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

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Shashi Kala Gupta, R/o Kothi No.1, Sector 12, Panchkula through Satinder Kumar Gupta, General Power of Attorney.

              ---Complainant

Vs.

1.   TATA AIG General Insurance Co. Limited, through its Branch Manager, SCO No. 232-234, 2^nd Floor, Sector 34-A, Chandigarh.

2.   The Branch Manager, TATA AIG General Insurance Co. Limited, SCO No. 232-234, 2^nd Floor, Sector 34-A, Chandigarh.

3.   Joshi Auto Zone Pvt. Limited, through its Managing Director, Plot No. 41, Industrial Area, Phase-II, Chandigarh.

4.   The Managing Director, Joshi Auto Zone Pvt. Limited, Plot No. 41, Industrial Area, Phase-II, Chandigarh.

---- Opposite Parties

BEFORE:   MRS.MADHU MUTNEJA            PRESIDING MEMBER

SH. JASWINDER SINGH SIDHU    MEMBER

Argued By:    Sh. Arun Kumar, Counsel for Complainant.

           Ms. Jaimini Tiwari, Counsel for Opposite Parties No.1 & 2.

           Sh. Devinder Kumar, Counsel for Opposite Parties No.3 & 4.

PER MADHU MUTNEJA, PRESIDING MEMBER

1.          The Complainant had taken an insurance policy from Opposite Parties No.1 & 2 for his new Mercedes Benz C250 CDI car effective from 15/3/2012 to 14/3/2013 after paying a total premium of Rs.29,931/-. This was after availing 60% no claim bonus of the actual premium of Rs.75,000/- for the total insurance.

          On 20/7/2012, it rained heavily for about one hour in the morning. The husband of the Complainant left for work around 11.00 A.M. when it stopped raining. There was no water in front of the house (H.No.1, Sec.12, Panchkula) when the husband of the Complainant left the house with his driver. But when he reached close to H.No.12 and 13 there was a gush of water flow from Sector 4 side (opp. Sec.12) towards Nallah (chow) which is across the street from H.No.13.

          Realizing the danger to the vehicle, the husband of the Complainant instructed the driver to take a ‘U’ turn and go back to the house. However, while the vehicle was being turned back, 2-3 cars belonging to the neighbours of the Complainant on the same street came from behind and splashed water standing on the street. When the husband of the Complainant reached near H.No.6 the car stopped abruptly. As he had to meet certain people for his official work urgently he left for work along with his driver in another car. After the rain stopped, the son of the Complainant tried to start the car, but was unsuccessful.

          The Complainant accordingly lodged her complaint with Opposite Parties No.1 to 4. The car was eventually carried to the Workshop of Opposite Parties No.3 & 4 on a flat bed truck on 20/7/2012 in coordination between the Opposite Parties No.1 to 4. Thereafter, the Complainant enquired about the status/ damage to her car, if any, from the representative of the Opposite Parties No.3 & 4. A Surveyor was also appointed by the Opposite Parties No.1 & 2. In the meantime, the Complainant received an estimate from Opposite Parties No. 3 & 4 for a sum of Rs.14,02,514/- for repair of the vehicle along with labour charges. The Complainant also received a letter dated 2/8/2012 from PEE KAY & Co., Surveyor and Loss Assessors appointed by the Opposite Parties No.1 & 2 that the company was not liable to make payment invoking Section I(2)(a) of the Policy. As per the letter, the liability of Opposite Parties No.1 & 2 was limited only to replacement of engine oil, oil filter and flushing of engine.

          The Complainant duly filled her claim with the Branch Manager of Opposite Parties asserting that the claim was payable. However, the Opposite Parties No.1 & 2 did not settle her claim. In the meantime, the Complainant on receipt of such a large estimate approached the Opposite Parties No. 3 & 4 and also enquired from other several workshops in other Cities for the repair. She was given a verbal estimate of repair between Rs.2,50,000/- to Rs.4,00,000/- depending upon the actual inspection after opening the engine as against estimate of more than Rs.14,00,000/- given by the Opposite Parties No. 3 & 4.

          The Complainant thus decided to get her car repaired from a private repairer for a lesser price. She paid Rs.25,000/- to Opposite Parties No.3 & 4 for inspecting the car on 18/8/2012 and took back her car. Thereafter, the Complainant carried the car on a flat bed truck to Gagan Motors, G.T. Road, Doraha (Ludhiana) for repair. Spare parts were purchased from various parts of India as well as abroad but no shopkeeper was ready to give the bill with regard to purchase of spare parts. The car was finally repaired on 8/10/2012 after about 50 days at Gagan Workshop. The delay was due to procurement of spare parts.  

          The Complainant thereafter, brought the vehicle to the workshop of Opposite Parties No.3 & 4 for detection and correction of any defects in the car. The vehicle was inspected and found to be in order. The Complainant has paid a sum of Rs.3,50,000/- approx. against the estimate of Rs.14,02,514/- as intimated by the Opposite Parties No. 3 & 4 but is unable to produce all the bills for repairs except the few enclosed along with the complaint. However, as the Opposite Parties have not settled the claim of the Complainant, she has preferred the present complaint, praying for the following reliefs:- 

           [a]  actual cost of repair of Rs.3,46,725/-;

[b]  Rs.2,00,000/- for efforts by the Complainant for reducing the repair cost from Rs.14,02,514/- to Rs.3,46,725/-;

[c]  Penalty for harassment Rs.10,00,000/-;

[d]  Lawyer fee Rs.1,00,000/-;

[e]  The Opposite Parties No.1 & 2 may also be directed to pay the interest @24% p.a. from the date of loss till the date of realization;

[f]  Any other relief as this Hon’ble Forum deems fit;

          The Complainant has attached some of the bills of the amount spent by her to prove her claim.

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

3.          Opposite Parties No.1 & 2 in their joint reply have maintained that there is no deficiency in service on their part. The claim, if any, is payable as per the terms and conditions of the policy keeping in view the report of the Surveyor. M/s Pee Kay & Company who are independent IRDA licensed surveyor had been appointed to assess the loss. As per the Surveyor report dated 27/8/2012 the net liability of the company has been assessed at Rs.21,316/- as per the terms & conditions of the policy. During the inspection of the vehicle by the Surveyor the following points were noted by him:-

1.   There was no external impact to the vehicle or the engine.

2.   Engine cannot be impacted by merely coming in contact with water and damage to engine can only be attributed to mechanical failure or trying to start/ run the engine when it is still in contact with water.

3.   It is evident by appearance that air cleaner was filled with water and also presence of water in engine oil. Further after dismantling the engine, one of the connecting rods was found bent and lower edge of cylinder bore broken.

          As per the Surveyor the insurance liability was only limited to the replacement of engine oil, oil filter and flushing of engine as per Section 12(a) of the Insurance Policy which reads as under: -

“Section 12(a): The Company shall not be liable to make payment in respect of: -

(a)  Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failure or breakages;

          Any aggravation of loss is not covered under the Policy in view of Condition No.4, which reads as under:-

“4.  The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured’s own risk.”

          The loss claimed by the Complainant is merely on account of ingress of water leading to seizure of engine. This is not possible unless there is a mechanical failure or trying to start/ run engine when in contact with water. No other damage was reported to other parts of the car. So the damage due to inundation/ flooding does not arise.

          On merits, Opposite Parties No. 1 & 2 have admitted the issuance of the policy. While reiterating the submissions already made above, the answering Opposite Parties have prayed that as per submissions made, they are liable to pay only Rs.21,316.38/- as assessed by the Surveyor, which is inclusive of Rs.7,599.37/- towards depreciation reimbursement as per the Policy coverage opted for by the Complainant. 

4.          Opposite Parties No. 3 & 4 have filed their joint written statement taking preliminary objection that the Complainant has not substantiated her allegations against them. No cause of action has arisen in favour of the Complainant against the answering Opposite Parties. The paragraphs in the complaint regarding insurance need no reply. The factual position is matter of record. There is no fault on the part of the answering Opposite Parties. Opposite Parties No.3 & 4 have therefore, prayed for dismissal of the complaint. 

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

6.          We have heard the learned counsel for the parties and have perused the record. 

7.           The claim of the Complainant is that Opposite Parties No.1 & 2 have not made payment of the expenses incurred for repair of her vehicle as per the insurance policy issued to her. The Opposite Parties No.1 & 2 in reply have placed reliance on surveyor’s report to prove that only the amount as per the said report is payable. 

8.          Annexure C-7 is an estimate placed on record by the Complainant from Opposite Parties No.3 & 4 wherein the amount estimated to be spend on repair is Rs.14,02,514/-. The Complainant has instead chosen to move away from the Opposite Parties No.3 & 4 and has got the vehicle repaired from other sources. Bills on record as at Annexure C-10 for Rs.25,000/- (OPs No.3 & 4); Annexure C-12 for Rs.5,000/- (Crane Service); Annexure C-13 for Rs.5,537/- (OPs No. 3 & 4); Annexure C-14 for Rs.13,088/- (OPs No. 3 & 4) and hand written repair cost bill {which is not on any letter head or bill format} for Rs.1,67,525/- (Annexure C-15). As per the Complainant’s own version, as the spare parts have been procured from various places all over the country and abroad and the suppliers have refused to issue the bill/ invoice, she is not in a possession of the complete bills for the amount spent by her on the repair of the vehicle in question. As per the legal notice dated 19/10/2012 at Annexure C-16 issued to the Branch Manager, TATA AIG General Insurance Co. Ltd., a sum of Rs.4,00,000/- approx. which included Rs.3,50,000/- on repair of car and Rs.50,000/- for travelling, phone calls and other expenses have been claimed from the Opposite Parties.  

9.          Placing reliance on the Private Car Package Policy and Surveyor’s Report (Annexure R-2 and R-3) Opposite Parties No.1 & 2 have denied the claim of the Complainant. The Surveyor and Loss Assessors in his survey report at Pg. 25 has made the following observations: -

“Observation:-  On initial inspection, we found the water in the air intake line-air filter wet. Water mixed with engine oil. Engine did not rotate when tried manually. Water was present on the piston tops. On removing oil sump wall of the cylinder block was broken on the lower edge by bent connecting rod which was caused due to continuous running of the car and engine after it came in contact with water which is a mechanical failure and is not payable as per policy condition Section 129a) of the Insurance Policy. A separate endorsement has been approved by IRDA to include such damages.

     In this case liability of insurer is limited to the flushing only and we have informed the insured vide our letter number 1060 dated 30.7.2012 copy of which is enclosed. We had discussions with insured’s husband also in this regard and have come to know that they have taken away the car from the Workshop.”   

10.        The repair assessment/ processing sheet giving details of the vehicle prepared by the Surveyor at the premises of Opposite Parties No. 3 & 4 shows the net liability of Rs.21,316.38/-. After adjusting the towing charges and compulsory excess the total amount payable has been given as Rs.14,717/-.

11.        Annexure R-3 is a letter dated 30.7.2012 addressed to the Complainant by the Surveyor and Loss Assessor intimating that loss to the engine due to water ingression is clearly out of the scope  of standard coverage under Section 1 of the policy. Relevant extract of the said letter is reproduced hereinbelow: -

“…..Initial inspection of the vehicle revealed the presence of water in air filter. On further inspection we have noted that:

1.   There was no external impact to the vehicle or the engine.

2.   Engine cannot be impacted by merely coming in contact with water and damage to engine can only be attributed to mechanical failure or trying to start/ run the engine when it is still in contact with water.

3.   It is evident by appearance that air cleaner was filled with water and also presence of water in engine oil. Further after dismantling the engine, one of the connecting rods was found bent and lower edge of cylinder bore broken.

All the automobiles manufacturers lay certain guidelines for driving/ handling the vehicle in a water logged area and also advise the motorists to exercise certain precaution in such cases.

Hence, liability of the insurer in this case limits only to replacement of engine oil, oil filter and flushing of engine.

Kindly refer to condition Section 12(a) of the insurance policy in this regard.

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

(a) Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages;

Such losses to engine due to water ingression are clearly out of the scope of standard coverages under section 1 of the policy. However, before taking a final decision by the insurer in the matter we invite your comments to our above observations….”

12.        The Hon’ble Supreme Court of India in Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777 has held:-

“Insurance Act, 1938 – S.64-UM – Surveyor/ Loss assessor’s report – Weightage to be given – Held, though not the last word, yet there must be legitimate reason for departing from report – No infirmity found in Surveyor’s report and therefore held, Insurance Company rightly admitted claim as per the report.”

          The Hon’ble National Consumer Disputes Redressal Commission in case New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) has held: -

“….Surveyor’s report being important piece of evidence, to be given weight and relied upon, unless proved unreliable.”

          In an another case Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), the Hon’ble National Consumer Disputes Redressal Commission has held that:-

13.     

“…….Surveyor’s report being important document, cannot be easily brushed aside.”

13.        It is thus clear that the Surveyor’s report is final, unless challenged by either the Complainant or the Opposite Party with specific contentions and averments. The Complainant, in the present case, has not contested the Surveyor’s report and has claimed the actual amount of repair of Rs.3,46,725/-, besides the compensation entailed above, though she has placed on record the invoices for Rs.18,625/- only. It is Complainant’s her own averment that a final survey was made by the Opposite Parties No.3 & 4. However, she has not placed on record the cost of the total repair as assessed by the Opposite Parties No.3 & 4. Opposite Parties No.1 & 2 have offered to pay an amount of Rs.21,316.38/- as assessed by the Surveyor which is inclusive of depreciation reimbursement as per the policy. To our mind, as the actual invoices/bills placed on record by the Complainant are less than this amount and she has not contested the surveyor’s report, she should accept this money from the Opposite Parties No.1 & 2 in full and final settlement.

14.        We accordingly dispose off the complaint with directions to the Complainant to accept the amount assessed by the Opposite Parties No.1 & 2 in terms of the assessment made by the Surveyor. No costs.

15.        The complaint against Opposite Parties No.3 & 4 is dismissed as they have only prepared the estimate, but the Complainant has not got the vehicle repaired from them. The bills raised by them for repair have not been challenged by the Complainant.

16.        The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

05^th August, 2013                              

Sd/-

(MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER