Chandigarh

DF-I

CC/353/2014

Haryana Tourism Corporation Limited. - Complainant(s)

Versus

M/S Hyundai Motor India Limited. - Opp.Party(s)

Monika Jalota

24 Mar 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

========

 

 

                                     

Consumer Complaint No.	:	CC/353/2014
Date of Institution	:	22/05/2014
Date of Decision	:	24/03/2015

 

 

Haryana Tourism Corporation Limited, S.C.O. No.17-18-19, Sector 17-B, Chandigarh through Sh. Ramesh Chander Sharma, Assistant Technical Officer.

…..Complainant

V E R S U S

1. M/s Hyundai Motor India Limited, 5^th 6^th Floor, Corporate One-Baani Building, Plot No.5, Commercial Centre, Jasola, New Delhi-110076.
2. M/s Berkeley Hyundai, Plot No.87, Industrial Area, Phase-I, Panchkula.
3. M/s Deep Hyundai, K-1, Udyog Nagar, Industrial Area, Peeragarhi Crossing, Rohtak Road, New Delhi.
4. M/s Bharti AXA General Insurance Co. Ltd., 1^st Floor, Fems Lcon, Survey No.28, Daddanakundi, Vill. K.R. Puram, Hobli, Banglore.
5. M/s Bharti Axa General Insurance Co. Ltd., JMD, Regent Arcade, Shop No.13-14-15, 2^nd Floor, MG Road, Gurgaon-122001.
6. M/s Bharti Axa General Insurance Co. Ltd., SCO 350-352, 1^st Floor, Sector 34-A, Chandigarh 160034.

 

……Opposite Parties

 

 

 

QUORUM:	P.L.AHUJA	PRESIDENT
	MRS.SURJEET KAUR	MEMBER

                                               

                                               

                       

For complainant	:	Ms. Monica Jalota, Advocate
For OP-1	:	Sh. Amit Gupta, Advocate
For OP-2	:	Sh. Sandeep Jasuja, Advocate
For OP-3	:	Sh. Rajendra Singh, Advocate
For OPs 4 to 6	:	Sh. Gaurav Bhardwaj, Advocate.

                       

                 

PER P.L.AHUJA, PRESIDENT

1.         Haryana Tourism Corporation Ltd., complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against M/s Hyundai Motor India Limited and others, Opposite Parties (hereinafter called the OPs), alleging that on 24.5.2013 it bought the Sonata GDi (MT) 6-Air Bags vehicle from OP-2 priced at Rs.18,04,047/- for the use of the Chairman of the Corporation. The vehicle was got insured under a comprehensive policy with OPs 4 to 6 for the period from 24.5.2013 to 23.5.2014. 

                According to the complainant, on 18.8.2013, the vehicle was parked in the parking area of Tilyar Lake Complex, Rohtak and there was heavy rain.  On 19.8.2013 when the driver of the vehicle, Sh. Anil Kumar went near the vehicle, he found it in the water upto engine level due to heavy rain. As the water drained out after some time, the driver tried to start the vehicle. The vehicle started once but stopped within a few seconds and thereafter never started. Hyundai company was contacted and the car was towed by OP-3 for repairing under the insurance policy.  The estimate of repair of the vehicle Rs.3,74,680/- and suspected parts (elect.) after engine assembling of Rs.1,09,353/- was sent. The complainant submitted the claim form to OP-4.  An e-mail was sent by the surveyor and loss assessor of the Insurance Company stating that it was a case of hydrostatic lock. However, the complainant was shocked to receive email dated 1.9.2013 from the Works Manager of OP-3 that the representatives of OPs 4 to 6 had sent an e-mail  informing that the case was of no claim because the vehicle was not insured for hydrostatic locking.  It has been alleged that the survey was got done on 26.8.2013 after about 7 days in the absence of the complainant.   On 19.9.2013,
OP-3 communicated that the vehicle had been repaired and was ready for delivery.  The repair cost was intimated as Rs.3,81,165/- and the delivery of the vehicle was only against full payment.  On 21.9.2013, OP-3 informed that the Insurance Company had finalized the claim for Rs.50,592/- as full and final settlement of loss. On 24.9.2013, an email was sent to OPs 3 & 4 that the complainant was not satisfied with the claim settlement of Rs.50,592/- and the delivery of the car was taken under protest. It has been averred that after discussions, it was decided that the amount of Rs.50,592/- be accepted by the complainant under protest and the letter dated 18.11.2013 alongwith discharge voucher duly signed and one original cancelled cheque was sent to OP-5.  On telephonic conversation, the representative of OPs 4 to 6 reiterated that the discharge voucher be signed and resent without adding “under protest” for getting the amount. Thereafter email and letters were also sent by representative of OPs 4 to 6 (Annexure C-17 to C-19).  It has been contended that as per the letter dated 30.10.2013 received from the Senior Mechanical Engineer, Govt. Central Workshop, Haryana water had gone into the engine due to the fact that the seal of the engine was not water proof.  It has been contended that vehicle was driven only 13046 kms. at the time when the defect occurred and was also covered under 3 years warranty.  It has further been contended that OPs 4 to 6 cannot escape the liability by simply stating that damage due to hydrostatic lock was not covered under the policy.    Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.

2.         In its written reply OP-1 has taken a number of preliminary objections including that the complainant does not have any locus to file the present complaint and that the complainant is not a consumer. It has been averred that the vehicle reported on 24.8.2013 at the workshop of Deep Hyundai for accidental repair work at the mileage of 11810 Kms. It has been submitted that the accidental repair work was not covered under warranty and hence repair work could be done on chargeable basis alone. It has been contended that the complainant is facing problem due to its own negligence and not due to any defect in the vehicle. It has been denied that OP-1 ever claimed that car manufactured by it is water proof. It has been pleaded that the complainant’s driver started the vehicle without properly draining out water resulting in hydrostatic lock and such incidents were not covered under the warranty policy of the OP.  The warranty would not apply to damage or failure resulting from misuse, abuse, accident, theft, flooding or fire etc. Pleading that there is no deficiency in service or unfair trade practice on its part, prayer for dismissal of the complaint has been made. 
3.         In its separate written reply, OP-2 has also taken a number of preliminary objections including that the complainant is not a consumer. The facts with regard to purchase of the vehicle have been admitted. It has been pleaded that the damage due to hydro static lock is not covered under the insurance policy as the same occurs due to negligence. It has been denied that OP-2 ever projected or assured that the insurance policy of OPs 4 to 6, being a comprehensive policy, covers all the risks including the damage due to hydrostatic lock.
4.         In its separate written reply OP-3 has admitted the factual matrix. It has been averred that OP-3 had taken up the repair work only after getting complainant’s consent and had been updating the complainant on regular basis.  It has been contended that OP-3 had already given the estimated cost of repair to be borne by the complainant and only after getting consent of the complainant the repair work was carried out.  It has been pleaded that the engine work on the vehicle was done at odometer reading 11810 Kms. and completed on 19.9.2013.  From the vehicle repair history, it was seen that the vehicle had reported six times thereafter at N2225 & N-7201 and had never reported any problem in engine performance. The vehicle had run 49520 Kms. when it last visited on 3.6.2014 at N-2225 M/s Berkley Hyundai, Chandigarh which confirms that there was no deficiency in service on the part of OP-3. 
5.          In its separate written reply OPs 4 to 6 have averred that the vehicle of the complainant was insured with them from 24.5.2013 to 23.5.2014. It has been contended that if an engine hydrolocks while idling or under low pressure conditions, the engine might stop suddenly with no immediate damage. And the hydrostatic lock is depending on how the liquid was introduced to the engine, it possibly could be restarted and dried out with normal combustion heat, or it might require more work, such as flushing out corrupted operating fluids and replacing damaged gaskets. It has been pleaded that in the present case the complainant repeatedly tried to start the vehicle while knowing the fact that the water was upto engine level which extended the loss of the engine and violated condition No.4 of the policy. It has, however, been averred that they allowed the claim of the complainant to the tune of Rs.50,591.50 in accordance with the terms and conditions of the insurance policy and as per the surveyor report and requested the complainant to submit the required documents for processing of claim vide letters dated 31.8.2013, 26.9.2013, 7.10.2013 and 21.01.2013.  It has been denied that the complainant is a consumer under the Consumer Protection Act.
6.         In its rejoinder, the complainant has controverted the stand of the OPs and reiterated its own. It has been averred that the vehicle was never used for the commercial purpose and was bought for the personal use of the Chairman of the Corporation. It has been contended that due precautions were taken and the vehicle was started only after draining out of the water. It has been pleaded that damage to the vehicle had been caused due to heavy rains and flooding of the parking and the said damage is covered under policy of OPs 4 to 6.
7.         The parties led evidence in support of their contentions.
8.         We have scanned the entire evidence and written arguments submitted by the parties.
9.         It is the admitted case of the OPs that on 24.5.2013, the complainant had bought one Sonata GDi (MT) 6-Air Bags vehicle from OP-2 at a price of Rs.18,04,047/- vide proforma invoice Annexure C-2.  OP-1 is the manufacture of the vehicle, OP-2 is the dealer of OP-1 through whom the vehicle was purchased, OP-3 is the workshop where the vehicle was sent for repair and OPs 4 to 6 is the Insurance Company with whom the car was insured under a policy of comprehensive insurance (Annexure C-3 & C-4). 
10.         At the outset, we have to consider whether the consumer complaint is maintainable against OPs 1 to 3.  The first point that arises for determination is whether the complainant, who is a State owned Corporation, had purchased the car for commercial purpose?
11.         According to the complainant, the said vehicle was purchased for the personal use of the Chairman of the Corporation and the Govt. of Haryana has issued a specific letter dated 30.4.2013 for providing such vehicles to the Chairmans of the Boards and Corporations.  It has been contended that since  the vehicle was purchased and was being used for the personal use of the Chairman of the Corporation, therefore, it was not purchased for a ‘commercial purpose’  and the complainant is covered under the definition of ‘consumer’ as defined under Section 2 (1)(d) of the Consumer Protection Act.  On the other hand, as per contention of the OPs, the vehicle in question was purchased by the complainant-Corporation for ferrying the VIP customers from one place to another and as such, the vehicle was purchased purely for ‘commercial purpose’ and the complaint is not maintainable. In this context, attention has been drawn to General Motors India Pvt. Ltd. Vs. G.S. Fertilizers (P) Ltd. and India Automobiles (1960) Ltd.-II (2013) CPJ 72 (NC).
12.         We have carefully considered the above arguments of the parties.  It is true that as per law laid down by the Hon'ble Supreme Court in Karnataka Power Transmission Corpn. & Anr. Vs. Ashok Iron Works Pvt. Ltd., Civil Appeal No.1879 of 2003 decided on 9.2.2009, a company is a ‘person’ within the meaning of Section 2(1)(m) of the Consumer Protection Act.  However, in the instant case, when the complainant has itself admitted that the vehicle was bought for the personal use of the Chairman of the Corporation, it obviously means that the Chairman had not to use the vehicle for self-employment to earn his livelihood but for commercial purposes as a perk of his office.  In somewhat similar circumstances, in General Motors India Pvt. Ltd. Vs. G.S. Fertilizers (P) Ltd. and India Automobiles (1960) Ltd.(supra), where the vehicle was purchased for the use of its Managing Director, the Hon’ble National Commission found that it clearly amounted to its purchase for a commercial purpose since the Managing Director of a Pvt. Ltd. Company would obviously not use that vehicle for self-employment to earn his livelihood but for commercial purpose as a perk of his office. It was held that it is obvious that Parliament intended to restrict the benefits of Act to ordinary consumers purchasing goods either for their own consumption or even for use in small venture which they may have embarked upon in order to make a living as distinct from large-scale manufacturing or processing activity carried on for profit.  It was held that since the said case pertained to the purchase of goods admittedly for ‘commercial purposes’, since the vehicle was purchased by a Pvt. Ltd. Company for its Managing Director, the case is squarely covered by the judgment of the Hon’ble Apex Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute-1995 (3) SCC 583.
13.         Taking into consideration the law laid down by the Hon’ble National Commission in General Motors India Pvt. Ltd. Vs. G.S. Fertilizers (P) Ltd. and India Automobiles (1960) Ltd. (supra), we are of the opinion that the Chairman of the complainant-Corporation had not to use the vehicle for self-employment to earn his livelihood but for ‘commercial purposes’ as a perk of his office.  Therefore, the complainant is not a ‘consumer’ as defined in Section 2(1)(d) of the Consumer Protection Act qua OPs 1 to 3.
14.         Even if for the sake of arguments, the complainant is assumed to be a consumer under the Consumer Protection Act, nevertheless the complainant has failed to produce any expert opinion proving any manufacturing defect in the vehicle in question.  The written reply of OP-3 shows that the engine work on the vehicle was done at odometer reading 11810 kms. and completed on 19.9.2013.  The vehicle repair history shows that the vehicle has been reported six times thereafter and has never reported any problem in engine performance.  The vehicle has run 49520 kms. when it last visited on 3.6.2014 at M/s Berkley Hyundai, Chandigarh.  The fact that the vehicle has already covered 49520 kms. till 3.6.2014 shows that the vehicle is not having any inherent manufacturing defect.  In somewhat similar circumstances, the appeal filed by General Motors India Pvt. Ltd. and India Automobiles (1960) Ltd. in General Motors India Pvt. Ltd. Vs. G.S. Fertilizers (P) Ltd. and India Automobiles (1960) Ltd. (supra) was allowed. Therefore, after taking into consideration the above legal position, we do not find any deficiency in service or unfair trade practice on the part of OPs 1 to 3 and feel that the complaint is not maintainable against them.
15.           Adverting to the question of liability of OPs 4 to 6 i.e. M/s Bharti AXA General Insurance Co. Ltd., admittedly the said vehicle was insured through a comprehensive insurance policy for the period from 24.5.2013 to 23.5.2014 vide cover note and insurance policy (Annexure C-3 and C-4). The allegations of the complainant coupled with copy of motor insurance claim form Annexure C-5 show that on 18.8.2013, the vehicle was parked in Tilyar Lake, Rohtak when on account of flood waters, the engine of the vehicle was covered in the water and thereafter on 19.8.2013 the vehicle could not be started.
16.         The next material question that arises for determination is whether complainant falls within the definition of a ‘consumer’ qua the Insurance Company?  It is important to note that the insurance policy was taken by the complainant for reimbursement or indemnification of loss which may be suffered due to various perils.  The policy was not intended to generate the profit but was only for indemnification of the actual loss. The contract of insurance generally belongs to general category of contract of indemnity.  Services may be for any commercial activity yet the same would be within the purview of the Act. Commercial purpose means goods purchased or services hired should be used in activities directly intended to generate profits which is the main aim of commercial purpose. A person who takes the insurance policy to cover envisaged risk not takes the policy for commercial purpose. In support of above view, attention can be had to Harsolia Motors Vs. National Insurance Co. Ltd.-I (2005) CPJ 23 (NC), Ritu Gram Udyog Samiti Vs. New India Assurance Co. Ltd.-III (2008) CPJ 180 (NC) and New India Assurance Co. Ltd. Vs. Dr. M.M. Krishan-II (2011) CPJ 301 (NC).  In view of the law laid down by the Hon'ble National Commission, we are of the opinion that the complainant-Corporation is covered under the ambit of ‘consumer’ as defined in Consumer Protection Act qua the insurance company.
17.         It is the admitted case of OPs 4 to 6 that the complainant lodged a claim (Annexure C-5) with OP-4.  According to the complainant, on 18.8.2013, there was heavy rain when the vehicle in question was parked in the parking of Tilyar Lake Complex, Rohtak. On 19.8.2013 when Sh. Anil Kumar, driver of the vehicle went near the vehicle, he found the same in water upto engine level due to heavy rain.  As the water drained out after some time, the driver tried to start the vehicle and it started once but stopped within a few seconds.  Admittedly, the car was towed away by OP-3 for repairing under the insurance policy. The complainant had to incur an amount of Rs.3,81,165/- for getting the vehicle repaired.  However, OPs 4 to 6 sent an email dated 1.9.2013 (Annexure C-9) to the complainant that the case was of no claim because the vehicle was not insured for hydrostatic locking.  Ultimately the Insurance Company finalised the claim only for Rs.50,592/- as full and final settlement of loss and the said amount was accepted by the complainant under protest. 
18.         It has been urged on behalf of the OPs 4 to 6 that if an engine hydrolocks while idling or under low pressure conditions, the engine may stop suddenly with no immediate damage. It has been argued that in the instant case after stopping of the engine, the driver of the complainant repeatedly tried to start the vehicle while knowing the fact that the water was upto engine level which extended the loss of the engine and as such, the complainant had failed to take the reasonable steps to safeguard the vehicle from loss or damage. In this context, OPs 4 to 6 have drawn our attention to condition No.4 of the insurance policy which is reproduced below :-

        “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.”

 

It has also been urged that the surveyor, Mr. Mukesh Setia vide his report Annexure OP-4/4 also found that after stop of the engine, insured must have been cranking again and again of the engine which extend the loss of the engine.  Therefore, the liability of the insurer was limited to the first loss which was allowed to the insured i.e. Rs.50,592/-.  OPs 4 to 6 have vehemently argued that the driver of the vehicle failed to take the reasonable care of the vehicle and he should not have tried to start the vehicle without proper drying of the vehicle. 

19.         We have given our anxious consideration to the above arguments of OPs 4 to 6.  It is noteworthy that the contention of the OPs that the insured did not take all reasonable steps to safeguard the vehicle from loss or damage is not supported by any expert evidence.  The written reply of OPs 4 to 6 is not supported by affidavit of any engineer that the circumstances of the present case clearly reflect that after stopping of the engine, the driver of the complainant repeatedly tried to start the vehicle while knowing the fact that the water was upto engine level and in this way the complainant failed to take reasonable steps to safeguard the vehicle from loss and damage and violated condition No.4 of the insurance policy.  Pertinently, the complainant has specifically pleaded that due precautions were taken and the vehicle was started only after draining out of the water. The OPs No.4 to 6 instead of filing affidavit of any expert, have simply filed affidavit of one Ms. Akansha Kapoor, Law Officer in support of the averments in the written reply of OPs 4 to 6.  Such an affidavit does not serve any purpose and is not sufficient to prove that the complainant failed to take reasonable steps to safeguard the vehicle from loss and damage.  Needless to say since there was a heavy rainfall, the vehicle could not be taken inside a room to save it from flood water. 
20.         As far as the surveyor report Annexure OP-4/4 is concerned, the same cannot be relied upon considering it to be a gospel truth.  OPs 4 to 6 have not filed even an affidavit of the surveyor in support of the survey report Annexure OP-4/4.  Consequently, we are of the opinion that the report of the surveyor, assessing the loss only to the extent of Rs.50,591.50, assuming that after stop of the engine insured must have been cranking again and again of the engine which extended the loss of the engine, is not corroborated by any concrete evidence in the shape of report of some expert.  We are of the view that the report of the surveyor is based merely on assumptions and presumptions and the payment of an amount of Rs.50,592/- only against expenses of repairs amounting to Rs.3,81,165/-, particularly when the insurance was a comprehensive insurance policy, is a mockery of justice. We are of the opinion that OPs 4 to 6 cannot escape the liability by simply stating that the damage due to hydrostatic lock is not covered under the policy.  If such an interpretation is allowed, the policy of comprehensive insurance would be rendered wholly useless and illusory for an insured person. We are of the considered view that OPs 4 to 6 are liable to indemnify the complainant after deducting the depreciation amount of the various items replaced/repaired by OP-3. We find that the circumstances on record are a clear pointer towards the deficiency in service and unfair trade practice on the part of OPs 4 to 6.   OPs 4 to 6 arbitrarily imposed a heavy cut on the amount of Rs.3,81,165/- spent by the complainant on the repair of the vehicle.
21.         For the reasons recorded above, the complaint fails against OPs 1 to 3 and the same is dismissed qua them with no order as to costs.  However, the complaint is allowed partly against OPs 4 to 6 and they are jointly and severely directed as under :-
    1. OPs 4 to 6 shall reconsider the claim of the complainant (for an amount of Rs.3,81,165/-) and shall make the necessary deductions in respect of the depreciation amount of the various items, in accordance with law, and to make the payment of the balance amount to the complainant. It is made clear that the amount of Rs.50,592/- shall be adjusted in that payment. 
    2. OPs 4 to 6 shall pay an amount of Rs.20,000/- to the complainant on account of deficiency in service.
    3. OPs 4 to 6 shall pay an amount of Rs.10,000/- to the complainant towards costs of litigation.
22.         This order shall be complied with by OPs 4 to 6 within two months from the date of receipt of its certified copy; failing which OPs 4 to 6 shall pay the amounts at Sr.No.(i) & (ii) above with interest @ 12% per annum from the date of filing of the present complaint, till realization by the complainant, besides payment of litigation costs.
23.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-
24/03/2015	[Surjeet Kaur]	[P. L. Ahuja]
hg	Member	President