STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UNION TERRITORY, CHANDGIARH

Appeal No.74 of 2010

(1)  M/s National Insurance Company Limited, through its Managing Director, Office at 3, Middleton Street Kolkata – 700071.

(2)  Branch Manager, National Insurance Company Limited, Branch Office at SCO No. 4-5, Sector 9, U.T. Chandigarh.

….Appellants.

Versus

(1)  Shri Vinod Mittal, M.D./ Director – M/s Chandigarh Flour Mills Pvt. Ltd., a duly Registered Company, having its Office at Plot No. 128/1, Industrial Area, Phase-I, U.T. Chandigarh.

(2)  M/s Chandigarh Flour Mills Pvt. Ltd., a duly Registered Company being represented through its M.D/ Director, having its office at Plot No. 128/1, Industrial Area, Phase-I, U.T. Chandigarh.

…..Respondents.

BEFORE:            HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT.

                        HON’BLE MRS. NEENA SANDHU, MEMBER.

ARGUED BY: Sh. R. C. Gupta, Advocate for the appellants.

                        None for the respondent.

MRS. NEENA SANDHU, MEMBER.

1.                     This is an appeal filed by OPs against order of District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter to be referred as District Forum) dated 23.12.2009 passed in complaint case No.1510 of 2008 : Sh. Vinod Mittal and another Vs. National Insurance Company Limited and another.

2.                     Briefly stated the case of the complainant is that it 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). It was averred that Complainant 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 the same comprehensively insured from the OPs vide Policy No.420203/31/07/6100002159 valid from 12.10.2007 to 11.10.2008 (A-4). It was next 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, which was later on towed to the office of the Complainant. It was averred that 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 Lacs, which was duly informed to the OPs with a request to appoint a Surveyor, vide letter dated 5.8.2008 (Annexure A-5). OP, it was averred, appointed one Mr. Sohal of Esquire Technocrats 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. As per the complainants, the Surveyor okayed for repair of the vehicle but subsequently, his behaviour was not proper and he was not responding to the calls given by the Dealer and the Complainant and the repair was being delayed. It was next averred that this fact was informed to the Divisional Manager of the OP vide letter dated 11.8.2008 (A-6), on account of which the Surveyor got annoyed and threatened not to allow the repair bill. The vehicle remained under repair with the authorized Dealer of the OP Company and was ready for delivery on 10.9.2008. As per the averments made in the complaint 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 thereafter, the Complainant received the repaired vehicle from the Dealer after spending an amount of Rs.1,43,874/- vide invoice/bill dated 10.09.2008. The Complainant, it was alleged, informed the OP vide letter dated 11.09.2008 (A-11) and submitted the original bill, receipt & salvage etc. who vide their letter dated 20.9.2008 (A-13), demanded the return of damaged parts to their office. The Complainant, it was also alleged, was surprised to find that only few parts for replacement were sanctioned by the OP/Surveyor and thus, he wrote letters dated 10.10.2008 and 11.20.2008 to the OPs and also submitted the required documents in original and further requested to furnish the reasons asking him to surrender only three parts instead of 26 part/items replaced during repair of the vehicle. As per the complainants, OP vide their letter dated 13.10.2008 (A-16) demanded only three parts. 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. The Complainant, it was averred, served a legal notice dated 25.11.2008 (A-19) upon the OPs but to no avail. Alleging the aforesaid acts of OPs as deficiency in service and unfair trade practice on their part, the complainants had filed the complaint before the learned District Forum.

3.                     The version of OPs No.1 and 2 in their joint written statement was 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. OPs further stated that subsequently, Shri Sandeep Arora, another Surveyor was appointed for re-inspection of the vehicle after its repairs as per settled norms and practices and the Survey Report dated 17.9.2008 was 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. As per the OPs, the Complainant had been already reimbursed the amount, which the Complainant was actually entitled to. It was pleaded that OPs on the expert and independent advice of an experienced and duly licensed Surveyor & Loss Assessor 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. Controverting all other material contentions of the Complainant and pleading no deficiency in service on their part, OPs prayed for dismissal of the complaint with exemplary costs.

4.                     The learned District Forum in its analysis of the complaint recorded in the impugned order that the main dispute between the parties was only in respect of the quantum of insurance claim to be paid by the OPs to the Complainant. The learned District Forum after detailed analysis of the entire case including the pleadings and the Survey Report produced by the OPs observed that the Surveyor had undoubtedly gone beyond his jurisdiction and brief. It also observed that the opinion of the Surveyor stating that the loss of only one connecting rod, which was initially damaged, was payable, was just not tenable. Dealing with the plea of the OPs as regards the engine of the car got damaged and stopped due to entering of water and because of the Complainant trying to restart the engine again and again, the learned District Forum was of the view that it was 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. The learned District Forum further recorded that the vehicle in question got stuck due to heavy rains in Sector 19, Chandigarh and the same stopped at once and ignition was off. As per the learned District Forum, the surveyor had 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. It further recorded that apart from the survey report, there was no other expert opinion to pin point the additional damage to the engine of the car was on account of the alleged cranking by the Complainant. As per the learned District Forum, Mr. Sohal, the Surveyor had not given a fair, impartial and independent assessment of the loss as his whole focus had 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. In the view of the learned District Forum, there was 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 also, as per the learned District Forum, it would 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, in the view of the learned District Forum, the Surveyor could not blame the Complainant for causing extensive damage to the car. It was obvious to the learned District Forum that when the second Surveyor conducted the re-inspection of the repaired vehicle, he should had 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 should had said so in his report. As per the learned District Forum, the OPs had 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. The learned District Forum in view of the aforesaid analysis of the entire case, was quite clear that although the Surveyor’s Report was a very important and significant document, which could not be brushed aside yet the Surveyor’s Report was not so sacrosanct or conclusive that it could not be departed from and it was not the last and final word on the subject. It was further observed by the learned District Forum that there was nothing on record to show that the OPs had already paid a sum of Rs.20,528/- to the Complainant or that the said amount had been accepted by the Complainant in full and final settlement of the insurance claim. As such, in the view of learned District Forum, the Complainant was clearly entitled to the full claim of insurance to the extent of Rs.1,43,874/- + Rs.1200/- as Towing Charges. In view of the foregoing discussion, the learned District Forum allowed the complaint and directed the OPs as under: -

“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.”

The order was directed to 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 were made, jointly and severally, liable to 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/-.

5.                     Aggrieved by the said order of learned District Forum, OPs have filed the present appeal. The appeal having been taken on board, notices were sent to the respondents/complainants and record of complaint was summoned from the District Forum concerned. Sh. R. C. Gupta, Advocate appeared on behalf of the appellants/OPs whereas no appeared for the respondent/complainant.

6.                     We have gone through the record on file as well as the impugned order and have heard the learned counsel for the parties.

7.                     The learned District Forum has passed a very detailed order. Firstly, the main point before us for consideration is whether the OPs were right in awarding the amount of repair to the tune of Rs.20,528/- and treating the rest of the amount towards the repair as consequential loss, based on the surveyor’s report?. In our view, the finding given by the surveyor that this loss is due to the mistake of the complainant as no due care has been taken by the complainant and when the car stopped in the water logged on the road, the complainant tried repeatedly to restart the engine by crackling it again and again, which damaged the engine and ultimately led to consequential loss, is not based on any cogent evidence.

8.                     On the other hand, the expert opinion of General Manager (Services) that if the water level is very high, it entered through the exhaust pipe can also damaged the engine. Hence, this damage is not due to the fault of the complainant.

9.                     While keeping in mind both the opinions of the surveyor as well as the General Manager (Services) of the manufacturer, we are of the view that the surveyor is wrong in assessing the cost of repair to the tune of Rs.20,528/- and considering the rest of the amount of the repair as consequential loss because in our opinion, the complainant did the same thing, which any other human being had done in the given circumstances. It is a human instinct that first and the foremost thing is to be done by anybody to try and restart the car by switching on ignition  and the complainant did the same thing. Therefore, the complainant had done nothing abnormal while switching on the ignition and trying to restart the car again. There is no question that the complainant had not taken any due care while handling the car in these particular circumstances. At the same time, we cannot ignore the opinion of the expert that the water can even enter through the exhaust pipe and damage the engine. After keeping the totality of facts in mind, we are of the opinion that there is deficiency in service on the part of OPs in not allowing the full repair charges and awarding an amount of Rs.20,528/- to the complainant based on the surveyor’s report. Thus, in our view, the complainant is entitled to the total amount spent on repair of the said car to the tune of Rs.1,43,874/- as awarded by the learned District Forum.

10.                   As regards the second allegation of the appellants that OPs have paid a sum of Rs.20,528/- to the complainant as full and final settlement of his claim vide cheque, there is nothing on record to prove this version of OPs. Thus, we have the same view as it has already been observed by the learned District Forum that there is nothing on record to show that OPs have already paid a sum of Rs.20,528/- to the complainant and the same has been accepted by the complainant in full and final settlement. In our view, the onus is on the appellants/OPs to prove that the said amount has been received by the complainant and the complainant has put his signatures on the said full and final settlement agreement. This contention of appellants/OPs cannot be believed particularly when the complainant has vehemently denied this fact that he has received a sum of Rs.20,528/- as full and final settlement. In our view, the learned District Forum was quite right by not deducting this amount while awarding an amount of repair to the tune of Rs.1,43,874/-. The compensation for a sum of Rs.30,000/- along with Rs.5,000/- as litigation charges also seems to be adequate but we feel that the amount of penal interest @18% per annum, in case the OPs failed to comply with the order within a period of six weeks, is on the higher side.

11.                   In view of the foregoing discussion, the appeal is dismissed with the modification that the penal interest is reduced from 18% per annum to 12% per annum. With this modification qua the penal interest, rest of the impugned order is upheld. However, under the peculiar circumstances of the case, the parties are left to bear their own costs of appeal.

12.                   Copies of this order be sent to the parties free of charge.

Pronounced.

28^th July 2010.

[JUSTICE PRITAM PAL]

PRESIDENT

[MRS. NEENA SANDHU]

MEMBER

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