Chandigarh

StateCommission

CC/282/2019

Arshjot Singh - Complainant(s)

Versus

Ford India Pvt. Ltd. - Opp.Party(s)

Sukhdeep Singh Bhinder & Dilraj Singh Bhinder Adv.

31 Mar 2021

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	282 of 2019
Date of Institution	:	17.12.2019
Date of Decision	:	31.03.2021

 

Arshjot Singh S/o Makhan Singh R/o #160, Near Manav Chownk, New Milap Nagar, Ambala City, Ambala presently residing at House No.416, Sector 45-A, Chandigarh.

……Complainant

V e r s u s

1. Ford India Pvt. Ltd., Plot No.142, 5^th Floor, Chimes 142, Sector 44 Road, Sector 44, Gurgaon, Haryana through its Managing Director.
2. Bhagat Cars Pvt. Ltd., Plot No.53, Industrial Area, Phase 2, Chandigarh through its General Manager.
3. Bharti AXA General Insurance, SCO 350-351-352, First Floor, Sector 34 A, Chandigarh, through is General Manager.
4. Pearl Ford, Tepla Ambala Jagadhari Road, Ambala Cantt., Ambala through its General Manager.

…..Opposite party

 

BEFORE:             JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS. PADMA PANDEY, MEMBER.

                             MR.RAJESH K. ARYA, MEMBER.

 

Present through video conferencing:                

                             Sh.Dilraj Singh Binder, Advocate for the complainant.

                             Sh.Gaurav Bhardwaj, Advocate for opposite party no.3.

                             Opposite parties no.1 and 2 exparte vide order dated   27.01.2020.

                             None for opposite party no.4.

 

JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                  

                   This complaint has been filed by the complainant seeking refund of the amount of Rs.31,32,313/- paid by him to opposite party no.2 towards purchase of vehicle bearing registration no.CHT 0019, make Ford 3.2L Endeavour Titanium, vide invoice dated 06.02.2019, Annexure C-1, alongwith damages and interest, on the ground that the said vehicle suffered from manufacturing defects. The said vehicle was got insured from opposite party no.3 on making payment of premium of Rs.79,858/- vide policy Annexure C-2. It is the case of the complainant that in the month of October 2019, while he was driving the said vehicle on a rainy day, the said vehicle stopped in between on Ambala City road. On calling the care service centre of opposite party no.2, he was advised to take the vehicle to its authorized service centre i.e. opposite party no.4. Resultantly, he towed the vehicle to the workshop of opposite party no.4, but it refused to inspect the same and directed him to take it to opposite party no.2. As such, the vehicle was then towed to the premises of opposite party no.2. However, without inspecting the vehicle, it was told to the complainant that it is hydro locked. Information in this regard was also given by the complainant, to opposite party no.1 which is the manufacturer of the said vehicle. However, despite the fact that the vehicle was parked in the premises of opposite party no.2 for number of days, yet, the same was not repaired. When the complainant lodged claim with opposite party no.3-Insurance Company, the same was denied on the ground that engine damage is not covered under the said policy. The surveyor appointed by opposite party no.3 after inspecting the said vehicle opined that neither there was any external impact on it nor there was any proof of entering water therein. It has been stated that by not repairing the vehicle in question, despite the fact that the same was under warranty period; denying the claim by opposite party no.3 and also  refusal by opposite party no.4 to rectify the defects in the vehicle in question, they were deficient in providing service, this complaint has been filed by the complainant. 

2.           Despite service, none put in appearance on behalf of opposite parties no.1 and 2, which are manufacturer and dealer respectively, as a result whereof, they were proceeded against exparte vide order dated 27.01.2020.
3.           In the reply filed by opposite party no.3-Insurance Company, it has been stated that the complainant has concealed material facts from this Commission; that on receipt of intimation regarding the said loss, Surveyors and Loss Assessors were appointed to assess the loss; that the vehicle in question was inspected by the said Surveyors and Loss Assessors who opined that neither any water ingression in the air filter/intake and engine oil nor any external impact has been observed; that the said Surveyors and Loss Assessors wrote email dated 13.12.2019 to the complainant to apprise regarding the loss but he did not give any reply; that thereafter they submitted report dated 03.02.2020 stating therein that since the engine cannot be damaged merely coming in contact with water, until it has been tried to start after ingress of water, which is a mechanical failure, hence no claim is payable under the policy; and that under those circumstances, only Rs.2000/-  was assessed by them on account of excess clause.
4.           On merits, the fact that the vehicle in question was got insured from opposite party no.3 and payment of premium aforesaid by the complainant, have not been disputed. Remaining averments of the complaint have been denied. Prayer has been made to dismiss the complaint with costs.
5.           Opposite party no.4 in its reply stated that this Commission is not vested with territorial jurisdiction to entertain this complaint; that the complainant himself refused to get the vehicle repaired on payment basis and was interested to get the same repaired from Chandigarh and as such took his vehicle back. While denying remaining averments of the complaint, prayer has been made to dismiss the complaint against it.
6.           The contesting parties led evidence in support of their case.
7.           We have heard the contesting parties and have gone through the evidence and record of the case, very carefully.
8.           First we will deal with the objection raised by opposite party no.4  in its written reply, with regard territorial jurisdiction of this Commission to entertain this complaint. It may be stated here that since the vehicle in question was purchased from opposite party no.2 at Chandigarh; it was insured with opposite party no.3 at Chandigarh; and also it was ultimately taken to the workshop of opposite party no.2 at Chandigarh for repairs but it failed to do so; and the fact that the claim raised by the complainant with opposite party no.3 was also denied by opposite party no.3 located at Chandigarh, as such, this Commission at Chandigarh has territorial jurisdiction to entertain this complaint. Objection taken by opposite party no.4 in this regard stands rejected.
9.           Before going into the merits of the case, it is very significant to mention here that opposite party no.1 is the manufacturer of the vehicle in question and opposite party no.2 is the dealer from whom the said vehicle had been purchased by the complainant. However, despite the fact that serious allegations have been leveled by the complainant in his complaint that the engine of the vehicle in question suffered from manufacturing defects, yet, opposite parties no.1 and 2 preferred not to put in appearance before this Commission, despite deemed service. It is not that opposite parties no.1 and 2 were not aware of the pendency of this complaint because at one point of time, on 11.02.2021, Ms.Sandeep Kaur, Advocate proxy for Sh.Karan Nehra, Advocate put in appearance on behalf of opposite parties no.1 and 2, but, by that day, they had already been proceeded against exparte vide order dated 27.01.2020. However, there is nothing on record that opposite parties no.1 and 2 preferred any appeal for getting the said order quashed from the Hon’ble National Commission. As such, non appearance of opposite parties no.1 and 2 to defend the allegations leveled by the complainant in his complaint to the effect that the engine of the vehicle in question suffers from manufacturing defects, attracts an adverse inference against them that they have nothing to say in their defence.     
10.           Perusal of record reveals that the complainant was made to run from pillar to post to get his vehicle repaired but he could not succeed. In the first instance, opposite party no.4 did not repair the vehicle. Thereafter, he towed his vehicle to the workshop of opposite party no.2. However, when his vehicle was still not repaired, he lodged his claim with opposite party no.3 in order to assess the loss caused to the vehicle, as the same was under insurance cover. On receipt of claim, opposite party no.3 deputed B & S Surveyors and Loss Assessors. As such, Sh.Munish Sen and Nitin Batra, Surveyors and Loss Assessors, inspected the vehicle in question to assess the loss and thereafter vide email dated 24.10.2019, Annexure C-4 in a very candid manner, informed the complainant that on inspection it was found that neither there was any external accidental impact nor there was any proof of water and as such, damage to engine/gear box due to any mechanical failure is not covered under the policy terms and conditions. Relevant part of the said email is reproduced hereunder:-

“Dear Amarjit,

After inspecting the vehicle it was observed that there is no external accidental impact on vehicle, neither there was any proof of water.

As discussed insured has not opted for engine/Gear box protection cover in the policy.

Damages to engine/gear box internal parts due to mechanical failure if any cannot be considered as per policy terms and condition

You may proceed with further dismantling/repairs with prior approval of insured….”

 

Under above circumstances, since the vehicle in question was under warranty period of two years from the date of its purchase, as such, the complainant wrote emails dated 24.10.2019, 07.11.2019 and 11.11.2019 to opposite parties no.1 and 2 to repair his vehicle being under warranty period but to no avail. However, to the utter shock of the complainant, vide email dated 14.11.2019, Annexure C-3, it was informed to the complainant by opposite parties no.1 and 2 that since the water had entered into the engine through air inlet duct leading to engine seizure, as such, the said act amounts to negligence on his part and therefore the same is not covered under the warranty period.

11.           However, we are surprised to note that thereafter, opposite party no.3 through its Surveyors and Loss Assessors, took a somersault and sent letter dated 13.12.2019 to the complainant and informed him that damage to internal parts due to ingression of water, if any, is out of scope of  insurance cover. Whereas, on the other hand, vide email dated 24.10.2019, earlier it had been clearly opined by the said Surveyors and Loss Assessors deputed by opposite party no.3 that there was no proof of water in the vehicle and that damage to engine/gear box internal parts was due to mechanical failure.  It was further stated in the said letter dated 13.12.2019 that the complainant has failed to take reasonable steps to safeguard the vehicle from the loss/damage.

                   Thereafter, without any evidence in hand, the said Surveyors and Loss Assessors submitted their report dated 03.02.2020 stating therein that because the engine cannot be damaged by merely coming in contact with water until it has run/tried to start after the ingress of water, which is clearly a mechanical failure resulted form aggravation of loss, it is not covered under the terms and conditions of the policy. These contents of letter dated 03.02.2020 were contrary to what were brought to the notice of the complainant by the said Surveyors and Loss Assessors, vide email dated 24.10.2019. To strengthen its case that inspection of the vehicle was carried out on 18.10.2019, photographs of the vehicle showing that the same had been got inspected thoroughly on the said date in the workshop of opposite party no.2, has also been placed on record by opposite party no.3.

12.           It is very significant to mention here that perusal of record reveals that the inspection of the vehicle in question was got done by the Surveyors and Loss Assessors on 18.10.2019, which fact is not disputed. Perusal of photographs placed on record by them further reveals that the various parts associated with the engine of the said vehicle were removed and thoroughly checked. It was only thereafter, that vide email dated 24.10.2019, Annexure C-4 it was intimated to the complainant by  Sh.Munish Sen and Nitin Batra, Surveyors and Loss Assessors, that after inspecting the vehicle, there was no proof of water therein and as such, damage to engine/gear box has been caused due to any mechanical failure. However, it has not been clarified by opposite party no.3 that once the said Surveyors and Loss Assessors had intimated that there was no proof of water found in the vehicle, why thereafter they took a somersault and rejected the claim of the complainant while holding that since the complainant has failed to take reasonable steps to safeguard the vehicle and that the engine got damaged due to ingress of water in the engine and it being a case of mechanical failure, claim is not payable.
13.           Thus, neither opposite parties no.1 and 2 nor opposite party no.3 have been able to provide any convincing evidence to the complainant or to this Commission in order to prove that there was any fault on the part of the complainant, resulting into loss/damage suffered by the said vehicle.  Since, opposite parties no.1 and 2 have failed to  put in appearance to defend their case, as such, it is held that email dated 14.11.2019, Annexure C-3, was nothing but a tool to evade their liability just to defeat the claim of the complainant. This act of opposite parties no.1 and 2 amounts to deficiency in providing service and adoption of unfair trade practice, which act needs to be deprecated.
14.           Now coming to opposite party no.3, in our considered opinion, it has not been able to prove that the complainant-insured has failed to take reasonable steps to safeguard the vehicle against any damage. Even otherwise, the policy taken by the insured was a comprehensive policy insuring the vehicle against damages of all kinds and, therefore, irrespective of the cause of damage, the insurer has to reimburse the insured for the loss suffered unless the case is covered under any of the exceptions contained in the insurance policy or the insurer is able to prove breach of a mandatory term of the insurance policy. Though it has come in the report of the Surveyors and Loss Assessors that the damage to the vehicle could be due to Hydrostatic lock i.e. run/tried to run after the ingress of water (which infact is contrary to what has been opined in email dated 24.10.2019 that there was no proof of water found in the said vehicle), even then such a damage would be covered under the insurance policy, because perusal of Section 1 of the policy reveals that opposite party no.3 had inter-alia insured the vehicle against loss or damage by flood, typhoon, hurricane, storm, tempest, inundation, cyclone and hailstorm frost. The case of the complainant, as noted earlier, is that his car stopped due to a splash of water by another vehicle under water logged bridge. There is no evidence against the complainant that he had cranked the vehicle several times in the standing water. Even otherwise, the issue involved in this complaint is no more res integra in view of the decision of the Hon’ble National Commission dated 05.1.2015 in Bharti Axa General Insurance Company Limited Vs. Chandra Mohan Goyal Revision Petition No. 4504 of 2014 wherein a similar plea taken by the insurance company was negated while holding as under:

 “7. The learned counsel for the petitioner company has produced before us a literature which to the extent relied upon reads as under:

Symptoms and damage If an engine hydrolocks while at speed, a mechanical failure is likely. Common damage modes include bent or broken connecting rods, a fractured head, a fractured block, crankcase damage, damaged bearings, or any combination of these. Forces absorbed by other interconnected components may cause additional damage. Physical damage to metal parts can manifest as a "crashing" or "screeching" sound and usually requires replacement of the engine or a substantial rebuild of its major components.

If an internal combustion engine hydrolocks while idling or under low power conditions, the engine may stop suddenly with no immediate damage. In this case the engine can often be purged by unscrewing the spark plugs or injectors and spinning the engine to expel the liquid from the combustion chambers and then restarted. Depending on how the liquid was introduced to the engine, it possibly can be restarted and dried out with normal combustion heat, or it may require more work, such as flushing out corrupted operating fluids and replacing damaged gaskets.

If a cylinder fills with liquid while the engine is turned off, the engine will refuse to turn when a starting cycle is attempted. Since the starter mechanism's torque is normally much lower than the engine's operating torque and momentum this will usually not damage the engine but may burn out the starter. The engine can be drained as above and restarted. If a corrosive substance such as water has been in the engine long enough to cause rusting, more extensive repairs will be required.

Amounts of water significant enough to cause hydrolock tend to upset the air/fuel mixture in gasoline engines. If water is introduced slowly enough, this effect can cut power and speed in an engine to a point that when hydrolock actually occurs it does not cause catastrophic engine damage.

Causes and special cases Automotive Hydrolock most commonly occurs in automobiles when driving through floods, either where the water is above the level of the air intake or the vehicle's speed is excessive, creating a tall bow wave. A vehicle fitted with a cold air intake mounted low on the vehicle will be especially vulnerable to hydrolocking when being driven through standing water or heavy precipitation. Engine coolant entering the cylinders through various means (such as a blown head gasket) is another common cause. Excessive fuel entering (flooding) one or more cylinders in liquid form due to abnormal operating conditions can also cause hydrolock.

8. The learned counsel has also relied upon the reply dated 22-10-2013 sent by IRDA under RTI Act, stating therein that generally insurance companies charge extra premium to provide add on cover for hydro static loss in a motor vehicle policy.

9. The contention of the learned counsel for the petitioner-company is that since the major damage to the vehicle occurred on account of hydro static loss and they had not charged extra premium in order to cover the said loss while issuing the policy to the insured, they are not liable to pay for the damage on account of hydro static loss to the vehicle.

10. We have perused the insurance policy issued by the petitioner-company to the complainant. The said policy while covering damage due to flood, cyclone, hailstorm, etc., does not exclude the loss to the vehicle due to hydro static lock. In the absence of such an exclusion, the insurance company will have to reimburse cost of repair of the vehicle on account of damage by heavy rains and flooding irrespective of whether the said loss occurred due to hydro static lock or for some other reason. If despite IRDA permitting charging of an extra premium for reimbursement in respect of loss due to hydro static lock the petitioner-company did not charge such a premium, it is only itself to blame for such a situation because the policy issued by it while granting insurance against damage due to flooding, etc., did not exclude the loss/damage to the vehicle on account of the aforesaid reason. Therefore, in our opinion, in a damage of this nature, unless expressly excluded, in the insurance policy, damage to the vehicle on account of hydro static lock would also be covered for the purpose of reimbursement. For this reason alone the petitioner-company must necessarily fail….”

15.           Furthermore, in the present case, neither the Surveyors and Loss Assessors deputed by opposite party no.3, in their report nor opposite parties no.1 and 2 have any report of automobile engineer supported by his affidavit, to prove that the damage to the vehicle, for which they are not ready to rectify free of cost, had occurred on account of hydro static locking of engine. This is yet another reason that opposite parties no.1 to 3 have failed to prove their case, especially in the face of candid admission by opposite party no.3 in the email dated 24.10.2019, wherein it was informed to the complainant that no proof of water entering into the vehicle has been found by it and that it was a mechanical failure of engine.
16.           Under above circumstances, it is held that the report submitted by the Surveyors and Loss Assessors deputed by opposite party no.3 was purely on the basis of surmises and conjectures, as a result whereof, opposite parties no.1 and 2 took advantage of the same and refused to repair the vehicle under warranty period. In this manner, neither opposite parties no.1 and 2 nor opposite party no.3 was ready to redress the grievance of the complainant and as such left him in lurch. In New India Assurance Company Ltd Vs Pradeep Kumar (Civil Appeal No 3253 of 2002, dated April 9, 2009), the Supreme Court referred to Section 64 UM (2) of the Insurance Act and observed that even though the assessment of loss by an approved surveyor is a pre-requisite for settlement of claim of Rs 20,000 or more, a surveyor’s report is not the last and the final word. Even though it is the basis for settlement of claim, it is not sacrosanct and it is not binding on the insurer or the insured, the Apex Court said. It is therefore held that opposite party no.3 failed to prove on record that the complainant did not take reasonable steps to safeguard the vehicle against the damage caused. The damage caused to the vehicle is squarely covered under the terms and conditions of the policy in question. Opposite parties no.1 to 3 were deficient in providing service to the complainant and also adopted unfair trade practice on this count.
17.           Now the question which arises for consideration is, as to what relief, the complainant is entitled to. No doubt, the complainant has sought refund of the amount paid towards the vehicle in question alongwith interest and damages. It may be stated here that the complainant has failed to prove by placing on record any expert report to show that the defects caused to the vehicle in question were of such nature that the same cannot be rectified. Manufacturing defect as per P. Ramanatha Aiyars Advanced Law Lexion, 3RD Edition, Volume 3, 2005, defines to mean as:-

 “An unintended aspect of finished product due to error or omission in assembly or manufacture, that causes injury.

BusinessDictionary.com defines it to mean:-

Frailty or shortcoming in a product resulting from a departure from its design specifications during production”.

 The manufacturing defect is much more than an ordinary defect which can be cured by replacing the defective part. Manufacturing defect is fundamental basic defect which creeps while manufacturing machinery. To prove such a defect, opinion of an Expert is necessary which is not forthcoming in the present case. It is not disputed that the complainant has plied the said vehicle for about 9 months. Had there been any inherent manufacturing defect in the vehicle, the same would have encountered within a week or month from the date of its purchase. Under these circumstances, in our considered opinion, if we order repair of the vehicle in question upto the satisfaction of the complainant after replacing the defective parts or if required the entire engine thereof, that will meet the ends of justice.

18.           At the same time, it is held that the complainant is also entitled to get compensation for the harassment and mental agony suffered by him, as he could not enjoy the ride of the vehicle, despite making payment of huge amount towards the same. He was made to run from pillar to post to get the said vehicle repaired despite the fact that the same was under warranty period and also under insurance cover but the opposite parties failed to provide him the services, for which he was legally entitled to and on the other hand, have retained the said vehicle for a long period without repairing it. Under these circumstances, compensation to the tune of Rs.5 lacs is awarded to the complainant that will meet the ends of justice.
19.           For the reasons recorded above, this complaint is partly accepted with costs, in the following manner:-
    1. Opposite parties no.1 and 2 are directed to repair the vehicle in question and replace the defective parts of the engine or the component, if any, or if required to replace the defective engine with a brand new engine of the same specifications, with fresh warranty thereon, without charging anything from the complainant  and make the vehicle in a perfect roadworthy condition, and return it to the complainant within a period of 20 days, from the date of receipt of a certified copy of this order failing which they shall be liable to refund the entire amount received towards price of the said vehicle alongwith interest @12% p.a. from the date of receipt thereof till realization.

                  

1. Opposite party no.3 is directed to pay the amount incurred upon the said repairs/replacement of defective parts or the entire engine of the said vehicle, directly to opposite parties no.1 and 2.
2. Opposite parties no.1 to 3 jointly and severally shall pay compensation to the tune of Rs.5,00,000/- to the complainant for causing him mental agony and harassment and also deficiency in providing service and indulgence into unfair trade practice and also to pay cost of litigation to the tune of Rs.50,000/- within a period of 30 days from the date of receipt of a certified copy of this order, failing which the said amounts shall carry penal interest @9% p.a. from the date of passing of this order till realization.

20.           Since no deficiency in providing service has been proved on the part of opposite party no.4, as such, the complaint against it is dismissed with no order as to cost.
21.           Certified Copies of this order be sent to the parties, free of charge.
22.           The file be consigned to Record Room, after completion.

 

Pronounced.

31.03.2021

Sd/-

 [RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

Sd/-

(PADMA PANDEY)

          MEMBER

 

 

Sd/-

 

(RAJESH K. ARYA)

 MEMBER

 

Rg.