

17. In the light of above observations, we are of the concerted view that the Opposite Party No. 3 is found deficient in giving proper service to the complainant. Hence, the present complaint of the Complainant deserves to succeed against the Opposite Party No. 3, and the same is Allowed. The Opposite Party No.3 is directed, to:- 

[a] To refund the amount of Rs.2,07,182/- I.e. (Rs.2,05,947/' + Rs.1236/-) which the Complainant was forced to pay to Opposite Party No.2, after deducting applicable depreciation, as per the terms & conditions of the policy; 

[b] To pay Rs.25,000/-on account of deficiency In service and causing mental and physical harassment to the Complainant; 

[c] To pay Rs.10,000/- as cost of litigation

 

13. The State Commission has concurred with the findings of the District Forum and passed a well-appraised reasoned Order. We do not find any   crucial error in appreciating the evidence by the two fora below, as may cause to require de novo re-appreciation in revision, is visible. No jurisdictional error, or legal principle ignored, or miscarriage of justice, is visible. Nothing warrants interference with the impugned Order of the State Commission in the exercise of the revisional jurisdiction of this Commission. 

The Revision Petition is bereft of merit and is dismissed.

14. We note that the complainant is a Lady Doctor and taking yearly a Comprehensive Car Insurance policy from the Petitioner. It is strange to note that the OP-3 initially told repair charges about Rs.17,836/- but admittedly as per the  Surveyor’s report it became  Rs.2,05,947/-. The insurance co. was duty bound to pay the amount to the OP-3 but it was demanded from the Complainant and which she paid because of compelling circumstances. Thereafter, the Insurance Co. instead of reimbursing the repair charges, repudiated her genuine claim. In our considered view, such unjustified the repudiation of claim by Petitioner Insurance Co. is deficiency in service by which the lady doctor suffered harassment and mental agony for a decade and was unnecessarily dragged up to National Commission.

15. To achieve the ends of justice, the Petitioner Insurance co. is directed to pay entire amount as directed by the State Commission within 4 weeks   along with a report-in-compliance through its chief executive with the District Commission failing which the entire amount shall carry interest @ 10% per annum till its realization. The District Forum shall undertake execution proceedings as per law after 4 weeks.

16. The Stenographer is requested to upload this Order today itself  on the website of this Commission  and the Registry to send a copy each of this Order to the chief executive of the revisionist Insurance Company, to the Complainant as well as to the District Forum, within four days from today.