United India Insurance Company Limited vs Gaurish Bhatnagar & 2 Ors

This revision petition has been filed by the petitioner United India Insurance Company Ltd. against the order dated 01.12.2016 passed in first Appeal No. 863 of 2010 by the State Commission , Rajasthan at Jaipur.

Brief facts of the case are that the Respondent No. 1 got his owned car No. RJ14-6C-7878 insured from United India Insurance Company Limited, the Petitioner herein for the period 10.7.2005 to 9.7.2006. While going from Jaipur to Gurgaon, on 15.8.2005, Respondent's car was damaged as a stone hit the vehicle from beneath and its engine got damaged and oil started leaking from the engine. Respondent took the car to authorised dealer who gave estimate of Rs.1,89,837/- for repairing of the car. Respondent gave the information to the Petitioner Company for appointment of surveyor and produced claim before the Insurance Company which was rejected by the company vide letter dated 18.10.2005. Respondents gave letter for appointment of second surveyor but the company did not appoint second surveyor and as per the survey report of the first surveyor, offered for payment of Rs.5166/- for the claim. Hence, on 09.7.2006, Complaint was filed before the District Forum. In March, 2010, the District Forum held in favour of respondents and directed petitioner insurance company to pay Rs 5166/- as per survey report within one month and Rs.10,000/- for mental agony and also Rs.2000/- as litigation cost. The Respondents filed an appeal before the State Commission, and the State Commission allowed the appeal and modified the order of the District Forum by directing the petitioner to pay Rs.1,89,837/- in place of Rs.5,166/-.

Hence, the present revision petition.

Heard the learned counsel for the petitioner and respondent No.3 in person who was also A.R. of respondent No.2.

The learned counsel for the petitioner stated that the surveyor Sh Amarjeet Singh Duggal has assessed the loss of Rs.5166/- for which Respondent was informed, but he did not produce bill before the company, hence the claim was closed. Further it is also stated in reply that the surveyor in his report has found that the Respondents kept on running the car despite the engine oil having been finished due to which engine of the car was seized. Hence the claim is not payable. The Respondents did not produce bills and other documents before the company, hence any act of company does not fall under the purview of deficiency in service. Learned counsel further argued that as per clause 2 of Section 1 of the Private Car Package Policy, the Company is not liable to pay any consequential damages. Learned Counsel drew attention of the bench to the following provision:-

"SECTION 1- LOSS OF DAMAGE TO THE VEHICLE INSURED

The Company shall not be liable to make any payment in respect of:

(a) Consequential loss, depreciation, wear and tear, mechanical or electrical breakdown, failures or breakages;

(b) damage to tyres and tubes unless the vehicle is damaged at the same time in which case the liability of the Company shall be limited to 50% of the cost of replacement and

(c) any accidental loss or damage suffered whilst the insured or any person driving the vehicle with the knowledge and consent of the insured is under influence of intoxicating liquor or drugs."

It was argued that as the consequential loss has happened due to negligence of the driver, the Insurance Company is not liable to indemnify loss occurred in terms of the above clause. Learned counsel further stated that the surveyors are appointed under the Insurance Act, 1938 and their reports cannot be disregarded without any cogent reasons. Both the fora below have erroneously disregarded the report of surveyor in awarding claim of the complainant. Learned Counsel for the petitioner referred to the judgment of this Commission in H.C.Saxena Vs. New India Assurance Co., RP No.2204 of 2010, decided on 03.1.2012 (NC) in support of his argument.

The Respondent No.3 argued that the vehicle met with an accident and was insured. There was more loss in accident but the surveyor intentionally assessed the loss to be very less. Also, Respondent no.3 stated that the car was fully insured and therefore, whatever damages were caused to the car are to be indemnified under the policy. Though there was no FIR lodged, however, surveyor has inspected the vehicle and has mentioned in the report that the engine was seized due to consequential effect as the vehicle was driven even when the oil had leaked. It is understood that certain other parts of the engine also got damaged due to which the engine got seized. Thus, damage of other parts cannot be treated as consequential damage, rather it is direct damage due to impact of the stone on the engine. The respondent No.3 further stated that the order of the State Commission is based on the actual bills submitted by the complainant for the repair of the vehicle, therefore, there cannot be any doubt that the complainant has suffered that much loss. In support of his arguments, the learned counsel relied on the following judgments:

a. Vinit Poonia vs. New India Assurance Co. Ltd., II (2012) CPJ 163 (NC).

b. United India Insurance Company Ltd. vs. K. Kannusamy, (2012) CPJ 19 (NC)

I have given a thoughtful consideration to the arguments advanced by both the parties and have examined the material on record.

The surveyor has only assessed the loss of Rs.5166/-. The surveyor in his report has mentioned that the driver at the time of mishap did not stop the insured vehicle for verification of leakage physically and also did not watch the meter gauge while driving the insured vehicle after the mishap. Due to the continued driving, the engine, due to leakage of engine oil, got seized. Though, the respondents took the car to authorised dealer for repair of the car, the estimate of the repair has not been examined by the surveyor. The State Commission has relied upon the bills and documents submitted by the complainant where total expenditure of Rs.1,89,837/- has been found to have been incurred. There is no doubt that the oil sump was pressed, cut and damaged due to the impact of the stone, there seems to be some negligence on the part of the driver. He should have stopped the vehicle when the stone hit the vehicle and should have checked the damage. Thus, there is contributory negligence on the part of the driver of the car, though this is not so serious that the whole claim of insurance may be denied.

Based on the above examination, I am of the view that the seizure of the engine in the present case may not be seen as a consequential damage, rather it may be considered as damage due to direct impact of the accident caused by hitting of a stone to the engine of the vehicle. However, it is also seen that the loss could have been minimized, if the driver had stopped the vehicle when he realized that a stone had hit the car. Thus, there is contributory negligence on the part of the driver. Hence, in the circumstances of the case, I deem it appropriate to allow the claim at 50% of the actual claim of repair.

On the basis of the above discussion, the revision petition no. 999 of 2017 is partly allowed and the petitioner Insurance Company is directed to pay Rs.94,919/- (rupees ninety four thousand nine hundred nineteen only ) to the complainant instead of Rs.1,89,837/-. Except for this modification, the order of the State Commission dated 1.12.2016 is upheld. This order be complied with within 45 days by the petitioner Insurance Company.