ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Party (herein referred to as OP) under section 35 of the Consumer Protection Act 2019 for the deficiency in service in not honouring the claim in its entirety in respect of the claim of repair charges of his vehicle bearing No.KA-01 MT-0199  amounting to Rs.25,17,910.31 by repudiating the insurance claim and for Rs.2,00,000/- as compensation for causing him to undergo mental agony and to award cost and for such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that; the complainant is the owner of the “Mercedes Benz C Class” car bearing registration No.KA-01 MT-0199 insured with OP for the period 21.04.2019 to 20.04.2020. At 7.10 pm on 02.10.2019 while he was driving the said car near the Forum Value Mall, all of a sudden, there was heavy rain and water level on the road increased which made the engine of the car to stop. Hence he had to park the same by the side of the road due to the heavy raining and water log on the road. He contacted M/s. Sundaram Motors and complained to them and as per their instruction the said car, was towed to Sundaram Motors Garage on the next day. Upon the inspection of the said car it was found that the engine sucked water while in motion through the air filter thereby, several parts of the car was to be replaced as per the observation made by Sundaram Motors who issued an estimate for a sum Rs.25,17,910.31 as service and repair charges. It also explained that as the car driven in the rain water, water has entered into the engine and the engine block is damaged and several parts not serviceable but to be replaced. 

3.     It is contended that, he made a claim for the said amount to the OP and to his utter shock, OP repudiated the claim by letter dated 27.12.2019 stating that the reported loss can be attributable to the “consequential loss” which are not covered under 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, mechanical or electrical breakdown, failures or breakages.” Whereas Section (1) of the Policy clearly state that the insurance company will indemnify the insured against loss or damage to the motor car under the private car motor policy/or its accessories for the reasons including flood, typhoon, hurricane storm, cyclone hailstorm frost etc. When such being the case, the damage caused to the engine and accessories of the car is due to flood due to the rain, which cannot be denied by OP.

4.     Further another letter was written by OP on 14.02.2020 wherein it has informed that there was a delay of 8 days on the part of the complainant in making the claim and that the complainant has admitted that the car was driven in the water and for the said reason, OP restricted his reimbursement of the claim to Rs.72,197/- for which he did not agree. He wrote a letter on 02.03.2020 clarifying and explaining the delay as M/s Sundarm Motors caused delay in checking the car and updating the actual loss.  It was also informed and clarified to the insurance company that he was driving the car on motorable road and it was heavily raining and that the water lever was below the tyre and rejected the offer of OP to pay Rs.72,197/- only.  He came to know that OP appointed a surveyor to conduct the survey regarding the damage caused to the vehicle. 

5.     The surveyor report has mentioned that removing and repeating the engine and some denting and repair work causes Rs.72,197/- and also it was observed that the damaged to the engine do not cover the engine under the policy relying on the report of the surveyor, OP has forward to pay the said amount.  The survey report is elaborate in respect of damage caused to the vehicle.  It is admitted that the car was driven during the rain and on that day there was heavy rain and water was logging on the road and the word flood was defined as oxford dictionary large amount of water covering the area i..e usually drive. When the insurance policy covers damages caused to the vehicle due the flood cyclone etc. Op cannot reject his claim.  Further the surveyor’s report do not specify the experience and qualification of the surveyor who conducted the survey. The repudiation is wholly baseless and willful one to avoid to paying the claim which is illegal and contrary to the terms and conditions of the insurance policy.  OP is finding one reason or the other to deny the claim to avoid legally paid compensation.  The terms and conditions of the policy have to be strictly followed and adhered by both the parties. Act of the OP in rejecting the claim is illegal, which amounts to deficiency of service and also unfair trade practice. Hence he had to issue a legal notice demanding the payment of the entire amount as per the estimate required for repair of the vehicle. Though the same was received by OP it has neither replied the notice nor complied with the demand made therein. Hence he was put to lot of mental agony, stress and inspite running form pillar to post with OP seeking the claim amount which has been denied by OP made him  file this complaint and prayed to allow the same.

6.     Upon the service of notice, OP appeared before the commission through his advocate and admitted having issued the insurance to the car but contended that this complaint is filed on false, malicious, incorrect and mala-fide reasons with an intention to abuse the process of law and to waste the precious time of the commission and same is liable to be dismissed under Section 26 of the Consumer Protection Act. It is further contended that, the complaint is not maintainable either in law or on fact as complaint has not come with clean hands and further there is no deficiency in service or unfair trade practice on its behalf and further there is no cause of action to the complainant to file this complaint.  Since to decide the complaint which involve intricate question of law and facts, which voluminous evidence, which cannot be done under summary proceedings adopted by this commission, prayed the commission to refer the matter to competent civil court jurisdiction.

7.     It is further contended that it is carrying on the business of insurance under the IRDAI rules and regulations. The terms and conditions of the insurance is binding on both the parties. It has admitted the car of the complainant has been insured with it the period from 21.04.2019 to 20.04.2020 and its liability is subject to the terms and conditions of the policy issued. The complainant intimated the loss to the vehicle on 10.10.2019. Immediately OP requested the complainant to furnish the details with necessary document to process the claim of the complainant. Further OP appointed a surveyor to assess the reason, and estimate and damage caused to the vehicle.  In view of the surveyors report submitted to it, it came to know that the vehicle was driven in a water log area and due to the same, the water entered into the engine and damage caused. It is consequential loss which is not at all covered under insurance Section 1 (2).

8.     It is further mentioned in the survey report that the Hydrostatic lock occurs when the vehicle runs in to water logging. Due to the presence of the water inside the engine, while the operation or attempt to run the vehicle, there would be unwarranted pressure or force to the engine inner component, resulting in damage to engine component. Thus the damage caused is categorized as mechanical failure/consequential extension loss. Hence they have admitted the liability to the extent of Rs.72,197/- only .

9.     Further it is contended that, notice in respect of the accidental loss /damage ought to have been given immediately and there after insured shall give all information and assistance as the insurance company shall require and in this case, complainant lodged the claim only on 10.10.2019 even though the alleged loss has occurred on 02.10.2019.  Hence there is clear delay of 8 days which is violative of the terms and conditions of the policy and hence the same is repudiated. Denying all the other allegations made against it in each and every para of the complaint, prayed the commission to dismiss the complaint.

10.   In order to prove the case, both parties have filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

11.   Our answers to the above points are:-

POINT NO.1 :   IN THE AFFIRMATIVE

POINT NO.2 :   PARTLY IN THE AFFIRMATIVE

                        For the following.

REASONS

POINT No.1:-

12.   On perusing the complaint, version, documents, evidence filed by both  parties, it becomes clear that, the complainant is the owner of vehicle No. KA-01 MT-0199 “MERCEDES BENZ C Class 220D” and the same has been insured with OP as per Ex.R1 and Ex.P1, wherein the vehicle declared value is Rs.32,50,000/-. OP has collected Rs.58,869/- being the own damages premium along with applicable GST and CST. It has also collected Rs.8,271/- towards the 3^rd party liability, PA cover to owner/driver etc. It is also not in dispute that the complainant has made the claim of Rs.25,17,910.31.

13.   It is not in dispute that, the complainant after the flood water entering into his car, stopped the vehicle and same was towed to M/s Sundaram Motors  for taking suitable action. In this regard, complainant has produced the details of the estimate requiring the amount for repair.  OP on its own, after the receipt of the claim, has appointed a surveyor who visited Sundaram Motors on 11.10.2019 and inspected the same and given a detailed report and has given his opinion that the damage to the engine and other parts of vehicle is due to the contaminated flood water, fuel air mixture found to have entered into the turbo charger and such damage caused is categorized as mechanical failure and/or consequently/ extension of loss as per the policy provided. There is no additional coverage like engine protect. Hence admissibility of the claim left to the insurer.  He assessed Rs.75,197/- as the total loss in respect of AC gas removal/installation of engine with automatic transmission engine overhead charges and labour and deducted additional or imposed excess of Rs.1,000/- and compulsory excess of Rs.2,000/- and mentioned that the net assessed amount payable is Rs.72,197/- which the complainant refused to receive.

14.   Complainant has produced a technical report by Sundaram Motors which has mentioned that the water entered the engine. The car was not in a driving condition and used endoscope tool and they could see the water entered in the engine and formed rust in engine block. Drained engine oil found water inside removed exhaust system water in catelic converter the rust may cause damaged by creating souring marks on engine block. Since the water has entered inside the engine, sought for the approval of the insurance for dismantle the engine for further diagnosis. OP repudiated the claim of the complainant on the ground of delay in informing the same and on the ground that it is a mechanical failure and /or consequently and extension of loss which is not covered under the insurance policy. It is also stated that, the consequential loss depreciation, wear and tear, mechanical electrical breakdown, failure or breakages, shall not be liable to be reimbursed. 

15.   On the other hand, the complainant has contended and the insurance is covered for the loss/damage caused to the vehicle insured and indemnify the insured against loss /damage to the motor car insured hereunder and /or accessories whiles thereon.  Section 1(iv): By flood, typhoon, hurricane storm, cyclone hailstorm frost etc.,”

16.   When such being the case it do not lie in the mouth of the OP to say that the damage caused to the vehicle is due to mechanical failure/electrical failure and so on.  Further the contention of OP that, there is a delay of 8 days in making the claim for which it has denied the entire claim, cannot also be accepted as it has honoured the partial claim. If there was a delay and the OP adhering to the strict terms and conditions then it ought not have cleared the claim for Rs.72,197/- also. Several judgments of the HON’BLE SUPREME COURT OF INDIA and HON’BLE NCDRC are to the effect that delay is not to be given much importance when the claim is genuine. Further the reason given by the complainant is that there was some festival during the said time and the service center was closed. Hence immediately after opening of the service center, the same was reported to the OP regarding the claim in respect of the vehicle and further the surveyor of the OP inspected the vehicle in the service center itself the next day.

17.   When such being the case, we cannot hold that the claim is abnormally belated.  In view of the same, the reasons given by the OP in refusing to pay the repair charges amounts to deficiency in service and not with a good intention but only to harass the complainant hence we answer POINT NO.1 IN THE AFFIRMATIVE.

POINT NO.2:

18.   In view of the same, OP has not at all denied or questioned the estimate of the amount required for the repair of the vehicle by M/s Sundaram Motors. We are of the opinion that, OP has to reimburse the repair charges of Rs.25,17,910.31 along with interest at 12% per annum from the date of claim i.e. 10.10.2019 till the payment of the entire amount along with damages of Rs.50,000/- for causing undue delay in settling the claim and also causing complaint to undergo mental and physical strain besides making the complainant to approach this commission by engaging a counsel for which he has to pay his professional fee which we assess at Rs.10,000/-  and we answer POINT NO.2 PARTLY IN THE AFFIRMATIVE and  pass the following:

ORDER

1. Complaint is allowed in part with cost.
2. OP M/s Bajaj Allianz General Insurance Co. Ltd., represented by its Manager/Authorized Signatory is hereby directed to pay a sum of Rs.25,17,910.31 to the complainant along with interest at 12% per annum from the date of claim i.e. 10.10.2019 till the payment of the entire amount.
3. OP is further directed to pay Rs.50,000/- towards damages and Rs.10,000/- towards litigation expenses to the complainant.
4. OP is further directed comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this commission within 15 days thereafter.
5. Send a copy of this order to both parties free of cost.           

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Commission on this day the 19^th day of MARCH 2022)

       MEMBER            MEMBER                  PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the Insurance policy.

Ex P2: Copy of the Technical report with estimate

Ex. P3: Copy of the Claim form.

Ex P4: Copy of the letter written by OP to complainant.

Ex P5: Copy of the letter written by complainant to OP.

Ex P6: Copy of letter written by Op to complainant by repudiating the claim.

Ex P7: Copy of the letter written by complainant to OP.

Ex P8: Copy of the Surveyor Report.

Ex P9: Copy of the  Legal notice.

Ex P10: Postal trace record.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Sri  Prabhakara Naik, Asst. Manager of OP.

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the policy.

Ex R2: Copy of the policy wordings.

Ex R3: Copy of the Motor insurance claim form.

Ex R4: Copy of the survey report.

Ex R5: Copy of the notice to the complainant (4 in Nos.)

       MEMBER            MEMBER                  PRESIDENT

RAK*