Icici Lombard General Insurance Co. Ltd. vs Mayur Batra And Anr.

C. Viswanath, Member

The present Appeal is filed by the Appellants under Section-19 of the Consumer Protection Act, 1986 against Order passed by the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the "State Commission") in Complaint No.216/2007 dated 21.01.2009.

The case of the Complainant is that he purchased a Ford Endeavour Sports Utility Vehicle for Rs.13,57,000/- from Respondent No.2/Opposite Party No.2, who was the authorized dealer of Ford India Pvt. Ltd. The vehicle was insured with the Appellant/Opposite Party No.1 ICICI Lombard General Insurance Co. Ltd. at a premium of Rs.50,550/-, vide covering note No.PC1534231 dated 28.02.2006 from 28.02.2006 to 27.02.2007. The said vehicle met with an accident near Ludhiana on 08.12.2006. The vehicle was badly damaged and the police was intimated about the accident. The front body of the vehicle was crushed like paper. The Complainant contended that the air bag also failed to inflate. The wind screen was broken and injured the Complainant. On 11.12.2006, the vehicle was towed to the workshop of Respondent No.2 for inspection and assessment of loss. The vehicle was inspected by the technical staff and the cost of repair was assessed at Rs.14 lakhs. The body shell was damaged and chassis was cracked and needed replacement. Insurance claim for the same was lodged with the Appellant-Insurance Company to pay the sum assured, as the cost of repair was estimated to be more than the cost of the new vehicle, treating it as a total loss. The Appellant in collusion with Respondent No.2, however, approved a sum of Rs.3 lakhs for carrying out the repair rather than pay the sum assured. As late as on 31.03.2007 Respondent No.2 informed the Complainant that the vehicle had been repaired and would be released on payment of Rs.4,81,148/- towards repair charges. In May, 2007 he was further informed to pay Rs.1,91,000/-, as the balance amount was to be paid by the appellant Company. The Complainant upon inspection noticed that the brakes were not working and hence the vehicle could not be taken on a test drive. Respondent No.2 was also unable to give any assurance regarding the safety of the vehicle, and that the vehicle had been restored to its original condition. It was also admitted by Respondent No.2 that "The Accidental deformities can be removed only by replacement of the body of the vehicle." Refusal of the Appellant and Respondent No.2 to get the vehicle fully restored to its original condition, thus, amounted to deficiency in service and unfair trade practice. A Complaint was, therefore, filed before the State Commission with the following prayer: -

"(a) Direct the OP1 to pay the claim to the complainant to the extent of the IDV i.e. Insured's declared value of Rs.13,03,400/- as it is a case of total loss and the vehicle cannot be made roadworthy again to its condition at the time of accident;

In the alternative, to relief (a)

Direct the OP1 and OP2 to repair the said vehicle to the fullest as per original estimate of OP2 to make it roadworthy by replacing the broken chassis and the damaged body shell etc. to restore the vehicle to its original condition to remove all the deformities from the vehicle;

Direct the OP1 to bear all expenses of repair without deducting/disallowing expense for any of the parts; and,

Direct the OP1 and OP2 to extend the warranty to the so repaired vehicle and ensure its safety and roadworthiness owing to the broken chassis and damaged body shell;

(b) Award a sum of Rs.500,000/- towards distress, harassment, mental agony, loss of work, tax cost and out of pocket expenses;

(c) Award a sum of Rs.4,90,500/- on account of loss of use of vehicle by the complainant since 08.12.2006 the day of accident till 31.10.2007 and thereafter at the rate of Rs.1500/- per day for each day;

(d) Award the crane charges amounting to Rs.12,000/-;

(e) Award the cost on account of the depreciation of the vehicle due to its non-use amounting to Rs.1,30,340/- calculated @ 10% being the rate prescribed by OP1.

(f) Award a sum of Rs.97,843/- being the interest paid by the complainant on the loan amount despite the fact that the vehicle could not be used from the date of accident till October, 2007;

(g) Allow the cost of the complaint alongwith interest @ 18% per annum on the amounts claimed.

Any other relief which the Hon'ble Commission may deem fit and proper under the circumstances of the case may also be awarded in favour of the complainant and against the Respondents."

The Appellant contested the case that though the vehicle did suffer damages, the estimate of Rs.14 lakhs was highly exaggerated. Surveyor Mr. J.K. Sharma was appointed, who submitted his report on 04.06.2007. He found that the vehicle was in repairable condition and after discussing with the representative of Respondent No.2 did not recommend the vehicle for total loss. The Appellant had approved a sum of Rs.3 lakhs for carrying out the repair of the vehicle on the recommendation of the surveyor and that the Complainant had agreed to the same. The estimate of Rs.14 lakhs was prepared at the insistence of the Complainant and the same was not binding on the Appellants. Repair work was started only after seeking consent of the Complainant.

Respondent No.2/Opposite Party No.2 denied all liabilities stating that the contract was basically between the Complainant and Respondent No.1. The vehicle was brought to its workshop and it was found that the body as well as the chassis of the vehicle were badly damaged and both of them required replacement. The entire replacement cost was worked out to Rs.14 lakhs but the Appellant rejected the estimate and advised for its repair. Respondent No.2 undertook repair of the vehicle as per the direction of the Complainant and there was no deficiency on its part. The Complainant had not paid the bill amounts to Respondent No.2 and therefore recovery suit had been filed in Tis Hazari Court, which was still pending. The delay in executing the repair work was due to the fact that parts of the vehicle had to be sourced from different places and the Complainant was kept informed of the entire process. The vehicle was fully repaired and there was no deficiency on the part of Respondent No.2.

The State Commission after going through the evidence and documents placed on record and hearing the arguments of both the parties directed as follows:-

"(i) OP No.1 shall pay to the Complainant the insured value of the vehicle in question less 5% depreciated value as the vehicle was only ten months old at the time of accident. The complainant shall on payment of the said amount take necessary steps to transfer the registration in the name of the OP No.1 Insurance Company and hand over the keys etc. In the circumstances no further compensation is called for.

(ii) Op No.1 shall also pay the cost of litigation to the extent of Rs.10,000/- to the Complainant.

(iii) OP No.1 shall pay the entire amount of Rs.4,81,148/- to OP No.2 for the repairs of the vehicle.

(iv) On payment of the said amount, OP No.2 shall hand over the vehicle to OP No.1 Insurance Company without claiming any further charges either from the OP No.1 or from the Complainant."

Aggrieved by the order of the State Commission, the Appellants filed the present Appeal. Heard the learned Counsel for the parties and carefully perused the material on record.

Learned Counsel for the Appellant submitted that the State Commission passed the impugned order without properly appreciating the terms and conditions of the insurance policy and the extent of indemnification. The impugned order was passed ignoring the report of the surveyor that the vehicle had been repaired. The delay in repair by Respondent No.2 was on account of the manufacturer's lukewarm attitude for which the Appellant was not responsible. It was submitted that the State Commission passed the impugned order without jurisdiction and interfered with the jurisdiction of the Civil Court.

Learned Counsel for Respondent No.1/Complainant submitted that the vehicle was insured with the Appellant and the accident occurred during the currency of the insurance policy. After repair of the vehicle neither the Insurance Company nor the Dealer gave any assurance as to the safety of the vehicle and that the vehicle had been restored to its original condition. The Appellant Insurance Company was, therefore, liable to pay the sum assured to the Complainant. None appeared on behalf of Respondent No.2/Dealer.

Admittedly a Ford Endeavour SUV was purchased by Respondent No.1/Complainant for Rs.13,57,000/- with registration No.DL-3C- AN 0889 from Respondent No.2. Complainant had also taken an insurance policy from the Appellant/ICICI Lombard General Insurance Co. Ltd. by paying premium of Rs.50,550/-, vide cover note No.PCI534231 dated 28.02.2006, valid from 28.02.2006 to 27.02.2007. During the validity of the insurance the vehicle met with an accident near Ludhiana on 08.12.2006, while the Complainant was returning from Jalandhar to Delhi alongwith his daughter. The vehicle was damaged and injured the Complainant, who also suffered minor injuries. Originally an estimate of Rs.14 lakhs was prepared by Respondent No.2 which involved replacement of several parts. Based on the Surveyor's report, however, at the behest of the Appellant/Insurance Company the vehicle was taken up for repair by Respondent No.2. Respondent No.2 after repairing the vehicle sought payment and delivery of the vehicle. The Complainant, however, did not pay the amount demanded nor took delivery of the vehicle. Suit was filed by Respondent No.2 for recovery of the amount.

Originally the Complainant and the dealer prepared an estimate of Rs.14 lakhs for repair of the vehicle. The dealer found the body and chassis fully damaged and held that both needed replacement. Its cost was assessed at Rs.14 lakhs. The insurer, however, rejected the estimate and on his advice repair was undertaken and accordingly the Complainant ordered for repair of the vehicle. As the cost of the vehicle or the Insured Declared Value was more than the cost of repair, the Complainant claimed the sum assured in the policy. The Appellant, Insurance Company, however, appointed a Surveyor and based on his report got the vehicle repaired, despite the contrary view held by the Complainant and Respondent No.2. Though the vehicle was badly damaged and needed replacement, the Insurance Company insisted on repair of the vehicle by Respondent No.2.

Complainant upon inspection of the vehicle did notice that the brakes of the vehicle were not functioning and this fact was not denied by Respondent No.2. Respondent No.2 also refused to give any assurance as to the roadworthiness of the said vehicle after the repair. Respondent No.2 could not admit that the vehicle was restored to its original condition and take the responsibility for the smooth running of the vehicle and safety of the occupants. He also admitted that the accidental deformities could only be removed by replacing the body of the vehicle. It is, thus, seen that though the vehicle got damaged badly in the accident, the Appellant- Insurance Company was not willing to concede to declare total loss of the vehicle and give the sum assured to the Complainant. The State Commission, therefore, rightly held that the Appellant shied away from their obligation under the contract of insurance.

In view of the above discussion, we are of the opinion that the impugned order passed by the State Commission was justified. Appellant failed to point any illegality or irregularity in the order passed by the State Commission, warranting interference in exercise of Appellate jurisdiction under Section 19 of the Consumer Protection Act, 1986. Appeal is accordingly dismissed with no order as to cost.