BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Harjit Singh, Proprietor, M/s Kanwar Enterprises, 19, MW, Industrial Area, Phase I, Chandigarh.

…..Complainant

                 V E R S U S

1.  HDFC ERGO General Insurance Company Limited, SCO No.124-125, Sector 8-C, Chandigarh, through Sh.Naveen Munjal, Assistant Claims Manager.

2.  M/s Krishna Auto Sales, 177 E, Industrial Area-1, Chandigarh.

                          ……Opposite Parties

CORAM:  SH.P.D.GOEL             PRESIDENT

        SH.RAJINDER SINGH GILL      MEMBER

        DR.(MRS) MADANJIT KAUR SAHOTA   MEMBER

Argued by:   Sh.Rajinder Singh Raj, Counsel for the complainant.

                Sh.Maninder Singh, Counsel for OP No.1.

                None for OP No.2.

PER P.D. GOEL, PRESIDENT

         Brief facts of the case are that the complainant’s Skoda Octavia-Rider 1.9 TDI Car bearing registration No.CH-04-F-6337, was insured with OP No.1 vide policy/cover note No.2311200028641800000. It is the case of the complainant that on 18.07.2011, when he was  going from Chandigarh to Mohali, there was a sudden heavy rain, consequently vehicle stopped  on YPS crossing at Mohali, in the middle of the road. On the next day i.e. 19.7.2011, the car was taken to OP No.2 by toeing and the claim was also lodged with the OP No.1 on the toll free number. The complainant had also informed Sh.Rajbir Sood, the Insurance Agent about the loss of the car.  The OP No.1 appointed Mr.Manoj Saxena, an independent surveyor to assess the loss, who visited and inspected the car in the agency. After dismantling the engine, the OP No.2 again informed the surveyor and gave an estimate of Rs.1,06,908/- for its repair vide letter dated 23.7.2011. It was also intimated by the company that actual estimate will be given after dismantling the vehicle. It was also pointed out that the AC and the radio of the car were not working. It has been further stated that after the vehicle was repaired by OP No.2, the complainant paid a sum of Rs.94,294/- vide invoice dated 11.8.2011 and Rs.3352/- vide invoice dated 19.8.2011. Thereafter, the complainant was shocked to receive a letter dated 23.8.2011 from OP No.1 qua which the claim of the complainant was rejected on the pretext that the damage to the engine cannot be considered in view of condition No.4 of the policy contract. Hence, this complaint.

2.       OP No.1 filed the reply, wherein, it has been pleaded that the damage to the vehicle has occurred on account of negligence of the complainant as he tried to start the car on the road, where water was logged, as such, he failed to take reasonable care and caution to protect his car. It has been further pleaded that the complainant, thereafter, tried to start the car repeatedly, as a result of which, the damage to the engine took place, which is not covered under the insurance Perils policy. It has been further pleaded that the OP No.1 appointed the Surveyor Sh.Manoj Kumar, who is an IRDA approved surveyor duly licenced to give his report. Upon the processing of the claim, the insurance company observed that the loss is not payable under the insurance perils of the policy. The contract of Insurance is governed by the terms and conditions of the policy and the complainant has failed to take reasonable care and caution equivalent to a man of ordinary prudence, as such, his claim was repudiated vide letter dated 23.08.2011. Denying all the material allegations of the complainant and pleading that there has been no deficiency in service on their part and prayer for dismissal of the complaint with costs has been made.

3.       OP No.2 filed the reply, wherein, it has been pleaded that there is no allegation against OP No.2 for any deficiency on its part, while doing the repair job. The OP No.2 provided the best possible service to the complainant by carrying out the repair work to the full satisfaction of the complainant. It has been further pleaded that the complaint against OP No.2 is totally illegal, without any cause and, therefore, frivolous and vexatious. Denying all the material allegations of the complainant and pleading that there has been no deficiency in service on their part and prayer for dismissal of the complaint with costs has been made.  

4.       Parties led evidence in support of their contentions.

5.       We have heard the learned Counsel for the complainant and ld.Counsel for OP No.1 and have also perused the record. 

6.       The ld.Counsel for the complainant raised the arguments that the car bearing Regd. No.CH-04-F-6337 was insured with OP No.1.  That on 18.7.2011, during subsistence of the insurance policy, when the complainant was going from Chandigarh to Mohali, there was sudden heavy rain, with the result the car stopped in the middle of the road at YPS Crossing, Mohali.  On the next day, the said car was taken to OP-2 for the purpose of repair and thereafter, the claim was lodged with the insurance company, who in turn appointed the Surveyor to assess the loss.  It was further argued that after dismantling the engine of the car, OP-2 informed the Surveyor and also gave estimate of Rs.1,06,908/- for its repair, subject to the condition that the actual estimate will be given after dismantling the engine of the vehicle. 

7.       It was further argued that the complainant paid a sum of Rs.94,294/- & Rs.3352/- on account of repair of the vehicle vide invoice dated 11.8.2011 & 19.8.2011 respectively. It was further argued that the complainant was shocked to receive the repudiation letter dated 23.8.2011 from OP Insurance Company on the ground that the damage to the engine cannot be considered/paid in view of Condition No.4 of the policy contract. 

8.       The ld.Counsel for OP No.1 submitted that the damage to the vehicle has occurred on account of negligence on the part of the complainant, as he has tried to start the car on the road, where water was logged and the complainant has also not taken reasonable care & caution to protect the car, as a result of which the damage to the engine took place, which was not covered under the insurance perils of the policy. Thus, the claim was repudiated vide letter dated 23.8.2011 (Annexure C-6).

9.       The ld.Counsel for OP-1 also raised the arguments that there is no allegation against OP-2 for any deficiency in service on its part, while taking the repair job.  Therefore, the complaint against OP-2 is not maintainable.     

10.      The other facts are admitted and the only point for consideration is whether the insurance company has rightly repudiated the claim of the complainant.  The answer to this is in negative.

11.      Annexure C-6, is the repudiation letter dated 23.8.2011. The relevant extract of it, is reproduced as under:

“4. The obvious course is known to be not to try to start the engine, without total cleaning the water from inside engine and inspection by an expert technician, thus your extension of damages to the engine if any cannot be considered as per condition no.4 of policy contract.”

12.     According to OP-1, the claim is not payable in view of Condition No.4 of the Policy.  Annexure C-7 is the extract of Terms & Conditions of the Policy, which contains Clause No.4, which reads as under:-

“4. 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 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.”

13.      A careful scrutiny of Clause No.4, referred to above, makes it clear that the insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition.

14.      Since the claim has been repudiated by OP Insurance Company in view of Clause-4 of the Policy, therefore, the duty was casted on OP-1 Insurance Company to prove that the insured had not taken reasonable steps to safeguard the vehicle from loss or damage and also failed to maintain it in efficient condition.  To prove the said fact, OP-1 has not produced on record any evidence. 

15.      The report of the Surveyor Ann.R-3 is based on conjectures and surmises. It has not been supported  by an affidavit. Therefore, it did have any evidentiary value.

16.      Admittedly, the Surveyor in his report (Ann.R-3), under the heading of Observations, at Point No.5 (Page 26) has mentioned that “While the water entered in the engine chamber through Air Cliner Assy during air suction, it mix with the lubricant, the water is lighter than the lube oil, so water had broken the lube layer, and the friction occur on the Pistons and Sleeves Assy. Caused Piston getting jam and …..crinking engine by insured, the connecting rod get stress and it goes to bend.”  

         Since, this is only an observation, which is not supported by an affidavit and also by     any other expert evidence, therefore, it is not sufficient to prove their case. Therefore, such observations are to be ignored and the insurance company has no legal right to deny the claim on the basis of said observations, as such observations are not the substitute of findings or conclusions.

17.      The matter does not end here.

18.      The grounds taken in the repudiation letter Ann.C-6 are also not inconsonance with the Condition No.4 at Ann.C-7. Thus, on this count also, we are of the opinion that the OP-1 Insurance Company has illegally repudiated the claim of the complainant.

19.      More so, the complainant had sent an e-mail to OP-1 (Ann.C-2), which reads as under:-

 “….. On 18-7-2011, when I was going from CHANDIGARH TO Mohali, there was sudden heavy rain, resulting in sudden gush of water, heavily flooding the roads on Y P S crossing Mohali.  There was absolutely no scope of stopping the car in dry land as all roads were flooded.  In water my car stopped.  I waited in car for some time and did not try to switch on the ignition as I had been warned earlier by company people and many friends who own this make, that car should never be restarted and should only be toed to authorized service station.  When the water on road subsided, I took help of some passer by and pushed car to side of road.  As it was raining that day I could not take car to authorized service centre in Chandigarh.

Today on 19-07-2011, I rang up agency in morning, which asked me to take car to them by toeing it.  I borrowed a tochain from a agency and toed the car by trying it to my brothers car to Krishna Motors in Chandigarh. I informed Mr.Rajbir Sood, on his mobile phone, the insurance Agent, and requested him to come over and direct the surveyor to inspect the vehicle at Krishna Motors Chandigarh.  He came and the vehicle was shown to him as well as to the tochain with which it was toed….”

20.      A careful scrutiny of the contents of Ann.C-2, referred to above, makes it abundantly clear that on 18.7.2011 when the complainant was on his way from Chandigarh to Mohali, there was a sudden rain, resulting into sudden gush of water.  The complainant has specifically stated that he did not try to switch on the ignition as he had been warned earlier by the company and friends that the car should never be restarted. The said information was immediate and without loss of time, so it can legitimately be concluded without any hesitation that the complainant did not try to switch on the ignition, when the incident took place. More so, when the information given by the complainant to the insurance company with regard to the incident and at that point of time, he did not know that OP No.1 was going to repudiate the claim on the ground of logging the water in the engine of the car, so it is concluded that the said information was the true account of the situation and not coloured one. Thus, it is held that the OP No.1 has failed to prove that the complainant has not taken reasonable care of the vehicle at the time of incident.

21.      It will be relevant to state here that OP-1 has placed on record Private Car Package Policy as Annexure R-1 wherein under Section 1, under the heading of LOSS OF OR DAMAGE TO THE VHEICLE INSURED, vide Clause No.V, it has been mentioned that:-

“The Company will indemnify the insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon

i.

ii.

iii.

iv.

v. by flood typohoon hurricane storm tempest inundation cyclone hailstorm forst;

22.      Now, it is established on record that the repudiation of the claim by OP No.1 is arbitrary and illegal as OP-1 has failed to prove on record that the repudiation of claim had been done in view of Clause-4 of the Policy. Undisputedly, the claim is covered vide Clause No. V of the policy referred to above. 

23.      To prove the loss, the complainant has placed on record Retail Invoices Annexure C-4 & C-5, dated 11.8.2011 & 19.8.2011 alongwith receipts, amounting to Rs.Rs.94,294/- & Rs.3,352/- respectively vide which he had made payment to Krishna Auto Sales towards the repair of his car.

24.      As result of the above discussion, the complaint is allowed. The OP No.1 (Insurance Company) is directed to pay a sum of Rs.97,646/- paid by the complainant to OP No.2 towards the repair of the car in question.  OP No.1 is also directed to pay Rs.25,000/- as compensation for the harassment caused to the complainant apart from paying litigation cost of Rs.10,000/-.

25.      However, the complaint qua OP No.2 stands dismissed as no deficiency in service is proved against it. 

26.     The order be complied with by the OP No.1 within a period of 30 days from the date of receipt of copy of this order, failing which, the OP No.1 shall be liable to pay interest on the above said awarded amount @12% p.a. from the date of filing this complaint i.e. 06.09.2011 till its actual payment, besides paying litigation cost of Rs.10,000/.-

27.     Certified copies of this order be sent to the parties free of charge.  The file be consigned.