State Consumer Disputes Redressal Commission
Hdfc Ergo General Insurance Company ... vs Sarup Industries on 3 June, 2016
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.205 of 2014
Date of Institution: 28.02.2014
Date of Decision : 03.06.2016
1. HDFC ERGO GENERAL INSURANCE COMPANY LIMITED,
Remon House, HT Pareshkh Marg, 169, Backbay reclamation,
Mumbai-400059.
2. HDFC ERGO GENERAL INSURANCE COMPANY LIMITED, 3rd
Floor Eminent Mall, 261 Lajpat Nagar, Near Guru Nanak Mission
Chowk, Jalandhar-14401.
.....Appellants/opposite parties
Versus
Sarup Industries, formery known as Sarup Tanneries Limited,
Ramdass Pura, Near Guru Ravi Dass Chowk, Jalandhar through
Shri Rupinder Singh S/o Avtar Singh accounts officer.
.....Respondent/complainant
First appeal against order dated
30.10.2013 passed by the District
Consumer Disputes Redressal
Forum, Jalandhar.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Shri J.S. Gill, Member.
Present:-
For the appellants : Sh. Sandeep Suri, Advocate For the respondent : Sh. A.K. Bakshi, Advocate ................................................... J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
The appellants of this appeal have directed this appeal against respondent of this appeal, assailing order dated 30.10.2013 of the District Consumer Disputes Redressal Forum, Jalandhar (in short the "District Forum"), vide which, the complaint of the respondent of appeal was partly accepted by directing the appellants to pay the amount of Rs.4,01,903/- alongwith interest @9% per annum from the date of filing the complaint till actual payment and out of this amount, amount if any already paid to the complainant First Appeal No.205 of 2014 2 shall be deducted, besides Rs.10,000/- as composite amount for compensation and litigation expenses. The appellants are opposite parties in the complaint and respondent of this appeal is complainant in the complaint and they be referred as such hereinafter for the sake of convenience.
2. The complainant has filed the complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act"), against the OPs on the averments that it is a private limited company duly incorporated under Companies Act, 1956, now it is known as Sarup Industries Limited. It was further alleged that Sh. Rupinder Singh, the accounts officer is conversant with the facts of the case and has been authorized by the resolution passed by the Board of Directors of the complainant on 07.01.2013 to file and pursue the complaint. The OPs are engaged in the business of general insurance having their Head Office at Mumbai and have various branches throughout India including one such branch at Jalandhar. The complainant got insured its car make BMW bearing registration no.PB-08-BJ-0534, engine no.76992, chassis no.77569, model 2009 with OPs, vide policy no.2311200180544900000 by paying premium Rs.47,011/-, vide cheque no.44198 dated 29.12.2011 for the period from 01.01.2012 to 31.12.2012 for a sum of Rs.38,72,743/-. It was further alleged that on 05.08.2012, Simarjit Singh Bawa was driving the car from Kapurthala to Jalandhar and due to heavy rain on that day, water had accumulated on road at Basti Bawa Khel at Jalandhar and traffic was flowing at normal speed. A bus coming from opposite First Appeal No.205 of 2014 3 direction splashed the water and it gushed into the car which immediately got stalled on the spot. Simarjit Singh Bawa called BMC Helpline and vehicle was toed from the spot to workshop at Ludhiana. Intimation was given to OP on 06.08.2012 about it. M/s Krishna Automobiles authorized dealer of the OPs inspected the vehicle and submitted service quotation no.SQ-120803 dated 14.08.2012 for a sum of Rs.5,89,154/- on account of estimated cost of repairs of the vehicle. The complainant instructed the said authorized dealer to carry out necessary repairs. M/s Krishna Automobiles inspected the vehicle again and submitted fresh estimate, vide communication dated 16.08.2012 and requested for advance payment of Rs.2,00,000/- to start the repair work. The amount of Rs.2 lakhs was transferred through RTGS to M/s Krishna Automobiles, Ludhiana by the complainant and authorized dealer started the repair work. The OPs deputed M/s Bansal & Company of Ludhiana as surveyor to carry out the survey on the vehicle, who submitted report dated 11.08.2012 and passed the claim for flushing of engine only and repudiated the claim for the balance repairs. Copy of report was received by the complainant on 14.08.2012 and complainant had disclaimed the said report, vide its reply dated 06.09.2012. The OPs approved the claim of Rs.12,303.43 paise only, which is not acceptable to the complainant. The OPs have wrongly observed that loss to the engine was due to consequential loss, depreciation, wear & tear, mechanical or electrical break down, failure of breakage. The OPs have wrongly passed the claim of First Appeal No.205 of 2014 4 Rs.12,303/- only, whereas complainant suffered financial loss of Rs.5,50,107.20 paise, as per tax invoice no.121043 dated 13.09.2012 raised by M/s Krishna Automobiles Limited Ludhiana. The complainant has, thus, prayed that OPs be directed to pay a sum of Rs.5,36,903.77 paise alongwith interest @18% per annum from 13.09.2012 till its realization, besides Rs.5 lakhs for mental harassment.
3. Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant vehemently. It was averred that the OPs have paid the amount of Rs.12,303/- as assessed by the surveyor & loss assessor in terms and conditions of the policy. The amount of loss was not payable to the complainant as per terms and conditions as any consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages is not payable. The surveyor M/s Bansal & Company was deputed to assess the loss to the vehicle and it conducted the survey at M/s Krishna Automobiles Limited Ludhiana and submitted report dated 19.09.2012, assessing the loss to the tune of Rs.12,303/- stating liability of OPs restricted to the cleaning and flushing of engine only and this fact was intimated to the complainant, vide letter dated 11.08.2012 sent on 13.08.2012. Any deficiency in service or unfair trade practice was vehemently denied by the OPs. Whatever the amount was admissible under the claim of Rs.12,303/- has already been paid to the complainant by the OPs. The OPs prayed for the dismissal of the complaint.
First Appeal No.205 of 2014 5
4. The complainant tendered in evidence affidavit Ex.CW- 1/A alongwith documents Ex.C-1 to C-49 and closed the evidence. As against it, OPs tendered in evidence affidavit Ex.O-A alongwith documents Ex.O-1 to Ex.O-4 and closed the evidence. On conclusion of evidence and arguments, the District Forum accepted the complaint of the complainant, as referred to above. Dissatisfied with the order of District Forum Jalandhar dated 30.10.2013, OPs, now the present appellants directed this appeal against the same.
5. We have heard the learned counsel for the parties at considerable length and have also examined the record of the case. Ex.C-1 is the legal notice sent to OPs by the complainant and postal receipt is part of it. Ex.C-2 is the memorandum and articles of association of complainant limited company. Ex.C-3 is the incorporation certificate of the complainant company. Ex.C-4 is the resolution passed by Board of Directors of complainant company authorizing Rupinder Singh Accounts Officer to file the complaint. Ex.C-5 and C-8 are the emails exchanged between the parties. The tax invoices issued by Krishna Automobiles Ex.C-9 to Ex.C-14 are on the record charging the amount of Rs.4,57,332/-, besides Rs.25,170/- for the repair of the car in question. The correspondence took place between the parties for settlement of claim, as is evident from Ex.C-15 to C-49 on the record. In rebuttal of this evidence OPs tendered in evidence affidavit of Shyama Charan Vats, Assistant Manager of OPs Ex.O-A on the record and Bansal & Company survey report is Ex.O-1 on the record. It is dated 19.09.2012. Ex.O-2 First Appeal No.205 of 2014 6 is the insurance policy of the car in question. Ex.O-3 is the copy of reminder to the complainant by the surveyor regarding it claim and Ex.OP-4 and the copy of postal receipt thereof. Ex.O-B is the affidavit Akshay Kshitij Bose, Legal Manager of OP on the record. Ex.O-C is the affidavit of Vijay Bansal surveyor and Loss on the record, who assessed the loss in this case.
6. The submission of counsel for the appellant is that policy contract Ex.O-2 is governing document between the parties. The parties are bound by the terms and conditions of it. It was submitted that as per HDFC General Insurance Company Limited, OPs shall not be liable to make any payment in respect of consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages. The emphasis of counsel for the appellant is that loss to the vehicle of complainant is consequential loss and as such it is not covered by the contract of insurance Ex.O-2. The only forceful submission of OPs now appellant is that the surveyor Bansal & Company in the report Ex.O-1 recorded the observation in para no.5 of the report, which is reproduced as under:
"All the losses to engine internal parts like piston, cylinder, connecting rod, crankshaft, bearing occurred in consequence of repeated cranking which lead to mechanical break down and then failure, hence are not payable as per the policy exclusion whose extract are written below:First Appeal No.205 of 2014 7
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.
As per our opinion our liability is restricted to cleaning & flushing of the engine only and we also informed the insured regarding the same dated 13.08.2012.
So we are assessing the loss with the flushing & cleaning of the engine & now it is the underwriters to settle the claim as per policy terms and conditions."
The surveyor, thus, assessed the net loss payable as Rs.12,303/- only. The main controversy before us is whether the loss to the complainant is consequential loss, so as to take present case out of the purview of the contract of insurance between the parties or not. In case, it is found to be consequential then in that eventuality as per terms and conditions of the insurance contract, the OPs shall not be liable. On this point, we have to refer to evidence on the record to determine the controversy. The complainant pleaded in the complaint that on 05.08.2012, Simarjit Singh Bawa was driving the car from Kapurthala to Jalandhar and due to heavy rain on that day, water had accumulated on road at Basti Bawa Khel at Jalandhar and traffic was flowing at normal speed. A bus coming from opposite direction splashed the water and it gushed into the car which immediately got stalled on the spot. This specific pleading has been raised in para no.5 of the complaint by the complainant. The OPs have denied this fact. Rupinder Singh authorized agent of First Appeal No.205 of 2014 8 complainant filed his affidavit Ex.O-A on the record stating this averment on oath. The OPs on the other hand relied upon the report of the surveyor Ex.O-1. The surveyor restricted the liability to the cleaning and flushing of engine and found the net loss payable as Rs.12,303/- only. The surveyor has not accepted the claim of the complainant for loss of Rs.4,52,176.79 paise to the vehicle.
7. Section I of the Contract of Insurance lays down as under:
"The company will indemnify the insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon;
i. by fire explosion self ignition or lighting; ii. by burglary housebreaking or theft;
iii. by riot and strike;
iv. by earthquake (fire and shock damage);
v. by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;
vi. by accidental externall means;
vii. by malicious act;
viii. by terrorist activity;
ix. whilst in transit by road rail inland-waterway lift elevator or air;
x. by landslide rockslide.
The OPs will indemnify the insured against loss or damage to the vehicle insured hereunder and/or its accessories whilst thereon, by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost, as per Section I (v) of this Contract. The car of the complainant First Appeal No.205 of 2014 9 which was insured with OPs got stalled on 05.08.2012, being driven from Kapurthala to Jalandhar. It was fetched by towing to the premises of workshop of M/s Krishan Automobiles Ludhiana, the authorized dealer of the company for repair. The complainant spent Rs.5,50,107.20 paise on the repair of the car which was insured with OPs in this case. The case of the appellant is that damage occurred to the engine due to repeated cranking which lead to mechanical breakdown and then failure. On the other hand version of the complainant is that the water accumulated on the road due to heavy rain and a bus was coming from the opposite side and splashed the water and went into the engine, which stalled it. The card was toed from the spot to the premises of the workshop for repair. This Commission has held in case "ICICI Lombard General Insurance Company Limited Vs. Baljit Singh & others" 2016(1)CLT-202/03 that the damage, at the most, was caused due to flood like situation on account of heavy rainfall. The damage to the vehicle was caused due to flood like situation on account of heavy rain fall and hence it is covered under the terms and conditions of the policy. We do not find any negligence on the part of driver of the car in question in this case and flood like situation was developed due to heavy rain and on account of coming bus, the water splashed and went to the engine parts of the vehicle without any fault of the driver of the car. The complainant claimed the amount of Rs.5,36,903.77 paise. As the car was of 2009 model and by considering the depreciation @25% to the vehicle, which was more than three years old, but not exceeding four First Appeal No.205 of 2014 10 years. The District Forum rightly found the amount of Rs.1,35,000/- as depreciation @25% and correctly assessed the amount of Rs.4,01,903/- payable to the complainant and the amount, if any already paid to the complainant shall be deducted. The order of District Forum is, thus, sustainable in the eye of law. There is no illegality or material infirmity in the same calling for any interference therein.
8. As a result of our above discussion, we find no merit in the appeal and the same is hereby dismissed.
9. The appellant of this appeal had deposited the amount of Rs.25,000/- with this Commission at the time of filing the appeal. This amount alongwith interest, which accrued thereupon, if any, be remitted by the Registry to the complainant/respondent by way of a crossed cheque/demand draft after the expiry of 45 days.
10. Arguments in this appeal were heard on 02.06.2016 and the order was reserved. Now the order be communicated to the parties. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR)
PRESIDING JUDICIAL MEMBER
(J.S. GILL)
June 03, 2016 MEMBER
(MM)