IN THE STATE COMMISSION: DELHI

(Constituted under section 9 of the Consumer Protection Act, 1986)

Date of Hearing:19.01.2021 

Date of Decision: 28.01.2021

First Appeal No.311/2015

IN THE MATTER OF

BAJAJ ALLIANZ GENERAL INSURANCE

COMPANY LIMITED

Shivaji Marg, New Delhi-110015….Appellant

VERSUS

          M/S MUDRA ELECTRONICS LIMITED

          LG-4,5,6 and 7, Somdutt Chambers-II,

          Bhikaji Cama Place,

          New Delhi-110066                                                   ....Respondent

HON’BLE  SH. ANIL SRIVASTAVA, MEMBER 

1.   Whether reporters of local newspaper be allowed to see the judgment? Yes     

 2.   To be referred to the reporter or not?                                                        Yes

Present:       Sh. Virender Prabhakar, Counsel for the Appellant

                   Sh. Kshitij Sharda, Counsel for the respondent

          ANIL SRIVASTAVA, MEMBER

JUDGEMENT

1.           The order dated 03.03.2015 passed by the Consumer Disputes Redressal Forum-VI in CC-1078/87 in the matter of M/s Mudra Electronics Limited versus M/s Bajaj Allianz General Insurance Co. Limited holding the insurer guilty of deficiency and directing them to pay to the insured an amount of Rs. 1,42,319/- alongwith 9% interest from the date of claim till realisation and Rs. 75,000/- as harassment and litigation expenses, has been assailed in this appeal before this Commission filed by the insurer, for short appellant under Section 15 of the Consumer Protection Act 1986, the Act, against the complainant before the forum, hereinafter referred to as respondent, praying for setting aside the order.
2.           Facts of the case necessary for the adjudication of the appeal are these.
3.           The appellant/insurance company had issued a private car package policy bearing number OG-07-1105-1801-00002339 in respect of vehicle bearing registration no. DL-9CG 0866 for the period from 27.09.2006 to 26.09.2007 in favour of the complainant/respondent against receipt of premium. The liability of the appellant/insurance company in case of any damage or loss of vehicle was subject to the terms and conditions of the insurance policy. It was the case of the complainant/respondent that on 17.06.2007 the director of the complainant company was driving the insured vehicle from Delhi to Faridabad. There was heavy rain and water logging at Sector-19 Faridabad and on account of that, the insured vehicle came to a halt. The insured vehicle was towed to M/s Silver Stones Service Station. The complainant/respondent informed the appellant/insurance company on 21.06.2007 and lodged a claim. An IRDA approved surveyor, M/s Insurance Engineers Corporation was detailed to inspect the vehicle and to assess the loss. The surveyor inspected the vehicle for the first time at the workshop of M/s Silver Stones Motors on 21.06.2007 taking the photographs of the vehicle from the exterior but could not take the photograph of the interior since keys of the vehicle were reportedly misplaced by the repairers. The surveyor again visited the workshop on 23.06.2007 but did not find any water in the seating compartment and the carpets were all found dry. The oil was checked with the help of Dipstick but no water was found in the engine oil, nor were traces of water found in the sumps.
4.           The surveyor thereafter submitted its report on 06.07.2007 and based on the report the insurance company vide letter dated 06.07.2007 sought the clarification from complainant/respondent as to why the claim towards repair of vehicle in question since does not fall within the ambit and scope of the insurance policy be not lodged. This led to filing of a complaint before the District Consumer Dispute Redressal Forum, District-VI (New Delhi) for the redressal of their grievances and the said complaint despite being contested by the insurer on the ground that there was no external impact to the vehicle, no signs of the vehicle being fully or partially submerged in water, no signs of water in the engine, engine oil or any of the engine parts and the damage to the vehicle was only on account of mechanical failure, was allowed, leading to filing of an appeal on the ground that the impugned order is contrary to law and facts of the case and is liable to be set aside. Secondly, the District Forum failed to appreciate that there was no deficiency in service on the part of Appellant/Insurance Company. Thirdly, the District Forum grossly erred in observing that the OP had arbitrarily denied the claim taking a shelter of mechanical defects of engine.
5.           Respondents were noticed and in response thereto they have filed their reply resisting the appeal, denying the averments made either in the appeal or in the grounds and reiterated that the insurer not approving the claim has been deficient in meeting their obligation and accordingly prayed for dismissal of the appeal and for upholding of the orders passed by the District Forum.  
6.           This matter was listed before this Commission for final hearing on 19.01.2021 when the counsel from both sides appeared and advanced their arguments, the appellant for acceptance of the appeal and for dismissal of the complaint as there existed no infirmity in their decision repudiating the claim and the respondents for upholding of the orders passed by the District Forum. I have perused the records of the case and given a careful consideration to the subject matter.
7.           I may in the first instance advert to the letter dated 06.07.2007 addressed to the insured. The letter is reproduced as under:-

This has reference to the above referred insurance claim towards repair of your vehicle DL9CG0866. In this regards we wish to draw your kind attention that loss reported by your good self does not fall under the ambit and scope of insurance policy terms and condition and hence can only be attributed to a mechanical breakdown of the machine based on the observation made below:-

1. There is no external impact to the vehicle as confirmed by the survey report as well as from the photographs of the vehicle in question.
2. There is no sign of vehicle fully or partially submerged in water.
3. There is no sign of water in engine oil, or engine or its parts nor any corrosion marks were observed.
4. Water being sucked from the air inlet by a running engine can be ruled out as follow:-

• Engine will also stop in the absence of fresh air if the exhaust is blocked by water and does not allow gases to get out of cylinder as the height of exhaust pipe is lower than air inlet and electronic parts of engine.
• Water entry into the running engine is also ruled out as the inlet circuit is sealed by the air filter, which is design to allow only air to pass and not water.
• There are additional safe guards given such as drain holes and upward movement of air column which will not allow water to enter from air inlet and cylinders in the running engine.

5. Water is not combustible hence engine cannot run on water even for fraction of second.
6. Water is also not explosive in nature and hence cannot cause bursting of engine or braking connecting rods or internal parts of the engine.
7. Vehicle in question is designed and manufactured by a well known company of the world repute. Needless to mention that manufacturer has taken all the necessary precaution to coop up such situation including passed of vehicle through low level water. This can also be concluded based on the user’s manual where there is no such warning or guidelines are given as the vehicle is well capable of meeting such conditions.

Therefore please let us know within seven days from the date of this letter as to why the claim should not be denied.

8.           The policy obtained for the period from 27.09.2006 to 26.09.2007 was comprehensive. The relevant portion of the policy are indicated as under:-

GEOGRAPHICALLY AREA

LIMITS OF LIABILITY:

Under Section-II-1(i) of the policy:- Death of or bodily injury: Such amount as is necessary to meet there requirements of the Motor Vehicle Act 1988.

Under Section-II-1(ii) of the policy:- Damage to Third Party Property: Rs. 75,00,00/-

LIMITATION AT TO USE:

The policy covers use of the vehicle for any purpose other than: Hire or reward, Carriage of goods (other than samples or personal luggage), organised racing, Pace making, Speed testing, Reliability trials, any purpose in connection with Motor Trade.

Any person including the insured: Provided that a person driving holds an effective driving licence at the time of the accident and is disqualified from holding or obtaining such a licence. Provided also that the person holding an effective learner’s licence may also drive the vehicle and that such a person satisfies the requirements of Rule 3 of the Central Motor Vehicles Rules, 1989.

IMPORTANT NOTICE:

The insured is not indemnified if the vehicle is used or driven otherwise than in accordance with this schedule. Any payment made b the company by reason of wider terms appearing in the certificate in order to comply with the motor vehicle act, 1988 is recoverable from the insured see the clauses headed “AVOIDANCE OF CERTAIN TERMS AND RIGHT OF RECOVERY.”

9.           On perusal of the terms of the policy it is found that denying the claim was not proper. It was irregular. Infact no new condition can be imposed after the policy was obtained. The claim preferred was within the parameters of the policy. The insurance, like any other contract, is a contract with which both the insurer and insured are bound.
10. The Hon’ble Supreme Court of India in the matter of Oriental Insurance vs. Sony Cheriyan as reported in (1999) 6 SCC 451 is pleased to hold as under:-

The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy.

11. Having regard to the discussion done and the legal position explained I am of the considered view that there exists no infirmity in the orders passed by the District Forum directing the insurer to pay an amount of Rs. 1,42,319/- with interest at the rate of 9% and to this extent the order is upheld. However orders to the extent of compensation of Rs. 75,000/- for harassment and litigation expenses, interest at the rate of 9% having been awarded which would take care of the compensation, seems to be on the higher side and this is accordingly set aside.
12. Ordered accordingly.
13. A copy of this order be forwarded to the parties to the case free of cost as is statutorily required. A copy of this order be forwarded to the District Forum for information.
14. File be consigned to records. Records received from the District Forum be returned.

(ANIL SRIVASTAVA)

MEMBER

PRONOUNCED ON

29.01.2021

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