Delhi

StateCommission

FA/669/2013

GENERAL MOTORS INDIA (P). LTD. - Complainant(s)

Versus

NEURON MARKETING (P). LTD. & ANR. - Opp.Party(s)

21 May 2018

ORDER

IN THE STATE COMMISSION: DELHI

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

 

Date of Decision: 21.05.2018

 

First Appeal- 669/2013

(Arising out of the order dated 25.04.2013 passed in Complainant Case No. 1003/2008 by the District Consumer Disputes Redressal Forum (III), Janakpuri, New Delhi)

 

M/s. General Motors India Pvt. Ltd.,

Ist Floor, Plot No.15,

Sector-32, Gurgaon 122001, Haryana.

 

Formerly at

 

401-412, Palm Court,

20/4, Sakhalin Chowk, Mehrauli-Gurgaon Road,

Gurgaon 122001, Haryana.

…..Appellant

 

Versus

1.       M/s. Neuron Marketing Pvt. Ltd.,

Through Shri Anil Sharma, Director,

403, Vishal Tower,

District Centre, Janak Puri,

New Delh-110 058.

 

2.       M/s. Tata AIG General Insurance Co. Ltd.,

          Lotus Tower, First Floor, Community Centre,

          New Friends Colony,

          New Delhi-110 025.

 

3.       M/s. Autovikas Sales & Services Pvt. Ltd.,

          12-A, Shivaji Marg,

          New Delhi-110 015.

 

4.       M/s. HDFC Bank Ltd.,

          J-12/21, Rajouri Garden,

          New Delhi-110 027.

.….Respondents

 

 

 

First Appeal- 739/2013

 

 

The Tata AIG General Insurance Co. Ltd.,

Business Park, Shivaji Marg,

Moti Nagar, New Delhi-110 015.

Through:

Head North Zone Claims,

Tata AIG General Insurance Co. Ltd.,

Lotus Towers, Ist Floor,

Community Centre, New Friends Colony,

New Delhi-110 025.

…..Appellant

 

Versus

 

1.       M/s. Neuron Marketing Pvt. Ltd.,

403, Vishal Tower,

District Centre, Janak Puri,

New Delh-110 058.

 

2.       Mr. Anil Sharma,

          Director, Neuron Marketing Pvt. Ltd.,

403, Vishal Tower,

District Centre, Janak Puri,

New Delh-110 058.

 

3.       M/s. General Motors India Pvt. Ltd.,

          401-412, Palm Court,

          20/4, Sukhrali Chowk,

          Mehrauli-Gurgaon Road,

          Gurgaon-122 001.

         

4.       M/s. Autovikas Sales & Services Pvt. Ltd.,

          12-A, Shivaji Marg,

          Moti Nagar,

New Delhi-110 015.

 

5.       M/s. HDFC Bank Ltd.,

          9^th Floor, Ansals Classique Tower,

J-Block, Rajouri Garden,

New Delhi-110 027.

 

.….Respondents

 

 

 

 

 

CORAM

 

Justice Veena Birbal, President

Salma Noor, Member

 

 

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

 2.     To be referred to the reporter or not?

 

Justice Veena Birbal, President

 

1. The respondents 1 & 2 before the District Forum in CC No.1003/08 have filed the aforesaid appeals against order and judgement dated 25.4.13 passed by the Consumer Disputes Redressal Forum-III, Janakpuri, New Delhi (in short, the “District Forum”) whereby the District Forum has allowed the complaint and has directed the aforesaid respondents as under:

“Both the respondents, respondent No.1 & 2 are liable to indemnify the complainant.  The IDV of the vehicle shall be shared by respondent No.1 & 2 in the ratio of 65:35.  65% of the IDV of the vehicle shall be paid by the insurance company with whom the vehicle was comprehensively insured and 35% of the IDV of the vehicle shall be paid by respondent No.2, manufacturer of the vehicle.  Complainant got the vehicle financed from OP-4 in spite of the fact that vehicle was completely burnt, he kept on paying the instalments to the financer. He already suffered enough financial loss as he was deprived of the use of the vehicle due to non-settling of the claim by respondents.  Hence he is awarded a sum of Rs.50,000/- as compensation which shall be shared in the same ratio by respondent No.1 & No.2.  If the awarded amount is not paid to the complainant within 30 days from the date of receipt of the order, respondent No.1 & 2 shall pay interest @ 6% per annum on this amount from the date of filing of the complaint till realization of the amount.”

 

2. FA No.669/13 is filed by manufacturer of vehicle i.e. respondent-2 before the District Forum.  FA No.739/13 is filed by insurance company i.e. respondent-1 before the District Forum. 
3. The respondent-1 herein is a company incorporated under the Companies Act and   respondent-2 herein is the Director of respondent-1.  Both the respondents were complainants before the District Forum.
4. For the sake of convenience, the parties are hereinafter referred as arrayed in the complaint.
5. Complainant-2 had purchased Chevrolet AVEO U-VA 1.2 LS from respondent-3 i.e. authorized dealer of manufacturer respondent-2. The vehicle was comprehensively insured with respondent-1 for an IDV of Rs. 4,17,657/-. On 26.2.08, complainant-2 went to Noida and had parked vehicle in film city, Sector-16 and left for work along with his son.  While he was in meeting, his son had received a phone call from police station, Sector-20, Noida informing that their vehicle had caught fire and was completely burnt.  The fire was extinguished with the help of people present there.  With the intervention of by-standers, the car was saved from explosion.  The matter was reported to police.  Reports were prepared by the police as well as by the Fire Department.  It was alleged that the car was in stationery position when it had caught fire.  It was further alleged that the car had caught fire within five months of its purchase and by that time it had covered only 3000 kms.
6. The authorized dealer i.e. respondent-3 from whom the car was purchased was informed.  With the help of crane, the vehicle was taken to the workshop of aforesaid dealer i.e. respondent-3 where estimate of repairs of Rs.2,26,972/- was prepared.  It was alleged that the technicians of respondent-3 had deliberately left out the details of most of the parts which were damaged.  Copy of said estimate of repairs was sent by the respondent-3 to complainants after six months.  It was alleged that after persuasion, additional estimate was prepared by respondent-3 which covered most of the damaged parts also.  The complainants had also informed insurance company i.e. respondent-1 about the incident.  Insurance company appointed Mr. Sandeep Puri to carry out the survey of the vehicle. The said surveyor prepared the estimate and assessed the loss to the tune of Rs.1,61,010/-.  It was alleged that the aforesaid surveyor had prepared the estimate in an arbitrary manner.  The complainants contacted officials of respondent-1 to settle the claim as one of total loss as the vehicle was totally burnt in the fire.
7. On 5.3.08, the complainants addressed an e-mail to the manufacturer i.e. respondent-2 and requested it to carry out an enquiry to ascertain the cause of fire and also demanded replacement of vehicle or refund of amount paid by him.  As per complainants, there was an inherent manufacturing defect and the same was covered under the warranty as such request was made to the manufacturer for replacement of vehicle or refund of the cost paid by him.
8. Complainants had alleged that a defective car was sold to him.  He had prayed for total price of the car from respondent No.3 and also claimed IDV from respondent No.1 on the ground that it was a case of total loss.  The complainants had alleged that the car was financed by respondent-4 i.e. HDFC bank.  However, complainants had paid the entire loss amount and no relief was claimed against respondent-4.  The complainants had also prayed Rs.10 lacs towards compensation and Rs.1 lac as litigation cost.
9. On 14.6.08, the respondent-1/complainant had received a letter from Manager Services of respondent-3 asking complainant to give permission to start the repair work as the estimate prepared by the surveyor of the respondent-1 was not enough to categorize the complainants’ car as a total loss as per insurance policy of the company. 
10. It was alleged that respondent-2 had turned down the request of the complainant for replacement of car on the ground that the cause of fire was due to extraneous reasons and not due to any defect in the vehicle as such denied their liability.
11. The complaint was contested by the insurance company/respondent-1, manufacturer/respondent-2 and bank/respondent-4 by filing separate written statements.  Respondent-3/authorized dealer of respondent-2 did not contest the complaint case.  The complainants had not claimed any relief against respondent-4.  Vide order dated 26.7.12, respondent-4 was discharged by the Ld. District Forum.
12. Respondent-2/manufacturer opposed the complaint on the ground that there was no manufacturing defect in the vehicle.  It was alleged that the cause of fire could be anything but was not a manufacturing defect.  It was alleged that the car might have caught fire due to external reasons also as such respondent-4 denied its liability to replace the car or refund its cost.
13. Insurance company/respondent-1 opposed the complaint by stating that on receiving the intimation about burning of the vehicle, an independent surveyor and assessor from M.M. Puri & Co. was appointed to assess the loss.  The said surveyor assessed the insurance liability for Rs.1,60,000/- on repair basis.  It was alleged that it was not a case of CLT (Constructive Total Loss).  It was stated that as per insurance policy, the complainants were entitled for claim on total loss basis if the cost of retrieval/repair of the vehicle was exceeding 75% of IDV of the vehicle.  It was stated that on the requests of the complainants, another surveyor namely, Shri Sanjiv Malhotra was also appointed to inspect the vehicle.  The said surveyor submitted his report and assessed insurance liability at Rs.1,89,489/- which was intimated to the complainant.  It was alleged that there was no deficiency on the part of the insurance company.  It was alleged that the complainants were insisting for taking it a case of settlement on total loss basis.  However, since the vehicle was repairable, it was not taken as a total loss.
14. Rejoinder was filed by the complainants to the written statement of respondent-1 and that of respondent-2 wherein the allegations made by them were denied and averments made in the complaints were reiterated.
15. The parties had filed evidence by way of affidavits.
16. After hearing the parties, the District Forum observed that no efforts were made by respondent-2/manufacturer to inspect the vehicle and to ascertain the cause of fire.  It was observed that neither the authorized service centre of respondent-2/manufacturer nor the surveyor appointed by respondent-1/insurance company had come out with a reason which had caused fire in the vehicle.  It was held that under the circumstances, opinion given by the Fire Department that the fire was caused due to short circuiting was the cause of fire.  Ld. District Forum further observed that if after 5 months of purchasing the vehicle, it had caught fire due to short circuiting, the manufacturer is liable to indemnify the complainants. Ld. District Forum observed that electric wiring of vehicle was not up to the mark which prima facie amounted to manufacturing defect.  The vehicle was also comprehensively insured. Ld. District Forum also noted that as per report of surveyors, the car had been badly damaged. As per terms and conditions of policy, cost of parts was not 100% reimbursable.  The car is new.  Even its floor had been damaged.  The surveyor appointed by respondent-1 had recommended for repairing rear portion, replacing the damaged parts, repairing the damaged parts with metallic 2K paint etc.  It was held that if repairing as suggested by surveyor would be done, lot of money would be required to be paid by consumer which would be unjustified keeping in view that present was a new car. The District Forum held that respondent-1 and respondent-2 were liable to indemnify the complainants. The District Forum ordered that IDV of the vehicle was to be shared by respondent-1 i.e. Insurance Company and respondent-2 i.e. manufacturer in the ratio of 65:35% i.e. 65% of IDV of the vehicle was to be paid by respondent-1/Insurance Company and 35% of IDV of the vehicle was to be paid by respondent-2/manufacturer.  Ld. District Forum also awarded Rs.50,000/- as compensation to be shared by both the aforesaid respondents in the same ratio.
17. Aggrieved with the aforesaid, the aforesaid appeals are filed.
18. Ld. Counsel for respondent-1/Insurance Company has contended that as per terms and conditions of the Insurance Policy, claim on total loss basis is admissible if repair charges are more than 75% of IDV of the vehicle.  It is contended that in the present case, the repair charges as assessed are much less than even 50% of the IDV as such respondent-1 is not liable to consider the claim on total loss basis as is held by Ld. District Forum.  It is contended that two independent surveyors of respondent-1 has determined the loss and no evidence has been placed on record to rebut the assessment of surveyors. It is contended that District Forum has taken the present case as that of total loss which is against the report of the surveyors.  It is contended that the District Forum has ignored the surveyor reports.  It is further contended that insurance liability is to be determined as per the terms and conditions of the policy and the order passed is not sustainable.  It is further contended that once the District Forum has held that there was a manufacturing defect then liability ought not have been imposed on insurance company as the manufacturing defect is not covered under the insurance policy. It is submitted that the impugned order is liable to be set aside.
19. Ld. Counsel for respondent-2 has also contended that the present is not a case of total loss.  District Forum ignored the surveyor reports appointed by respondent-1.  It is contended that the authorized dealer, respondent-3 had given second estimate after one year which is not believable.  No affidavit of respondent-3 is filed whereas the affidavits of both the surveyors appointed by appellant/OP have been filed.  It is contended that both the surveyors have reported that the rear part is affected.  Engine/Dash Box etc. are not affected as such present is not a case of total loss.  The affidavits of surveyors are not controverted by complainants.  It is contended that as per surveyor reports, the repair cost has not exceeded 75% of the IDV of the vehicle as such present is not a case of total loss.  It is contended that District Forum has wrongly held that it was a case of total loss.  It is further contended that there is no manufacturing defect in the vehicle.  It is further submitted that onus was on the complainants to prove the same.  When complainants have not discharged the burden, the District Forum ought not have held respondent-2 liable in any manner. It is contended that engine is also not burnt as per the report of surveyors.  It is contended that in the facts and circumstances of the case subject matter of dispute falls clearly between complainants and insurer of vehicle. The manufacturer is not privy to such matter.  In these circumstances, respondent-2 cannot be made liable to make payment to the respondent/complainant as is held by District Forum. 
20. Complainant No.2 has argued that the District Forum after hearing the parties and considering all relevant facts and material on record has passed a reasonable order.  It is contended that the surveyors appointed by the respondent-1 had prepared the report in an arbitrary manner.  It is contended that Shri Sandeep Puri, surveyor appointed by respondent-1 had left out vital parts of the body of the car.  The other surveyor, Shri Sanjiv Malhotra also prepared a report which was an    eyewash.  It is contended that the said report was not covering cost of roof and side panels of car which were totally damaged.  It is contended that the District Forum has rightly held that it was a case of total loss.  It is contended that there is an extensive damage to the car and respondent-2 is deliberately trying to shove off its liability.  It is contended that the car was completely burnt from inside.  It is contended that District Forum has considered the entire material on record and thereafter has rightly apportioned the liability. It is contended that despite the fact that a new car was burnt, respondent-2 even did not bother to inspect the same.  It is further contended that the car was for the personal use of Director. The District Forum has rightly passed the impugned order. 
21. We have heard Counsel for respondent 1 & 2 as well as complainant-2 who has argued in person and perused the material on record including record from the District Forum. 
22. It is admitted position that the complainants had purchased the vehicle in question manufactured by respondent-2 from M/s. Autovikas Sales & Services Pvt. Ltd. i.e. respondent-3, authorized dealer of respondent-2. It is also not in dispute that the aforesaid vehicle was insured with OP-1 for an IDV of Rs.4,17,657/-.  It is also not disputed that within 5 months of its purchase, the vehicle had caught fire while it was parked in Film City, Section-16, Noida.  It is also not in dispute that by then the vehicle had covered only 3000 kms. 
23. It is also admitted position that the surveyor appointed by respondent-1, namely, Shri Sandeep Puri did not give the report as to the cause of fire.  At the request of complainant, another surveyor was appointed by respondent-1, namely, Shri Sanjiv Malhotra who has given his report on 21.10.08 and wherein also the cause of fire is not given.  Even the manufacturer i.e. respondent-2 also did not give any report about the cause of fire.  Though in letter 18.6.08 written by respondent-2, it was stated that an independent inspection had been arranged through their engineers for the personal satisfaction of complainant, however, no inspection report is placed on record by OP-2 nor it is their case that inspection of vehicle was done at any stage.
24. As per complainants, on getting the information of the fire incident, the team of Fire Department had arrived at the spot and before their visit, the fire was extinguished.  The Fire Department has given the report dated 26.2.08, Ex-CW1/5 as per which the probable cause of fire is “short circuiting”. 
25. The contention of OP-1 that present is not a case of ‘total loss’ and the District Forum has ignored the surveyor reports is considered. We have also perused the reports of the surveyors, Ex-OP1/1 and Ex-OP-1/5       appointed by respondent-1.  The first surveyor Ms M.M. Puri and Co. has assessed the loss of repairs to the tune of Rs.1,60,000/-.  The said report is dated 4.7.08. At the request of complainant, another surveyor, Mr. Sanjeev Malhotra   was appointed by respondent-1 and the said surveyor vide report dated 21.10.08 arrived the estimate cost of repairs as Rs.3,71,132/-.  The said surveyor has assessed the liability of insurance company at Rs.1,89,989/-. 
26. The IDV of the vehicle is Rs.4,17,657/-, 75% of the same comes to Rs.3,13,242/-.  The surveyor, Mr. Sanjeev Malhotra has taken the estimate cost of damaged parts as Rs.3,02,632.87 and has assessed the same as Rs.1,52,058.38. He has taken the cost of parts as 50% and not 100% as it is stated that as per terms and conditions, the cost of parts is not 100% reimbursable but only 50% is reimbursable.  The total labour charges are assessed at Rs.68,500/- whereas the assessed labour charges is 50% i.e. Rs.37,931/-.  The total estimate of repair is Rs.3,71,132.87 whereas the assessed repair cost is Rs.1,89,489.98. The aforesaid estimate does not take into consideration the damage to the roof and side panels of car though the same have been damaged in the fire incident as is evident from photographs placed on record. If the cost of same is added, the assessed loss will be much more. The surveyor has also recommended for repainting the damaged portion with metallic 2k paint and cutting out damaged dicky floor and welding with new ones which is not justified keeping in view the fact the present is a new car having run only 3000 kms.
27. We have gone through the judgement relied upon by Ld. Counsel for respondent-1 i.e. United India Insurance Co. vs Roshan Lal Oil Mills, (2000) 10 SCC 19 wherein it is held that surveyor report is important document and non-consideration of same is miscarriage of justice.  In the present case, it cannot be said that surveyor report is not considered.  The same is duly considered by the Ld. District Forum and whatever damage is not considered by the surveyor, the benefit of same is given to consumer.  Additional cost is considered by Ld. District Forum on the basis of whatever was left by surveyor.  There is no illegality in the same.  Further it is not the stand of the appellant/OP-1 that fire incident is not covered under the policy.  Further appellant/OP-1 has not been directed to pay full IDV of the car.  Only 65% of IDV of vehicle has been directed to be paid by appellant/OP-1.
28. Further M/s. Autovikas Sales and Services Pvt. Ltd. i.e. the authorized dealer of appellant/OP-2 where the vehicle was taken after the incident of fire for repairs has given the cost of repairs as Rs.2,26,972/-.  Since the said assessment was not including the complete damaged parts, the respondent-1/complainant requested to include the other damaged parts also.  Thereupon an additional estimate was prepared including most of the remaining damaged parts and thereafter he prepared additional estimate of Rs.81,574/-. The stand of respondent-1/complainant is that even respondent-3 did not include all the damaged parts.  The aforesaid report is not rebutted in any manner by respondent-1 & 2.
29. The District Forum has not ignored the reports of surveyors as is alleged but has given reasons as to how the complainant is entitled for more amount than assessed by the surveyor.  We find no reason to interfere with the reasoning given by Ld. District Forum. 
30. We may also mention that respondent-2 had not arranged for inspection of vehicle despite the fact that it had informed vide letter dated 18.6.08 to complainants in this regard. The said letter is reproduced as under:

“This is further in reference to your email dated 16^th Jun 2008, addressed to our President & Managing Director, Mr. Kari Slym, concerning the insurance claim of your Chevrolet Aveo U-VA LS bearing registration number DL 2CAJ 0112.  Please refer our earlier response on the subject matter and your communication with our authorized dealer M/s Autovikas, Delhi and your insurance provider TATA AIG.

 

We understand that damage claim inspection and estimation has been done by TATA AIG with help of Autovikas during Feb & Mar’ 2008.  Please be informed that based on your request, we have further arranged independent inspection through our Engineers for your personal satisfaction.  We would like to reiterate that loss on your vehicle, caused due to fire while parked in the locality unknown to us, is totally due to extraneous reasons and would further like to confirm that the same unfortunate event has not taken place due to any defect in your said vehicle.  Also, we would like confirm that, we at General Motors India are not in a position to influence TATA AIG to consider your claim under “Total Loss”, as requested by you.

 

We request you to have further negotiation with the insurance company with regard to insurance claim process and extend your cooperation to start the repair work at our dealer’s workshop under the policy guidelines from insurance company, which have been explained to you in past.

 

Please be assured of our best support and services.”

 

31.   By the aforesaid letter, respondent-2 had informed that they will be inspecting the vehicle and submitting the report.  Despite sending aforesaid letter, nothing was done by respondent-2.  The car had caught fire within 5 months of its purchase.  At least for satisfaction of consumer, it could have found out the cause of fire.  During course of arguments, it was also informed that respondent-2 had stopped manufacturing the aforesaid model of car.  The Fire Department has given cause of fire as “short circuit”.  Complainants are relying on aforesaid document to prove the cause of fire and are alleging inherent defect in the car.  The aforesaid report is not refuted by respondent-2 in any manner. Considering attitude of respondent-2 especially considering that it was a new car, the manner in which surveyor of respondent-1 has suggested for repairs of brand new car and also considering that chances of inherent defect are also not ruled out, the manufacturer is also liable to share the loss caused. By the impugned order, respondent-2 has been asked to pay only 35% of the IDV of the vehicle to the respondent/complainant. We find no reason to disagree with the same.
32. As regards award of compensation, District Forum has awarded compensation of Rs.50,000/- towards financial loss being caused to complainant.  The reasoning given is as under:

“Complainant got the vehicle financed from OP-4 in spite of the fact that vehicle was completely burnt, he kept on paying the instalments to the financer.  He already suffered enough financial loss as he was deprived of the use of the vehicle due to non-settling of the claim by respondents.  Hence he is awarded a sum of Rs.50,000/- as compensation which shall be shared in the same ratio by respondent No.1 & No.2.”

 

33. We find no reason to interfere with the same.  The compensation is not awarded for mental harassment as such judgement of Sikka Papers Ltd. vs National Insurance Co. Ltd., III (2009) CPJ 90 SC relied upon by Counsel for respondent-1 is not applicable in the present case.
34. Considering the totality of facts and circumstances, we find no illegality in the impugned order.  A well reasoned order has been passed by the District Forum after considering the material on record. 
35. Both the appeals stand dismissed.
36. A copy of this order as per statutory requirements be sent to the parties free of charge and also to the concerned District Forum.  Record of the District Forum be also sent back forthwith.  Thereafter the file be consigned to record room.

 

(Justice Veena Birbal)

President

 

 

 

(Salma Noor)

Member

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