State Consumer Disputes Redressal Commission
G.Sridhar Goud S/O Late G.Dayanand Goud vs Future General India Insurance ... on 20 January, 2014
BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. C.C.No.70 OF 2012 Between: G.Sridhar Goud S/o late G.Dayanand Goud aged about 34 years, Occ: Business R/o Flat No.103 1-2-47/182, TNR Vaishnavi Apartments Gagan Mahal Road, Domalguda, Hyderabad-29 Complainant A N D 1. Future General India Insurance Co.Ltd., 8-2-120/115/8/6, 3rd floor, BBR Forum Road No.2, Beside Gymkhana Club Banjarana Hills, Hyderabad-34, rep. by its Manager 2. Adishwar Auto Diagnostics Pvt Ltd., Mahavir Motors, rep. by Managing Director Regd.Off: at MB Towers, Plot NO.47 & 48 Madhapur, Hyderabad, AP Opposite parties Counsel for the Complainant M/s. K.Laxman Rao Counsel for the opposite parties M/s Katta Laxmi Prasad (OP1) M/s A.P.Venugopal(OP2) QUORUM SRI R.LAXI NARASIMHA RAO, HONBLE MEMBER
& SRI THOTA ASHOK KUMAR, HONBLE MEMBER MONDAY THE TWENTIETH DAY OF JANUARY TWO THOUSAND FOURTEEN Oral Order (As per Sri R.Lakshminarasimha Rao, Honble Member) ***
1. The complaint is filed seeking for the sum assured under the insurance policy in respect of his Mercedes Benz car bearing registration number AP 09 UFTR 7226 and an amount of `15,00,000/- towards compensation and costs.
2. The complainant submitted that he got insured his Mercedes Benz car bearing registration number AP 09 UF T/R for the IDV of `39,79,517/- with the opposite party no.1-insurance company. He has submitted that the clutch system, gear box and engine of the vehicle posed some problem or other from the date of its purchase and that the opposite party no.1 had not issued warranty card to him. The complainant submitted that on 22.08.2011 the engine of the car was switched off though there was no heavy rain and he had reported the problem along with the vehicle to the opposite party no.2 which opened job card for repair of the vehicle.
3. The complainant submitted that as the opposite party no.2 had not carried out the repairs of the vehicle, he got issued notice on 5.11.2011 and the opposite party no.2 issued reply on 30.12.2011. The opposite party no.2 assessed the loss caused to the vehicle at `14,35,652/- and the opposite party no.1 recommended for settlement of claim at `1,07,012/- and there is vast difference between the two amounts as also that the opposite party no.1 has not settled the claim.
4. The opposite party no.1-insurance company has resisted the claim on the premise that the complaint is filed without there being any cause of action and without the complainant giving reply to the notice rejecting the claim. The opposite party has submitted that cause of action is created supressing the true facts that the damage occurred due to peril that is not insured and that the claim does not fall within the preview of the provisions of Consumer Protection Act. It is contended that the averments of the complaint that the complainant was not happy with the performance of the vehicle establish the manufacturing defect in the vehicle.
5. The first opposite party submitted that it issued cover note on 28.01.2011 and the insurance policy on 2.02.2011 and that the allegations made against the opposite party no.2 would show that there is no case made out against the opposite party no.1. It is contended that the opposite party no.1 addressed letter dated 10.12.2011 that it had given approval as per entitlement on claim and that the complainant has to get the vehicle repaired and produce bills for reimbursement and the complainant had not acted upon the same advice of the opposite party no.1. The damage sustained to the car is not covered by the terms of the policy and yet it considered labour charges and some spare parts in the assessment.
6. The opposite party no.2 contended that the complaint is bad for non-joiner of manufacturer of the car and that the complainant is not a consumer as defined in the provisions of the Consumer Protection Act and this Commission has no jurisdiction to try the dispute as it seem that the car is put to use by the complainant for enhancing his profits in the business conducted by him. The opposite party no.2 furnished the complainant with warranty card at the time of sale of the car.
7. The opposite party no.2 submitted that it received complaints of breakdown of the vehicles due to water logging on the same day on which the complainant had towed down the vehicle to its work shop and as per the preliminary version of the complainant, the vehicle was stalled in water logged condition and he started the vehicle while it is in water logged condition. The complainant had not followed the instructions mentioned in the owners manual and he cannot make claim against the opposite party no.2.
8. The opposite party no.2 submitted that the damage caused to the vehicle is beyond the terms of warranty and the opposite party no. 2 could not proceed with the repairs of the vehicle as the opposite party no.1-insurance company has not given its approval therefor. The second opposite party has given estimate for `14,35,652/- towards labour charges, consumables and replacement of engine of which some of the items may not be covered by the terms of the insurance policy. The opposite party no.2 submitted that there was no deficiency in service on its part and hence prayed for dismissal of the complaint.
9. The complainant has filed his affidavit and the documents, Ex.A1 to A10. On behalf of the opposite parties, the authorized signatory of the opposite party no.1 and the Head (After Sales) of the opposite party no.2 filed their respective affidavits and the documents, Exs.B1 to B5.
10. The points for consideration are:
i) Whether the opposite party no.2 supplied defective vehicle to the complainant/
ii) Whether the vehicle sustained damage due to it being run in water logged road?
iii) To what relief?
11. POINT NO.1: The complainant purchased Mercedes Benz car from the opposite party no.2 on 26.01.2011 under invoice bearing number AD011011RIN00224 for consideration of `39,75,560/-. The complainant had not complained of any defect in the vehicle till 22.08.2011 and he got issued notice dated 5.11.2011 stating that he got the service to the car done regularly and he was using the car sparingly as also that the car was defective. The complainant used the car for a period of 8 months without there being any complaint and he had not filed job cards to show whether he made any complaint at the time the vehicle was taken for servicing.
12. The learned counsel for the opposite party no.1 has contended that the complaint is not maintainable as it seen that the complainant has put the car to enhance profit in his business. There is no specific objection to the effect nor the second opposite party could assert that the vehicle is used for commercial purpose. As such this Commission does not find any substance in the contention of the learned counsel for the opposite party no.2.
13. The complainant had not stated that he made any complaint to the opposite party no.2 about any specific defect in the vehicle. Even in the notice dated 5.11.2011 a vague allegation that the vehicle was defective in nature was made without referring to any specific problem. The complainant for the first time made an averment in the complaint that the clutch system and gear box in the transmission system was defective. The problems complained of are subsequent to the date on which the vehicle was stalled on the water logged road on 22.08.2011.
14. Mere pleading does not take place of proof. In absence of any complaint made as to the vehicle suffering from inherent defect and any evidence adduced in support thereof, we do not find any substance in the contention of the learned counsel for the complainant that the vehicle suffered from manufacturing defect. The point is answered against the complainant.
15. POINT NO.2: The complainant paid a sum of `77,619/- on 28.1.2011 to the opposite party no.1-insurance company towards insurance premium and the opposite party no.1 issued the insurance policy bearing number 2011-MOO72895-FAR on 28.01.2011 for the period from 28.01.2011 till 27.01.2012 in respect of the car of the complainant. The complainant towed down the vehicle on 22.08.2011 to the workshop of the opposite party no.2 with the complaint of the engine of the car being switched off on water logged road. The opposite party no.2 addressed letter dated 14.09.2011 to the complainant informing that it had prepared estimate for the repairs of the vehicle and thereafter it would send supplementary estimate thereafter.
16. The second opposite party addressed letter seeking for his approval for making supplementary estimate and it had also requested the complainant through its previous letter containing information as to the primary estimate. On both occasions, the complainant failed to respond and he had not taken steps to give his approval or the approval from the opposite party no.1-insurance company. To the notice dated 5.11.2011, the opposite party no.1-insurance company issued reply informing the complainant that it had given approval to the limited extent as per the terms of the insurance policy and it is not liable to bear the entire expenditure.
17. The surveyor has inspected the vehicle and assessing the loss submitted his report to the opposite party no.1-insurance company. The surveyor estimated the loss for `1,07,012/-. The surveyor had described the cause and nature of accident as under:
CAUSE AND NATURE OF ACCIDENT;
As per the insured version and as explained in the claim and as per the available information i.e. on 22.08.211 at about 1.09 a.m. it was raining and roads were filled with rain water, while IV was moving near Domalguda in the rain water slowly moving all of a sudden IV engine got switched off and vehicle stopped and complete vehicle submerged in the rain water upto the bonnet level. Hence the I.V. engine got affected with flood water.
In this incident no t.p damages and injuries. This matter was not reported to Police authorities Note: As per the cause and nature of accident as IV was stopped in the rain water, but the insured tried to restart the engine, due to this IV engine had hydrostatic lock inside the engine and seized.
18. The surveyor had elicited information from the complainant as to what happened on the day and the circumstances leading to the engine of the vehicle getting switched off and the questions of the surveyor and the answers thereof from the complainant read as follows:
1. Exact location of accident with land mark?
2. Details on how the accident happened?
3. What situation the accident has happened?
4. What was the condition of the vehicle immediately after the accident and what parts have got damage?
5. What did you do after accident?
6. Whether any temporary or permanent repair was carried out and where? List out the parts replaced if any during this repair?
7. Did you try to restart the vehicle?
8. Who came for help? Provide us their name and contact details?
9. How many occupant were their in the car at the time of accident?
10. How did you bring the vhiec le to workshop?
Name of the Insured: Sridhar Goud Vehicle NO. AP 09 UF T/R 7226
1. Domalguda outside of my home
2. To much of rain there was of water coming on the roads
3. Water went inside from top of Bonnet and down level of .
4. the engine got off
5. We park at the same point and
6. No
7. pickup are of the owner of
8. Two
10. By towing
19. Thus, the complainant cannot claim that there was no heavy rain on the day, viz., and he cannot contend that he being fed up with the defects in the car, surrendered the vehicle to the opposite party no.2. The complainant labouring under the impression that hydrostatic lock is not covered by the terms of the insurance policy, he had gone to the extent of stating that there was no rain in Hyderabad on -22.08.2011 and the vehicle suffered manufacturing defect and as such he surrendered the vehicle to the opposite party no.2. The statement of the complainant is manifestly incorrect.
20. The opposite party no.1-insurance company refused to pay rather restricted its liability to the sum of Rs.1,07,012/- presumably on the premise that hydrostatic locking is not an accident and it is not covered by the terms of the insurance policy . Clause iv of Section I of the terms of the insurance policy deals with the precautions to be taken by the complainant to safeguard the vehicle and it reads as under:
The insured shall take all reasonable stps to safeguard the vehicle form loss or damage and to main it in efficient condition and the company shall have at time free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. I the event of any accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insureds risk.
21. The opposite party no.1-insurance company has stated in its reply to the notice of the complainant that there was no external impact and the engine of the vehicle cannot be impacted by merely coming into contact with the water and the complainants to attempt to start the vehicle which was stopped in water logged road was the cause for the damage of the vehicle and the relevant paragraph of the reply notice reads as udner:
It is not out of place that in the case of hydrostatic lock,
1. There is no external impact either to the vehicle or to the engine from outside
2. Engine cannot be impacted merely coming in contact with the water and hence damages if any can be attributed to either mechanical failure or trying to run the engine of the vehicle when it is still in contact with the water.
3. When a vehicle stops in water logged on road, efforts to start the vehicle is well known source to cause damage to the engine..
Hence the damages are not comes under the purview of the policy and still my client had considered the claim of labor charges and some spare parts in the assessment.
22. Therefore, it becomes clear that there was heavy rain on 22.08.2011 and the car was stalled on the water logged road. The cause for the engine going off is due to hydrostatic locking. It is pertinent to note that hydrostatic locking is considered as an accident and covered by the terms of the insurance policy by this Commission in Vasireddy S.V.Prasad vs Mercedes Benz India Pvt Ltd., (MB India) and others in CC.No.6 of 2012 decided on 27.12.2013 which reads as under:
The surveyor deputed by the opposite parties no.3 and 4 had reported that water entered into the engine through air cleaner and he found hydrostatic lock of the engine. The surveyor had not said anything about cranking of the engine. Thus, no fault can be attributed to the complainant in attempting to drive the vehicle on the water logged road. Chandigarh State Commission referring to its earlier decision, in Tata AIG General Insurance Company (supra) held that damage caused to the engine of insured car cannot be termed as consequential damage when the vehicle was stopped due to splash of water on account of another vehicle. It held :
The facts of the case show that the complainant was going back from BMW workshop after some minor repairs. It was raining; the driver had been told not to crank the self if the engine stops on the way; he followed those instructions when the car stopped due to splash of water given by another vehicle coming from the opposite side. There was, therefore, no negligence on the part of the driver of the vehicle and the damage to the engine cannot be said to be a consequential damage due to the negligence of the driver of the driver of the vehicle. In fact, all the precautions appear to have been taken by the driver while driving the vehicle and, therefore, the claim could not be denied by the OP/appellant. Our view in this respect is supported by the order passed by this Commission in Kanta Dhir Vs. M/s The Manager, ICICI Lombard & Anr., Appeal case No. 830 of 2007 decided on 24.10.2008, wherein it was held that if a person is going in the car and all of sudden rain starts and the water accumulates in the intersection and enters the engine or engine is seized then it is not fault of the insured and the insurer is liable to reimburse the claim. This order was followed in another case titled as New India Assurance Co. Ltd. Vs. V.K. Bawa, Appeal case No.428 of 2009 decided by this Commission on 11.11.2009.
24. The opposite parties have not disputed the finding of the surveyor appointed by the complainant that the damage to the engine of Benz car can be caused due to accident caused by external means on account of flood/rain water as the inlet venture tube is exposed to outside at the front grill area and the compression ration operated by Mercedes Benz compared to other vehicles is on higher side and Mercedes Benz vehicle is prone to damage, hydrostatic lock which occurs in a couple of seconds without the knowledge of the driver.
25. The surveyor opined that such damage could occur with a lump of water splashed on account of rushing of other vehicle in rainy time even at the time the other vehicle ran at safe water level on the road. Thus, it can be said that the damage caused to the vehicle is not consequential and it occurred as a result of an accident occurred by external means which is covered by the terms of the insurance policy.
23. Thus, the contention of the opposite party no.1 that the hydrostatic locking is not covered by the terms of the insurance policy is not sustainable. The opposite party no.1 is liable to bear the repair charges of the vehicle.
24. In the result, the complaint is allowed directing the opposite party no.1 to reimburse the amount to the complainant subject to production of the receipts relating to the repairs of the vehicle bearing No.AP 09 UF T/R 7226.
The complaint against the opposite party no.2 is dismissed without costs. The costs of the proceedings quantified at `10,000/-. Time for compliance four weeks.
MEMBER MEMBER Dt.20.01.2014 కె.ఎం.కె.* APPENDIX OF EVDIENCE WITNESSES EXAMINED NIL EXHIBITS MARKED For complainant Ex.A1 Copy of invoice dated 29.01.2011 Ex.A2 Copy of insurance policy dated 28.01.2011 Ex.A3 Copy of preliminary estimation by OP2 dated 14.09.2011 Ex.A4 Copy of report of Surveyor dated 07.10.2011 Ex.A5 Copy of letter of OP No.1 dated 10.12.2011 Ex.A6 Copy of legal notice dated 5.11.2011 Ex.A7 Copy of reply notice of opposite party no.1 dated 30.12.2011 Ex.A8 Copy of return notice of Ops Ex.A9 Copy of workshop/job card order dated 23.08.2011 Ex.A10 Copy of Deccan Chronicle News Paper dated 22.08.2011 For opposite parties Ex.B1 Copy of Survey Report Ex.B2 Copy of technical report Ex.B3 Copy of reply of technical report Ex.B4 Copy of claim form Ex.B5 Initial claim alert advice MEMBER MEMBER