National Consumer Disputes Redressal
New India Assurance & Anr. vs Kumar Gaurav & Ors. on 5 February, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 365 OF 2013 (Against order dated 13.12.2012 in First Appeal No. 331/2012 of the State Consumer Disputes Redressal Commission, UT, Chandigarh) 1. The Chief Regional Manager, New India Assurance Co. Ltd. SCO No.36-37, Sector-17A, Chandigarh 2. The Senior Divisional Manager, New India Assurance Co. Ltd. SCO No.804, Manimajra, Chandigarh Through Manager, New India Assurance Co. Ltd. Delhi Regional Office-1, 5th Floor, Jeevan Bharti Building, Tower II, Connaught Place, New Delhi-110001 Petitioners Versus 1. Kumar Gaurav S/o Sh. Rajinder pal Sharma R/o H. No. 176, Sector-15, Dashmesh nagar, Kharar, District Mohali, Punjab 2. Hyundai Motor India Ltd., 5th and 6th Floor, Corporation one, (Banni Building) Plot No.-5, Commercial Centre, Jasola, New Delhi-110 076 3. The Chief Regional Manager, Regional Office, M/s Hyundai Motor India Ltd. B-2, 3rd Floor, DLF, IT Park, Chandigarh 4. M/s Ultimate Automobiles Pvt Ltd. 155, Industrial Area Phase-1, Chandigarh . Respondents BEFORE: HONBLE MR. JUSTICE J.M.MALIK, PRESIDING MEMBER HONBLE DR. S.M. KANTIKAR, MEMBER For the Petitioner : Mr. K.K. Bhat, Advocate For the Respondent No. 1 : Mr. Sukhwinder Singh Sudan, Advocate For the Respondent No. 2&3 : Ms. Sangeeta Mandal, Advocate For the Respondent No. 4 : Nemo PRONOUNCED ON 5th FEBRUARY, 2014 ORDER
PER DR. S.M. KANTIKAR, MEMBER
1. The Facts of the case are that the Complainant, Kumar Gaurav purchased a Hyundai Verna Car on 23.04.2010 from M/s Ultimate Automobiles Pvt Ltd /OP No. 5, manufactured by Hyundai Motors India (OP 1 & 2), and insured with New India Assurance Co. Ltd. (OP Nos. 3 & 4). The Insured Declared Value (IDV) of car was Rs.7.15 lakhs. Unfortunately, the car met with an accident on 16.05.2011 and was badly damaged. Complainant informed the insurance company about the accident and took the car for repairs to OP No.5, who gave an estimate for Rs.7,38,252/- for the repairs, including replacement of body shell of the car. The Insurance Company gave the instructions to the dealer for repairs of the vehicle but, car was not repaired for 7 months due to non-availability of body shell car. Neither the dealer (OP-5), nor the Hyundai Motors India Ltd (HMIL) , the manufacturer (OP-1 & 2) was able to supply body shell. Therefore, the Complainant sent a legal notice to all the OPs for settlement of his claim, but to no avail. Thereafter, Complainant filed a complaint before District Consumer Disputes Redressal Forum, Chandigarh (in short, District Forum) against all the OPs for deficiency in service and unfair trade practice.
2. The District Forum held OP liable and directed to pay full insured IDV amount with interest @ 12% from the date filing of complaint. In addition, the Forum also allowed Rs.50,000/- as compensation for harassment and Rs.15,000/- for litigation expenses.
3. Aggrieved by the order of District Forum, OP filed the first appeal FA 331/2012 before State Consumer Disputes Redressal Commission (in short, State Commission), which was dismissed.
4. Against the order of State Commission, this revision aroused.
5. We have heard the Counsel for the parties. The counsel for OP-1/Petitioner vehemently argued and denied his liability as to the Total Loss (Rs.7.15 lacs), which was observed by the fora below. He has admitted the facts about the extensive damage to the car due to major accident and contended that as per the surveyors report, liability of insurance company (OP-3 & 4) will be only for the repairs to the extent of Rs.3,86,168/-. The car was undoubtedly repairable and body shell needed replacement, which was taken up by the workshop with the manufacturer HMIL on various occasions. HMIL, almost after 6 months, in turn, informed the dealer/workshop (OP-5) that the body-shell for Verna for this particular model was not serviced any longer and individual parts as per requirements could be provided. This was intimated by the dealer/workshop to the insurance company (petitioner) by letter dated 13.01.2012. Therefore, the car would not come into its original shape, and strength, by replacing the individual parts, without replacing the body shell.
6. On perusal of the affidavit evidence of OP No.5 (authorised dealer) it clearly goes to show its inability to repair the car, as the manufacturer could not provide the complete body shell. Hence, there was no deficiency, in rendering service, on the part of dealer.
7. On perusal of Surveyors report, it did not satisfy us, which appears to be vague and evasive. The counsel for petitioner argued that , the dealer M/s Ultimate Automobiles Pvt Ltd.(OP-5) gave total estimated cost for repairs for Rs.7,38,252/- (Rs.6,45,759/- towards cost of 142 items to be replaced +Rs.92,492.99/- as labour charges) whereas, the Surveyor assessed the net loss to the tune of Rs.3,86,168/- (Rs.3,69,644.61/- towards the cost of 71 items to be replaced +. Rs.24,500/- as labour charges). The surveyor did not quote any reasons for reduction in labour charges and the basis of reduction of the items to be replaced from 142 to 71 only. Hence, it was an incomplete report which could not be relied upon and accepted.
8. Petitioner Company filed its written statement denying any deficiency of service and reinforcing that the vehicle cannot be declared as a total loss when there is partial loss to the vehicle and it was repairable. A copy of the Written Statement filed by the Petitioners before the District Forum is placed on record as Annexure P-10.
9. We gave a thoughtful consideration to the facts in this case. It is pertinent to note that, during subsistence policy there was an accident and the insurer accepted for the repairs of damaged car and its surveyor gave estimate for Rs.3,68,168/-. The dealer could not able to repair the car because the body shell was not made available by the manufacturer. We are surprised to note that, how the manufacturer abruptly stopped the production of said car and its parts including the body shell? Was there any such policy adopted by HMIL? The OP 1 & 2 failed to produce any convincing document in this regard.
10. The Counsel for OP1 & 2 further argued that, liability of manufacturer of Hyundai cars is limited and extends to warranty obligations alone. As per OP 1 & 2s warranty terms and conditions, damages or repairs due to accident, fire, tempering or improper repair, negligence of proper maintenance of the vehicle, use of parts other than Hyundai genuine parts, is not covered under the warranty policy. It is further submitted that, OP has provided, timely and efficient 1st, 2nd, 3rd free services to the Complainant; hence there is no cause for filing the present complaint. There is no manufacturing defect in the vehicle.
11. We are not convinced by the arguments advanced by Counsels for the petitioner/insurer and the manufacturer. No doubt, the warranty ceases after accident. It means the repairs and replacement parts will not be done, free of cost. Hence, it cannot absolve the manufacturer from non-supply of spare parts, which are necessary for the repairs and to bring the car in original condition. The correspondence/ communication clearly establish that the HMIL has expressed their inability to supply body shell of said car. The email is reproduced as follows:
This a major loss case wherein body shell has also got damaged and needs to be replaced. However, the body shell is no longer in production for this particular model (Old Verna). Due to production constraint, the case needs to be settled on cash loss basis considering it as special case.
The said email was sent after lapse of 6 months. OP 1 & 2 should have brought this fact immediately to the notice of insurer or to the complainant, about the non-availability of body shell and VIN number of said vehicle. Therefore, the matter was prolonged for more than 10 months by insurance company.
12. The responsibility of insurance company is only for restoring the vehicle to the way it was, before it was damaged. After the accident, an insurer will inspect the vehicle and determine whether it could be repaired or whether it is to be labeled as "total loss". A vehicle is considered to be, a total loss (or a write-off) vehicle, when the cost of repairs is greater than the current value of the vehicle. It may also be considered as a total loss, if the necessary repairs cannot be carried out, safely or economically. In this case, there was extensive damage and one important part body shell was not available, therefore, it should be considered as Total Loss.
If the repairer is chosen by the insurer or its agents, the insurer will be responsible for ensuring any deficiencies in the repair, and the same have to be put right. In these circumstances, we are likely to conclude that it is the insurer, rather than the policyholder, who is liable for any shortcomings in the work.
13. In the legal notice, complainant pointed out that even during the warranty period the manufacturer had discontinued manufacture of body-shell of the car, which in itself, was a great deficiency of service on the part of the manufacturer. Hence, it is explicitly attributable to deficiency of service on the part to the manufacturer, for non-supply of the body-shell, which rendered the car unrepairable.
14. In view of the foregoing discussion, the role of dealer was minimal, limited to the extent of providing the spares, if those supplied by manufacturer; hence, he is not liable in this case. We are of considered view that, the manufacturer (OP1 & 2) and the insurer (OP 3 & 4) are deficient in their services and for unfair trade practices.
15. Complainant had suffered due to tossing and just evasive nature of all the opposite parties. As, the car cannot be repaired or brought to normal condition, hence, we consider it as a Total loss. Accordingly the liability of the Insurance company is restricted up to IDV of Rs.7,15,000/-. The manufacturer is also liable for, the deficiency in service for not providing body shell of the car and delayed the matter unnecessarily. Accordingly, we pass the following order with certain modifications in orders passed by fora below, as under;
The Insurance Company (OP 1 & 2) are directed to pay Rs. 7,15,000./- the IDV to the complainant with interest @ 6% per annum from filing of this complaint. The manufacturer HMIL (OP 3 & 4) is directed to pay Rs.1,00,000/- as a compensation and Rs.30,000/- as litigation charges. Entire order be complied within 3 months from the date of receipt of this order, otherwise it will carry interest @ 9% per annum, till its realisation.
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(J. M. MALIK, J.) PRESIDING MEMBER ..
(S. M. KANTIKAR) MEMBER Mss/1