IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated, the 31st day of October, 2022.
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 128/2021 (Filed on 29-07-2021 )
Petitioner : Anju K. Biju,
D/o. Biju Thomas,
Kuzhiparackal (Christeen) House
Vijayapuram village,
Vadavathoor P.O.
Kottayam – 686010
(Adv. Jose Joseph K.)
Vs.
Opposite party : (1) Vision Motors Pvt. Ltd.
Rep. by its Service Manager,
Building No.XI/243,
Nattakom, Kottayam – 686013
(Adv. Lal K. Joseph)
2) Reliance General Insurance Co.
Ltd. Rep. by its Manager,
Chelliozhukkam Road,
Kottayam – 686001. (Adv. Agi Joseph)
O R D E R
Sri. Manulal V.S. President
Complaint is filed under Section 35 of Consumer Protection Act, 2019
Case of the complainant is as follows;
The complainant purchased a Honda amaze car from the first opposite party and insured with the second opposite party. At the instance of the first opposite party the complainant took a motor vehicle policy from the second opposite party for the period from 15-11-2019 to 14-11-2020.The vehicle also had warranty for the period from 16-11-2019 to 18-9-2020. On 1-8-2020 when the complainant and her husband were going to Neendoor through Manjoor –Nendoor raod when they reached Kandannkuzhy padashekharam there was heavy rain. Many vehicles were also passing through the road without any interruption. The car got into a gutter which was not visible as the same was filled with water The engine of the car of the complainant was stopped and the car was pushed and brought safely to the higher side of the road with the help of the local people. According to the complainant if there is no gutter in the road, the vehicle would not have been submerged in water.
As per the direction of the first opposite party the car was brought to the first opposite party on 1-8-2020 with the help of sun shine Crane and Recovery services. On 3-8-2020 when the complainant handed over the documents of the vehicle to the first opposite party it was informed that the vehicle had comprehensive insurance and is eligible to get the amount required for repairing and the first opposite party will do all the necessary steps for the same. The claim of the complainant was repudiated by the second opposite party on the ground that the vehicle was made to pass through the water and the vehicle was dismantled and repairs were started prior to the survey of the vehicle without intimating the second opposite party. Then only the complainant came to know that the first opposite party started the repairs prior to the survey of the vehicle, without intimating the second opposite party. The said illegal and improper act of the first opposite party amounts to deficiency in service.
The complainant had spent Rs.1,27,900/- for repair the vehicle and Rs.2500 towards towing charges. The complainant was entitled to get the vehicle repaired freely as there was valid insurance policy with the second opposite party. There is a gross deficiency in service and unfair trade practice on the part of the opposite parties. Undue hardship and agony has been caused to the complainant and to his family by the acts of the opposite parties. Hence, this complaint is filed by the complainant praying for an order to direct the opposite parties to pay Rs.1,30,400/- along with interest and compensation of Rs.50,000/-.
Upon notice opposite parties appeared before the Commission and filed separate version.
Version of the first opposite party is as follows:
The first opposite party is only an authorized dealer of the vehicles manufactured by the Honda Cars India Ltd. Concern of the complainant is addressed by the first opposite party on the date of submission of the same and had escalated with the manufacturer as well as the insurer of the vehicle. As per
instruction and on the handing over of the initial amount of Rs.50,000/- on 18-8-2020 the first opposite party had initiated the repair works of the vehicle and delivered the vehicle to the complainant on 1-10-2020, on the payment of balance amount of Rs.77,900/- to the satisfaction of the complainant.
It is submitted in the version that the warranty of the vehicle is provided only for the manufacturing and services defects of the vehicle. The damages sustained to the vehicle due to any actions on the part of the owner, done in violation of the cautions in the Usage Manuel is specifically outside the warranty of the vehicle. Clause 202 of the usage manual specifically mentioning about the precautions in driving. The damage to the vehicle was caused through a condition called Hydrostatic lock caused by entering water into the engine, by the riding of the vehicle through flooded water. The complainant is aware that it is a warranty excluded condition and she had done the services to the vehicle on paid basis. The fact that there was a heavy rain and flooding of roads in the area mentioned by the complainant is accepted, but he contention of the complainant that many vehicle were passing though the road without any interruption is alleged only with an intention to mislead this commission.
It is understood that many vehicles were stuck in the flooded water and uninterrupted traffic was not possible thorough the flooded water. On examination of the vehicle, the surveyor had expressed the inability of the second opposite party to honour the insurance claim of the complainant. To the knowledge of the first opposite party, the second opposite party had rejected the
claim and the same was intimated to the complainant. Thus understanding the fact that the she is not entitled for the insurance claim the complainant had instructed the first opposite party to proceed with the repair work. Since the repair works demanded was outside warranty of the vehicle, the first opposite party would commence the work only on getting assurance regarding the payment towards the parts and labour to be employed by them for the repair work, either from the insurer or the owner.
The contention of the complainant that the first opposite party had dismantled and started the repair work prior to the survey examination and without intimating the second opposite party is false. Therefore, first opposite party had not committed any deficiency in service or unfair trade practice.
Version of the second opposite party is as follows:
The alleged loss was caused while vehicle was driven through the water logged area. When a vehicle passes through puddle of water, water can enter the engine through air intake valve. Since water is non -compressible, it stops the piston from completing its stroke required to create the spark that ignites the engine. This leads to stalling of the engine. The policy issued to the petitioner does not cover consequential losses. Hydrostatic loss is a consequential loss as it is a consequence of the driver cranking the engine. It is not a direct result of the water ingression. The vehicle was not damaged by this situation but due to action taken in this situation. Thus the loss due to hydrostatic lock are not covered under the insurance policy and the negligence on part of the driver to safeguard the vehicle is also a violation of the policy condition. It is submitted in the version that the vehicle was already dismantled and repairs were started prior to survey of the vehicle without intimating the insurance company. Thus the insurance company have deprived an opportunity to ascertain the necessary facts related to cause of loss, circumstances and quantum of loss required to decide admissibility of the claim.
On the date of alleged incident the Kandankuzhi-Valachery Padashekharam road fully inundate and unable to travel through the said road. A light motor vehicle is unable to travel through the said road. The engine was stopped due to the intake of water. The said incident was caused due to negligence of the driver and owner of the vehicle and insurance company is not liable to pay compensation to the complainant as there is no deficiency in service.
Complainant filed proof affidavit in lieu of chief examination and exhibit A1 to A6 were marked. One Santhosh Bernard, who is the customer relations manager of the first opposite party filed proof affidavit and exhibits B1 to B5 were marked from the side of the first opposite party. Cherian Kurain,, who is the
Manager-legal claims of the second opposite party filed proof affidavit and exhibits B6 marked from the side of the second opposite parties.
On evaluation of complaint, version and evidence on record we would like to consider the following points.
- Whether the complainant had succeeded to prove any deficiency in service or unfair trade practice on the part of the opposite parties?
- If so, what are the reliefs and costs?
Point number 1 and 2 .
There is no dispute on the fact that the complainant purchased a Honda amaze car from the first opposite party and the said vehicle was insured with the second opposite party vide exhibit A2 insurance policy. On perusal of Exhibit A2 insurance policy we can see that the insurance cover is for the period from 15-11-2019 to 14-11-2020 and the insured value of the vehicle was 8,28,023/-. There is also no dispute of the fact that on 1-8-2020 when the complainant and her husband were going to Neendoor through Manjoor –Nendoor raod when they reached Kandannkuzhy padashekharam the car was submerged in water and got damaged. On 1-8-2020 the vehicle was entrusted to the first opposite party for repair works. Exhibit A5 proves that the complainant had spent Rs. 2500/- towards the towing charge of the said vehicle to the first opposite party’s workshop. It is admitted by the first opposite party that they had started the repair works on 18-8-2020 after payment of Rs.50,000/- by the complainant as advance and delivered the vehicle to the complainant on 1-10-2020., on the payment of balance amount
of Rs.77,900/-.
The claim of the complainant was repudiated by the second opposite party on the ground that Hydrostatic loss is a consequential loss as it is a consequence of the driver cranking the engine. The second opposite party in exhibit A3 relied the clause 4(a) of the exclusion clause.
On perusal of policy terms and condition we can see that in section 1 it is stated that 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;
Hon’ble National Consumer Disputes Redressal Commission has held in Tata AIG General Insurance Co. ... vs M/S. Ambience Leasing Pvt. Ltd. & Anr decided on 6 February, 2017as follows
“ The case of the complainant / respondent, as noted earlier, is that due to heavy rains there was flood like condition on the road when the engine of the car went off suddenly and had to be pushed to a side of the road. The case of the appellant company is that had the driver of the vehicle not started / cranked it several times in flood water, the engine would not have got damaged. There is no evidence of the driver having started / cranked the vehicle several times in flood water. The surveyor not being an automobile engineer, his report by itself is not sufficient to prove that the engine could not have got damaged without the vehicle having been started / cranked several times in flood water. In any case, the issue involved in this appeal is no more res integra in view of the decision of this Commission dated 05.1.2015 in Bharti Axa General Insurance Company Limited Vs. Chandra Mohan Goyal Revision Petition No. 4504 of 2014. The aforesaid judgement to the extent it is relevant reads as under:
“ 7. The learned counsel for the petitioner company has produced before us a literature which to the extent relied upon reads as under:
“Symptoms and damage If an engine hydrolocks while at speed, a mechanical failure is likely. Common damage modes include bent or broken connecting rods, a fractured head, a fractured block, crankcase damage, damaged bearings, or any combination of these. Forces absorbed by other interconnected
components may cause additional damage. Physical damage to metal parts can manifest as a “crashing” or “screeching” sound and usually requires replacement of the engine or a substantial rebuild of its major components.
If an internal combustion engine hydrolocks while idling or under low power conditions, the engine may stop suddenly with no immediate damage. In this case the engine can often be purged by unscrewing the spark plugs or injectors and spinning the engine to expel the liquid from the combustion chambers and then restarted. Depending on how the liquid was introduced to the engine, it possibly can be restarted and dried out with normal combustion heat, or it may require more work, such as flushing out corrupted operating fluids and replacing damaged gaskets.
If a cylinder fills with liquid while the engine is turned off, the engine will refuse to turn when a starting cycle is attempted. Since the starter mechanism’s torque is normally much lower than the engine’s operating torque and momentum this will usually not damage the engine but may burn out the starter. The engine can be drained as above and restarted. If a corrosive substance such as water has been in the engine long enough to cause rusting, more extensive repairs will be required.
Amounts of water significant enough to cause hydro lock tend to upset the air/fuel mixture in gasoline engines. If water is introduced slowly enough, this effect can cut power and speed in an engine to a point that when hydro lock actually occurs it does not cause catastrophic engine damage.
Causes and special cases Automotive Hydro lock most commonly occurs in automobiles when driving through floods, either where the water is above the level of the air intake or the vehicle’s speed is excessive, creating a tall bow wave. A vehicle fitted with a cold air intake mounted low on the vehicle will be especially vulnerable to hydro locking when being driven through standing water or heavy precipitation. Engine coolant entering the cylinders through various means (such as a blown head gasket) is another common cause. Excessive fuel entering (flooding) one or more cylinders in liquid form due to abnormal operating conditions can also cause hydrolock”
8. The learned counsel has also relied upon the reply dated 22-10-2013 sent by IRDA under RTI Act, stating therein that generally insurance companies charge extra premium to provide add on cover for hydro static loss in a motor vehicle policy.
9. The contention of the learned counsel for the petitioner-company is that since the major damage to the vehicle occurred on account of hydro static loss and they had not charged extra premium in order to cover the said loss while issuing the policy to the insured, they are not liable to pay for the damage on account of hydro static loss to the vehicle.
10. We have perused the insurance policy issued by the petitioner-company to the complainant. The said policy while covering damage due to flood, cyclone, hailstorm, etc., does not exclude the loss to the vehicle due to hydro static lock. In the absence of such an exclusion, the insurance company will have
to reimbursee cost of repair of the vehicle on account of damage by heavy rains and flooding irrespective of whether the said loss occurred due to hydro static lock or for some other reason. If despite IRDA permitting charging of an extra premium for reimbursement in respect of loss due to hydro static lock the petitioner-company did not charge such a premium, it is only itself to blame for such a situation because the policy issued by it while granting insurance against damage due to flooding, etc., did not exclude the loss/damage to the vehicle on account of the aforesaid reason. Therefore, in our opinion, in a damage of this nature, unless expressly excluded, in the insurance policy, damage to the vehicle on account of hydro static lock would also be covered for the purpose of reimbursement. For this reason alone the petitioner-company must necessarily fail”.
We are of the opinion that the ratio in the above said decision is squarely applicable to case in hand. A perusal of exhibit B6 insurance policy would show that the appellant had inter-alia insured the vehicle against loss or damage by flood, typhoon, hurricane, storm, tempest, inundation, cyclone and hailstorm or frost therefore we are of the opinion that the second opposite party has committed deficiency in service by repudiating the claim of the complainant. . Another contention of the second opposite party is that the vehicle was already dismantled and repairs were started prior to survey of the vehicle without intimating the second opposite party .
It was held by Hon’ble National Consumer Disputes Redressal Commission. In Wilson Home Appliances vs New India Assurance Co. Ltd. & Anr. Decided on 10 December, 2020 that
“8. Investigation and Survey by an insurance company are fundamental in determining the amount payable to the insured. An insurance company is duty bound to appoint its surveyor in accordance with the provisions of The Insurance Act, 1938 (Section 64 UM Surveyors or loss assessors specifically refers). Essentially, its surveyor has to possess the prescribed qualifications, it is accountable, inter alia also to the regulator. A Survey cannot be disregarded or dismissed without cogent reasons (it, but, also goes concomitantly that the rationale and computation recorded in the Survey should be convincing and pass credence in scrutiny).”
Though the second opposite party took a contention that they were deprived of an opportunity to conduct the survey to assess the damages they did not disclose the date on which the surveyor inspected the vehicle and found that the repair works has been started without the consent of the insurer. The opposite
party did not produce the report to prove their contention. On the other hand first opposite party submitted that on 18-8-2020 they had initiated the repair works of the vehicle. The mishap occurred on 1-8-2020 and the vehicle was entrusted to the first opposite party on 3-8-2020. Though the second opposite party admitted in exhibit A3 that intimation was given to them on 10-8-2020 however they did not disclose date on which they have deputed the surveyor to inspect the vehicle. Moreover on perusal of exhibit A3 we can see that it is stated in exhibit A3 that “ on perusal of documents in the matter, it was observed that the vehicle was made to pass in water when the loss occurred.” Therefore it is evident that the second opposite party came into a conclusion that the vehicle was got damaged due to Hydrostatic loss without any inspection of the vehicle. Without disclosing the date on which the surveyor was appointed and the date on which he had inspected the vehicle we cannot accept the contention of the second opposite party that the vehicle was dismantled and repairs works had been started without their consent and permission. Without complying the statutory duties for which the second opposite party is in a bounden duty to perform, the second opposite party cannot rely derivation of opportunity to conduct the survey as a ground to repudiate the claim.
On the basis of above discussion and we are of the opinion that the act of the second opposite party amounts to imperfection and inadequacy in service for which they are bound to maintain as per the contract of insurance thereby committed deficiency in service.
A mere reading of the Exhibit A2 policy proves that the said policy was an Ad-ons (zero depreciation) policy and the second opposite party has collected Rs.5,383/- from the complainant to give zero depreciation cover for the own damages of the vehicle. Thus the second opposite party is bound to reimburse the entire claim amount without considering the depreciation on the value of the car. Exhibit A6 proves that the complainant had paid Rs.1,27,307/- to the first opposite party for the repair works and Rs.2,500/- vide exhibit A5 towards the towing charge. Thus the second opposite party is bound to pay Rs.1,29,807/- to the complainant. The illegal repudiation of the claim of the complainant by the second opposite party has caused much mental agony to the complainant for which the second opposite party is liable to pay compensation.
In the light of above discussion we allow the complaint and pass the following order.
- We hereby direct the second opposite party to pay Rs.1,29,807/- to the complainant.
- We hereby direct he second opposite party to pay Rs.25,000/- as compensation for the deficiency in service committed by the second opposite party.
Order shall be complied within 30 days from the date of receipt of copy of Order. If not complied as directed the award amount will carry 9% interest from the date of Order till realization.
Pronounced in the Open Commission on this the 31st day of October, 2022
Sri. Manulal V.S. President Sd/-
Smt. Bindhu R. Member Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 – Copy of registration certificate from RTO Kottayam
A2 –Copy of insurance certificate by 2nd opposite party
A3 – Copy of letter dtd.28-08-2020 by 2nd opposite party to complainant
A4- Receipt No.3054 by Vision Motors dtd.01-10-2020
A5 – Receipt No.4003 dtd.01-08-2020 by Sun Shine Crane & Recovery
Services
A6 – Copy of customer proforma invoice by Honda
Exhibits marked from the side of opposite party
B1 – Manual of the Honda Amaze
B2 – Copy of receipt – KMB voucher dtd.18-08-2020 by Vision Motors Pvt. Ltd
B3 – Tax invoice dtd.18-09-2020 by Vision Motors Pvt. Ltd.
B4- Tax invoice dtd.24-09-2020 by Vision Motors Pvt. Ltd.
B5 – Receipt voucher No.3054 dtd.01-10-2020
B6 – Copy of insurance policy
By Order
Assistant Registrar
