Chandigarh

StateCommission

A/231/2015

M/s TATA AIG General Insurance Company Limited - Complainant(s)

Versus

Joshi Autozone Private Limited - Opp.Party(s)

Rajneesh Malhotra & Vandanaa Malhotra,Adv.

23 Oct 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

First Appeal No.	231 of 2015
Date of Institution	14.09.2015
Date of Decision	23.10.2015

 

1.  M/s TATA AIG General Insurance Company Limited, SCO 232-234, Sector 34-A, Chandigarh, through its Regional Manager/ Branch Manager.

2.  M/s TATA AIG General Insurance Company Limited, Registered Office: Peninsula Corporate Park, Nicholas Primal Tower, 9th Floor, Ganpat Rao Kadam Marg, Lower Parel, Mumbai – 400 013, through its Managing Director.

                                …..Appellants/Opposite Parties.

                                Versus

Joshi Autozone Private Limited, presently situated at Plot No.41, Industrial Area, Phase-II, Chandigarh, through its Chief Operating Officer Shri Ashok Sharma.

.…..Respondent/Complainant.

BEFORE:    JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                MRS. PADMA PANDEY, MEMBER

 

Argued by:

 

Sh.Rajneesh Malhotra, Advocate for the appellants.

Sh.Rajesh Verma, Advocate for the respondent.

               

PER PADMA PANDEY, MEMBER

                This appeal is directed against the order dated 22.07.2015, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (in short the Forum), vide which, it allowed the complaint filed by the complainant and directed the Opposite Parties (now appellants) as under :-

“12.     For the reasons recorded above, the present complaint succeeds against the Opposite Parties. The same is allowed. We direct the Opposite Parties, as under:-

[a]  To reconsider the claim of the Complainant and after making the necessary deductions in respect of the depreciation amount of various items (for which an amount of Rs.12,23,356.35P was spent by the Complainant) in accordance with the law, shall make the payment of the balance amount to the Complainant. It is made clear that the amount shall not be deducted on any other ground;

 [b]  To pay Rs.30,000/- as compensation on account of deficiency in service to the Complainant; 

      [c] To pay Rs.20,000/- as cost of litigation;

13.        This order shall be complied with by the Opposite Parties, jointly & severally, within one month from the date of receipt of its certified copy; thereafter, they shall pay the entire claim amount of Rs.12,23,356.35 with interest @9% per annum. Further, the compensation amount as per sub-para [b] above, shall carry interest @12% per annum from the date of institution of this complaint, till it is paid, apart from cost of litigation of Rs.20,000/-. “ 

2.             The facts, in brief, are that the complainant Company i.e. M/s Joshi Autozone Pvt. Ltd. purchased one Mercedes Benz C-230 bearing registration No. CH04-K-4483 vide Registration Certificate (Annexure C-1), for the personal use of its Managing Director and Chief Operating Officer. The said vehicle was got insured with the Opposite Parties for the period from 22.08.2011 to 21.08.2012, by paying the premium of Rs.42,598/-. At the time of issuance of cover note, the complainant company had received a letter dated 27.08.2011 (Annexure C-2 Colly.) giving policy and premium details i.e. number etc. alongwith Certificate of Policy but no terms and conditions were provided or attached with the schedule. The said vehicle was got damaged on 07.07.2012, while picking one of the employees of the company from his residence and the car stopped in the water on the main road at Chandigarh. The claim was reported to Opposite Party No.1 for payment of claim under the policy, upon which, M/s Pee Kay and Co. was deputed as Surveyor on 10.07.2012, who inspected the vehicle. After inspection of the vehicle, the complainant company received a letter dated 30.07.2012 (Annexure C-4) from the Surveyor, wherein, they showed their inability to pay the claim on the ground that there was no external impact to the vehicle or the engine but only presence of the water in the engine oil etc. It was stated that since the vehicle was required for the personal use of the Managing Director of the Company and Chief Operating Officer and other Officers, the vehicle could not be left for long without repairs and, therefore, the complainant got repaired the vehicle with payment of a total amount of Rs.12,23,356.35, as per the invoice dated 18.9.2012 (Annexure C-7). Ultimately, the complainant got served a legal notice dated 20.08.2012 (Annexure C-9) through Regd. Post upon the Opposite Parties, which was duly replied by them vide reply dated 21.09.2012 on false grounds. Therefore, the aforesaid act of the Opposite Parties amounted to deficiency in service and indulged into unfair trade practice.  When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the “Act” only), was filed.

3.             In their written statement, the Opposite Parties, while admitting the factual aspects of the case, pleaded that immediately on intimation of the claim, they appointed M/s Pee Kay & Co. as Surveyor & Loss Assessor to inspect the vehicle and assess the loss. The Surveyor surveyed the vehicle and gave his detailed assessment report on 27.08.2012 (Annexure A-3 Colly). It was stated that the Surveyor observed that there was no external impact to the vehicle or engine and assessed the loss to the tune of Rs.41,601/- subject to the terms and conditions of the Policy. The Surveyor wrote a letter dated 30.07.2012 to the complainant mentioning therein that the liability of the Company was limited only to the extent of replacement of engine oil, oil filter and flushing of engine (Annexure A-4). It was further stated that the Company should not be liable to make any payment in respect of consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages. While admitting the receipt of legal notice dated 20.08.2012, the replying Opposite Parties submitted that the same was duly replied,  clearly mentioning that the Surveyor assessed the net liability of the Company to the tune of Rs.41,601/-, which the Company is ready and willing to pay to the complainant. All other allegations were denied by them and stated that there was no deficiency in service or indulged into unfair trade practice on the part of the Opposite Parties.

4.             The Parties led evidence, in support of their case.

5.             After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the Forum allowed the complaint, as stated above. 

6.             Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.

7.             We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

8.             The core question, that falls for consideration, is, as to whether, the Insurance Company/appellants rightly rejected the claim of the complainant, as per the terms and conditions of the Policy. The answer, to this question, is in the negative. Admittedly, the respondent/complainant got his vehicle i.e. Mercedes Benz C-230 bearing registration No.CH-04-K4483 insured with the appellants/Opposite Parties for the period from 22.08.2011 to 21.08.2012 by paying a premium of Rs.42,598/-. It is also the admitted fact that the said car stopped functioning on 07.07.2012 and on the reporting of the claim, a Surveyor & Loss Assessor i.e. Pee Kay & Co. was deputed by the Insurance Company to assess the loss. Annexure C-6 is an estimate of Rs.20,73,555/-, which was likely to be spent on the damages caused to the vehicle, in question, and the same was denied by the Insurance Company on the ground that there is no external impact to the vehicle or the engine, presence of water in the engine oil etc. (Annexure C-4). It is also the admitted fact that the Opposite Parties offered an amount of Rs.41,601/- only to the complainant, which was not acceptable to the complainant Company. Annexure C-7 is a copy of invoice dated 18.09.2012. From this document, it is proved that the complainant got repaired the vehicle with an expenditure of Rs.12,23,356.35.

9.             It is, no doubt, true that the vehicle of the complainant was insured with the Insurance Company i.e. appellants. The contention of the Counsel for the appellants is that as per the Surveyor’s observation, the loss caused to the vehicle was due to continuous running of the car and engine after it came in contact with water, which is a mechanical failure and, therefore, not payable as per Policy condition Section 2(a) of the Insurance Policy. He further contended that for consequential losses and for covering the risk of ingress of water, no risk was sought to be taken by the complainant and neither any premium was paid by the complainant. He further contended that the amount assessed by the Surveyor was offered to the complainant, which the complainant Company refused to accept. The Counsel for the appellants submitted that as per Condition No.4 of the Policy, the complainant was required to take all reasonable steps to safeguard the vehicle from loss or damage but in the present case, the complainant tried to run/start the engine when in contact with water, due to which, the engine seizure occurred and thereby he breached the terms and conditions of the Policy.

10.           After going through the record of the Forum and contention of the Counsel for the appellants, aforesaid, we find no force, at all. So far as the contention of the appellants/Opposite Parties regarding non-payment of any additional premium to get the risk of water ingress into engine covered is concerned, we are of the view that when the Insurance Company insured the vehicle of the complainant, it is the duty of the Insurance Company to convey to the complainant that some additional premium is required for that kind of loss and if it is acceptable to the complainant, he/she can deposit the said amount, but in this case, the Insurance Company failed to place on record any document/letter, which was sent to the complainant, to prove that additional premium is required to get the risk of water ingress into engine covered. So, the Forum rightly held that neither any such terms and conditions nor any authentic document placed on record by them (Opposite Parties) to prove that the complainant refused to pay any premium to them to get the risk of water ingress into engine covered. 

11.           So far as the report of the Surveyor regarding disallowing the claim of the insured on the ground that loss to the engine was due to ingress of water, which is not covered under the Policy and there was no external impact to the vehicle or the engine is concerned, it is, no doubt, true that the vehicle got damaged on 07.07.2012, while picking one of the employees of the Company from his residence, the said vehicle stopped in the water on the main road at Chandigarh. The claim was duly reported to the Insurance Company, which was disallowed by the Surveyor vide letter dated 30.07.2012 (Annexure C-4), on the ground that there was no external impact to the vehicle or the engine. Did the Insurance Company supply any terms and conditions to the complainant ? It is pertinent to note that when the complaint was at the stage of arguments before the Forum, the Opposite Parties moved an application for placing on record terms and conditions of the Insurance Policy, which was opposed by the complainant, by filing the reply to the said application, in which, it has been clearly stated that the terms and conditions of the Policy were never supplied to the complainant. However, the Forum while allowing the application, aforesaid, vide order dated 24.02.2015, subject to payment of costs, stated that ‘if the same are allowed to be placed on record, the complainant has nothing to suffer because they can still show that copy of the same was not supplied to them.’ Even in para No.3 of the complaint, the complainant has specifically stated that no terms and conditions were provided or attached with the schedule.

12.           So far as the terms and conditions of the Policy is concerned, Section 1 of the policy condition – Annexure A-1/A (at page No.75 of the Forum file)  reads as under :-

^{“Section 1 : Loss of or damage to the vehicle insured}

^{1.         The Company will indemnify the insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon.}

^{(i).          by fire explosion self ignition or lightning;}

^{(ii).          by burglary housebreaking or theft;}

^{(iii).         by riot and strike;}

^{(iv).         by earthquake (fire and shock damage);}

^{(v).         by flood typhoon hurricane storm          tempest   inundation cyclone hailstorm frost;}

^{(vi).         by accidental external means;}

^{(vii).        by malicious act;}

^{(viii).       by terrorist activity;}

            ^{(ix).     whilst in transit by road rail inland-waterway        lift  elevator or air;}

            ^{(x).      by landslide rockslide.”}

 

The meaning of inundation is “flood, overflow, deluge, torrent, influx; tidal wave, flash flood etc”. Therefore, it is clearly proved that the claim of the complainant is duly covered under the abovesaid condition of the policy. Since the Insurance Company failed to file any evidence, it is not proved that there were any terms and conditions, in accordance with which, the damage to the car engine by water ingress was excluded. Since the Insurance Company has not led any evidence about informing the complainant in respect of the conditions of the Policy, we feel that the Insurance Company cannot escape from their liability of indemnification on the ground of such exclusionary clause.  The Forum rightly held that the Insurance Company was ready to pay the amount of Rs.41,601/- to the complainant itself shows that they admit their liability to compensate the complainant, but the amount offered by them is too meagre because the complainant had paid an amount of Rs.12,23,356.35 towards the repair of the damaged vehicle. The plea taken by the appellants/Opposite Parties that as per Condition No.4 of the Policy, the complainant was required to take all reasonable steps to safeguard the vehicle from loss or damage has no force, at all, because the complainant Company being an authorised dealer for the Mercedes Benz cars, is fully aware of the manufacturer’s precautions to be taken in case the car is driven through a water logged area or stopped in the water. It is noteworthy that the owner of such a luxury car or the driver would never intentionally take the car in deep waters to cause damage to their own property.

13.           Keeping in view the facts and circumstances of the case, we are of the considered view that the Forum was right, in allowing the complaint, as stated above.   Hence, the order passed by the Forum, being based on correct appreciation of evidence and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

14.           For the reasons recorded above, the appeal, filed by the appellants, being devoid of merit, must fail, and the same stands dismissed, with no order as to costs. The order of the Forum is upheld.

15.           Certified Copies of this order be sent to the parties, free of charge.

16.           The file be consigned to Record Room, after completion.

Pronounced.                                             Sd/-

23.10.2015

                                          [JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

rb