Chandigarh

DF-I

CC/433/2014

Joshi Autozone Pvt. Ltd. - Complainant(s)

Versus

M/s Tata Aig General Insurance Co. Ltd. - Opp.Party(s)

Rajesh Verma

22 Jul 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

============

Consumer Complaint  No	:	CC/433/2014
Date  of  Institution	:	04/07/2014
Date   of   Decision	:	22/07/2015

 

 

 

 

 

 

Joshi Autozone Private Limited, presently situated at Plot No.41, Industrial Area, Phase-II, Chandigarh, through its Chief Operating Officer Shri Ashok Sharma.

 

…........... Complainant.

 

Vs

 

[1]  M/s TATA AIG General Insurance Company Limited, SCO 232-234, Sector 34-A, Chandigarh, through its Regional Manager/ Branch Manager.

 

[2]  M/s TATA AIG General Insurance Company Limited, Registered Office: Peninsula Corporate Park, Nicholas Primal Tower, 9^th Floor, Ganpat Rao Kadam Marg, Lower Parel, Mumbai – 400 013, through its Managing Director.

….......... Opposite Parties  

 

 

BEFORE:   SH.P.L. AHUJA               PRESIDENT

          MRS.SURJEET KAUR             MEMBER

          SH. SURESH KUMAR SARDANA     MEMBER

 

 

For Complainant	:	Sh. Rajesh Verma, Advocate.
For OPs	:	Sh. Rajneesh Malhotra, Advocate.

 

PER SURJEET KAUR, MEMBER

 

 

          Succinctly put, the Complainant company i.e. M/s Joshi Autozone Pvt. Limited purchased one Mercedes Benz C-230, bearing Regn. No. CH-04-K-4483, for the personal use of its Director and Chief Operating Officer and got the same duly insured with the Opposite Parties for the period 22.08.2011 to 21.08.2012, by paying the premium of Rs.42,598/-. On 7.7.2012, while picking one of the employees of the company from his residence, the said vehicle stopped in the water on the main road at Chandigarh. The claim was reported to Opposite Party No.1 for payment of claim under the policy, upon which M/s Pee Kay and Co. was deputed as Surveyor, who inspected and prepared an estimate of Rs.20,73,555/-. However, the Opposite Parties vide letter dated 30.07.2012 showed their inability to pay the claim, on the ground that there was no external impact to the vehicle or the engine (Annexure C-4). As the vehicle was required for the personal use of the Managing Director of the Company and Chief Operating Officer and other Officers, the Complainant got repaired the vehicle with a total amount of Rs.12,23,356.35P as per the invoice dated 18.9.2012 (Annexure C-7). Eventually, the Complainant got served a legal notice dated 20.08.2012 (Annexure C-9) upon the Opposite Parties, for payment of claim. However, instead of complying with the said legal notice, the Opposite Parties sent a reply dated 21.09.2012 on false grounds. Hence, alleging the aforesaid act & conduct of the Opposite Parties as deficiency in service, the Complainant has filed the present Complaint.

 

2.      Notice of the complaint was sent to Opposite Parties seeking their version of the case.

 

3.      Opposite Parties in their joint reply, while admitting the factual aspects of the case, have pleaded that immediately on intimation of the claim, they appointed M/s Pee Kay & Co. as Surveyor & Loss Assessor to inspect the vehicle and assess the loss. The surveyor surveyed the vehicle and gave his detailed assessment report on 27.08.2012 (Annexure A-3 colly). The surveyor observed that there was no external impact to the vehicle or engine and assessed the loss to the tune of Rs.41,601/- subject to the terms and conditions of the policy. The Surveyor wrote letter dated 30.07.2012 to the Complainant to the effect that the liability of the Company was limited only to the extent of replacement of engine oil, oil filter and flushing of engine (Annexure C-4). While admitting the receipt of legal notice dated 20.08.2012, the answering Opposite Parties submitted that the same was duly replied  clearly mentioning that the Surveyor has assessed the net liability of the company to the tune of Rs.41,601/-. Denying all other allegations and stating that there is no deficiency in service on its part, Opposite Party No.1 has prayed for dismissal of the complaint. 

 

4.      Parties were permitted to place their respective evidence on record in support of their contentions.

 

5.      We have heard the learned Counsel for the parties and have also perused the record, along with the written arguments filed on behalf of the parties.  

 

6.      The first material question that arises for determination is whether complainant falls within the definition of a ‘consumer’ qua the Insurance Company?  According to the Opposite Parties, the car in question was used by the Company in furtherance of its business i.e. for commercial purpose. Therefore, the car being used for commercial activity, the Complainant does not fall within the definition of “Consumer”. However, we feel that the above contention of the Opposite Parties is devoid of any force. 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-Company is covered under the ambit of ‘consumer’ as defined in Consumer Protection Act qua the insurance company.

 

7.      The case of the Complainant is that the Mercedes Benz C-230 purchased by it for the personal use of its Directors and Chief Operating Officer got damaged on 7.7.2013, which was duly and validly insured by the Opposite Parties. Annexure C-3 is the copy of an e-mail by the Complainant to the Opposite Parties regarding the incidence of damage of the vehicle. Subsequent to the claim preferred by the Complainant Company, the vehicle was inspected by the Opposite Parties and M/s Pee Kay & Co. was deputed as Surveyor. Annexure C-6 is an estimate of Rs.20,73,555/- which was likely to be spent on the damages caused to the vehicle and the same was denied by the Opposite Parties on the ground that there is no external impact to the vehicle or the engine, presence of water in the engine oil etc. It has been urged that the Complainant got repaired the vehicle with an expenditure of Rs.12,23,356.35 paise as per Annex. C-7. Annexure C-9 is the legal notice dated 20.8.2012 by the Complainant for the payment claim. Annexure C-10 dated 21.09.2012 is the reply to the legal notice by the Opposite Parties denying the claim based on the terms & conditions of the policy.   

 

8.      It is the admitted case of the Opposite Parties that the Complainant got his Mercedes Benz C-230 bearing Registration No.CH-04-K4483 insured with them for the period from 22.8.2011 to 21.8.2012 by paying a premium of Rs.42,598/-. The said car stopped functioning on 7.7.2012 and on the reporting of the claim, a Surveyor was deputed by the Opposite Party No.1, based on whose report the Opposite Parties showed their inability to pay the claim on the ground that there was no external impact to the vehicle or the engine. It is also admitted case of the parties that the claim was lodged with the Opposite Parties and it offered an amount of Rs.41,601/- only which is not acceptable to the Complainant.

 

9.      The stand taken by the Opposite Parties who had insured the vehicle is that upon inspection of the car in question it transpired that the loss to the engine due to ingress of water is not covered under the standard policy which the Complainant is holding in the present case (Para No.3 of the written statement). It has been further contended that the Complainant has not paid any additional premium to get the risk of water ingress into engine covered, hence the claim of the Complainant is not allowed as per the policy. It has been further urged that as per Section 1, 2 (a) of the Policy the company shall not be liable to make any payment in respect of consequential loss, depreciation, wear and tear.   

 

10.      We have given our thoughtful consideration to the above contentions. The present case is based only on the challenge to the report in which the Surveyor had disallowed the claim to the insured on the ground that loss to the engine was due to ingress of water which is not covered under the policy and there was no external impact to the vehicle or the engine. So far as the contention of the Opposite Parties regarding non-payment of any additional premium to get the risk of water ingress into engine covered is concerned, we are not impressed with the same. Neither any such terms and conditions nor any authentic document have been placed on record by the Opposite Parties to prove that the Complainant at any stage refused to pay any additional premium to them to get the risk of water ingress into engine covered.  We feel that it was the duty of the Opposite Parties to ensure that the vehicle was able to withstand rain showers which occurs every year. However, it was not brought to the notice of the Complainant that the car in question was vulnerable to water ingestion and not suitable to be driven in the rainfall.

 

11.      After going through all the documents, we do not hesitate to conclude that it is the case of damage suffered which ought to have been covered under the insurance policy and the insurance company cannot escape from the liability by simply stating that the damage is not covered under the policy. If such plea is allowed, the insurance cover would be totally useless and illusory for the insured person. Moreover, there is no such term in the policy that the damage by water ingress is excluded and there is no cogent evidence on record to show any kind of consequential/ mechanical loss to the vehicle in question. The insurance company cannot escape the liability of indemnification on the ground of such exclusionary clause. The fact that the Opposite Parties are ready to pay Rs.41,601/- to the Complainant itself shows that they admit their liability to compensate the Complainant, but the amount offered by them is too less because the Complainant had paid an amount of Rs.12,23,356.35P towards the repair of the damaged vehicle. It is noteworthy that the owner of such a luxury car or the driver would never intentionally take the car in deep water to cause damage to its own property. We are of the view that the evidence on record points out towards the deficiency in service on the part of the Opposite Parties, for which they are liable to indemnify the Complainant after deducting the depreciation amount of the various items replaced/ repaired.

 

12.      For the reasons recorded above, the present complaint succeeds against the Opposite Parties. The same is allowed. We direct the Opposite Parties, as under:-

[a]  To reconsider the claim of the Complainant and after making the necessary deductions in respect of the depreciation amount of various items (for which an amount of Rs.12,23,356.35P was spent by the Complainant) in accordance with the law, shall make the payment of the balance amount to the Complainant. It is made clear that the amount shall not be deducted on any other ground;

 

[b]  To pay Rs.30,000/- as compensation on account of deficiency in service to the Complainant; 

 

[c] To pay Rs.20,000/- as cost of litigation;

 

13.      This order shall be complied with by the Opposite Parties, jointly & severally, within one month from the date of receipt of its certified copy; thereafter, they shall pay the entire claim amount of Rs.12,23,356.35 with interest @9% per annum. Further, the compensation amount as per sub-para [b] above, shall carry interest @12% per annum from the date of institution of this complaint, till it is paid, apart from cost of litigation of Rs.20,000/-.  

 

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

 

Announced

22^nd July, 2015                                           

Sd/-

(P.L. AHUJA)

PRESIDENT

 

 

Sd/-

 (SURJEET KAUR)

MEMBER

 

 

Sd/-

(SURESH KUMAR SARDANA)                                                                                                      MEMBER