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

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Complaint  Case No  : 474 of 2009

Date of Institution :  06.04.2009

Date of  Decision   :  13.04.2010

Nisar Ahmed, resident of H.No. 1017, Sector 45, Burail, Chandigarh.

 ……Complainant

V E R S U S

1]     ICICI Lombard General Insurance Company, Zenith House Keshavrao Khadye Marg, Opp. Race Course, Mahalaxmi, Mumbai.

2]     ICICI Lombard General Insurance Company, Quiet Office No. 10, Sector 40-B, Chandigarh.

.…..Opposite Parties

CORAM:     SH.LAKSHMAN SHARMA              PRESIDENT

          SH.ASHOK RAJ BHANDARI       MEMBER

          MRS.MADHU MUTNEJA             MEMBER

PRESENT: Sh. Anurag Chopra, Adv for the Complainant.

         Sh. Aftab Singh, Adv. Proxy for Sh. Mrigank Sharma, Advocate for the OPs.

PER ASHOK RAJ BHANDARI, MEMBER

        Concisely put, the Complainant purchased a “Chevrolet Tavera” vehicle and got the same insured from OP No.1 on 14.5.2007 for a period of one year i.e. upto 13.5.2008 which was extended upto 27.5.2009.  However, the said vehicle met with an accident on 8^th June, 2008, while being driven on the Deogarh Road. Subsequently, the accidental car was picked from the site of the accident by the Recovery Service on 10^th June, 2008 and was sent to Dynamic Motors for preparing the accidental repair estimate. After getting a rough estimate of the accidental repair, he immediately approached the Sale Representative of the OP for getting his insurance claim settled, but the matter was delayed on one pretext or the other. As no action was taken by OPs in respect of the insurance claim, the work of repairs of the accidental car could not be started by Dynamic Motors and he was forced to remove his vehicle from the Dynamic Motors Garage after paying a sum of Rs.7500/- as parking charges. Subsequently, he served a legal notice but the OPs finally rejected his insurance claim on 11.7.2008, giving the reason for rejection as “car was used for hire and reward”. Hence, this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice. In the end, the Complainant has prayed for the following reliefs:-

a)  To direct the OP to get the vehicle repaired from the Authorized Dealer and reimburse the entire expenses incurred for the repairs of the vehicle.

b)  Award a compensation to the tune of Rs.2,65,758/- on account of financial loss and mental agony suffered by the Complainant due to the rejection of getting the insurance cover on the vehicle and on account of deficiency of service and unfair trade practice adopted by the OP.

c)  Any other order which in the facts and circumstances of this case, this Hon’ble Forum may deems fit and proper be also passed.

2]      Notice of the complaint was sent to OPs seeking their version of the case. 

3]      OPs in their written statement, while admitting the factual matrix of the case/reply, pleaded that they deputed an independent and licensed investigator for the proper scrutiny of the loss and the said investigator in his report dated 30.6.2009 categorically returned a finding that the vehicle in question was being plied for hire and reward in spite of the same being insured as a ‘Private Car’ and, therefore, the claim was repudiated on 11.7.2008 which is completely as per the terms and conditions of the insurance contract.  All other material contentions of the Complainant were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint with exemplary costs.

4]      Parties led evidence in support of their contentions.

5]      We have carefully gone through the entire case thoroughly, including the complaint and the relevant documents tendered by the complainant / OPs. We also heard the arguments put forth by the learned counsels for the Complainant and OPs. As a result of the detailed analysis of the case, the following points/issues have clearly emerged and certain conclusions/arrived at, accordingly:-

i]  The basic facts of the case in respect of the Complainant having purchased a “Chevrolet Tavera” bearing Chassis No. MASAB6G767HD55608 and Engine No. 3DG55872, duly insured by OP No. 1 on 14.5.2007 for a period of one year i.e. upto 13.5.2008, after receiving the premium of Rs.24,246/- from the Complainant and that the said vehicle met with an accident on 8^th June, 2008, while being driven on the Deogarh Road, have all been admitted. Subsequently, the accidental car was picked from the site of the accident by the Recovery Service on 10^th June, 2008 and was sent to Dynamic Motors– the authorized dealer for the Chevrolet Tavera Car for preparing the accidental repair estimate. As per the Complainant, after getting a rough estimate of the accidental repair by the Dynamic Motors, he, immediately, approached the Sale Representative of the OP for getting his insurance claim settled, but the matter was delayed on one pretext or the other. In the meantime, since no action was taken by the OP in respect of the insurance claim, the work of repairs of the accidental car could not be started by the Dynamic Motors and the Complainant was forced to remove his vehicle from the Dynamic Motors Garage, after paying a sum of Rs.7500/- as parking charges. Subsequently, a legal notice was also issued by the Complainant to the OPs. Finally, the OPs rejected the insurance claim of the Complainant on 11.7.2008, giving the reason for rejection as “car was used for hire and reward”. This has led to the present complaint.  

ii] The OPs in their written statement/ reply while raising preliminary objections, have controverted all the allegations made by the Complainant, stating that there is no deficiency in service on their part and as a matter of fact, it is the Complainant, who for the reasons best known to him has not responded to the communications and reminders sent to him. It further says that the OP – Insurance Company deputed an independent and licensed investigator for the proper investigation of the loss and the said investigator in his report dated 30.6.2009 (Annexure R-1) has categorically returned a finding that the vehicle in question was being plied for hire and reward, inspite of the same being insured as a ‘Private Car’. Resultantly, the claim was repudiated on 11.7.2008 (Annexure R-2). In addition to all this, the OP says that it also appointed an independent and duly licensed Surveyor for the proper assessment of the loss and the Surveyor in his report dated 11.7.2008 (Annexure R-4) categorically returned a finding that the vehicle in question was repairable and the liability of the company was to the extent of Rs.1,09,325.58/-.

iii] In its reply on merits, the OPs have reiterated the same facts, as given in its preliminary reply and objections. It has finally concluded that there is no deficiency in service on its part and the insurance claim was rightly repudiated by it on the ground that the vehicle in question had been registered for private usage and the same was being used by the Complainant for hire and reward, which is a violation of the terms and conditions of the insurance document and, therefore, the rejection of the claim is completely as per the terms and conditions of the insurance contract. 

Iv] The only dispute between the parties in respect of the rejection of the insurance claim by the OPs has been that as per the OPs, the car was used for hire and reward whereas the same had been insured as well as registered for private use only.  In support of their case the OPs have referred to the investigation report dated 30.10.2008 submitted by Mr. A.P. Singh, GIC claim investigator in which he has returned a finding that the vehicle in question was being plied for hire and reward in spite of the same being insured as a private car.  As per the investigator he had visited the spot of the accident as also the residence of the insured/ complainant and made discrete enquiries from different taxi stands near the insured’s residence. Finally he had also gone to Tushar Tours and Travels, Sector 45, Chandigarh and he claims that the said car was being used as a taxi under the supervision of M/s Tushar Tours and Travels. The second document produced by the OPs is the survey report dated 11.7.2008. The surveyor had submitted his assessment of the loss at Rs.1,09,325.58 after talking into account the cost of labour, replacement of parts, depreciation, excess clause and salvage value. Thus even the OPs themselves admit that the extent of loss as a result of the accident is Rs.1,09,325.58.

V]  In our opinion, the ground of rejection of the claim given by the OPs is at best a minor violation of the terms and conditions of the insurance contract.  Further, there is no nexus between the happening of the accident and the specific usage of the car whether as a private vehicle or for hire and reward.  It is also not conclusively proved that the car in question was being used for hire and reward.  But even if it is assumed that the version of the OPs for the use of the car as a taxi is accepted, the insurance claim could easily be accepted on non standard basis.  Here we may refer to a recent judgment in the case of Amalendu Sahoo Vs. Oriental Insurance Co. Ltd.-II (2010) CPJ 9 (SC) wherein also the vehicle insured for personal use was used on hire and in that case the Hon’ble Apex Court held that the repudiation of claim in toto was unjustified. 

Vi] The rejection of the claim has been done merely on the ground of its use for hire and reward whereas the car in question had actually met with an accident which has been duly admitted and acknowledged by both the parties, is not justified as there is no linkage or nexus between the use of the car as a private vehicle or for hire and reward and the event of accident. Therefore, in our considered opinion, the OPs have wrongly and unjustifiably rejected the claim of the complainant which has solely arisen because of the accident to the vehicle and not because it was being used for hire and reward.  An accident could happen to a vehicle anyway, whether it is being used as a private vehicle or as a taxi.  The basic question in case of any accident insurance claim always is as to whether the event  of accident has actually taken place and that the vehicle had really suffered some loss.  Both these facts have been duly acknowledged and accepted by the investigator as well as the surveyor appointed by the OPs in their respective reports.  It is thus clear that the OPs are bound to pay the insurance claim of the complainant.  However, since the OPs in their written statement/reply as also on the basis of the investigation report have  claimed that there is some violation of the terms and conditions of the insurance contract, the claim in question can be settled on non standard basis as per the norms of the settlement of similar insurance claims. 

6]      Keeping in view the above detailed discussion in our view, the present complaint has a lot of weight, merit and substance and deserves acceptance.  We, therefore, decide the complaint in favour of the complainant and against the OPs and direct the OPs to jointly and severally make the following payments to the complainant –

a)       The OPs shall pay 75% of the accident claim on non standard basis as per the assessment of loss made in the surveyor’s report i.e. 75% of Rs.1,09,325.58.

b)       The OPs shall further pay a sum of Rs.7,500/- as parking charges paid by the complainant to M/s Dynamic Motors, Chandigarh.

c)       The OPs shall pay a sum of Rs.20,000/- as compensation for physical harassment, mental agony and pain caused to the complainant on account of wrongful rejection of his insurance claim.

d)       The OPs shall pay a sum of Rs.5,000/- as cost of litigation.

7]      The aforesaid order be complied with by the OPs, within a period of 06 weeks from the receipt of its certified copy, failing which the OP shall pay the said amount of Rs.1,09,495/- along with interest @18% per annum from the date of  repudiation of the claim till the date of realization besides paying the cost of litigation of Rs.5000/-.

8]     Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

13.04.2010                                       Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

                                              Sd/-   

(ASHOK RAJ BHANDARI)

MEMBER

                                             Sd/-   

(MADHU MUTNEJA)

MEMBER

‘Dutt’