Chandigarh

StateCommission

CC/301/2015

Sulakshna Devi - Complainant(s)

Versus

Liberty Videocon General Insurance Company Limited - Opp.Party(s)

Nitin Gupta & Gaurav Gupta, Adv.

09 Mar 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	301 of 2015
Date of Institution	:	09.12.2015
Date of Decision	:	09.03.2016

 

Sulakshna Devi W/o Sh. Satish Kumar, resident of House No.3236, 21-D, Chandigarh.

……Complainant

Versus

1. Liberty Videocon General Insurance Company Limited, SCO No.174-175, 2^nd Floor, Sector 9-C, Chandigarh through its Divisional Manager.

2. Liberty Videocon General Insurance Company Limited, 10^th Floor, Tower A, Peninsula Business Park, Ganpath Rao Kadam Marg, Lower Parel, Mumbai, Maharashtra – 400013, through its General Manager.

3.   Krishna Automobiles, BMW Cars Dealers, Plot No.125, Industrial Area, Phase-1, Chandigarh through its Manager/Authorized Signatory.

              .... Opposite Parties.

 

Complaint under Section 17 of the Consumer Protection Act, 1986

 

BEFORE:   JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                MR. DEV RAJ, MEMBER.

                MRS. PADMA PANDEY, MEMBER

 

Argued by:

 

Sh. Gaurav Gupta, Advocate for the complainant.

Sh. Rajneesh Malhotra, Advocate for Opposite Parties No.1 & 2.

None for Opposite Party No.3.

 

PER DEV RAJ, MEMBER

            The facts, in brief, are that the complainant, being the owner of BMW 5 series 520 car bearing registration No.CH-04J-5076 (Annexure C-1), was using the same for personal pursuits on day to day basis. The said vehicle was insured from Opposite Party No.1 vide Private Car Package Policy No.2011-200502-14-1002862-01-000 (Annexure C-2), valid from 28.02.2015 to 27.02.2016 for an Insured Declared Value (IDV) of Rs.22,68,000/-. On 23.08.2015 at about 3.00 A.M., when the vehicle was being driven by Ashwani Kumar accompanied by complainant’s son, on their way back to home in Sector 21-D, Chandigarh from Sector 79, Mohali, due to heavy rain, due to low visibility, the car of the complainant got badly struck in a water logged deep ditch in the middle of the road. The driver of the car switched off the engine of the car. Intimation of the incident was given to the Opposite Parties. The Surveyor of the Insurance Company conducted the spot survey and on his advice, the car was shifted to the authorized service centre of BMW cars i.e. Opposite Party No.3 by towing the same. A DDR was also registered in Police Station Sohana, Mohali (Annexure C-3). Opposite Party no.3 prepared the repair estimate and assessed estimate of Rs.22,13,220/- vide Repair Estate dated 04.09.2015 (Annexure C-4).

2.         The complainant applied for claim settlement by furnishing claim form (Annexure C-5) at Chandigarh office alongwith all required information and documents. The Insurance Company delayed the approval process and vide letter dated 11.09.2015 (Annexure C-6) demanded documents for claim processing. Despite all the demanded documents already supplied to Opposite Parties No.1 & 2 through their Surveyor Sh. Mohit Sharma, the complainant again supplied the said documents. Vide letter dated 28.10.2015 (Annexure C-7), the complainant requested the Insurance Company to give status of her car claim and also requested to supply surveyor assessment and other documents. The Surveyor prepared his report on 29.10.2015 (Annexure C-8), wherein he did not consider the actual estimate given by Opposite Party No.3 and assessed the loss only of Rs.14,43,171/- towards spare parts and Rs.1,65,961/- as labour charges whereas Opposite Party No.3 assessed total loss of Rs.22,13,220/-. The complainant represented to Opposite Party No.1 vide letter dated 5.11.2015 (Annexure C-9) and requested to recheck the Surveyor assessment. On this, the Surveyor prepared an addendum survey report dated 6.11.2015 (Annexure C-10) of Rs.5,36,966/-. However, in Addendum Report, the Surveyor neither allowed nor disapproved the EXCH-Turbo cost (i.e. Rs.1,42,347/-) with remarks that it would be confirmed only after dismantling the car and also did not approve loss of Rs.1,11,123/- towards parts mentioned in the addendum report at Sr. No.1, 8, 9, 10, 11, 12 & 13. Opposite Party No.3 vide email dated 3.9.2015 (Annexure C-11) (infact 03.10.2015) confirmed that Exch-Turbo was defective and same was very much in the knowledge of the Surveyor.

3.         The complainant received letter dated 2.11.2015 (Annexure C-12) from Opposite Party No.1 vide which it was informed to the complainant that the Licensing Authority was not able to verify the driving licence of the driver and the repair liability of the Insurance Company was Rs.8,33,586/- and asked to get the vehicle repaired and submit the bills of repair for further process of claim. The total repair estimate as per the surveyor assessment came to be Rs.18,62,602/-, which exceeds 75% of the IDV of the vehicle and, as such, the vehicle was to be treated as a constructive total loss, as per clear condition of Insurance. It was stated that as per information dated 23.10.2015, obtained by Opposite Party No.1 under RTI (Annexure C-14) , the record of Licensing Authority relating to the driving licence of Sh. Ashwani Kumar is missing and the said authority has registered FIR for the said lost record. The complainant requested the Opposite Parties that since the vehicle was a total loss, therefore, the repair of the vehicle was neither justified nor tenable and requested to review their decision and release the entire Insured Declared Value of the car. Now due to delay on the part of Opposite Parties No.1 & 2 in settling the claim, Opposite PartyNo.3 is demanding parking charges @Rs.500/- per day w.e.f. 15.09.2015, for which the Insurance Company is solely liable.

4.         It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Parties to pay the claim amount of Rs.22,68,000/- towards the Insured Declared Value of the car alongwith interest @12% per annum; Rs.1,50,000/- as compensation for mental torture etc; parking charges @Rs.500/- per day w.e.f. 15.09.2015 and Rs.50,000/- as cost of litigation.

5.         Opposite Parties No.1 & 2, in their written statement, while admitting insuring the BMW 5 Series 520 car of the complainant for the period from 28.2.2015 to 27.2.2016, stated that on receipt of intimation that the car had been stuck in a ditch, Opposite Parties No.1 & 2 appointed Sh. Mohit Sharma as an independent IRDA accredited Surveyor, to assess the exact extent of loss and liability of the answering Opposite Parties. It was further stated that the complainant was also written letter dated 11.09.2015, for supplying the necessary documents, which were supplied. It was further stated that the Surveyor submitted his detailed preliminary survey report dated 29.10.2015. It was further stated that as the vehicle, in question, was more than five years old and, as such, the Surveyor applied depreciation as per Section I of the Insurance Policy and, accordingly, assessed the liability of the answering Opposite Parties to the extent of Rs.8,33,586/-. It was further stated that the Surveyor had kept reserved the assessment for the Exh-Turbo as he was suspecting any damage to the said part. It was further stated that on 6.11.2015, the Surveyor issued addendum report giving clarification, as to why some of the parts estimated were not considered while assessing the loss. It was further stated that the claim was payable only as per the assessment made by the Surveyor and if there was no violation of the terms and conditions of the Insurance Policy. It was further stated that the Surveyor was not to follow the estimate given by the complainant or Opposite Party No.3. It was further stated that the Surveyor was to assess the loss after dismantling the necessary parts of the vehicle by Opposite Party No.3. It was denied that the report made by the Surveyor or the addendum report was non-speaking.

6.         It was further stated that as regards driving licence of the driver of the vehicle, in question, the answering Opposite Parties have already written a letter to the RTO concerned, for verification of the driving licence of Sh. Ashwani Kumar. It was further stated that the calculation made by the complainant with regard to the total repair estimate to the tune of Rs.18,62,602/- is erroneous. It was further stated that the total repair estimate is to be taken only as per the report of the Surveyor. It was further stated that as per GR 8 of the Indian Motor Tariff governing the terms and conditions of the Policy, any vehicle could only be declared total loss in case the repair cost of the same is more than 75% of the Insured Value. It was further stated that in the present case, the repair value was Rs.8,33,586/- as per the Surveyor, which was below 75% of the insured value of the vehicle i.e. Rs.22.68 Lacs and, therefore, the vehicle could not have been declared as constructive total loss. It was further stated that the answering Opposite Parties reserve the right to repudiate the claim, in case, the driving licence of the driver Ashwani Kumar, is found to be a fake one or not valid on the date of accident to drive the vehicle, in question. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.1 & 2, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

7.         Opposite Party No.3, in its written statement, stated that as per motor insurance claim form (Annexure R-1), it was crystal clear that the damage to the car was due to ingress of rain flooded water. It was further stated that Opposite Party No.3 is ready to repair the vehicle but the same can only be initiated after receiving clearance/approval from both the customer and the insurance company, as the damage sustained to the vehicle is due to external aspects and not due to any manufacturing defect. It was further stated that the complainant has not entered into any service contract with Opposite Party No.3, hence, as per standard practice, all the repairs can only be carried out on 100% chargeable basis. It was further stated that the vehicle is 2009 year model and is well outside the coverage of two years standard warranty term. It was further stated that after inspection of the vehicle, initial estimate was given (Annexure R-2). It was further stated that in case of insurance claim, the estimate was subject to approval of Insurance Company and the customer, for which, as on date, no approval has been received. It was admitted that the turbo charger was again inspected on request of both the complainant and Insurance Company and the same was found to be faulty. It was also admitted that the charges of estimate and parking charges have been demanded in line to the standard business terms and policy. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.3, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

8.         The complainant, in support of her case, submitted her affidavit, by way of evidence, alongwith which, a number of documents were attached.

9.         Opposite Parties No.1 & 2, in support of their case, submitted the affidavits of Sh. Jitendra Jain, their Chief Litigation Manager, and Er. Mohit Sharma, Surveyor, by way of evidence. 

10.       Opposite Party No.3, in support of its case, submitted the affidavit of Sh. Sachit Passi, its Managing Partner, by way of evidence, alongwith which, a number of documents were attached. 

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

12.       It is evident that the complainant got insured her BMW 5 Series 520 D/Sedan bearing No.CH 04 J 5076 insured with Opposite Parties No.1 & 2 vide Certificate of Insurance-cum-Policy Schedule (Annexure C-2) for the period from  28.02.2015 to 27.02.2016 for an Insured Declared Value (IDV) of Rs.22,68,000/- after paying premium of Rs.40,564/-. Admittedly, the vehicle, in question, stuck in a water logged ditch and damaged, when it was being driven by Sh. Ashwani Kumar. After spot inspection by the Surveyor appointed by Opposite Parties No.1 & 2, the same was towed to the workshop of Opposite Party No.3, where a repair estimate of Rs.22,13,220/- was prepared on 04.09.2015 (Annexure C-4). The complainant filed claim with Opposite Parties No.1 & 2 vide motor insurance claim form (Annexure C-5). Further, it is evident that vide letter dated 11.09.2015, Opposite Parties No.1 & 2 sought some documents to process the claim, which were duly supplied. Thereafter, vide letter dated 28.10.2015 (Annexure C-7), complainant  sought status of her claim from Opposite Parties No.1 & 2. The Surveyor, namely, Er. Mohit Sharma submitted his report dated 29.10.2015, vide which, he assessed the net loss to the extent of Rs.8,33,586/-.

13.       The case of the complainant is that since the estimate of repair given by Opposite Party No.3 viz. Rs.22,13,220/- is more than 75% of the IDV, as such, the vehicle is to be treated as constructive total loss and the IDV of the vehicle is payable by Opposite Parties No.1 & 2. The Counsel for the complainant placed reliance on Rugharam Vs. New India Assurance Company Ltd., II (2015) CPJ 132 (NC), to contend that the estimates furnished by authorized garage cannot be brushed aside. On the other hand, the case of Opposite Parties No.1 & 2 is that since, the value assessed by the Surveyor was Rs.8,33,586/-, which was below 75% of the insured value of the vehicle i.e. Rs.22.68 Lacs, therefore, the vehicle could not have been declared as constructive total loss.

14.       The core question, which falls for consideration, is, as to whether the complainant is entitled to the Insured Declared Value of the Vehicle, in question or not? While Opposite Party No.3, after inspection, vide its repair estimate dated 4.09.2015 (Annexure C-4), assessed the cost of repair to the extent of Rs.22,13,220/-, the Surveyor & Loss Assessor appointed by Opposite Parties No.1 & 2, namely, Er. Mohit Sharma, assessed the same to the extent of Rs.8,33,586/-. At Sr. No.7, under the heading “CAUSE & NATURE OF ACCIDENT”, Surveyor recorded as under:-

“7. CAUSE & NATURE OF ACCIDENT:-

As mentioned in the claim form and narrated by the insured is being reproduced as under:-

As the insured’s vehicle reached near the place of accident due to rain the visibility was very low and the insured’s vehicle went into the deep ditch in the middle of the road and the water entered the insured’s vehicle. And after some time when the insured’s son came back, he saw that the front windshield was broken.”

The Surveyor, then at Sr. No.8 under the heading “DETAIL OF ASSESSMENT”, assessed the loss on account of rubber parts (inclusive of 12.5% VAT) to the tune of Rs.14,43,171.50 and after applying 50% depreciation, the same was assessed to Rs.7,21,586/-. The summary given by the Surveyor in his Preliminary surveyor Report (Annexure C-8) is extracted hereunder:-

Parts Assessed	Rs.7,21,586.00
Labour Assessed	Rs.1,14,000.00
Towing Charges	0.00
Total Assessed	Rs.8,35,586.00
Les Salvage Value	0.00
Less Policy Clause	Rs.2,000.00
Net Assessed	Rs.8,33,586.00

 

The Surveyor then under the heading “Remarks”, mentioned as under:-

“The Exch-Turbo is a suspected part which might be damaged but it will be confirmed after the dismantling of the part. So it is kept Open.”

15.       Subsequently, in his Motor Addendum Survey Report dated 6.11.2015 (Annexure C-10) also, which was submitted to clarify the reason for not considering the remaining parts in his previous assessment dated 29.10.2015, the Surveyor kept open the estimate assessed qua Exch-Turbo Charger viz. Rs.1,42,347.11. In this Addendum Surveyor Report, the Surveyor under “Remarks”, recorded as under:-

“The Exch-Turbo is a suspected part, which might be damaged but it will be confirmed after dismantling of the part. So, it is kept Open and if it is found in damaged condition after the vehicle gets ready then the same will be considered.

Part S.No.8, 9, 10, 11 & 12 in this assessment are not covered under purview of perils covered in Policy.”

It may be stated here that for assessing the repair estimate, the Surveyor first assessed the loss on account of rubber parts to the extent of Rs.12,82,819.11 + Rs.1,60,352.00 = Rs.14,43,171.50 and then put 50% depreciation on the same, which was totally wrong and incorrect. The loss being more than 75% of IDV, it was a case of total loss and depreciation was not applicable. As such, the amount of Rs.14,43,171.50 is to be added as a whole. Further, in his report, the Surveyor has not given any reasons for arriving at an assessment of amount of Rs.1,00,000/-, under “Labour Charges” (1) “REMOVAL AND REFITTING OF PARTS”,  as against the estimated labour charges of Rs.1,45,580/-. He also reduced the service tax of Rs.20,381/- to Rs.14,000/-, without giving any cogent reasoning there for.

16.       Further, the Surveyor in his Motor Addendum Survey Report dated 6.11.2015 (Annexure C-10) did not disallow the loss on account of Exch-Turbo Charger to the tune of Rs.1,42,347.11 and kept the same open for confirmation. It may be stated here that vide email dated 03.10.2015 (Annexure C-11), relevant part of which is extracted hereunder, Opposite Party No.3 found the Turbo Charger to be defective:-

“As per discussion during last joint meeting with Mr. Vinod from Insurance Company, Mr. Mohit Surveyor, your goodself, me and Tiwana Sir, we have removed the Turbo Charger and found it defective. Same has been updated and shown to surveyor Mr. Mohit also. Now we have reassembled the car and would request you to kindly give us approval to proceed further with a repair.”

Since, Opposite Party No.3 confirmed the Turbo Charge to be defective, the same is to be included in the repair estimate. This email dated 03.10.2015 is prior to Motor Addendum Survey Report dated 6.11.2015. Apparently, the Surveyor gravely erred by not taking into account the sum of Rs.1,42,347.11 qua Exch-Turbo Charger, while assessing the loss.  

17.       Therefore, by adding the following amounts,  without applying any depreciation, as was done by the Surveyor wrongly, and by taking the estimated value of labour charges and service tax, the net assessed amount comes to Rs.17,51,480/-, which exceeds 75% of the Insured Declared Value of the vehicle, in question i.e. Rs.22,68,000.00:-

Assessment for rubber parts + 12.5% Vat extra (Page 39 of file)	14,43,171.50
Labour Charges + Service Tax @14%	Rs.1,65,961.20
Loss on account of Exch-Turbo Charger as indicated in Annexure   C-10	Rs.1,42,347.11
Total	Rs.17,51,480/- (Rounded)

 

On calculation, 75% of the Insured Declared Value viz. Rs.22,68,000/-, comes to Rs.17,01,000/-, whereas aforesaid amount of Rs.17,51,480/- exceeds 75% of the Insured Declared Value of the vehicle in question viz. Rs.17,01,000/-. Clearly, the loss to the complainant, as per estimate (Annexure C-4), being Rs.22,13,220/-, was substantially more than 75% of the insured declared value of the vehicle. In this view of the matter, under policy terms and conditions, the insured vehicle, in question, was to be treated as a constructive total loss and Opposite Parties are liable to pay the Insured Declared Value (IDV) of the vehicle, in question, i.e. Rs.22,68,000/- to the complainant, alongwith interest @9% per annum from the date of filing the complaint till actual payment. Thus, the loss assessed by the Surveyor viz. Rs.8,33,586/- in view of repair estimate of Rs.22,13,220/- was highly incorrect. As per established parameters, the vehicle, in question, is a case of total loss. In Rugharam Vs. New India Assurance Company Ltd.’s case (supra), relied upon by the Counsel for the complainant, the District Forum allowed the complaint, which order was subsequently modified in appeal by the State Commission. In Revision, the Hon’ble National Commission held in Para 14 as under:-

“……In the present case, we find that the vehicle was a brand new vehicle and the loss which it had suffered during the course of incident of burning on account of the fire in which it got engulfed was extensive. After going through the two reports of the surveyors particularly the final report, we have no manner of doubt that if we take into consideration the probable loss to the major items left out by the surveyor, it is undoubtedly a case of total loss in which, by any stretch of imagination, it would not be feasible and practicable to restore the vehicle to a reasonably good condition without incurring huge expenditure which amount might equal to the price of vehicle itself. In this context, the estimates furnished by the authorized garage cannot be easily

brushed aside. Under these circumstances, we find that the State Commission gravely erred in blindly relying on the report of the surveyor and ignoring the other evidence before it…….”

Thus, the facts of Rugharam Vs. New India Assurance Company Ltd.’s case (supra) are fully applicable to the facts involved in the instant case.

18.       So far as plea of Opposite Parties No.1 & 2 relating to the driver of the vehicle, namely, Sh. Ashwani Kumar not having the valid driving licence at the time of incident is concerned, there is, on record, a letter dated 23.10.2015 (Annexure C-14) written by State Public Information Officer-cum-Assistant Superintendent (Treasury) O/o Sub Divisional Officer (N), Panchkula to Opposite Party No.1, contents whereof are extracted hereunder:-

“With reference to letter dated 07.10.2015 on the subject cited above, you are informed that due to loss of register No.62 from 05.09.2001 to 10.12.2001 regarding licence no.1788/LA/PKL 28.09.2001, an FIR No.282 dated 07.07.2014 u/s 38 IPC was registered against Sh. Krishan, Clerk. Therefore, to verify this licence at this stage is not possible.”

The complainant has placed on record coloured photocopy of Driving Licence bearing No.1788/LA/PKL 28.09.2001 of Sh. Ashwani Kumar (Annexure C-13), which bears the signatures, clear stamp and seal of Licencing Authority,  Panchkula. In view of the fact that the record pertaining to this driving licence was lost and FIR registered against the concerned official, photocopy of licence placed, on record, by the complainant, cannot be ignored or treated as fake, when there is nothing, on record, to prove the same. Opposite Parties No.1 & 2 could have examined/cross-examined Sh. Ashwani Kumar by way of interrogatories, to establish their point. A simple plea of driving licence being fake, taken by Opposite Parties No.l & 2, for denying the genuine claim of the complainant, cannot be accepted as valid and legally sustainable.

19.       So far as grant of compensation on account of mental agony and physical harassment is concerned, the complainant has certainly suffered immense physical harassment and mental agony, for the loss she suffered on account of damage to her vehicle and denial of her claim, for which, she is entitled to compensation. Grant of an amount of Rs.1,00,000/- as compensation, in our opinion, will meet the ends of justice.  

20.       No other point, was urged, by the Counsel for the parties.

21.       For the reasons recorded above, the complaint is partly accepted, with costs. Opposite Parties No.1 & 2 are, jointly and severally, held liable and directed  as under:-

1. To pay the amount Rs.22,68,000/-, to  the complainant, alongwith interest @ 9% per annum, w.e.f. 9.12.2015, within two months, from   the  date of receipt of a certified copy of  this   order, failing which the aforesaid amount will be payable alongwith interest @12% per annum from the date of default till actual payment.
2. To pay an amount Rs.1,00,000/-, to  the complainant, as compensation for mental agony and physical harassment, within two months, from   the  date of receipt of a certified copy of  this   order, failing which, the aforesaid amount of Rs.1,00,000/- will be payable alongwith interest @12% per annum from the date of default till actual payment.
3. To pay cost of litigation, to the tune of Rs.50,000/- to the complainant, within a period of two months, from the date of receipt of a certified copy of this order, failing which, the aforesaid amount of Rs.50,000/- will be payable alongwith interest @12% per annum from the date of default till actual payment.
4. Since, admittedly the car, in question, is lying with Opposite Party No.3, the same can be collected by Opposite Parties No.1 & 2, from it (Opposite Party No.3), after paying the amount of indemnification to the complainant, as indicated in Clause (i) above, as well as parking charges, if any, to it (Opposite Party No.3).
5. Complainant shall execute the requisite documents, in favour of Opposite Parties No.1 & 2, for transfer of the vehicle, in question, in their name, so as to vest them with the ownership thereof, within one month of receipt of the amount of indemnification.

22.       However, the complaint against Opposite Party No.3 stands dismissed.

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

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

Pronounced.

March   9^th, 2016.

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

[PRESIDENT]

 

 

Sd/-

[DEV RAJ]

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

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