Chandigarh

DF-II

CC/712/2020

Avtar Singh Bhandari - Complainant(s)

Versus

M/s Joshi Automotive Private Limited - Opp.Party(s)

Adv. Devinder Kumar

06 Jul 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II,

U.T. CHANDIGARH

 

Consumer Complaint  No	:	712 of 2020
Date  of  Institution	:	21.12.2020
Date   of   Decision	:	06.07.2023

 

 

 

 

 

Avtar Singh Bhandari son of Late Sh.Chaman Singh Bhandari, aged about 64 years, r/o House No.114, Block-A, Golden Enclave, Adarsh Nagar, Naya Gaon, District Mohali.

 

             …..Complainant

Versus

 

1]  M/s Joshi Automotive Private Limited, Plot No.67, Industrial Area, Phase-II, Chandigarh through its Managing Director

2]  M/s Honda Cars India Limited, Plot No.A-1, Sector 40-41, Surajpur-Kasna road, Greater Noida, Industrial Development Area, Distt. Gautam Budh Nagar (U.P.) 201306 through its Managing Director

3]  IFFCO Tokio General Insurance Company Limited, IFFCO Bhawan, 4^th Floor, Plot No.2B and C, Sector 28-A, Madhya Marg, Chandigarh through its Branch Manager 160002

     ….. Opposite Parties

 

BEFORE:  SMT.SURJEET KAUR     PRESIDING MEMBER 

                    SH.B.M.SHARMA                 MEMBER

 

                               

Argued by  : Sh.Devinder Kumar, Counsel for the complainant

Sh.Rajesh Verma, Counsel for OP NO.1

Sh.Aditya Verma, Counsel for OP No.2.

Sh.J.P.Nahar, Counsel for OP No.3.

 

PER B. M. SHARMA, MEMBER

 

         The case of the complainant precisely is that his Honda Jazz Car bearing Regd.No.CH-01-BE-4417, was duly insured with OP NO.2 Insurance Company for the period from 14.12.2019 to 13.12.2020 (Ann.C-13).  It is stated that the said car of the complainant had breakdown, during the policy period, on 26.8.2020 near Light Point of PEC, Chandigarh while the complainant was on his way to Harmony Honda, Indl.Area, Phase-2, Chandigarh.  The car was towed to OP NO.2- Joshi Automotive Private Limited, an authorized service centre, for doing the needful.  It is submitted that the OP No.1 intimated the complainant that on inspection, they found that the damage/loss to vehicle is covered under insurance policy and accordingly they have intimated the loss of the vehicle to OP No.3 Insurance Company. It is also submitted that OP No.3 appointed Sh.Mohit Sharma, Surveyor for the claim of complainant to whom the complainant supplied all necessary documents and information.  Thereafter, the Surveyor sent letter dated 24.10.2020 to the complainant informing that the damage to the engine happened due to failure of internal parts which is not covered under insurance policy.  Then the complainant took the matter with OP No.1, who sent email dated 8.9.2020 (Ann.C-20) stated that on their observations, the water entry was observed in the engine, resulting into engine blockage. Subsequently, the complainant approached OP No.3 Insurance Company to consider his claim under policy, but the OP No.3 issued letter dated 27.11.2020 (Ann.C-22) repudiating the claim of the complainant on the ground that the damage to the vehicle is due to blocked engine and failure of internal engine part, hence there is no external impact and it seems that the loss has occurred due to failure of internal engine part, so the claim is not tenable and stands repudiated.  It is stated that the vehicle is lying with OP NO.1 since 26.8.2020. Hence, the present complaint has been preferred alleging the above act & conduct of the OPs as gross deficiency in service and unfair trade practice.

 

2]       The OP No.1-Joshi Automotive Pvt. Ltd. has filed written version and while admitting the factual matrix of the case, stated that the vehicle in question was reported to the workshop of the answering OP On 26.8.2020.  It is stated that the engine of the complainant’s vehicle was severely damaged due to the water getting into the engine, when it was passing through water logged area.  It is also stated that after inspection of the vehicle, it was found that the engine block was damaged and engine oil was already drained.  It is submitted that answering OP upon observation found that water was found inside the engine and it was concluded that the current condition of the engine is due to HYDROSTATIC LOCK, a specific type of Automotive engine Damage that occurs when the water enters the engine and is compressed in one or more cylinders.  It is also submitted that the damage sequence often called is “hydrostatic lock”, when the water enters a typically automotive engine cylinder during the intake stroke and in this case also, water having been sucked in the engine, as the car had gone through a water logged area.  It is pleaded that the claim of the complainant comes within the purview of the insurance policy issued by OP No.3 and is not covered by OPs No.1 & 2.  Pleading no deficiency in service and denying all other allegations, the OP No.1 has prayed for dismissal of the complaint.

 

         The OP No.2-Honda Cars India Ltd. has also filed written version stating that the relationship between OP NO.1 & OP No.2 is purely on principal-to-principal basis and each party is responsible for its own action.  It is stated that the complainant never had any direct dealing with OP NO.2; the said vehicle was purchased by the complainant from OP NO.1, who is one of the authorized dealers.  It is denied that there any manufacturing defect in the vehicle.  It is submitted that the complainant failed to prove by cogent and credible evidence supported by opinion of an expert automobile/mechanical engineer that the vehicle suffers from inherent manufacturing defect.  It is also submitted that to redress the grievances of the complainant, a thorough inspection of the vehicle was carried out by the dealership- OP No.1 and on the basis of their observations, the water entry was observed in the engine resulting into engine blockage and any repair/replacement job would be carried out on payment basis.  It is pleaded that after the claim of complainant was repudiated by OP No.3, he tried to allege manufacturing defect in the vehicle.  Denying other allegations, the OP NO.2 has prayed for dismissal of the complaint.

 

         The OP No.3 - IFFCO-TOKIO General Insurance Company Ltd.  has filed written version and while admitting the factual matrix of the case stated that besides the standard motor car policy, the complainant has also opted for additional covers like Depreciation Waiver, Engine and Gear Box Protection Cover, Loss of Key Cover and Return to Invoice Value and paid additional premium.  It is submitted that from the averment of complainant, it is clear that the vehicle stopped on its own without any external cause and hence it is mechanical failure of the vehicle, which is not covered under the policy in question.   It is also submitted that the said loss to the engine is neither covered by the standard policy nor by an add-on cover engine and gear box protection cover opted under the insurance policy by the complainant.  It is further submitted that the coverage provided under the engine and gear box protection cover provides cover to the engine and gear box only arising out of water ingression or leakage of lubricant oil due to accidental external means.  It is pleaded that the engineers of OPs No.1 & 2 did not explain the cause of engine seizure. It is also pleaded that the complainant in a statement to the Surveyor mentioned that the vehicle was neither struck with any stone nor any water entered the engine (Ann.OP-3/2).  It is stated that the Surveyor deputed by Op No.3 did not find any circumstances leading to engine seizure due to hitting of some stone underneath the engine or entry of water in the engine.  It is also stated that the claim was rightly repudiated as it does not fall within the purview of the insurance policy.  Pleading no deficiency in service and denying all other allegations, the OP No.3 has prayed for dismissal of the complaint.

 

3]       Replications have also been filed by complainant thereby controverting the assertions of the OPs as made in their reply.

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the contesting parties and have perused the entire record including written arguments.  

 

6]       Admittedly the insured vehicle was breakdown during the policy period on 26.8.2020; towed to OP No.2-Joshi Automotive Private Limited, for repairs and the claim was repudiated by OP Insurance Company vide letter dated 27.11.2020 (Ann.C-22) on the ground that the same occurred due to failure of internal engine part. It is undisputed that the vehicle is lying unrepaired with OP No.1 since 26.8.2020.

 

7]       The stand of OP No.1 is that the engine of the vehicle in question was found to be blocked due to ingress of water.

 

8]       On the contrary, the OP No.3-Insurance Company stated that the vehicle had breakdown due to mechanical failure of internal part of vehicle, therefore, it is not covered under the policy nor under add-on cover of engine protection, so the claim was rightly repudiated.

 

9]       Now the only question to be determined is whether the engine of the car in question breakdown/seized due to ingress of water as alleged by OP No.1 (Authorized Service Center) or mechanical failure of its internal parts as alleged by the Insurance Company.

 

10]      In our opinion, once the OP No.1 specifically stated that the engine was damaged due to Hydrostatic Lock due to ingress of water then the onus shifted upon the OP Insurance Company to prove the alleged mechanical failure of engine due to its internal part and not on account of ingress of water or external impact.

         However, the OP Insurance Company except bald assertions regarding failure of the internal part of the vehicle, failed to bring on record any cogent and reliable evidence in the shape of the report of some Technical Expert to this effect.  A hearsay of the OP Insurance Company that it was a internal/mechanical failure without there being any concrete & credible evidence is not enough to accept their version.

 

11]      Likewise the opinion of the Surveyor that the loss has occurred due to failure of internal engine part, in the absence of any expert report from the field of mechanical or automobile cannot be accepted.  No doubt the Surveyor is competent to assess the loss, but at the same time, he is a not a technical expert person to reach at such conclusion.

 

12]      It is worth mentioning here that the Expert Opinion has been received from The Punjab Engineering College, Chandigarh vide Memo No.PEC/MED/115, dated 19.1.2023 (Ann.X), in compliance to order dated 19.12.2022 passed by Hon’ble State Commission in R.P. No.18 of 2022, which has been duly singed by Prof. Sanjeev Kumar, Professor & Head, Mechanical Engineering Department, Punjab Engineering College (Deemed to be University), Chandigarh, Dr.Ankit Yadav, Assistant Professor and Sh.Gopal Dass, W.I., wherein it has been reported that “After visual inspection by the committee, no traces or evidences were found for leakage of oil from beneath the body of the vehicle.”  Thus one thing is clear that the engine of the vehicle in question was not damaged due to leakage of oil from beneath. 

 

13]      Pertinently the car in question was insured having engine protection cover. The OP No.1 specifically mentioned in reply that water was found inside the engine and the same was damaged due to Hydrostatic Lock (a specific type of Automotive Engine Damage that occurs when the water enters the engine and is compressed in one or more cylinders) and as such it is not a manufacturing defect, rather falls under insurance cover.

 

14]      Once the company i.e. OP No.1, who is having a team of technical/mechanical engineers/experts, has arrived at a conclusion that the engine was damaged due to Hydrostatic Lock, then the stand of the OP Insurance Company as well as its Surveyor that the loss has occurred due to mechanical failure without external impact or ingress of water, has no relevance in the absence of any reliable evidence.

         More so, the Expert Opinion/Report (Ann.X), referred above, neither ruled out the possibility about the damage to the engine of the car in question due to ingress of water nor any manufacturing defect has been held or specified.    

 

 

15]      The Hon’ble Apex Court in New India Assurance Company Ltd Vs Pradeep Kumar (Civil Appeal No 3253 of 2002, dated April 9, 2009, observed that even though the assessment of loss by an approved surveyor is a pre-requisite for settlement of claim, yet the surveyor’s report is not the last and the final word. Even though it is the basis for settlement of claim, it is not sacrosanct and it is not binding on the insurer or the insured.

16]     It is opined that what is the spirit of Insurance Policy, should be kept in mind by the officials dealing with the genuine claims of the sufferers and the same should not be rejected on methodological grounds in a mechanical manner. The tendency of Insurance Companies in rejecting genuine claims is the reason of increasing litigation between the insurers and the insured/their legal heirs.

17]      The repudiation made by the OP-Insurance Company regarding genuine claim of the complainant has been made without application of mind.

         In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims.

 

18]      In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

    “It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

         Thus it is established that the OP No.3 Insurance Company has illegally repudiated the genuine claim of the complainant, which certainly caused loss, harassment and mental agony to the complainant. The complainant has also been deprived of the comfort of a personal car and could not utilized his vehicle during all these years since August, 2020 as the vehicle is still lying unrepaired with OP No.1 due to illegal repudiation done by OP Insurance Company.

  

19]      Taking into consideration the above discussion and findings, we are of the opinion that the deficiency in service has been proved on the part of OP Insurance Company i.e. OP No.3. Therefore, the complaint stands allowed with following directions:-

a)  The OPs No.1 & 2 are directed to repair the vehicle in question by replacing necessary parts, if any, making the vehicle roadworthy forthwith and the OP No.3 (Insurance Company) shall pay all such charges to OPs No.1 & 2 forthwith.   

c)  The OP No.3 is directed to pay an amount of Rs.One lakh to the complainant towards compensation for the harassment, mental agony and loss suffered by him due to its deficient service;

d) The OP No.3 shall also pay litigation cost of Rs.15000/- to the complainant.

e)  The OPs No.1 & 2 shall not claim any miscellaneous or parking charges from the complainant in respect of the vehicle in question.

         This order shall be complied with by the Opposite Parties No.1 to 3 within a period of 45 days from the date of receipt of its certified copy.    

         In case of failure on the part of OP No.3 to reimburse the repair charges, as raised by OPs No.1 & 2, then it shall be liable to pay such amount to them or to the complainant, as the case may be, along with interest @9% p.a. from the date of invoice or payment till its realization.

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

Announced

6^th July, 2023

                                                                                       Sd/-

 (SURJEET KAUR)

PRESIDING MEMBER

 

Sd/-

(B.M.SHARMA)

MEMBER