KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
VAZHUTHACADU THIRUVANANTHAPURAM
APPEAL NO: 535/2005
JUDGMENT DATED:05..02..2011.
PRESENT
SRI. M.V. VISWANATHAN : JUDICIAL MEMBER
SRI.M.K. ABDULLA SONA : MEMBER
Nageshwara Rao, S/o Sanjeeva Rao,
Managing Partner, : APPELLANT
M/s Devee Motors, Kasaragod.
(By Adv. Sri.P.V.Baby & A.N.Santhosh)
Vs.
1. National Insurance Co. Ltd.,
Kasaragod Branch, 3rd floor,
High Lane Plaza, MG Road,
Kasaragod.
(R1 by Adv:Sri.Rajan.P.Kaliyath)
2. Tata Motors Ltd., Service Division,
Jamshadpur, Jorkand-631 010. : RESPONDENTS
3. M/s Shakthi Automobiles,
Anangoor, Kasaragod.
(R3 by Adv:Sri.Joseph Markose)
JUDGMENT
SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER
The appellant was the complainant and respondents 1 to 3 were opposite parties 1 to 3 respectively in OP.136/04 on the file of CDRF, Kasaragod. The complaint therein was filed alleging deficiency of service on the opposite party, National Insurance Company Limited, Kasargode Branch in repudiating the insurance claim preferred by the complainant with respect to the insured bus bearing registration No.KL-14 C/3577. The complainant claimed the repairing charge of Rs.48,420/- for repairing the manufacturing defects in the vehicle and also for the financial loss of Rs.16,000/- suffered by the complainant with a further compensation of Rs.25,000/- for the mental agony and pain suffered by the complainant.
2. The opposite party/M/s National Insurance Company Limited entered appearance and filed written version contending as follows:-
The complaint is bad for non joinder of necessary parties. The manufacturer and dealer of the vehicle are necessary parties. The claim preferred by the complainant is not covered by the insurance policy. The damage to the crank shaft of the vehicle was caused due to the negligence of the complainant due to want of care and timely repair and maintenance. The defects are not manufacturing defects. The opposite party deputed senior surveyor Sri.M.Raveendran who filed the report stating that the damage to the crank shaft was due to the failure of the main bearing due to the lack of flow of oil into those parts owing to the blockage of all line and delayed garaging of the vehicle at the workshop for a thorough inspection. The damage to the vehicle caused due to the negligence of the complainant in maintaining the vehicle. The damage due to misuse, negligence, improper, inadequate and poor maintenance are not covered by the policy. The surveyor has assessed the cost of the repair at Rs.29,100/-. The crank shaft could be repaired and again put to use. The salvage value of the crank shaft is assessed at Rs.10,000/-. So, the actual amount if any to be assessed can only be minus the salvage value. Thus, the actual repair cost would come to Rs.19,100/-. The opposite party has also disputed the correctness of the amount claimed by the complainant.
3. On the basis of the contentions adopted by the opposite party/National Insurance Company Limited, the complainant filed an application to implead the manufacturer of the vehicle Tata Motors Limited as 2nd opposite party and dealer of the vehicle M/s Sakthi Automobiles examined as 3rd opposite party.
4. The 2nd opposite party the Tata Motors Limited remained absent through out the proceedings.
5. The 3rd opposite party filed written version denying the alleged deficiency of service. They also contended that the complaint is not maintainable in view of the fact that the vehicle was purchased for commercial purpose and commercial activity; that the vehicle involved in the complaint was being serviced regularly by the 3rd opposite party. The 3rd opposite party further contended that there was no deficiency of service on the part of the 3rd opposite party and prayed for dismissal of the complaint filed against them.
6. The 1st opposite party/M/s National Insurance Company Ltd. Filed additional written version contending that the warranty and the extended warranty are subject to the terms and conditions of the policy, that the manufacturing defects are subjected to the confirmation of appropriate laboratory; that confirmation of the defect by appropriate laboratory is mandatory as far as Consumer Protection Act is concerned, that as per the extended warranty the 1st opposite party has undertaken the manufacturing defect up to a period of 5 years or up to 5 lakhs Kms; that the vehicle is plying for commercial purpose and so the provisions of Consumer Protection Act will not be attracted and the complainant is not a consumer as defined in the Consumer Protection Act. The bus bearing registration No.KL-14C-3577 is a public carrier and is plying for commercial activity and so the CDRF, Kasaragod is not having the jurisdiction to entertain the complaint. Thus, the 1st opposite party prayed for dismissal of the complaint with cost.
7. The Forum below framed the following points for consideration:-
1. Whether the complaint is maintainable?
2. Whether the complaint is bad for non joinder of necessary parties?
3. Whether the defects of the bus alleged by the complainant is due to manufacturing defect?
4. Whether there is deficiency of service on the part of the opposite parties as alleged?
5. Whether the complainant is entitled to get refund of Rs.48,420/- being the repair charges, and Rs.16,000/- being the tax and bank loan paid by him as alleged?
6. Whether the complainant is entitled to compensation and if so, the quantum thereof?
8. Before the Forum below, the complainant was examined as PW1. Exts.A1 to A7 documents were also marked on the side of the complainant. On the side of the 1st opposite party/M/s National Insurance Company Limited, approved surveyor was examined as DW1. Exts.B1 to B5 documents were also produced and marked on the side of the 1st opposite party. The 2nd opposite party remained absent. No evidence was adduced from the side of the 3rd opposite party. On an appreciation of the evidence on record, the Forum below passed the impugned order dated:21/3/2005 and thereby dismissed the complaint in OP.136/04. Hence the present appeal.
9. When this appeal was taken up for final hearing, there was no representation for respondents 1 and 2. We heard the learned counsel for the appellant/complainant and the 3rd respondent/3rd opposite party. The learned counsel for the appellant/complainant submitted his arguments based on the grounds urged in the memorandum of the present appeal. He argued for the position that the complainant is a consumer and the dispute involved is consumer dispute coming within the ambit of the Consumer Protection Act, 1986. He vehemently disputed the finding of the Forum below that the complainant is not a consumer and the complaint is not maintainable. He also relied on the testimony of PW1 and that of DW1 and argued for the position that there was deficiency of service on the part of the 1st respondent/1st opposite party, M/s National Insurance Company Ltd. in repudiating the insurance claim preferred by the complainant. Thus, the appellant prayed for setting aside the impugned order passed by the Forum below and to allow the complaint in OP.136/04 on the file of CDRF, Kasaragode. On the other hand, the learned counsel for the 3rd respondent/3rd opposite party pointed out the evidence of PW1 that the complainant does not want any relief against the 3rd opposite party, the dealer of the vehicle. He argued for the position that there was no deficiency of service on the part of the 3rd opposite party/M/s Sakthi Automobiles, Kasaragode. Thus, the 3rd respondent prayed for exonerating the dealer of the vehicle from the liability to pay compensation to the appellant/complainant.
10. The points that arise for consideration are:-
1. Whether the complaint in OP.136/04 on the file of CDRF, Kasaragode is maintainable under the provisions of the Consumer Protection Act, 1986?
2. Whether the appellant/complainant can be considered as a consumer as far as insurance claim preferred by the complainant is concerned?
3. Is there any sustainable ground or material available on record to fasten liability on respondents 2 and 3 (opposite parties 2 and 3)?
4. Whether the Forum below can be justified in dismissing the complaint in OP.136/04 by finding that the complaint is not maintainable under the provisions of the Consumer Protection Act, 1986?
5. Whether the insurance claim and the claim for compensation put forward by the appellant/complainant can be allowed, if so what is the quantum?
11.Point Nos.1 to 3:-
Appellant/complainant purchased a new vehicle (bus) bearing registration No.KL-14 C/3577. The 2nd respondent/2nd opposite party is the manufacturer and the 3rd respondent/3rd opposite party is the dealer of the said vehicle. Admittedly, the said vehicle was having the warranty given by the 2nd opposite party/manufacturer viz, Tata Motors Ltd. The aforesaid warranty given by the manufacturer was up to 1,50,000Kms. Admittedly the aforesaid warranty period expired when the alleged manufacturing defect developed in the vehicle. It is an admitted fact that the said vehicle had covered a distance of more than 3 lakh Kms when the vehicle developed manufacturing defect in August 2003. The complainant as PW1 has categorically admitted that the said bus had run 3,60,000Kms on the date of the defect which was developed in August 2003. Thus, it can be seen that the warranty provided for the said vehicle by the manufacturer had expired prior to August 2003. More over, the complainant as PW1 has also deposed that he does not want any relief against the 3rd opposite party, the dealer of the vehicle. It is also to be noted that it is come out in evidence that the 3rd opposite party (3rd respondent) the dealer of the said vehicle carried out the regular services for the vehicle. There is also no complaint for the appellant/complainant against the 2nd opposite party/manufacturer or against the 3rd opposite party/dealer. It is pertinent to note at this juncture that the original complaint in OP.136/04 was filed against the 1st opposite party/M/s National Insurance Company Ltd alone. The opposite parties 2 and 3 were impleaded subsequently on the basis of the contentions adopted by the 1st opposite party, M/s National Insurance company Ltd. There is also nothing on record to show that there was any sort of deficiency of service on the part of opposite parties 2 and 3. So, the appellant/complainant is not entitled to get any relief against opposite parties 2 and 3 (respondents 2 and 3). In effect they are not necessary parties to the complaint in OP.136/04 and they cannot be made liable to pay any compensation to the complainant.
12. Admittedly, the 1st respondent/1st opposite party issued B1 commercial vehicles package policy and thereby the warranty for the said vehicle was extended by the 1st respondent/1st opposite party/National Insurance Co. Ltd. The extended warranty was for a period of 5 years or 5.lakhs Kms which ever is earlier. The vehicle was purchased in June 2001. The vehicle was having 5 years extended warranty or 5.lakhs Kms. Admittedly, the vehicle had covered only a distance of 3,60,000Kms when the alleged manufacturing defects developed in the vehicle. So, it can very safely be concluded that the alleged manufacturing defect developed during the extended warranty period. There is also no dispute for the 1st respondent/1st opposite party, National Insurance Company Ltd. regarding the extended warranty. Then, it was incumbent upon the 1st respondent/1st opposite party M/s National Insurance Company Ltd to honour the insurance claim preferred by the appellant/complainant.
13. The 1st respondent/1st opposite party/Insurance Company raised the plea that the appellant/complainant is not a consumer and that the Forum below had no jurisdiction to entertain the complaint in OP.136/04 as the dispute involved in the said complaint cannot be treated as a consumer dispute coming within the ambit of the Consumer Protection Act, 1986. It is to be noted that there was a valid and effective insurance policy for the subject vehicle viz, the bus bearing registration No.KL-14C 3577. It is the case of the 1st respondent/1st opposite party that the said vehicle was purchased for commercial activity or commercial purpose and the policy of insurance was taken for commercial purpose. It may be correct to say that the aforesaid vehicle was purchased for commercial purpose to ply the same as a stage carriage. But the complainant availed the services of the 1st opposite party/M/s National Insurance Co. Ltd. by availing the policy of insurance by getting the warranty extended for a period of 5 years. The aforesaid insurance policy was taken not for any commercial purpose or for commercial activity. It is to be noted that the aforesaid stage carriage could be plied even without getting a package policy or without getting an extended warranty for the vehicle. It can very safely be concluded that the policy of insurance was taken from the 1st opposite party/National Insurance Company Ltd not for any commercial activity. So, the complainant who availed the services of the 1st opposite party/M/s National Insurance Company can be considered as a consumer as defined under sec.2(1)d (ii) of the Consumer Protection Act, 1986. The service rendered by the 1st opposite party/M/s National Insurance Company Ltd. Can be considered as a service availed on consideration as defined under section 2(1)(O) of the Consumer Protection Act 1986. The definition for the term service under section 2(1)(O) of the Consumer Protection Act, 1986 would make it clear that the service or facility availed in connection with insurance is to be treated as a service coming under the purview of the Consumer Protection Act, 1986. Thus in all respects it can be held that the complainant who availed the services of the 1st opposite party/M/s National Insurance Company Ltd; is a consumer coming within the ambit of the Consumer Protection Act ,1986.
14. It has been held by the Hon.National Commission in Harisolia Motors Vs M/s National Insurance Company Ltd. & Ors. Reported in 2005 (1) CPR (1) (NC) that the goods purchased or services availed must be used directly for any commercial activity intended for generating profit. Otherwise, the goods purchased or services availed can only be considered as service availed by a consumer coming within the ambit of the Consumer Protection Act, 1986. It is also held that the Insurance policy taken by a commercial unit or commercial establishment cannot be treated as service for commercial purposes. The principles enunciated in the aforesaid decision would make it clear that the complainant who availed the services of the first opposite party/ M/s National Insurance Company Ltd. for insuring the stage carriage can only be treated as a consumer as defined under Section 2 (i) (d) (ii) of the Consumer Protection Act, 1986. The aforesaid service availed by the complainant has no nexus with the profit making process or activity. The aforesaid service has no direct connection or nexus with the commercial activity of the complainant. Therefore, this State Commission is pleased to hold that the complainant is a consumer who availed the services of the first opposite party/first respondent and the dispute involved in the complaint in OP.136/04 between the complainant and the first opposite party/ M/s National Insurance Company Ltd. is a consumer dispute coming within the ambit of the Consumer Protection Act, 1986. If that be so, the Forum below (CDRF, Kasaragod) is having the jurisdiction to entertain the complaint in OP.136/04. The Forum below cannot be justified in dismissing the complaint as the complaint is not maintainable. Hence, we further hold that the complaint in OP.136/04 is maintainable as far as the first respondent/first opposite party, M/s National Insurance Company Ltd. is concerned. These points are answered accordingly.
15. POINT NOs.4 & 5
The complainant’s definite case is that the insured vehicle developed manufacturing defect. It is averred that the Crank Shaft, Main bearing, control bearing, piston rings, engine O/M kits, air compressor, head assembly required repairing. According to the complainant the aforesaid defects are to be treated as manufacturing defects. The aforesaid case of the complainant is supported by B5 estimate submitted by the 3rd opposite party/dealer of the vehicle. It is to be noted that B5 estimate was forwarded by the 3rd opposite party/dealer to the first opposite party/Insurance Company. B5 document would show that the total repair charges including labour charges would come Rs.48,420/-.
16. But the complainant could not substantiate his claim for the said sum of Rs.48,420/-. There is nothing on record to show that the complainant incurred so much amount of Rs.48,420/- for getting the vehicle repaired. So, the claim preferred by the complainant for Rs.48,420/- cannot be allowed as such. The mere fact that the 3rd opposite party issued an estimate for Rs.48,420/- cannot be taken as a ground to hold that the complainant incurred the aforesaid sum of Rs.48,420/- towards the repair charges.
17. The 3rd opposite party estimated the amount at RS.48,420/- including the cost of new crank shaft amounting to Rs.29,000/-. The version filed by the 3rd opposite party would make it clear that the defective crank shaft was replaced by a second hand crank shaft. The 3rd opposite party in their written version categorically contended that the complainant brought a crank shaft and the same was replaced. It is also contended by the 3rd opposite party that new crank shaft was not available for replacement. The approved surveyor who submitted B2 survey report has also reported that the vehicle was repaired by replacing the defective crank shaft by a second hand crank shaft. The surveyor as DW1 has also deposed to that effect. The complainant could not produce the bill for purchase of a new crank shaft. The cross examination of the complainant as PW1 would make it clear that the complainant has not purchased new crank shaft and the defective crank shaft was replaced by a second hand crank shaft. Thus, in all respects the claim for Rs.48,420/- towards the repair charges cannot be allowed.
18. The approved surveyor assessed the repair charges at Rs.29,100/-. He calculated the salvage value for the damaged crank shaft at Rs.10,000/-. It is to be noted that total cost of the spare parts is assessed at Rs.27,100/- and the labour charges at 2,000/-. Thus, the net assessment towards the repair charges was made at Rs.29,100/-. The salvage value fixed at Rs.10,000/- cannot be accepted. It is to be noted that the surveyor assessed the net loss at Rs.29,100/- against the estimated repair charges of Rs.48,420/-. The mere fact that the complainant could not establish his claim for Rs.48,420/- cannot be taken as a ground to hold that the calculation made by the surveyor is to be accepted as such. At any rate, the salvage value of Rs.10,000/- assessed by the approved surveyor is very much on the higher side. We have no hesitation to interfere with the salvage value fixed by the surveyor. It is true that some guess work is to be done in fixing a reasonable salvage value for the damaged crank shaft. The approved surveyor has not given any data or description for assessing the salvage value for the crank shaft. It is come out in evidence that it was a damaged crank shaft. Then naturally it would fetch only scrap value. It is too much to say that the scrap value of the damaged crank shaft would come to Rs.10,000/-. So, the salvage value is fixed at Rs.2000/-. If that be so, the repair charges would come to Rs.27,100/-. Hence, the repair charges is fixed at Rs.27,100/-.
19. First opposite party/Respondent, Insurance Company have got a case that the defects developed in August 2003 are not manufacturing defects. But DW1, the approved surveyor has categorically admitted the facts that crank shaft, piston, main bearing, oil rings etc are parts of the engine. So, the defects developed to the parts of the engine during the extended warranty period can be treated as the defects in the engine. It is the case of the 1st opposite party/Insurance company that the aforesaid engine defects developed due to non maintenance of the vehicle at the appropriate time. But at the same time, it is admitted that there occurred defects to the parts of the engine. The defects to the important parts of the engine can be treated as manufacturing defects. It is to be noted that crank shaft, piston etc are important parts of the engine. There is no case for the opposite party/insurance company or DW1, the approved surveyor that the defects to the said engine parts cannot be treated as manufacturing defects. On the other hand, it is the case of the 1st opposite party/insurance company and that of DW1 that the aforesaid defects to important parts of the engine like crank shaft etc were developed due to the negligence of the complainant in maintaining and servicing the vehicle at the appropriate time. Then, the burden is upon the insurer to substantiate its case that there was negligence on the part of the complainant in maintaining and servicing the vehicle at the appropriate time. In other words, the burden is upon the insurer to substantiate its case that there was negligence on the part of the insured and on account of the alleged negligence the insured vehicle became defective. But there is no acceptable evidence to support the aforesaid case of the 1st opposite party/insurer. On the other hand, the 3rd opposite party, the dealer cum repairer of the vehicle categorically contended in their written version that proper service and maintenance were done to the vehicle. There is no evidence available on record to discard the aforesaid statement made by the repairer in his written version. The Forum below cannot be justified in finding fault with the complainant for his failure to substantiate his case by adducing expert evidence or by getting report of an appropriate laboratory. It is to be noted that it is an admitted fact that the engine parts became defective during the extended warranty period. The aforesaid engine parts are covered by the extended warranty. So, the 1st respondent/1st opposite party/insurance company is liable to indemnify the loss suffered by the appellant/complainant/insured.
20. A perusal of the testimony of DW1, the approved surveyor would show that he filed B2 survey report based on some hearsay informations. There is nothing to support the observations made by the approved surveyor. Nobody was examined to prove the case of the approved surveyor that there was negligence on the part of the complainant/insured in properly maintaining the vehicle. The Forum below has gone wrong in relying on the aforesaid information furnished by the approved surveyor based on surmises and presumptions. On the other hand, the materials available on record would show that the insured vehicle developed the defects which are covered by the extended warranty issued by the 1st opposite party/insurance company. If that be so, the 1st respondent/1st opposite party/insurance company is liable to pay the repair charges of Rs.27,100/- to the complainant.
21. The appellant/complainant has also claimed compensation for Rs.25,000/- and another sum of Rs.16,000/- by way of financial loss. But the complainant could not substantiate the aforesaid claim for Rs.25,000/- as compensation and Rs.16,000/- by way of financial loss. It is to be noted that the complainant is the managing partner of an establishment and that the said establishment is engaged in automobile transport business and the said establishment is having 4 buses plying as stage carriages. The mere fact that the 1st respondent/1st opposite party/insurance company denied the insurance claim for Rs.48,420/- would not cause any mental agony or inconvenience to a consumer like the complainant. So, the aforesaid claim for compensation and financial loss is disallowed.
22. The 1st respondent/1st opposite party/insurance company is to be made liable to pay interest on the aforesaid repair charge of Rs.27,100/-. It is to be noted that the complainant/insured has already incurred the aforesaid sum for repairing the insured vehicle. So, the aforesaid amount will carry interest at the rate of 9% per annum from the date of the complaint in OP.136/04. The appellant/complainant is also awarded cost of Rs.2000/-. Therefore, the impugned order passed by the Forum below is set aside and the complaint in OP.136/04 is allowed as indicated above. These points are answered accordingly.
In the result, the appeal is allowed. The impugned order dated:21/3/2005 passed by CDRF, Kasaragode in OP.136/04 is set aside and the complaint therein is allowed. The 1st respondent/1st opposite party/M/s National Insurance Company Limited is directed to pay Rs.27,100/- by way of repair charge to the appellant/complainant with interest at the rate of 9% per annum from the date of the complaint in OP.136/04 till realization. The appellant/complainant is also awarded cost of Rs.2000/-. The decree amount is to be paid within one month from the date of receipt of copy of this judgment.
M.V. VISWANATHAN : JUDICIAL MEMBER
M.K. ABDULLA SONA: MEMBER
VL.
