DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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M/s Golden Wheat and Allied Mills Private Ltd., having its Branch Office at # 19, Sector 2, Chandigarh – 160002, through its Director Sh.Amarpal Singh Somal.

…..Complainant

                                      V E R S U S

Future Generali India Insurance Company Limited, having Chandigarh Branch Office at SCO No.78-79, 2^nd / 3^rd floor, Sector 17-C, Chandigarh – 160017, through its Director.

……Opposite Party

QUORUM:   P.L.AHUJA                                                  PRESIDENT

                   RAJINDER SINGH GILL                                MEMBER

                   DR.(MRS) MADANJIT KAUR SAHOTA         MEMBER

Argued by: Sh.Kabir Sareen, Counsel for the complainant.

                     Sh.Vishal Aggarwal, Counsel for OP.

PER P.L.AHUJA, PRESIDENT

1.                M/s Golden Wheat and Allied Mills Private Ltd., complainant has filed this consumer complaint under Section 2(1)(g), 2(1)(o), 2(1)(r) & 14(1)(d) of the Consumer Protection Act, 1986, against Future Generali India Insurance Company Limited - Opposite Party (hereinafter called the OP), alleging that the complainant had obtained a comprehensive insurance policy No.V1708452 dated 21.03.2012 – Annexure C-1 in respect of its Skoda Yeti Ambient MT. 2.0 bearing registration No.CH01AF0783. The said vehicle was being driven by Mr.Amarpal Singh Somal, Director of the complainant company on 3.6.2012 when it met with an accident on Kalka-Parwanoo expressway which now forms a part of National Highway-22. The said accident took place due to stray cattle roaming free upon the express way and the driver Mr.Amarpal Singh Somal was constrained to swiftly swerve the vehicle in order to avoid a head on collision which resulted in the vehicle traveling over a large stone, which caused extensive damage to the under carriage, engine assembly, suspension & shockers of the vehicle. It has been further contended that as an action/reaction to the said accident, the vehicle traveled a short distance subsequent to the impact and further as per law was required to be removed to a safe bay a few meters away from the spot in order to safeguard the vehicle and other fast moving vehicles from further collision. The vehicle was subsequently towed and sent to M/s Krishna Auto Sales, Chandigarh being the authorized sales and repair agency for Skoda vehicles in the city. The said agency prepared an estimate of repairs amounting to Rs.3,07,666/-. The OP was duly notified of the said accident and provided with a copy of the estimate of repairs. The complainant was informed vide letter dated 8.6.2012 that a surveyor agency namely “M/s/Mr.Arora Associated” had been deputed for the purpose of survey and in order to ensure that the claim process would be processed further, the complainant was called upon vide letter dated 8.6.2012 – Annexure C-3 to provide the detailed list of documents in order to have a hassle free procedure. Ms/Mr.Arora Associates further carried out the survey and also allowed M/s Krishna Auto Sales to dismantle the engine assembly in order to assess the extent of damage and thereafter they forwarded a written query concerning the distance of the vehicle traveled subsequent to impact viz. 75-100 meters and the damage as a result of the same. The same was looked into only around the 27^th/28^th June, 2012 and not earlier. Copy of the query upon the estimate of repairs is Annexure C-4. M/s Krishna Auto Sales vide letter dated 28.6.2012 – Annexure – C-5 responded that the damage to the engine may be caused due to the movement of the vehicle subsequent to impact to the engine and resultant engine oil loss. It has been contended that the complainant was utterly shocked and dismayed upon receiving communication via email dated 28.6.2012 whereby its claim was termed a one being in breach of condition – 4 of the policy.  It has been contended that the said vehicle was finally repaired at a total cost of Rs.1,40,150/- vide detailed bill dated 28.7.2012, copy of which is Annexure C-6. It has been contended that the complainant sent various communications to the OP in order to resolve the issue and also issued a legal notice dated 16.8.2012 to the OP wherein it was stated that the said accident took place amidst the fast moving traffic upon the Kalka-Parwanoo expressway and it was most urgent and necessary to remove the vehicle to a further distance of approximately 75-100 meters subsequent to impact which followed in shock/panic in order to avoid any further collisions on the expressway. The copy of legal notice dated 16.8.2012 is Annexure C-7. The complainant received a communication dated 31.8.2012 – Annexure C-8 wherein all the requests and claims and grievances were summarily rejected by saying that the extension of damages to the engine, if any, could not be considered as per condition No.4 of the policy contract. Subsequently the complainant received a settlement of claim amounting to Rs.17,900/- only which is alleged to be against law, facts and devoid of any merit. The complainant has alleged that the OP has failed to appreciate the Doctrine of Proximate Cause and it failed to apply the most fundamental principles of insurance law of utmost good faith. It has been contended that it was the duty and obligation of the OP not to blindly rely upon the report submitted by the surveyor. It has been further stated that as per provisions of Section 20 of the Highway Administration Rules, 2004 the complainant was duty bound under the law to remove the damaged vehicle at the earliest from the fast moving expressway. The complainant has alleged gross negligence and deficiency in service on the part of OP. The complainant has made a prayer for a direction to the OP to settle the claim to the tune of Rs.1,40,150/-, apart from making payment of interest, compensation and litigation expenses.

2.                OP in its written statement has admitted the factum of insurance policy. However, it has been stated that even after the accident, if the vehicle was to be removed from the expressway then it could have been pushed/dragged/towed from the spot and the explanation of the complainant that it had to be started and removed from the expressway is totally frivolous and without any base. It has been averred that the complainant could have simply brought the vehicle to extreme left and then pushed/dragged/towed it to the carriage way. It has been stated that action of the complainant of having driven it for 100 meters is totally wrong and unacceptable. It has been further stated that as per case of the complainant himself he while driving the vehicle in order to avoid a head on collision had to swerve the vehicle due to which it traveled  over a large stone on the said expressway, which resultantly caused extensive damage. It has been stated that on account of the said damage there was leakage of engine oil and the complainant ought to not have even started the said vehicle but he drove the same for more than 100 meters due to which extensive damage was caused to the engine. It has been stated that it is clearly mentioned even in the warranty booklet that in the case the engine oil is drained out due to any reason then the driver should stop the car immediately without any further delay, failing which, there shall be extensive damage to the engine. It has been further averred that as per Section 1(2) (a) of the terms and conditions of the policy, the company shall not be liable to make any payment in respect of the consequential loss, depreciation, wear and tear, mechanical or electrical break down, failures or breakage. It has also been stated that the complainant also violated condition No.4 of the policy.

3.                The parties led evidence in support of their contentions.

4.                After going through the entire evidence and hearing the arguments of the learned Counsel for the parties, we are of the opinion that the complaint merits acceptance.

5.                It is the admitted case of the parties that Skoda Yeti Ambient MT. 2.0 vehicle bearing registration No.CH01AF0783 belonging to the complainant was insured for the period from 10.3.2012 to 9.3.2013 with the OP Insurance Company. The said car met with an accident on 3.6.2012 at Kalka-Parwanoo expressway. The same was towed and sent to M/s Krishna Auto Sales, Chandigarh. The said car was finally repaired at a total cost of Rs.1,40,150/- vide invoice dated 27.7.2012, copy of which is Annexure    C-6/34. However, the OP settled the claim only for an amount of Rs.17,900/- as per the survey report. A cheque of Rs.17,900/- was sent to the complainant vide letter dated 6.9.2012 – Annexure C-8/43. The remaining claim was disallowed on the ground that Crankshaft bearings, Connecting rods, Union with sealing, piston, vacuum pipe, piston rings and cylinder lingers and engine compartment cannot be scratched merely hit by stone underbody, if any, can be attributed to either mechanical failure or trying to run the engine after without engine oil after the accident as mentioned in the letter Annexure C-8/42.

6.                The most material question for determination in this case is whether the complainant is entitled to receive the payment of the remaining amount spent by it on repair of the vehicle or not.

7.                A perusal of the report – Annexure R-1 of Surveyor Arora Associates shows that only an amount of Rs.10126.30 was allowed towards oil sump and an amount of Rs.6158.53 was allowed towards sealing flange. The amount claimed for connecting rod set, crankshaft, crankshaft Brg. Shell, Crankshaft Brg. Shell, Thrust Washer, Connecting rod Brg. Shell, Connecting rod Brg. Shell, pistone set, head gasket, shaft seal, oil pump, windage tray, seal, toothed belt, suction pipe, oil and filter element was disallowed by the surveyor. According to the surveyor, due to the accidental impact the oil sump of the said vehicle got damaged and engine oil drained out and the engine stopped working. As per the technical observation of the surveyor, the damages on crankshaft, pistons and engine compartment from piston side occur due to irresponsible driving after the hit which is violation of policy terms and condition No.4. The learned Counsel for the OP has drawn our attention to condition No.2 of the terms and conditions of the policy and has argued that the company is not liable to make any payment in respect of the consequential loss, depreciation, wear and tear, mechanical or electrical break down, failures or breakage. He has also argued that as per condition No.4 of the terms and conditions of the policy the insured shall take all responsible 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 the 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. The learned Counsel for the OP has urged that in the instant case after the accident the complainant drove the vehicle for a distance of about 100 meters. He has argued that the engine oil was drained out due to the above reason. Inspite of the leakage, the complainant continued to drive the vehicle due to which the engine seized and the loss to the various parts was due to the negligence of the driver and not due to the alleged accident. He has also argued that the extensive damage to the under carriage engine assembly etc. was not the result of the accident. He has argued that the vehicle should not have been removed from the scene of accident and even if it was to be removed, it could have been pushed/dragged/towed from the spot. The learned Counsel for the OP has drawn our attention to one judgment in case titled as Varinder Kumar Vs. ICICI Lombard decided on 18.7.2012 by the Hon’ble State Commission, UT, Chandigarh and has argued that the company is not liable to pay any amount for the consequential loss.

8.                We have given our thoughtful consideration to the above arguments. It is quite true that the Krishna Auto Sales vide its letter dated 28.6.2012 – Annexure C-5/31 informed the OP “it is possible that if car runs without engine oil upto 75 to 100 meters. Impacted the internal side of engine. As per estimate.” In the instant case, the allegations in the complaint, which is in the form of affidavit of Mr.Amarpal Singh Somal, Director of the complainant company show that the accident took place due to stray cattle roaming free upon the expressway and he was constrained to swiftly swerve the vehicle in order to avoid a head on collision which resulted in the vehicle traveling over a large stone, which resultantly caused extensive damage to the under carriage, engine assembly, suspension and shockers of the vehicle. We feel that the distance travelled in the range of merely 75 - 100 meters subsequent to impact is a part and parcel of the said accident. Since the expressway is extremely busy and fast moving, had the vehicle been left there and then by the complainant, there was threat of a vehicle pile up and resultant loss of life. A bare perusal of Section 20 of the Highway Administration Rules, 2004 reads as under :-

“20(ii)(a). Safety Control under sub-section (1) of Section 37.-

(ii) To stand on Highway unless –

(a)such vehicle stands in such circumstances which has not to cause or likely to cause danger, obstruction or undue inconvenience to other users of the highway or to the passengers thereon;

20(ii)(c) such vehicle is parked in a place legally allowed or allowed by the Highway Administration for such parking;

20(ii)(e) such vehicle is not creating any obstruction in a smooth and easy traffic movement on the highway.”  

As contended by the complainant, he was duty bound to remove the damaged vehicle from the fast moving expressway. There is no such evidence on the part of OP that there were ready tow vehicles available at the spot to remove the vehicle of the complainant immediately to a safe bay area. The contention of the OP that the complainant ought to have pushed/dragged or towed the vehicle from the spot is unacceptable because the copy of driving licence at page No.27 of the documents of the complainant in the file shows the date of birth of Mr.Amarpal Singh Somal, Director of the complainant company to be 21.02.1949. Obviously a person at the age of 63 years cannot be expected to push or drag the vehicle from the spot. We feel that the contention of the complainant that the traveling of a distance of merely 75-100 meters which is inclusive of the shock reaction subsequent to the impact was a part of the said accident and not extension to the same. We also feel that the act of the complainant shows that he acted under the principle of utmost good faith by removing the vehicle and safeguarding it from further damage. In Shree Shyam Cold Storage Vs. National Insurance Co. Ltd. & Anr. IV(2007) CPJ  Rajasthan State Commission, Jaipur 386 (cited by the learned Counsel for the complainant), it was observed as under :-

“Where more perils than one act simultaneously or successively, it will be difficult to assess the relative effect of each peril of pick out one of these as the actual cause of the loss. In such cases, the doctrine of proximate cause helps to determine the actual cause of the loss.”

In the instant case, we are of the view that applying the doctrine of proximate cause to the facts of the present case, the most proximate cause was the impact of the vehicle under carriage with a large stone which in turn may have led to the leakage of the engine oil. All other causes of damage to the vehicle subsequent to the impact as an action under shock removal of the vehicle in order to safeguard it from further impact etc. are all one and same and are peripheral to the main proximate cause. We are of the view that the surveyor seriously erred in disallowing the claim of the complainant in respect of the various articles mentioned in the survey report. It has been held by the Hon’ble Supreme Court in New India Assurance Co. Ltd. Vs. Pradeep Kumar IV(2009) CPJ 46(SC) that surveyor’s report is not the last and the final word. It may be basis for settlement of claim but neither binding upon insurer nor insured. In the instant case, it is also worth noting that the report of the surveyor – Annexure R-1 is not even supported by the affidavit of the surveyor showing that the other causes of damage to the vehicle were not part and parcel or peripheral to the main proximate cause.

9.                As far as the ruling Varinder Kumar Vs. ICICI Lombard (supra) cited by the learned Counsel for the OP is concerned, in that case the observations on the report of the surveyor about the further damage to the vehicle were made after weighing the evidence of that case.  In the instant case, we feel that the surveyor seriously erred in disallowing the claim of damage to the various articles mentioned in his report. Of course he could deduct the depreciation on those articles in accordance with the terms and conditions of the insurance policy. We are of the opinion that the action of the OP in disallowing the claim in respect of connecting rod set etc. detailed at page No.14 of documents of the OP is unjustified and OP is guilty of deficiency in service. As held in Shree Shyam Cold Storage Vs. National Insurance Co. Ltd. & Anr. (supra), the insurance is meant to protect men against uncertain events which may otherwise be of some disadvantage to them not only those persons to whom positive loss may arise by such events occasioning the deprivation of that which they may possess, but also those who in consequence of such events may have interpreted from them the advantage or profits which but for such event they will acquire according to the ordinary and probable course of things. The object of the contract of insurance is to indemnify the assured in respect of loss and this object is not carried out unless he is relegated to his former position. The assured is entitled to recover the real value of the property destroyed and such value may either be the market value or the cost of reinstatement.

10.              We are of the view that in the instant case since the contract of insurance was a contract of indemnity the complainant was entitled to recover loss incurred by it as per the terms and conditions of the policy.

11.              For the reasons recorded above, we find merit in the complaint and the same is partly allowed. We deem it proper to direct the OP to reconsider the claim of the complainant in respect of the various items/articles disallowed in the surveyor report and settle the claim of the complainant after allowing the deductions as per the terms and conditions of the insurance policy. Resultantly the OP is directed :-

i)                             To settle the claim of the complainant in respect of the remaining articles/items disallowed in the surveyor report within a period of 30 days of receipt of the copy of the order. 

ii)                            To make payment of an amount of Rs.11,000/- to the complainant towards litigation expenses.

12.              This order be complied with by the OP within 30 days from the date of receipt of its certified copy, failing which, the complainant shall be entitled to recover the amount of Rs.1,22,250/- (Rs.1,40,150/- - Rs.17,900/-) with interest @9% p.a. from the date of filing of the complaint, till its realization.

13.               The certified copies of this order be sent to the parties free of charge. The file be consigned.