Date of filing : 08.10.2015

 IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

Present: Hon’ble Thiru Justice R.SUBBIAH       ... PRESIDENT

             Thiru.R VENKATESAPERUMAL     … MEMBER

C.C. No.264 of 2015

                               Orders pronounced on:     09.09.2022

S.Sathyaselvi,

W/o.Sivagnanam,

No.C-22, Arcot Terrace,

No.160, Arcot Road,

Vadapalani,

Chennai 600 026.                                         … Complainant

vs.

1. M/s.Lanson Motors

     Pvt. Ltd., rep. by its

Head Customer Relations Officer,

No.34, P.H. Road,

Koyambedu,

Chennai 600 107.

2/ M/s.Toyota Kirloskar Motor Ltd.,

rep. by its M.D.,

Plot No.1, Bidadi Industrial Area,

P.O. Bidadi,

Ramangara District,

Karnataka-562 109.

3. M/s.Cholamandalam MS General

Insurance Company Ltd.,

rep. by its Regional Claims Manager,

2nd Floor, Dare House,

NSC Bose Road,

Chennai 600 001.                                    ... Opp. Parties.

             For Complainant      :  M/s.L.N.Praghasam

             For OP No.1             :  M/s.Soundara Rajan

             For OP No.2             :  M/s.S.K.Srinivasan

             For OP No.3             :  M/s.M.B.Gopalan Associates

This Complaint came up for final hearing on 12.08.2022 and, after hearing the arguments of the counsels for the parties and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

O R D E R

R.Subbiah, J. – President.

             The present Complaint is filed, seeking this Commission to pass an order directing OP Nos.1 and 2 to pay to the complainant a sum of Rs.15 lakh for their deficiency in service & delivery of vehicle with inherent manufacturing defect and another sum of Rs.15 lakh towards damages for mental agony, etc. and also directing the 3rd OP to pay to her Rs.12 lakh as the full insured amount, besides costs.

             2. In brief, the case of the complainant is as follows:-

              On 31.01.2013, the complainant purchased a Toyota Innova VX 8S Model Car with SRS & Airbag protection, from the 1st OP under Invoice No.LAC130000030, dated 31.01.2013, for Rs.14,27,658.48.  The Registration Number of the said Car is TN-10 AK-4030, with chassis No.MBJ11JV4007381755 & Engine No.2KDU206113.  It was purchased under hypothecation with HDFC Bank, Aminjikarai Branch, Chennai, by availing finance to the tune of Rs.10 lakh.  The said vehicle was duly insured and the insurance is periodically renewed from time to time.  The complainant, being a home-maker, has employed a Driver, who has driving experience of about 13 years.  On 15.05.2015, after attending a marriage function, when the complainant and 4 of her relatives were returning in the vehicle in question to Chennai via  Trichy-Chennai NH from South to North, due to the negligent driving of a lorry bearing Registration No.TN-45 BC-1191 that was going in front of the complainant's vehicle to take a right u-turn without signal at Alathur Taluk Office, the Driver of the complainant's vehicle  had to suddenly take a right turn  but he lost the control, hit behind the said lorry and the vehicle toppled over.  Some of them were severely injured while others including the complainant sustained minor injuries for which they took treatment in a nearby Hospital. A police complaint was lodged by the complainant's Driver, resulting in registration of FIR No.187 of 2015 at Padalur P.S. on 16.05.2015. The car in question is a model provided with Supplemental Restraint System  (SRS) and Airbag that would protect the Driver and the passengers in the car during accidents, however, the said system controlling the Airbags did not work at the time of the accident resulting in serious injuries to the Car Driver and the Passengers travelling therein.   From the date of purchase, the vehicle has covered 43231 KMs.  On information, the Motor Vehicles Inspector inspected the Car on 16.05.2015 and, in his report, he detailed about the damages suffered by the vehicle due to the accident. Subsequently, the vehicle was taken to the workshop through a crane from Padalaur P.S. to Perambalur RTO Office and from there to the workshop of the 1st OP and, in that regard, the complainant paid a sum of Rs.14,000/- to M/s.Harish Crane Services, Trichy, vide Bill No.551, dated 17.05.2015.   The accident was immediately informed to the 3rd OP/Insurance Company, whose Surveyor, after an assessment, furnished a survey report, dated 31.05.2015, wherein, he concluded the claim settlement mode as 'total loss' and arrived at a net liability of Rs.11,89,400.04.

             The invoice shows that the SRS/Airbag need to be changed and thus, it is apparent that the 1st OP is trying to hide the inherent manufacturing defect in the SRS Airbags which did not function, resulting in both physical injury and mental agony to the complainant.  The car was not technically fit for driving and in fact, a defective one was sold to her by OP Nos.1 and 2.  The insurance claim is pending process with the 3rd OP and the complainant is yet to receive the claim amount.  Under such circumstances, she issued a notice, dated 29.06.2015, to the 1st OP, seeking a compensation of Rs.20 lakh for delivering a car with inherent manufacturing defect viz., SRS malfunctioning at the time of accident.  She sent subsequent notices, dated 15.07.2015 and 24.07.2015, calling upon the 1st and 2nd OPs to pay damages, but in vain.

             The 3rd OP sent a letter, dated 09.07.2015, to the complainant, intimating that the estimate repair and aggregate assessor loss exceeds the IDV (Insured Declared Value) of  Rs.10,37,463/- and that they have identified a salvage buyer.  The complainant sent a notice, dated 04.08.2015, to the 3rd OP stating that her claim on  IDV shall be settled in full forthwith, without any reference to selling of her vehicle which is the material object of evidence in her case to be filed against the 1st and 2nd OPs and thus called upon the said OP to settle her claim as per the insurance policy.    Consequently, the 3rd OP informed the complainant by letter dated 12.08.2015 that they have identified a wreck buyer for disposing the vehicle at a wreck value of Rs.6.85 lakhs and that the IDV, wreck value, policy excess, being Rs.10,37,463/-, Rs.6,85,000/- and Rs.2,000/- respectively, their insurance liability is only Rs.3,50,463/-. Despite being aware of the fact that the issue with the Dealer and Manufacturer of the vehicle prevails, the 3rd OP has sent a Discharge Voucher for Rs.3,50,463/-, which clearly shows that the said OP is colluding with the other OPs.  The OPs are liable to compensate the financial loss suffered by her due to their service deficiency, hence, the present Complaint, seeking to issue the direction, as stated supra.

             3. The 1st OP resists the complaint by filing a written version, wherein, among other things, it is stated thus:-

             The allegations levelled by the complainant are not based on any evidence.  The complainant had visited their service station for nearly 20 times from 09.02.2013 for servicing and for other minor repair works, but, no complaint has been made by her about the performance and services rendered by the 1st OP.  After the accident, the expert inspected the place of accident & the vehicle involved and found 'the car is damaged in front left side under chasis, this is damaged after hitting on the centre median and reflector post and it is an offset collision due to roll over and under chasis impact, this not a frontal impact.  The impact sensors are found to be intact and crush box is not damaged, this confirms the collision is not frontal.  No malfunction observed in the vehicle systems like brake, engine and SRS etc.  There are no hard marks on seat belt it conform both driver and co-driver side belt not fasten as the vehicle rolls over and criteria not met.' At the time of purchase of vehicle, the complainant was provided with owner's manual and safety book wherein the deployment conditions/work pattern of Airbags are clearly explained, stating that the Airbags are not deployed in all types of accidents and are meant to deploy only when the lives of the occupants are threatened in a severe front collision.  In this case, the SRS did not deploy at the time of accident because the deployment criteria was not met and also, no abnormality was observed in the SRS.  The front Airbags are generally not designed to inflate if the vehicle is involved in side impact or in rear end collision or in rollover accidents.  Further, Airbags do not deploy in collision where the passenger compartment is not directly impacted.  The Motor Vehicle inspection report also says "Front wind screen glass broken, front left side mudguard, bannet, dash board are damaged. Left side front and rear door damaged.  Left side body scratchy.  Left side running board damaged.  Front left side fender damaged.  Rear left side danger light and indicator broken.  Rear right side quarter glass broken. Top roof left side bend.    Front left side quarter glass broken.  Top roof left side bend.  Front left side chassis bend.  Front left side suspension damaged.  Top luggage carrier damaged." The above report makes it very clear that the car in question suffered the accident/hit on the front left side near door, thus, the Airbags did not deploy; as such, the allegation of manufacturing defect is rendered baseless and ill-founded.  It is incorrect to state that the 1st and 2nd OPs have admitted that the SRS in the complainant's vehicle did not function at the time of accident.  There being no act of omission or commission on the part of this OP, no cause of action arises to file the complaint.  The actual loss and damages suffered by the complainant are not due to any service deficiency on the part of this OP and hence, the complaint is liable to be dismissed as devoid of any merit.

             The 2nd OP has filed a written version almost on the same lines as that of the 1st OP and sought for dismissal of the complaint.

             4. The 3rd OP/Insurance Company, in their written version, inter alia states thus:-

             The complainant insured the vehicle in question with them vide Policy No.5573/97156211/000/00 for the period between 08.02.2015 and 07.02.2016 for the IDV of Rs.10,37,463/- and, at the time of insurance with them, it was a 2 year old vehicle and not a brand new one.  Premium is calculated on the IDV of Rs.10,37,463/- which represents the maximum indemnity that could be claimed under the policy, subject to deduction/adjustment of salvage value.  The insurer cannot be made answerable for the insured's grievances regarding the alleged defects in the vehicle.  This OP's liability for any accidental damage is only under the contract of insurance and not exceeding the IDV, as aforementioned.  The complainant cannot demand payment of the IDV in full and in parallel, to retain the salvage, thereby depriving the legal right of this OP to salvage upon settlement of claim for the damage to the vehicle.   Admittedly, settlement was offered by requesting for sale of the wreck so that they can adjust the salvage value against the IDV and pay the balance.    This OP has offered Total Loss Settlement since the cost of repairs exceeds the IDV of the vehicle in which case the policy stipulates that the loss would be treated as Constructive Total Loss (CTL).  Accordingly, they offered to pay the IDV for which the vehicle was  insured and the premium that was paid by the complainant, subject to adjustment of the salvage value.   But, the complainant has refused to cooperate with the sale of the wreck despite identification of a buyer by them.  Since they have to bear the difference after adjustment of the salvage value, they would always bring the best possible price for disposal of the salvage.  The complainant has neither permitted sale of the wreck nor has offered to adjust the offered price for payment of the balance. The complainant has effectively prevented them from settling the claim and she cannot demand anything more without agreeing for the disposal of salvage or adjustment of the salvage value.  The complaint against the 3rd OP is wholly misconceived and thus, they sought for dismissal of the complaint.

              5.  In support of the claim and counter-claim, the parties have filed their respective proof affidavits and, while the complainant has filed 21 documents as Exs.A1 to A21, on the side of the OPs, 10 documents have been filed as Exs.B1 to B10.

             6. It is the prime submission of the learned counsel for the complainant that the car in question was purchased on the projection made by the manufacturer on various advance features thereof including the Supplemental Restraint System related to Airbags that would offer individual protection beyond the seatbelt in the event of collision.  A person encountering an Airbag deployment would not even see the sudden expansion thereof because it happens so swiftly to save the driver and the passengers in the vehicle, but, in the present case, at the time of accident, the Airbag did not deploy as per the mechanism which is a clear indication of inherent manufacturing defect pertaining to a vital protective measure and as a result, the Driver and other passengers had sustained serious injuries.   The invoice issued by the Toyota shows that the SRS Airbag need to be changed which indicates that the 1st OP is trying to hide the structural defect of the car.  In such circumstances, no credence can be given to the explanation offered on their side by referring to the User Manual.  Hence, they are liable to pay the compensation and damages as sought for by the complainant.

             Further, as per the insurance contract, the claim of the complainant on the declared value shall have to be settled in full and in that regard, the Insurance Company cannot overstretch the scope of the policy in their favour to suggest that they would adjust the salvage value against the IDV and pay only the balance.  According to the learned counsel, any settlement of claim by the Insurance Company shall be without reference to selling of the vehicle which is the material object/evidence in the case to be filed against the 1st and 2nd OPs.   Since the 3rd OP/Insurance Company is attempting to deprive the complainant of the lawful claim of insurance amount by interpreting the policy conditions to their whims and fancies, necessary direction may have to be issued for settlement of the full insurance claim without subjecting the vehicle to sale by salvage, he pleaded. 

             7. Per contra, learned counsels for OP Nos.1 and 2 would submit that it is apparent here that the complainant, before rushing to file this complaint against these OPs, is not seemed to have consulted any technical expert or at least referred to the User Manual about the functioning of the SRS and deployment of Airbags.  By drawing our attention to the investigation report of the expert marked as Ex.B3, dated 13.07.2015, which clearly mentions that it is an offset collision and not a frontal impact and also, in parallel, to the User Manual under Ex.B5 which contain details about the types of collisions that may not deploy the SRS Front Airbags, would contend with strong emphasis that the complainant was well aware of the fact that the Airbags will deploy/inflate only in severe frontal collision, but, in the present instance, since the vehicle suffered hit and crashing at the Left Hand side, the deployment criteria for the Airbags was not met and that is why, no abnormality was observed by the Expert in the SRS System.  As such, the allegation of the complainant that the vehicle had inherent manufacturing defect is only a figment of feeble imagination.  The materials available on record with clear details regarding the working mechanism of SRS and deployment of Airbags would deflate the case of the complainant that it lacks cause of action against these OPs and hence, the complaint is liable to be dismissed at the threshold, they pleaded.

             8. Learned counsel appearing for the 3rd OP/Insurance Company, at the outset, has invited our attention to Clause-4 (a) of the Policy marked as Ex.B1, that reads as follows:-

            "4. The company may at its own option repair reinstate or replace the vehicle insured or part thereof and/or its accessories or may pay in cash the amount of the loss or damage and the liability of the company shall not exceed:

    (a) for total loss / constructive total loss of the vehicle - the Insured's Declared Value (IDV) of the vehicle (including accessories thereon) as specified in the Schedule less the value of the wreck." ,

and submitted that the above provision is clear and categoric that the liability of the company shall not exceed the CTL - the IDV of the vehicle, as specified in the schedule, less the value of the wreck.   Learned counsel, by referring to Section-1 of the said Policy which provides that the insured vehicle shall be treated as CTL if the aggregate cost of retrieval and/or repair of the vehicle, subject to the terms and conditions of the policy, exceeds 75% of the IDV of the Vehicle, states that here, since the repair costs exceed not just 75% but more than the IDV of Rs.10,37,463/- and the estimate and surveyor's assessment showed that the cost of repairs would be more than Rs.12 lakh, as per the policy condition, the vehicle is treated as CTL.  By virtue of the aforesaid condition No.4, liability of the company is to pay the IDV of the vehicle - Less the value of the wreck.  As such, any further demand as made by the complainant shall be outside the scope of the Policy and the company is not legally bound to comply therewith.  Within three months of the accident, the company duly processed the claim of the complainant and, in all fairness, by the Offer Letter under Ex.A20, dated 12.08.2015, they conveyed to the complainant that she could receive a sum of Rs.3,50,643/- from the Company and Rs.6,85,000/- towards the wreck value from the Salvage Buyer and thereby,   get the full indemnity, however, the complainant expected something beyond the policy coverage, which is absolutely inadmissible.   In such circumstances, since the Insurance Company is unnecessarily dragged by the complainant for no service deficiency on their part and by considering the clinching fact that they have acted within the framework of the policy for duly settling the claim and that it is the complainant, who failed to co-operate in the process of settlement, they cannot be faulted and hence, the complaint is liable to be dismissed.

             9. Having regard to the rival submissions advanced on either side, we have carefully gone through the materials available on record.

             10. In the light of the rival submissions made on behalf of the respective parties, the following two issues arise for consideration in this case:-

              i)  Whether the complainant has established her case against OP Nos.1 and 2 that the vehicle in question had inherent manufacturing defect in the SRS/Airbag Deployment? and

              ii) For what relief, the complainant is entitled to as against the 3rd OP/Insurance Company regarding the insurance claim over the vehicle in question, that was declared to be a CTL?

             11.  Coming to the 1st question, from the averments made in the complaint, we could infer that it is the understanding of the complainant that the deployment of Airbags under the SRS provided in the Car should become active at the very second the car faces an accident, irrespective of the angle or direction in or towards which the vehicle suffers collision.  But, regarding the mechanism of SRS/Airbags functionality, it is common knowledge that reception of signal that is sent from the Airbag System's electronic control unit to the Inflator with the Airbag module depends upon the position of collision that matters as to whether it was at the rear side or side portion or front area of the vehicle. Generally, the activation of Airbag deployment is contingent upon the characteristics of the crash, the Airbag system's strategy and the crash sensor locations.  In this regard, we have carefully perused the materials regarding the allegation of the complainant about the vehicle's inherent manufacturing defect/alleged failure of SRS/non-deployment of Airbag at the time of accident.  On this aspect, let us first look into the working pattern or mechanism of the SRS in the car in question from the manufacturing point of view that is available under Ex.B5/Owner's Manual & warranty booklet of the car in question.  Clause-1.7 of the Manual deals with "Safety Information - SRS airbags", from which, it is pertinent to extract below the portion relevant for the present point:-

                "TYPE OF COLLISSIONS THAT MAY NOT DEPLOY THE SRS AIRBAGS (SRS FRONT AIR-BAGS)

                The SRS front airbags are generally not designed to inflate if the vehicle is involved in a side or rear collision, if it rolls over, or if it is involved in a low-speed frontal collision.  But, whenever a collision of any type causes sufficient forward deceleration of the vehicle, deployment of the SRS front air-bags may occur."

Thus, the designing of the SRS Airbag System regarding the vehicle in question is that the Airbags will not inflate if the collision is on the side area or rear portion, in case of rolling over of the vehicle and if the vehicle is involved in a low-speed frontal collision.  The owner manual further says that the SRS front Airbags are designed to deploy in severe frontal collisions where the magnitude and duration of the forward deceleration of the vehicle exceeds the designed threshold level.    Therefore, as per the Manual, the main criteria for deployment of the SRS front Airbags is that the severity of the impact should be above the designed threshold level due to frontal collision. We could infer from the various details presented here that deployment of Airbag depends upon various factors including vehicle speed, angle of impact, density and stiffness of vehicles or object which the vehicle hits against in the collision.    As to whether the vehicle in question suffered the accident in the angle and manner that would trigger the sensors for deployment of the Airbag, we perused the expert report under Ex.B8, dated 13.07.2015, prepared after spot inspection of the vehicle.  Inter alia, it states that the vehicle suffered damage after hitting the tipper lorry on the right hand side, that major damage occurred in front Left Hand side, that left hand side under chassis is damaged, that it is an 'off-set collision due to roll over and under chassis impact, that 'it is not a frontal collision', that the impact sensors were found to be intact and crush box is not damaged, confirming that the collision is not 'frontal', that there are no hard marks on seat belts and it confirms both the driver and co-driver side seat belt not fastened as the vehicle rolled over and criteria not met, that the right hand side of the body also damaged because of the roll over, etc.  The expert opinion is not disputed by the complainant and it clearly states that the accident involved rolling over of the vehicle and that the vehicle had the impact of collision not at the frontal portion rather at the side portions which is described in the expert report as an 'off-set collision'.  In this regard, the averment of the complainant at para No.4 of complaint, extracted below, assumes much significance which in a way correlates the description given by the expert-

       "The said accident was occurred while the driver was driving the vehicle on the Trichy to Chennai Highways on the direction of South to North at Alathur Taluk Office had to suddenly take right and thereby lost control and hit behind the lorry and toppled over".

Thus, a combined reading of the averments of the complainant herself and also the expert report would show that the accident suffered by the vehicle had not created any impact in the sensor of the vehicle for deployment of the SRS Airbags, since the collision was "not frontal" and it is a clear instance of "roll over" and an "off-set collision," where there is no scope for operation or activation of the SRS/deployment of Airbags. Apart from this, the complainant has not filed any credible evidence in the form of an opinion by an automobile expert or mechanical engineer stating that the vehicle otherwise suffered from manufacturing defects. On the contrary, the OPs have produced the expert report to show that there was no manufacturing defect and the said report virtually falsifies the allegation of manufacturing defect in the SRS/Airbag Deployment. As such, there is no basis to sustain the said allegation of the complainant.  Accordingly, we reject the contentions of the complainant in that regard and answer the issue against the complainant.

             12. Coming to the insurance claim with the 3rd OP, from the papers, we find that since the cost of repairs was estimated to be more than Rs.12 lakh that exceeded 75% of the IDV of Rs.10,37463/-, rightly, the 3rd OP treated the vehicle as CTL and, as per condition No.4 of the Policy, the liability of the Insurance Company is to pay the IDV "less the value of the wreck".  It is seen from Ex.A20 that the 3rd OP had also offered to pay to the complainant the full IDV of Rs.10,37,463/- by two ways viz., Rs.3,50,463/- from the source of the Insurance Company and Rs.6,85,000/- as wreck value from the salvage buyer.  However, the complainant expects the 3rd OP to settle the full IDV without exposing the wreckage to sale, since according to her, she requires the same as a material object of evidence in a case to be filed against the 1st and 2nd OPs.  Such expectation of the complainant from the 3rd OP is beyond the scope of the terms and conditions of the policy to which she is a signatory and it can only be said to be an unfair approach.  If she desires to further prosecute the other OPs over the allegation of manufacturing defect, she could have obtained an expert report or certificate in that regard from the Motor Vehicle Inspector immediately after the accident and she cannot expect the Insurance Company to leave the already damaged car in her custody,  exposing it to rain and shine for its further destruction and dwindling of the salvage value.  Therefore, we do not see any fault in the process undertaken by the 3rd OP over the insurance claim in question except on the point of Discharge Voucher for Rs.3,50,463/-.  By issuing the discharge voucher, the Insurance Company virtually represented the culmination of the insurance claim. But, their service role does not end with issuing a discharge voucher alone. Like the present instance where the amount offered under the said voucher is disputed by the insured, with due caution, they should have deposited the amount to show their bona fides, without waiting for the voucher discharged by the insured.  In that regard, there is a glaring failure on the part of the Insurance Company and such failure can only be construed to be a sort of service deficiency, for which, they are liable to pay the sum under the Discharge Voucher viz., Rs.3,50,463/- with 9% interest p.a. from the date of complaint till the date of payment.  The issue is answered accordingly. 

                     13. In the result, the complaint is dismissed except to the extent of directing the 3rd OP/Insurance Company to pay to the complainant the sum under the Discharge Voucher viz., Rs.3,50,463/- (Rupees three lakh fifty thousand four hundred and sixty three only)  within two months from the date of receipt of a copy of this order and the said sum shall carry interest at the rate of 9% p.a. from the date of complaint till the date of payment. However, there shall be no order as to costs.

R VENKATESAPERUMAL                                           R.SUBBIAH, J.

MEMBER                                                                   PRESIDENT.

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT

•                 Date                      Description of Documents

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE Ops

•                 Date                     Description of Documents

R.VENKATESAPERUMAL                                           R.SUBBIAH, J.

MEMBER                                                                   PRESIDENT.

ISM/TNSCDRC/Chennai/Orders/AUGUST/2022.