PRESENT: Sh.Harish Bansal, Adv. for the Complainant.

         Sh.R.C. Gupta, Adv. for OPs.

PER ASHOK RAJ BHANDARI, MEMBER

        Concisely put, Complainant is a Private Ltd. Company, incorporated under the Companies Act and is doing business of manufacturing wheat products, besides other businesses detailed in the Memorandum of Association (Annexure A-1). Complaint No. 1 purchased a Toyota Corolla car bearing Regn. No. CH-03-W-1000 for his personal use and also for the use of other Directors of the Complainant Company, but the vehicle was purchased in the name of Complainant No. 2 and got the same comprehensively insured from the OPs vide Policy No. 420203/31/07/6100002159, valid from 12.10.2007 to 11.10.2008 (Annexure A-4). It was averred that on 4.8.2008, in the evening, while the Complainant No. 1 was driving the vehicle, it got stuck due to heavy rain in Sector 19, Chandigarh and stopped at once and ignition was off. It was later on towed to the office of the Complainant. On the next day, the Complainant informed the OP and at about 1.00 PM, Authorized Dealer – M/s EM PEE Motors Ltd. towed the vehicle to their Company Workshop and gave the estimate of repairs/replacements for Rs.4.00 Lacs, which was duly informed to the OPs with a request to appoint a Surveyor, vide letter dated 5.8.2008 (Annexure A-5). Pursuant thereto, one Mr. Sohal of Esquire Technocrats was appointed as Surveyor who inspected the vehicle on 6.8.2008. The Complainant completed all the formalities and submitted the required documents, as per his demand. The Surveyor okayed for repair of the vehicle. Thereafter, his behaviour was not proper and he was not responding to the calls given by the Dealer and the Complainant, due to which, the repair was being delayed, which fact was informed to the Divisional Manager of the OP vide letter dated 11.8.2008 (Annexure A-6), on account of which the Surveyor got annoyed and threatened that he would not allow the repair bill to be passed. The vehicle remained under repair with the authorized Dealer of the OP Company and was ready for delivery on 10.9.2008. The Complainant also informed the OP, vide letter dated 10.09.2008 that the vehicle would be collected at 3.00 PM on 10.09.2008, pursuant to which one Mr. Sundeep Arora, Surveyor conducted final survey after repairs and subsequently, the Complainant received the repaired vehicle from the Dealer and obtained invoice for Rs.1,43,874/-, which amount was paid by him to the Dealer. The copy of the letter dated 10.09.2008, invoice/bill, towing bills and receipt are attached as Annexures A-7 to A-10. After obtaining the repaired vehicle, the Complainant informed the OP vide letter dated 11.09.2008 (Annexure A-11) and submitted the original bill, receipt & salvage etc. Finding no response from the OP, he again sent letter through Regd. Post, which is at Annexure A-12. The OP wrote a letter dated 20.9.2008 (Annexure A-13), demanding the return of damaged parts to their office. It was alleged that the Complainant was surprised to find that only few parts for replacement were sanctioned by the OP/Surveyor. The Complainant again wrote letters dated 10.10.2008 and 11.20.2008 to the OPs and submitted the required documents in original and also requested the OP to know the reasons asking him to surrender only three parts instead of 26 part/items replaced during repair of the vehicle. The OP again sent letter dated 13.10.2008 (Annexure A-16), demanding only three parts. Thereafter, the Complainant made representation and had even issued legal notice to OPs. It was also alleged that the OP at the first instance, allowed the Dealer to repair the vehicle and when the vehicle was finally repaired and the bill was obtained, only then started saying that the vehicle was damaged/stuck due to some other reason and not due to heavy rain. The Complainant had also written letter earlier dated 11.9.2008 to the Dealer, asking for reason for damage of vehicle, in reply thereto, M/s EM PEE Motors Ltd. who are technical experts, gave detailed opinion dated 22.9.2008 (Annexure A-18) and the reason for the damage to the engine of the vehicle was given purely due to the entry of water into the engine. They also explained that the behaviour of the Surveyor was totally biased and unprofessional. The Complainant, thereafter, served a legal notice dated 25.11.2008 (Annexure A-19), but to no avail. Hence, this complaint, alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice. In the end, the Complainant has prayed for the following reliefs:-

a)  The OPs be directed to settle and pass the genuine claim of the Complainant for Rs.1,45,074/- (Rs.1,43,874/- invoice amount and Rs.1,200/- towing charges) along with interest at the rate of 15% on the above mentioned amount, which has been withheld by OPs.

b)  The OPs be directed to pay the damages to the tune of Rs.50,000/- for committing unfair trade practice and deficiency in service and for causing mental harassment and agony.

c)  The OPs be directed to pay the future interest @15% on the above mentioned amount from the date of filing of the complaint uptill the date of final actual realization.

d)  The OPs be directed to pay the litigation charges to the tune of Rs.11,000/- towards the unwarranted and uncalled for litigation.

2]      Notice of the complaint was sent to OPs seeking their version of the case. 

3]      OPs No. 1 & 2, in their joint written statement, while admitting the factual matrix of the case/reply, pleaded that the vehicle in question was being used for commercial purpose and hence, the present complaint was excluded from the scope of Consumer Protection Act, 1986 and was liable to be dismissed. On merit, it was submitted that on receipt of the information, OPs immediately deputed Mr. Sohal of M/s Esquire Technocrats, Surveyors & Loss Assessors of A- Category to find the facts and assess the loss in the right earnest. Later on, Shri Sandeep Arora, another Surveyor was appointed for re-inspection of the vehicle after its repairs as per settled norms and practices. The Survey Report dated 17.9.2008 is at Annexure R-5. It was asserted that the Complainant had failed to take due and reasonable care of the car and extensive damage was caused to the car due to pure negligence of the insured himself. The insured admittedly entered his car in question in water, knowing fully well that the same can stop the engine and further after stopping of the engine, carelessly and deliberately started ignition time and again, which further caused extensive consequential damage to the engine of the car, which are clearly not payable by the OPs as per terms and conditions of the Insurance Policy and hence, the Complainant’s claim is not tenable. The Complainant has been already reimbursed the amount, which the Complainant was actually entitled to. He had himself breached the terms and conditions of the policy of insurance and the same amounts to violation and deliberate breach on his part and, hence, the OPs were not liable to pay any further compensation as claimed in the complaint. Moreover, the Insurance Company, on the expert and independent advice of an experienced and duly licensed Surveyor & Loss Assessor, empanelled by the Insurance Regulatory and Development Authority of India, after due application of mind and considering all the aspects of the matter, had already made payment of Rs.20,528/- vide Cheque No. 129616, dated 16.12.2008, in full and final settlement of the claim against loss dated 4.10.2008, having accepted the same without any qualification or protest and with consent of the insured, the Complainant had waived its rights of claiming any further amount from the OPs. All other material contentions of the Complainant were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint with exemplary costs.

4]      Parties led evidence in support of their contentions.

5]      We have carefully gone through the entire case thoroughly, including the complaint and the relevant documents tendered by the complainant / OPs. We also heard the arguments put forth by the learned counsel for the Complainant and OP No. 1 & 2. As a result of the detailed analysis of the entire case, the following points/issues have clearly emerged and certain conclusions/arrived at, accordingly:-

i]  The basic facts of the case in respect of the Complainant having purchased a Toyota Corolla car bearing Regn. No. CH-03-W-1000 for his personal use and other Directors of the Complainant Company and that the vehicle was comprehensively insured from the OPs vide Policy No. 420203/31/07/6100002159, valid from 12.10.2007 to 11.10.2008 and further that the said car got stuck in water in Sector 19, Chandigarh due to heavy rains, while it was being driven by Complainant No.1, have all been admitted. It is also a fact that the OPs were informed by the Complainant, the next day and they appointed a Surveyor on the subsequent day i.e. 06.08.2008, who inspected the vehicle and submitted a survey report. Thereafter, the Complainant got the vehicle repaired from the authorized dealer and obtained an invoice of Rs.1,43,874/-. The said amount was paid by the Complainant himself to the Dealer. In addition, the Complainant had paid a sum of Rs.1200/- as Towing Charges for towing the vehicle from the place of occurrence of the incident to his premises, after it was stuck due to heavy rains.

ii] The main dispute between the parties is only in respect of the quantum of insurance claim to be paid by the OPs to the Complainant; whereas, the Complainant has made a claim of Rs.1,43,874/- + Rs.1200/- as towing charges, as per the invoice prepared by the Authorized Dealer, on the contrary, the OPs say that they have paid Rs.20,528/- and claimed that this amount was paid in full and final settlement of the insurance claim against the loss caused to the vehicle on 04.08.2008 and that the Complainant having accepted the same without any qualification or protest has waived his rights of claiming any further amount from the OPs.

iii] The main focus and emphasis put by the OPs for making the assertion that the only admissible amount payable to the Complainant was Rs.20,528/- and not Rs.1,43,874/-, has been the report of the Surveyor i.e. Mr. Sohal of Esquire Technocrats [Annexure R-5]. The Surveyor, in his report, at page 2, has mentioned the cause of accident and also given calculations in respect of the Net Assessed Loss as Rs.20,578.33P with Salvage valued at Rs.50/- and Net Rs.20,528.33P. The relevant extract of the report is reproduced hereinbelow:-

Cause of Accident: As explained verbally and has filled in the claim form by the insured’s representative Sh. Vinod Mittal, who was behind the wheels at the time of loss is reproduced as under:

“Because of the heavy rain flooding took place and our car stopped due to flooding, lot of other cars were also struck. I tried to start but failed and then when in the morning water level came down, we towed the car to our premises. Rain water had entered the car”.

    On page 5 of the Survey Report, the Surveyor has given his own logic and reasoning as to why the vehicle has suffered much greater and heavier damage than it would have, had the Complainant taken due care not to restart the engine by cranking it again and again, which according to him ultimately led to consequential loss and as per the terms and conditions of the Insurance Policy, the company shall not be liable to make any payment in respect of the consequential loss. The relevant extract of the recommendations of the Surveyor are quoted below:-

“Instead of calling the recovery help line to tow the vehicle to a motor garage, the person driving, Sh. Vinod Mittal tried repeatedly to restart the engine by cranking it. Due to this reason, the water entered into the other cylinders also and caused more damages to the other connecting rods and even broke the one connecting rod into two pieces which further damaged the engine cylinder block.

Damage to other connecting rods and to the engine cylinder block cannot take place until and unless the person behind the wheels does not try to restart the engine by cranking it again and again and following that the water sucked in by the engine caused the damages to the other connecting rods and engine cylinder block.

Had the person driving the vehicle not tried to restart the engine by cranking it, the loss would have been limited up to one connecting rod only. Further loss can only be explained as consequential loss and not accidental loss/damage.

Keeping in view the above facts we are of the opinion that the loss of only one connecting rod, which was initially damaged is payable under standard private motor car insurance policy upon which, he claim has been made. To replace the connecting rod, piston rings set and gasket kit have to be replaced. The further damages which were caused to the other engine parts are consequential damages which do not come within the scope and preview of the standard private motor insurance policy which read as:

The Company shall not be liable to make any payment in respect of:

(a) Consequential loss, Depreciation, wear & tear mechanical and electrical breakdown, failure or breakages…………”

iv] From the detailed analysis of the entire case, including the pleadings and averments of the parties and also the relevant documents and papers submitted by them and especially, the Survey Report produced by the OPs, it is quite clear that the Surveyor has undoubtedly gone beyond his jurisdiction and brief. The duty of the Surveyor is only to assess the loss and certainly, not make any extraneous recommendations as to whether a particular loss is payable by the Company or not. Secondly, the opinion of the Surveyor stating that the loss of only one connecting rod, which was initially damaged, is payable, is just not tenable. He further says that due to the consequent damage to the vehicle water entered into other cylinders and also caused more damage to other connecting rods and even broke one connecting rod into two pieces which further damaged the engine cylinder block. Therefore, the engine of the car got damaged and stopped, which is technically known as ‘hydro lock’ and all this happened because the Complainant was trying to restart the engine again and again. Had he not done so, there would have been only minimal damage to the engine and accordingly, the loss claimed would have been much lower than at present. It is extremely difficult to draw a line as to how many times the Complainant tried to restart the engine and thereby caused further/ extensive damage to the vehicle. As per the Complainant, as the vehicle in question got stuck due to heavy rains in Sector 19, Chandigarh, it stopped at once and ignition was off. Later on, when the water level came down, the vehicle was towed to the office of the Complainant. Next day at about 1.00 PM, he informed the OP about the incident. The surveyor has not given any documentary evidence as to how many times the Complainant tried to restart the vehicle or that there was continuous cranking by the Complainant to restart the car and at what point of time, how much loss could occur to the engine and why. Apart from the lone survey report, there is no other expert opinion to pin point the additional damage to the engine of the car on account of the alleged cranking by the Complainant, which has been alleged to be deficiency of service on the part of the Complainant by the OPs.

v]  In rebuttal of the claim made by the Surveyor that the loss to the engine of the car occurred because of cranking by the Complainant, the Complainant has submitted the expert opinion dated 22.09.2009, given by the manufacturer of the car, conveyed through Authorized Dealer : EM PEE Motors Ltd., Chandigarh. The relevant extract of the expert report given by Sh. A.S. Mangat, General Manager (Service) of the Manufacturer – M/s Toyota car Company, which was communicated to the Complainant through a letter, is reproduced below:-

“1. The said vehicle was towed to our Workshop on 22.7.2008 and stated that the same stalled due to heavy water logging. In such cases, if the water level is very high, it enters through the exhaust pipe and damages the engine.

2. The Insurance Company was informed of the same and Mr. Sohal was deputed to investigate the damages. As per his guidance and instructions various actions were taken to determine the presence of water in the engine, like drainage of engine oil to determine the colour of it (which was whitish in colour and this happens only when water mixes with oil) opening of Air Filters and removal of total silencer.

3. Mr. Sohal insisted on cranking of the engine inspite of my objection and the same was done in front of you. It was not once, but twice when the same was done. The engine did crank but emitted a very odd sound and I had to forcibly ask him not to do the same as it could cause a lot of damage to the engine.

4. On dismantling of the engine, it was found that three of the connecting rods had got bent and one was broken which led to the damage of the cylinder block. The damage to the engine was purely due to the entrance of water and it has been found in a number of cases that this type of damage is possible.

5. The behaviour of Mr. Sohal was totally biased and unprofessional.” 

vi] From the above, it is quite clear that there are two contradictory opinions, which are poles apart in fixing the quantum of damage caused to the vehicle. It appears that Mr. Sohal – the Surveyor has not given a fair, impartial and independent assessment of the loss. His whole focus has been that the Complainant, when faced with the situation of stoppage of the car in the midst of heavy rains, continued to re-start the car by repeated cranking, which caused a heavy damage to the engine than it would caused otherwise. There is no authority or any expert opinion or any other evidence written or oral to prove as to how many times the Complainant had actually tried to re-start the engine by cranking. Even otherwise, it will be almost impossible to draw a line between the number of times a person should try to restart the car before it gets damaged to a larger extent  than otherwise. More so, as per the Expert Report given by the General Manager (Service) of the Manufacturer, it was the Surveyor himself who insisted upon cranking the engine not once, but twice, which caused further damage to the car engine. Thus, the Surveyor can’t blame the Complainant for causing extensive damage to the car. Further, as per the pleadings/ averments made by the Complainant, which have been duly admitted by the OPs, after the entire repair work was finished at the Workshop of the Authorized Dealer, the car was again re-inspected by another Surveyor – Sh. Sandeep Arora, appointed by the OPs. The Survey Report of this Surveyor has not been placed on record. It is obvious that when the second Surveyor conducted the re-inspection of the repaired vehicle, he would have taken into account the final invoice prepared by the Dealer for Rs.1,43,874/- and in case, he had any objection to this invoice, he would have said so in his report. The OPs have failed to bring forth any such report of this Surveyor or any objection raised by him in respect of the repairs carried out at the Workshop of the Authorized Dealer. It is also a fact that although the independent surveyor is an approved and licensed professional, who is expected to submit a totally independent and fair report, but it is also a plain truth that he is on the pay rolls of the Insurance Company, which can adversely affect his independence and impartiality to an extent.

vii] In view of the aforesaid analysis of the entire case, it is quite clear that although the Surveyor’s Report is a very important and significant document, which cannot be just brushed aside and rejected, yet the Surveyor’s Report is not so sacrosanct or conclusive that it cannot be departed from and it is not the last and final word on the subject. In support of this view, the following authorities/ judgments are reproduced below: -

(A) “New India Assurance Company Ltd. Vs. Pradeep Kumar, 2009 CTJ 599 (SC)(CP).  Accident of vehicle, fell into a Khud 300 ft deep below the road. Respondent claimed Rs.1,58,409/- for repairs and interest paid to the bank for obtaining loan from the Bank for making payment to repairer – Insurer offered Rs.63,771/- based on assessment made by the Surveyor – District Forum awarded/ granted Rs.1,58,403/- - SC/NC confirmed. The Supreme Court held that the Surveyor’s Report is not the last and final word for settling insurance claim. It is not that sacrosanct or conclusive that it cannot be departed from – Appeal dismissed being devoid of any substance.”   

(B) “Oriental Insurance Vs. Mehar Chand, RP No. 3499 of 2009, decided on October 9, 2009 (NC) - Pointing out that the Surveyor had given no plausible explanation for disallowing the estimate of the authorized garage, the National Commission held that the State Commission was fully justified in setting aside the Surveyor’s report and making its own assessment of what needs to be paid by the insurer – which was Rs.2,20,699/- along with 9 per cent interest from the date of filing the complaint till the date of payment of the amount, and also costs of Rs.2,500/-.”

    There is nothing on record to show that the OPs have already paid a sum of Rs.20,528/- to the Complainant or that the said amount has been accepted by the Complainant in full and final settlement of the insurance claim. As such, the Complainant is clearly entitled to the full claim of insurance to the extent of Rs.1,43,874/- + Rs.1200/- as Towing Charges.

6]      Keeping in view the foregoings, it is our considered opinion that the present complaint carries a lot of weight, substance and merit & deserves to be accepted. There is definitely a serious deficiency of service on the part of the OPs in not paying the claim to the Complainant in full in regard to the loss caused to his car due to heavy rains and entry of water into the engine. We, therefore, decide the complaint in favour of the Complainant and against the OPs. The OPs are directed to make the following payments, jointly and severally, to the Complainant:-

i] To pay Rs.1,45,074/- (Rs.1,43,874/- invoice amount and Rs.1,200/- towing charges), which has been withheld by OPs so far for no concrete and solid reasons.

ii] To pay a compensation of Rs.30,000/- to the Complainant for causing physical harassment, mental agony and pain, on account of non-settlement of the insurance claim for a long time and without reason.

iii] To pay litigation costs of Rs.5000/- to the Complainant.

9]      The aforesaid order be complied with by the OPs within a period of six weeks from the date of receipt of the certified copy of the order, failing which, they shall, jointly and severally, pay the sum of Rs.1,75,074/- along with interest @18% per annum from the date of filing of present complaint i.e. 18.12.2008, till the date of realization, besides paying the cost of litigation at Rs.5,000/-.

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

Announced

23.12.2009

MEMBER

‘Dutt’