State Consumer Disputes Redressal Commission
United India Insurance Company Ltd. vs Robin Khurana on 20 September, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.242 of 2021
Date of institution : 19.07.2021
Reserved On : 08.09.2022
Date of decision : 20.09.2022
United India Insurance Company Limited, Kotkapura Road, Bagha
Purana, Divisional Manager, through Ms. Sham Arora, Assistant
Manager (Legal) having its Regional Office at 136, Feroze Gandhi
Market, Ferozepur Road, Ludhiana.
....Appellant/Opposite Party
Versus
Robin Khurana S/o Sh. Naresh Kumar R/o Muglu Patti, near Pray
School, Bagha Purana, District Moga.
....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 12.03.2021 passed by the
District Consumer Disputes Redressal
Commission, Moga.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mrs. Urvashi Agnihotri, Member.
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 appellant : Sh. Varun Mittal, Advocate
For the respondent : Sh. Vivek Salathia, Advocate.
JUSTICE DAYA CHAUDHARY, PRESIDENT
Appellant/opposite party i.e. United India Insurance
Company Limited, Kotkapura Road, Bagha Purana, Divisional First Appeal No.242 of 2021 2 Manager, through Ms. Sham Arora, Assistant Manager (Legal) having its Regional Office at 136, Feroze Gandhi Market, Ferozepur Road, Ludhiana has filed the present appeal under Section 41 of the Consumer Protection Act, 2019 being aggrieved by the order dated 12.03.2021 passed by the District Consumer Disputes Redressal Commission, Moga (in short, "the District Commission"), whereby the complaint filed by the respondent/complainant was allowed and a direction was issued to the appellant/opposite party to pay an amount of ₹11,94,000/- to the complainant as compensation against the claim of insurance of the vehicle in dispute along with interest at the rate of 8% per annum from the date of filing of the complaint i.e. 11.09.2018 till its realization and also to pay an amount of ₹5,000/- as lump sum compensation for causing harassment to the complainant as well as litigation expenses within a period of 45 days from the date of receipt of copy of the order. A direction was also issued to the complainant to transfer the RC of the vehicle etc. in the name of the opposite party and the expenses towards transfer charges was to be borne by the opposite party.
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 as mentioned in the complaint filed by the respondent/complainant, which are necessary to be First Appeal No.242 of 2021 3 mentioned for decision of the present appeal are that the complainant was the owner of car make Volvo XC 90 D5 bearing Registration No.PB-19H-5080. Said vehicle was insured with the opposite party vide Insurance Policy No.2012043116P116192185 which was valid for a period with effect from 28.02.2017 to 27.02.2018. Said vehicle was hypothecated with Kotak Mahindra Bank. It was further mentioned in the complaint that the complainant along with his friend was going in the said vehicle and when they reached near village Chahil, District Faridkot on 10.12.2017, fire took place in the running car and it was totally damaged. The complainant and his friend who was travelling with him escaped their lives by jumping out of the car. The intimation thereof was conveyed to the office of Fire Brigade, Faridkot as well as Municipal Committee, Kotkapura by one Mr. Bhola Singh, J.E., Sewerage Board who was following the car on his vehicle. The fire was controlled with the help of Fire Brigade, which reached at the spot. Thereafter, the matter was reported to Police Station, Sadar, Kotkapura against GD No.039 dated 11.12.2017. It was also conveyed to the opposite party and in response thereof they deputed the Spot Surveyor to visit the spot for necessary investigation on 12.12.2017 and Survey Report dated 12.12.2017 was prepared. However, the complainant raised certain objections to the Survey Report and requested for appointment of new surveyor. Thereafter, a new surveyor was appointed by the opposite party vide letter dated First Appeal No.242 of 2021 4 12.01.2018, who asked for certain documents by way of writing a letter but it was informed that all the documents had already been supplied. It was further mentioned in the complaint that the Surveyor did not supply the copy of survey report to the complainant and subsequently, the report was sought under Right to Information Act. Thereafter, again a new surveyor namely Mr. A.S. Kapoor was appointed who called the joint meeting of both the parties. Said surveyor also submitted his report dated 30.06.2018. It was further mentioned in the complaint that nothing was done in-spite of submission of survey report but the complainant had to bring the vehicle with the help of crane by paying an amount of ₹3,000/- as conveyance charges and had to pay an amount of ₹3,000/- as rent per month for parking the vehicle in the house of one Avtar Singh. Thereafter, the claim of the complainant was repudiated by the opposite party vide letter dated 17.08.2018.
4. Claiming to be a case of 'deficiency in service' on the part of the appellant/opposite party, a prayer was made in the complaint for issuance of directions to the opposite party to pay an amount of ₹12 lac towards insurance claim as the accident had occurred during the period of insurance and also to pay an amount of ₹50,000/-as compensation on account of rental and other charges and ₹50,000/- on account of compensation for causing mental tension, harassment and agony to the complainant.
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5. Notice of the complaint was issued by the District Commission to the opposite party and reply to the complaint was filed by the counsel representing the opposite party. Certain preliminary objections were raised stating therein that the complaint was not maintainable and it was bad for non-joinder of necessary party and also that the car was hypothecated with Kotak Mahindra Prime Limited and the same was not impleaded as party. It was also mentioned that complicated questions of facts and law were involved in the complaint, for which detailed documents and evidence were required and it was not possible in the summary trial and as such the appropriate remedy was available to the complainant by approaching the Civil Court. The averments made in the complaint were also specifically denied by the opposite party on various grounds. It was mentioned in the reply that a loan was approved on 01.04.2017 with monthly instalment of ₹16,650/- and the complainant paid only two instalments up to June, 2017 and out of total 29 cheques issued by the complainant, only 5 cheques were cleared and 24 cheques were dishonoured/bounced. It was also mentioned in the complaint that the insured was not in a position to pay the EMIs loan instalments as the EMI was of ₹16,650/-.
6. Replication to the written statement was filed by the complainant responding to the reply stating therein that all the instalments were paid and wrong averments were made in the reply, there was no force as all the allegations mentioned in the reply were First Appeal No.242 of 2021 6 denied. The complainant has placed on record the evidence and certain documents to show his financial condition and payment of the loan amount.
7. On considering the averments made in the complaint and reply thereof filed by the opposite party, the District Commission allowed the complaint vide impugned order dated 12.03.2021 with the directions to the opposite party to pay an amount of ₹11,94,000/- to the complainant as compensation against the claim of insurance of the vehicle in dispute along with interest at the rate of 8% per annum from the date of filing of the complaint i.e. 11.09.2018 till its realization and also to pay an amount of ₹5,000/- as lump sum compensation for causing harassment to the complainant as well as litigation expenses within a period of 45 days from the date of receipt of copy of the order. Further a direction was issued to the opposite party to transfer the RC of the vehicle in favour of the opposite party and also to pay the amount towards transfer charges which were to be borne by the opposite party.
8. Said order has been challenged by the appellants/opposite parties by way of filing the present appeal by raising a number of grounds.
9. There was a delay of 65 days in filing of the appeal. Misc. Application No.782 of 2021 was filed for condonation of delay, which First Appeal No.242 of 2021 7 was supported by an affidavit. Said application was allowed vide order dated 26.07.2021 and the delay in filing of the appeal was condoned.
10. Mr. Varun Mittal, learned counsel for the appellant/opposite party has submitted that the District Commission has not properly considered the objections raised by the appellant/opposite party and no specific and independent findings have been recorded. The appellant had taken a specific objection that the accident of the vehicle was appearing to be manmade due to the reason that the complainant was not in a position to maintain the vehicle and even to repair it as per estimate prepared by the Authorized Dealer in the month of April, 2017 but the said objection was not properly dealt and discussed and no finding was given. Learned counsel also submits that the road was quite wide and the car was burnt at the extreme side of the road, whereas it was not a case that the car was burnt while running on the road. A detailed observation was made by the surveyor, which was supported by the technical opinion but the same was ignored. Learned counsel further submits that it was not proved on record that it was a case of short circuit and no specific finding was recorded with regard to flammable material which was allegedly lying underneath the car. Learned counsel also submits that the complainant has also failed to reply certain queries raised/put by the surveyor. It is also the argument of the leaned counsel that the District Commission has also erred in not considering the provisions of Section 64-UM of the Insurance Act, First Appeal No.242 of 2021 8 1938 and no claim in respect of any loss can be settled unless and until a report from the surveyor is obtained/received. Even the complainant has not placed on record any evidence to disprove the contents of the survey report. At the end, learned counsel submits that the compensation awarded by the District Commission was subject to depreciated value for that year but this fact has not been considered while passing the impugned order. Simply on the ground that the surveyor had assessed the compensation and the same is payable, the complaint filed by the complainant was allowed.
11. Mr. Vivek Salathia, learned counsel for the respondent/complainant submits that the order passed by the District Commission is well reasoned and the same has been passed after considering the arguments raised by both the parties. There was no intentional act of the complainant to put the car on fire and no such evidence has been produced by the opposite party. The impugned order passed by the District Commission is self speaking and no interference is required.
12. Heard the arguments of learned counsel for the parties. We have also perused the impugned order passed by the District Commission and all other documents available on the file.
13. Facts of the case regarding filing of the complaint by the complainant before the District Commission, reply thereto filed by the appellant/opposite party, the allowing of said complaint and thereafter First Appeal No.242 of 2021 9 filing of the present appeal by the appellant/opposite party are not disputed.
14. Admittedly, the vehicle in dispute was insured with the appellant/opposite party for a period w.e.f. 28.02.2017 to 27.02.2018 for an IDV of ₹12,00,000/- as is clear from the Insurance Policy, which has been placed on record as Ex.C-8. It is also not in dispute that the car was damaged due to fire on 10.01.2017. It is also not in dispute that the complainant was driving the car and was on the way at Kotkapura road at the time of fire incident. The intimation of fire was sent to the Fire Station, Faridkot as is clear from Ex.C-10. The fire report issued by the office of Fire Station, Municipal Committee, Kotkapura is Ex.C-11.
15. The claim of the complainant has been repudiated vide letter dated 17.08.2018 (Ex.C-5) on the ground that the complainant has violated/breached the provisions of Clauses 4 & 5 of the terms and conditions of the policy contract of utmost good faith and misrepresented and concealed certain material facts as well as indulged in fraudulent activities of doing manmade fire.
16. It is relevant to mention here that the complete terms and conditions of the policy have not been produced by either of the parties before the District Commission or before this Commission. However, Clause-4 of the policy as mentioned in the repudiation letter is reproduced as under:
First Appeal No.242 of 2021 10
"The Insured shall take all reasonable steps to safeguard the vehicle insured from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown, the vehicle insured shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle insured 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 insured's own risk."
17. Admittedly, the car caught fire while being driven on the highway and this fact is evident from the Survey Reports and Fire Report. Immediate intimation was given to the Fire Brigade and as per Fire Report dated 13.12.2017 (Ex.C-11), the intimation was received that the car in question caught fire on the Kotkapura-Faridkot Highway at 21.50 on 10.12.2017. The Fire Brigade reached at the spot immediately and extinguished the fire. However, the car was badly damaged/destroyed by fire. The complainant has specifically averred that he and his employee Gagan Chadha were travelling in the car at the time of incident and when the car caught fire, they escaped their lives by jumping out of car. As per case of the complainant, the car was being maintained by him regularly. The car caught fire while being driven on the highway where a number of vehicles were passing on both the sides and immediate intimation was given to the Fire Brigade.
18. As per case of the opposite party, the car was left unattended by the complainant and he failed to take all reasonable First Appeal No.242 of 2021 11 steps to safeguard the vehicle insured from loss or damage. The repudiation of the claim was based on violation of aforesaid Clause of the policy.
19. The other ground has been taken in the repudiation letter that as per Clause-5 of the policy, the Company was competent to cancel the policy on the grounds of mis-representation, fraud, non- disclosure of material facts or non-cooperation by the insured. However, nowhere it is mentioned that the complainant had ever made any misrepresentation or had not disclosed the material facts or remained non-cooperative at any point of time. He supplied all the relevant documents to the opposite party as well as surveyor and also replied to the queries raised by the surveyors and Investigator.
20. Intimation of loss/claim was immediately given by the complainant to the opposite party vide letter dated 11.12.2017 (Ex.OP-
3) i.e. just one day after the occurrence of fire. The police was also informed and DDR No.039 was recorded on 11.12.2017. Therefore, there is no delay in intimating the opposite party and the police about the fire incident.
21. On receipt of intimation, the opposite party deputed Mr. Devinder Singh Sandhu, Surveyor and Loss Assessor, Faridkot who submitted Motor Spot Survey Report dated 12.12.2017 (Ex.C-6). As per said report, the vehicle was lying at the spot in its original condition/position and the damages appeared to be fresh and visible, First Appeal No.242 of 2021 12 which were physically verified by the spot surveyor. Said surveyor nowhere has opined in his report that there was any mis- representation or concealment on the part of the insured.
22. Thereafter, the opposite party appointed Mr. A.S. Kapoor as surveyor, who submitted 'Private & Confidential Motor Survey Report (Final)' dated 30.06.2018 (Ex.C-33). On perusal of said report, the Registration Certificate of the car and driving licence of the complainant were produced and those documents were found to be in order. Statement of the complainant was also recorded. As per his statement, the car caught fire when he along with his employee namely Gagan Chadha were travelling therein and the complainant himself was driving the car. As per his statement, when he switched on the AC, sudden sparks were noted from inside the wiring which converted into fire flames immediately. Both of them jumped out of the car and saved their lives. The metal parts of the engine were badly burnt and melted. All the four wheels, alloys, rims and spare wheel were also badly melted. One person namely Mr. Bhola Singh, J.E., Sewerage Board who was following the car of the complainant had noticed the fire in the car and he immediately informed the Fire Brigade and in response thereof, the Fire Brigade from Faridkot and Kotkapura arrived at the spot and extinguished the fire but the car was badly damaged.
First Appeal No.242 of 2021 13
23. By seeing the photographs of the damaged car at the spot clicked by the initial surveyor, Mr. A.S. Kapoor, Surveyor had observed that some burning material was lying just ahead of place of occurrence of the car from where the car was dragged behind. However, no such thing was pointed out by the initial surveyor Mr. Devinder Singh Sandhu, in his report Ex.C-6, who verified the fire incident and damages to the car at the spot.
24. It is also relevant to mention that it is mentioned in the first page of final survey report (Ex.C-33) that the car caught fire on 10.12.2017 on the highway but the date of allotment of survey to surveyor Mr. A.S. Kapoor is mentioned as 29.12.2017, whereas the place of the survey of the damaged car is mentioned 'in the godown of Sh. Sadhu Singh, Ex-MLA'. Meaning thereby the surveyor had surveyed the damaged car on or after 29.12.2017 i.e. after 19 days from the date of fire occurrence. Thus, the said surveyor had no occasion to inspect the damaged car at the spot on the date of fire incident and he based his opinion only on the basis of the photographs clicked by the initial surveyor and that too when the initial surveyor had not observed any such burning material lying underneath or near the car on the date of accident. Moreover, the final surveyor has not corroborated his report by supporting evidence and only the opinion has been given but without any solid and authentic basis. Therefore, said observation of the final surveyor is not believable. First Appeal No.242 of 2021 14
25. The opposite party also got the matter investigated from Swift Investigation Agency, who after thorough investigation has submitted its report Ex.C-23. On perusal of said Investigation Report, the occurrence of fire and damages to the car during said fire have been corroborated as the investigator had recorded the statements of the complainant and his employee Mr. Gagan Chadha as well as Mr. Bhola Singh who was an independent witness. Therefore, it has not been proved by any cogent and convincing evidence that it was an intentional or deliberate act of the complainant in putting the insured car on fire or there was any inflammable material lying under the car at the time of fire incident. The investigator has opined that the chances of occurrence of fire in the vehicle by short circuit are very rare but he has also mentioned that the proximate cause of fire was short circuit.
26. The opposite party also took a further stand that the complainant had availed a loan from Kotak Mahindra Prima Limited for purchasing the car in question but thereafter he was not in a position to pay the loan instalments as the EMI was of ₹16,650/- and out of total 29 cheques issued by the complainant, only 5 cheques were cleared and 24 cheques were bounced. However, it is clear from letter dated 06.12.2018 (Ex.C-45) issued by Kotak Mahindra Prime to the complainant that the payment of loan instalments was regular and no EMI was outstanding till the date of issuance of said letter. The First Appeal No.242 of 2021 15 contents of said letter have clearly falsified the stand of the opposite party regarding non-payment of loan instalments by the complainant.
27. It was also pointed out by the opposite party that there was delay in reporting the matter to the Fire Brigade. It is relevant to mention that the complainant along with his employee Gagan Chadha were inside the driven car on 10.12.2017 when it caught fire and they saved their lives by jumping out of the burning car. In such situation, both of them might be in a state of mental trauma and shock and moreover the intimation of fire was given a passerby namely Mr. Bhola, who was working as J.E. in Sewerage Board at 21.50 on 10.12.2017 i.e. the date of occurrence of fire. Therefore, it cannot be said that there was any delay in giving intimation to the Fire Brigade.
28. The surveyor Mr. A.S. Kapoor in his report, against the estimate of repair/replacement of parts equal to the cost per IDV of the car including taxes, has mentioned the estimate of ₹88,73,360/- and the amount was assessed as ₹12,00,000/- and after deducting ₹2,000/- by applying less Compulsory Deduction Clause and ₹4,000/- as value of salvage/wreck, the surveyor assessed the Net Assessed Loss to the tune of ₹11,94,000/-.
29. In view of the facts and circumstances as mentioned above, it is apparent that the claim of the complainant has wrongly and illegally been repudiated by the appellant/opposite party on untenable First Appeal No.242 of 2021 16 grounds. The impugned order passed by the District Commission is based on proper appreciation of evidence available on the file.
30. Accordingly, we do not find any force in the arguments raised by learned counsel for the appellant/opposite party.
31. While allowing the complaint, the District Commission has issued the directions to the opposite party to pay an amount of ₹11,94,000/- to the complainant as compensation against the claim of insurance of the vehicle in dispute along with interest at the rate of 8% per annum from the date of filing of the complaint i.e. 11.09.2018 till its realization and also to pay an amount of ₹5,000/- as lump sum compensation. The complainant was also directed to furnish the letter of subrogation, power of attorney etc. for transfer of the RC of the vehicle in favour of the opposite party. However, since it was a case of total loss, 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 it may not be misused by any person.
32. 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, First Appeal No.242 of 2021 17 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, 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."
33. 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, or 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. As per Sub Section (2) of Section 55, an action 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 for cancellation. Meaning thereby the Registering Authority is ultimate authority 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- First Appeal No.242 of 2021 18 Alone Health Insurers and Specialized Insurers) regarding the misuse of total loss accidental vehicle documents over stolen vehicles. Through said letter, the insurers were advised to ensure cancellation of certificate of registration of the vehicle in case of total loss claim settlement. Therefore, a direction is also required to be issued to the opposite party to get the RC of the vehicle in question cancelled and dispose of the salvage of the damaged car with the assistance/cooperation of the complainant.
34. Accordingly, the appeal being devoid of any merit is hereby dismissed and the order dated 12.03.2021 passed by the District Commission is upheld but with the modification that the opposite party shall get the RC of the vehicle in question cancelled and dispose of the salvage of the damaged car in accordance with Section 55 of the Motor Vehicles Act, 1988 and Circular No.IRDA/NL/CIR/MOTOD/118/07/2019 dated 26.07.2019 issued by IRDA) and the complainant shall also cooperate with the opposite party in this regard.
35. Since the main case has been disposed of, so all the pending Miscellaneous Applications, if any, are accordingly disposed of.
36. The appellants had deposited a sum of ₹7,35,400/- at the time of filing of the appeal. An amount of ₹7,39,000/- was also deposited, vide receipt dated 18.08.2021 in compliance of order dated First Appeal No.242 of 2021 19 26.07.2021 passed by this Commission. Said amounts, 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.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (URVASHI AGNIHOTRI) MEMBER September 20, 2022.
(Gurmeet S)