State Consumer Disputes Redressal Commission
United India Insurance Co. Ltd. vs Smt. Suman Jain on 13 September, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.188 of 2022
Date of institution : 11.03.2022
Reserved On : 25.08.2022
Date of decision : 13.09.2022
1. United India Insurance Co. Ltd., No.19, opposite Bus Stand, G.T.
Road, Jalandhar through its D.M. through R.O. i.e. U.I.I.C., 136,
Feroze Gandhi Market, Ludhiana through Assistant Manager (L)
Shama Arora Mittal.
2. United India Insurance Co. Ltd., SCO No.72, Phase-IX, SAS
Nagar, Mohali, Punjab, through D.M. through its Regional Office
i.e. U.I.I.C., 136, Feroze Gandhi Market, Ludhiana through
Assistant Manager (L) Shama Arora Mittal.
....Appellants/Opposite Parties
Versus
Smt. Suman Jain w/o Sh. Ashok Kumar R/o H.No.1160, Sector 34-C,
Chandigarh.
....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 06.12.2021 passed by the
District Consumer Disputes Redressal
Commission, Sahibzada Ajit Singh Nagar
(Mohali).
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mrs. Urvashi Agnihotri, Member.
First Appeal No.188 of 2022 2
1) Whether Reporters of the Newspapers
may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported
in the Digest? Yes/No
Present:-
For the appellants : Sh. Lalit Garg, Advocate
For the respondent : Sh. K.K. Verma, Advocate.
JUSTICE DAYA CHAUDHARY, PRESIDENT
Appellants/opposite parties i.e. United India Insurance Co. Ltd. & another have filed the present appeal under Section 41 of the Consumer Protection Act, 2019 against the order dated 06.12.2021 passed by the District Consumer Disputes Redressal Commission, Sahibzada Ajit Singh Nagar (Mohali) (in short, "the District Commission"), whereby the complaint filed by the respondent/ complainant namely Suman Jain was allowed and the appellants/opposite parties were directed to pay an amount of ₹12 lac along with interest at the rate of 9% per annum jointly and severally from the date of filing of the complaint till its payment to the complainant within a period of 60 days from the date of receipt of certified copy of the order. Both the opposite parties were also directed to pay compensation of ₹1 lac for causing mental agony and harassment as well as cost of litigation. A further direction was also issued to the opposite parties to conduct an enquiry and to recover the amount of compensation from their erring Manager, who was First Appeal No.188 of 2022 3 responsible for raising frivolous and unnecessary objections to deprive the complainant from his genuine claim.
2. It would be apposite to mention here that hereinafter the parties will be referred as have been arrayed before the District Commission.
3. Briefly, the facts of the case which are necessary for decision of the present appeal filed by the appellants/opposite parties as averred by the respondent/complainant in the complaint filed before the District Commission are that she purchased one BMW car having Engine No.21056649 and Chassis No.BWANX55090CY9525 in the year 2008, which was registered vide No.CH-01-AX-7669. The complainant got insured the said car by way of obtaining an Insurance Policy for the period 22.03.2017 to 21.03.2018. It was further mentioned in the complaint that the son of the complainant took the car with her consent for driving on 24.08.2017 to Derabassi and some mechanical defect occurred. The car was parked outside the premises of S.S. Motors, Bhagwanpura, Derabassi. However, the mechanic could not detect the problem in the car and the same was parked outside the workshop where other vehicles were also parked. It was further mentioned in the complaint that there was unrest in the area due to agitation by the followers of Dera Sacha Sauda, Sirsa. In the midnight of 27.08.2017, the son of the complainant received a telephonic call that the car had caught fire and was got burnt. The son First Appeal No.188 of 2022 4 of the complainant reached at the spot and found that the car was totally burnt. A complaint was reduced in writing and DDR was recorded. As per version of the local police, the fire occurred due to shirt circuit. The opposite parties were also informed on 28.08.2017 and an estimate was also prepared by M/s Krishna Automobiles. One Mr. R.P. Singh, Surveyor was deputed by the opposite parties to assess the loss and a report was submitted. Thereafter, one Mr. Garish was appointed as surveyor who submitted Final Survey Report. Opposite party No.1 also appointed one Dr. Joseph K. Masih as Investigator and all the relevant documents and requisite information were supplied.
4. It was further mentioned in the complaint that in-spite of completing all the formalities, still the opposite parties failed to settle the genuine claim of the complainant. Stating to be a case of 'deficiency in service' and 'malpractice' on the part of the opposite parties, a prayer was made to issue directions to the opposite parties to pay the insured amount of the car to the tune of ₹13.50 lac along with interest at the rate of 12% from the date of loss till its realization. An amount of ₹1 lac was sought towards compensation for causing harassment and mental agony to the complainant as well as ₹50,000/- towards litigation expenses.
First Appeal No.188 of 2022 5
5. Upon notice issued to the respondents, reply was filed wherein certain preliminary objections regarding maintainability, concealment of facts etc.etc. were raised.
6. On merits also, the averments made in the complaint were denied. It was also stated in the reply that the incident of fire had occurred at the instance of the complainant in connivance with the mechanic. It was further mentioned in the reply that as per the DDR, the car caught fire due to some short circuit and not due to agitation by the followers of Dera Sacha Sauda, Sirsa. It was further mentioned in the reply that the car was not parked in the garage but it was parked in the open area and as such the fire occurred due to negligence on the part of the complainant as she did not take care of the safety of the car. It was further mentioned in the reply that the intimation regarding fire to the vehicle was not sent to the opposite parties well in time.
7. The complainant in support of her averments made in the complaint submitted her affidavit Ex.CW-1/1 along with documents Ex.C-1 to Ex.C-15. The opposite parties also submitted affidavit of Ms. Hemlata Panwar, Deputy Manager Ex.OP-1/1 and other documents Ex.OP-1/2 to Ex.OP-1/7.
8. During the pendency of the complaint, an application was moved by the opposite parties for cross-examination of the complainant and questionnaires were filed which were to be answered First Appeal No.188 of 2022 6 by the complainant. Reply of that application was filed. However, said application was rejected vide order dated 17.12.2019.
9. By considering the averments made in the complaint filed by the complainant as well as reply filed by the opposite parties and on hearing the arguments raised by both the sides, the complaint was allowed vide impugned order dated 06.12.2021. The relevant portion of the impugned order as mentioned in Para No.7 is reproduced as under:
"7. In view of above discussion, we allow the present complaint against the OPs. The OPs are jointly and severally directed to pay an amount to the tune of Rs.12,00,000/- (Rs. Twelve Lakhs only) alongwith interest @ 9% per annum from the date of filing the complaint till payment, to the CC within a period of 60 days from the date of receipt of free certified copy of this order. The OPs jointly and severally are further burdened to pay a lump sum compensation to the tune of Rs.1,00,000/- (Rs. One Lakh only) for mental agony and harassment and costs of litigation. It is further ordered that the OPs will conduct an enquiry and will recover the compensation from the erring Manager of the OPs who is responsible for raising such frivo lous and vexatious objections in order to deprive the CC from his genuine claim. Such type of order is passed since it is seen that in most of the cases objections raised by the OPs are vague, absurd and create unnecessary litigation between the parties. We further direct the OPs to set up an appropriate mechanism of legal experts so that the claims are settled immediately as and when such type of incidents take place. Free certified copies of the order be supplied to the parties as per rules. File be indexed and consigned to record room."First Appeal No.188 of 2022 7
10. Said order has been challenged by the appellants/opposite parties by way of filing the present appeal by raising a number of arguments.
11. There was a delay of 15 days in filing of the appeal. Misc. Application No.366 of 2022 was filed for condonation of delay, which was supported by an affidavit. Said application was allowed vide order dated 16.03.2022 and the delay in filing of the appeal was condoned.
12. Mr. Lalit Garg, learned counsel for the appellants/opposite parties submits that the impugned order has been passed without considering the arguments raised by the opposite parties and the preliminary objections raised in the reply. The averments made in the complaint were not correct. Learned counsel further submits that as per DDR, the car caught fire due to short circuit but no expert was called by the police to ascertain as to how the vehicle was burnt or the car was burnt due to short circuit or not. The vehicle was not parked in the garage and it was parked in the open area, which shows the negligence on the part of the complainant. The owner of the garage was also equally liable for the loss suffered by the complainant. The car was not under surveillance of any employee or any authorized person appointed by the insured at the time of alleged incident of fire and the same is violation of Condition No.4 of the policy.
13. As per Condition No.4 of the policy, the policyholder was required to take all reasonable steps to safeguard the vehicle from loss First Appeal No.188 of 2022 8 or damage and to maintain it in an efficient condition. Even in case of any accident/breakdown, the vehicle should not have been left unattended without proper precautions to prevent further damage or loss while parking even in case the repair work was going on. Learned counsel further submits that the District Commission has allowed the complaint but without having any expert opinion. Even the complainant herself did not make any effort to have the expert opinion or to remove the car from the garage to some authorized service station and the car remained unattended for a period of 4 days till it caught fire. Learned counsel also submits that no FIR was lodged well in time and the DDR was recorded after a delay of six days from the date of alleged incident, which shows the negligence on the part of the insured as the police also was not informed immediately after the accident. It is also the argument of learned counsel for the appellants/opposite parties that the District Commission also failed to take into consideration that no repair work was going on in the car and the question of catching fire did not arise. This fact has further been corroborated from the statement of the owner of the garage where the vehicle was parked. The Investigator sought the clarification and it was stated by the owner of the workshop that no repair work was going on when the car caught fire. Learned counsel further submits that the District Commission has failed to take into consideration the Exclusion Clause No.2 of the Insurance Policy and the impugned order has been passed contrary to First Appeal No.188 of 2022 9 the terms and conditions of the policy. Learned counsel further submits that the District Commission has directed the opposite parties to conduct an enquiry and to recover the compensation amount from their Manager, who was responsible for raising such frivolous and vexatious objections. The District Commission has totally gone beyond the scope of legal parameters while issuing such directions. Nothing has been mentioned in the complaint regarding the act and conduct of any official of the opposite parties. There was no evidence available before the District Commission to reach to the conclusion as the allegations of bias were not alleged in the complaint against the officials of the opposite parties and as such the observations made by the District Commission are contrary to evidence and beyond the averments made in the complaint. The claim of the complainant has been rejected by considering the terms and conditions of the policy. At the end, learned counsel submits that the interest granted by the District Commission at the rate of 9% is also on excessive side in view of latest judgment passed by the Hon'ble Supreme Court of case titled as Raj State Transport Corp. v. Alexix Sonier. The impugned order is liable to be set aside.
14. Mr. K.K. Verma, learned counsel for the respondent/complainant submits that a very detailed and well reasoned order has been passed by the District Commission by considering the averments made in the complaint and also by First Appeal No.188 of 2022 10 considering the arguments raised by learned counsel for both the parties. Learned counsel further submits that it cannot be said that the car was parked unattended, whereas the car was in the custody of workshop owner for doing necessary repairs. Intimation of fire incident was immediately given to the opposite parties and the police. The FIR was registered after recording of DDR. There was no delay in informing the police or the opposite parties. In case there was any delay in lodging FIR, the same was on the part of the police authorities. At the end, learned counsel submits that there is no merit in the appeal and the same deserves to be dismissed.
15. Heard the arguments of learned counsel for the parties. We have also carefully perused the impugned order passed by the District Commission, written arguments filed on behalf of the appellants and all other documents available on the file.
16. Facts of the case regarding filing of the complaint by the complainant before the District Commission, reply thereto filed by the appellants/opposite parties, allowing the said complaint and thereafter filing of the present appeal by the appellants/opposite parties are not disputed.
17. Admittedly, the car of the respondent/complainant was insured with the appellants/opposite parties vide Motor Insurance- Private Car Package Policy Schedule (Ex.C-2) which was valid w.e.f. 22.03.2017 to 21.03.2018. On 24.08.2017 Mr. Ashish Jain, the son of First Appeal No.188 of 2022 11 the complainant took the said car with her consent to Derabassi for some work, where the car developed some mechanical problem. The car was taken to the workshop of S.S. Motors, Bhagwanpura, Derabassi. The mechanic could not detect the problem in the car as the car caught fire in the midnight of 27.08.2017 while parked outside the garage of the mechanic for repairs. In the night of 27.08.2017 at about 12.15 a.m., the son of the complainant received a phone call from the said workshop that the car in dispute caught fire. He reached at the spot immediately and found that the car was totally burnt.
18. The claim lodged by the complainant was repudiated by the opposite parties vide letter dated 04.06.2018 (Ex.C-13) on the ground that the vehicle was parked outside the garage of the workshop without any supervision and the complainant failed to take reasonable care of the vehicle and had left the same unattended. It amounts to breach of Condition No.4 of the terms and conditions of the policy.
19. In this regard, it is relevant to mention here that the car had developed some fault and it was entrusted to the repairer for effecting necessary repairs. Since the car was lying outside the garage when it caught fire, the complainant cannot be blamed for the same and as such it cannot be said that the complainant failed to take reasonable steps to safeguard the vehicle as per Condition No.4 of the policy. The fault if any was on the part of the repairer but the fact remains that the First Appeal No.188 of 2022 12 car suffered loss due to fire, which is duly covered as per the provisions of Section-I(i) of the terms and conditions of the policy.
20. The further ground raised in the repudiation letter was that the as per estimate of expenses prepared by repairer M/s Krishna Automobile dated 03.11.2017, the speedometer reading of the car was 94678 kms. but at the time of pre-inspection thereof at the time of insurance, the reading was 10201 kms. It clearly shows that the vehicle was in proper running condition at the time of loss and the complainant has misrepresented this fact which amounts to violation of Condition No.8 of the policy as well.
21. The aforesaid plea of the opposite parties is also not tenable, as the pre-inspection report prepared at the time of inspection of the car has not been produced either before the District Commission or before this Commission. In absence of any documentary evidence, the bald statement of the opposite parties in this regard cannot be believed in the eyes of law.
22. The opposite parties also took the defence that the complainant failed to give intimation of fire to the police immediately and the DDR was recorded on 02.09.2018 i.e. after a delay of five days. Firstly, it is relevant to mention that the said ground was not taken in the repudiation letter. However, perusal of DDR No.016 dated 02.09.2017 (Ex.C-3) clearly shows that the son of the complainant namely Ashish Jain had submitted a written complaint about the fire First Appeal No.188 of 2022 13 incident to the police on 28.08.2017 i.e. on the very next day of fire incident, which occurred in the midnight of 27.07.2017. The police recorded the DDR on 02.09.2017 only after conducting the necessary investigation. Therefore, the delay in recording the DDR cannot be attributed in any way to the complainant. Even otherwise, as per the provisions of Clause-1 of the terms and conditions of the policy at page-6 of the policy, in the event of occurrence of any accidental loss the insured/complainant was required to give a written notice to the Insurance Company immediately. The insured was required to give immediate notice to the police only in the case of theft of the insured vehicle and not in the event of accidental loss. Clause-1 of the policy is reproduced as under:
"1. Notice shall be given in writing to the Company immediately upon the occurrence of any accidental loss or damage and in the event of any claim and thereafter the insured shall give all such information and assistance as the Company shall require. Every letter claim writ summons and/or process or copy thereof shall be forwarded to the Company immediately on receipt by the insured. Notice shall also be given in writing to the Company immediately the insured shall have knowledge of any impending prosecution, inquest or fatal inquiry in respect of any occurrence which may give rise to a claim under this policy. In case of theft or criminal act which may be the subject of a claim under this policy the insured shall give immediate notice to the police and co-operate with the Company in securing the conviction of the offender.
23. The fire incident took place in the midnight of 27.08.2017 and the complainant gave written intimation about loss to the vehicle by fire vide letter dated 28.08.2017 (Ex.C-5) i.e. on the very next day of the incident. Therefore, there is no delay in intimating the opposite parties. Even the police was informed in writing about the fire incident First Appeal No.188 of 2022 14 on the next day i.e. 28.08.2017 as discussed above. Therefore, there is no breach of Condition No.4 of the policy on the part of the complainant.
24. The opposite parties deputed one Mr. R.P. Singh, Automobile Engineer as surveyor, who submitted Private & Confidential (Motor Spot Survey Report dated 01.12.2017 (Ex.C-7). He gave details of damage stating various parts of the vehicle such as front bumper, both fender and fender lining, front both apron, both head lights, both fog lights, both front grills, front wind shield glass, both LHs door glass, both rear view mirror, dashboard assy. complete, engine assy., meter assy., comp. wiring assy., steering assy., gear box assy., clutch system, brake system, inter cooler and radiator/condenser, front both tyres with alloys, front both comp. suspension, comp. front chassis, comp. front and rear seats and carpets, roof, sun roof and lining, cowl top with grill, wiper assy. and silencer assy. were damaged.
25. Thereafter, the appellants/opposite parties appointed Mr. Girish Sharma as Surveyor and Loss Assessor who after thorough investigation submitted his Motor Final Report dated 18.03.2018 (Ex.C-9). The exact cause of fire has not been mentioned in the survey reports Ex.C-7 and Ex.C-9. The matter was also got investigated by the appellants/opposite parties by appointed Dr. Joseph K. Masih, Investigator. He after thorough investigation submitted his report dated First Appeal No.188 of 2022 15 12.02.2018 (Ex.C-10). The Investigator recorded the statements of complainant, her son Ashish Jain, witness of fire incident namely Shehzad and the owner of workshop namely Suresh Kumar. All of them verified the factum of damages suffered by the car in dispute by fire in the midnight of 27.08.2017. The Investigator opined that the exact cause of fire could not be established as the Fire Brigade was called. However, the police mentioned in the DDR that the car caught fire due to short circuit. The opposite parties pleaded that no expert was examined to know the exact cause of the fire. Although, there is no exact cause of fire but it was also not proved on record that the vehicle was intentionally set on fire by the complainant in connivance with the repairer. Moreover, the incident of fire has been duly proved by way of the evidence as mentioned above and the loss of vehicle by fire is duly covered under the terms and conditions of the policy. The authority relied upon by learned counsel for the appellants is not applicable to the facts and circumstances of the present case.
26. As per the survey report (Ex.C-9), the vehicle in dispute suffered 'Total Loss' due to fire. Liability on repair basis was worked out to be ₹28,18,308/- less salvage value of ₹25,000/-. So net liability was worked out to be ₹27,93,308/- which was likely to increase further from ₹1 lac to ₹2 lac during repairs due to unforeseen damages. The surveyor has specifically mentioned in the report that after discussion with the competent authorities and the repairer, it was not reasonable First Appeal No.188 of 2022 16 and economical to repair the vehicle and as such the loss was settled on 'net of salvage basis'. The IDV of the vehicle as mentioned in the policy was ₹13,50,000/- and after deducting ₹2,000/- towards less policy clause and wreck value to the tune of ₹1,48,000/- (without RC), the net liability on 'Net of Salvage Basis' was calculated as ₹12,00,000/-.
27. The District Commission has allowed the complaint filed by the complainant and directed the opposite parties to jointly and severally pay an amount of ₹12 lac as assessed by the surveyor appointed by the opposite parties along with interest and compensation. However, the District Commission has failed to take into consideration the fact that car in question suffered total loss as per surveyor report and as such the RC and salvage are to be protected/disposed of by bringing this fact to the notice of the Registering Authority. The RC of the vehicle is to be deposited with the concerned Registering Authority, so that there may not be any possibility of misusing the RC by any person. Section 55 of the Motor Vehicles Act, 1988 is relevant, which is reproduced as under:
"55. Cancellation of registration:
(1) If a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner shall, within fourteen days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward to the authority the certificate of registration of the vehicle.
(2) The registering authority shall, if it is the original registering authority, cancel the registration and the certificate of registration, First Appeal No.188 of 2022 17 or, if it is not, shall forward the report and the certificate of registration to the original registering authority and that authority shall cancel the registration."
28. On perusal of said provision, it is apparent that in case a motor vehicle has been damaged/destroyed or it has been rendered permanently incapable of use, the owner of the vehicle is to report to the Registering Authority within the specified period, within whose jurisdiction the owner has residence or place of business, where the vehicle is normally kept, as the case may, and he/she is to forward to the Registering Authority the certificate of registration of the vehicle. Sub Section (2) of Section 55 is the action, which is to be taken by the Registering Authority, as it is the responsibility of the Registering Authority to cancel the registration. The Registering Authority is to forward the report and certificate of registration to the original Registering Authority, which shall be cancelled. Meaning thereby the Registering Authority is ultimately to cancel that registration. By relying upon the provisions of Section 55 of the Motor Vehicles Act, 1988, a letter bearing Ref:IRDA/NL/CIR/MOTOD/118/07/2019 dated 26.07.2019 was circulated by Insurance Regulatory and Development Authority (IRDA) of India to all General Insurers (other than Stand- Alone Health Insurers and Specialized Insurers) regarding the misuse of total loss accidental vehicle documents over stolen vehicles. Through that letter, the insurers were advised to ensure First Appeal No.188 of 2022 18 cancellation of certificate of registration of the vehicle in case of total loss claim settlement.
29. The District Commission has also directed the appellants/opposite parties to conduct an enquiry and recover the amount of compensation from the erring Manager, who was responsible for raising frivolous and vexatious objections in order to deprive the complainant of her genuine claim. Said direction of the District Commission is not warranted in the eyes of law. Neither any ill- will, enmity or bias has been alleged in the complaint against any officer/official of the Insurance Company nor any documentary evidence has been produced in this regard. Even otherwise, said direction has been issued at the back of the concerned officers/officials of the Company and that too without hearing them personally. Therefore, said direction issued by the District Commission is against the law and is liable to be set aside.
30. In view of the facts and circumstances as mentioned above, the appeal being without any merit is hereby dismissed and the impugned order dated 06.12.2021 passed by the District Commission is upheld so far as the merits of the case are concerned but with the modification that the respondent/complainant shall dispose off/sell the salvage, if not already disposed of, and shall forward the RC of the car in dispute to the concerned Registering Authority for cancellation First Appeal No.188 of 2022 19 within a period of 14 days from the date of receipt of certified copy of this order. The direction issued by the District Commission to the appellants/opposite parties to conduct an enquiry and recover the amount of compensation from the erring Manager is set aside being unwarranted in the eyes of law.
31. Since the main case has been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
32. The appellants had deposited a sum of ₹8,48,543/- at the time of filing of the appeal. Said amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith. The respondent/complainant may approach the District Commission for the release of the same and the District Commission may pass appropriate order in this regard in accordance with law.
33. The appeal could not be decided within the statutory period due to heavy pendency of court cases and pandemic of COVID-19.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (URVASHI AGNIHOTRI) MEMBER September 13, 2022.
(Gurmeet S)