DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE

PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB    : PRESIDENT

Smt. PRIYA.S, BAL, LLB, MBA (HRM) :  MEMBER

Wednesday, the 31^st day of July 2024

CC. 479/2013

Complainant

Arshad Abdulla,

S/o P.M. Abdulla,

Mumtaz Bhavan,

Near Stadium, Kozhikode – 673 001.

(By Adv. Sri. Syam Padman)

Opposite Parties

1.            EVM Auto Mobiles Pvt. Ltd,

(Authorised dealer for Nissan MotorIndia Pvt Ltd.,

Near Elathur Panchayath Office,

Opp. Puthoor Temple,

Puthiyangadi (PO),

Pavangad, Kozhikode – 673 021.

2.           Bharti AXA General Insurance Company Ltd,

6^th floor, Madayil Centre Point,

Warriom Road Junction, MG Road,

Cochin, Kerala.

OP 2 Substituted as

                    ICICI LOMBARD General Insurance Co. Ltd,

Ground floor,

Mahesh Estate,

Vazhuthacaud (PO),

Thiruvananthapuram – 695 014.

3.           Nissan Motor India Pvt  Ltd,

No. 37 /38, Asv Ramana Towers, 3^rd floor,

Venkatanarayana Road,

T Nagar, Chennai – 600017.

(Second opposite party substituted as per order dated 18/05/2022 in IA 56/2022)

(OP1 By Adv. Sri. P. Rajeev, OP2- By Adv. Sri. N. Sooraj and OP3 By Adv. Sri. Sreejith Cherote)

                                                                                 ORDER

By Sri. P.C, PAULACHEN  – PRESIDENT.

            This is a complaint filed under Section 12 of the Consumer Protection Act,  1986.

2.  The case of the complainant, in brief, is as follows:

                        The complainant purchased a Micra XV Diesel Premium R car manufactured by the third opposite party from the first                  opposite party authorised dealer by paying a sum of Rs. 6,49,279/- through the financial assistance arranged by the first opposite                party. The vehicle was delivered to the complainant on 04/12/2012. The first opposite party had represented that they jointly with              the second opposite party insurance company, provide customised and efficient comprehensive insurance coverage (bumper to                  bumper) including all accessories in the form of private car package policy, besides extended warranty for an additional 2 years                  after expiry of original warranty or up to 80,000 kms, whichever occurs earlier. The first opposite party collected a sum of Rs.                    17,943/- as total premium payable for the comprehensive insurance coverage under the private car package policy and Rs. 5,578/-              towards extended warranty. It was represented by the first opposite party that the relevant documents regarding the insurance                      coverage and extended warranty would be furnished to him in due course.

3. On 05/05/2013 the vehicle met with an accident causing damage to the vehicle. The driver had immediately intimated the accident to the first opposite party and as per their instruction the car was taken to the service centre of the first opposite party. The first opposite party stated that the repair would be done at the earliest and that the same was covered under the policy. The first opposite party stating that a claim has to be preferred before the second opposite party, got a claim form, a letter and a blank satisfaction letter addressed to the second opposite party executed by the complainant on 05/06/2013.
4. In spite of all these, there was delay on their part in carrying out the repairs and delivering back the vehicle. When the complainant sternly  required the first opposite party to deliver back the vehicle after repairs, they issued two bills dated 31/08/2013 and 19/09/2013 claiming an amount of Rs. 1,26,065/- and Rs. 1,18,433/- respectively as repair charges. The first opposite party is not entitled to make any such claim as the accident repair was covered under the policy. The first opposite party has not furnished the copy of the insurance policy containing the terms and conditions and he was served with only a certificate cum policy schedule.
5. The complainant purchased the vehicle after paying substantial amount believing and relying on the representation made by the first opposite party. He was put to much embarrassment, mental agony and pain on account of the unfair trade practice and deficiency of service on the part of the opposite parties.
6.  On 19/10/2013 the first opposite party has issued a notice to him making false allegations and claims and threatening that the car would be moved to open yard and demurrage at the rate of Rs. 250/- per day would be charged if the vehicle was not taken delivery after paying the amount. Till date the opposite parties have not repudiated the claim or intimated any reason for not extending the insurance coverage to the complainant. The opposite parties have no right to illegally retain the vehicle for the alleged unpaid repair bills.
7. Hence the complaint to direct the opposite parties to hand over the vehicle after rectifying the defects without insisting for any payment and by honouring the insurance claim of the complainant and pay a sum of Rs.5,00,000/- as compensation for the loss and injury sustained by the complainant on account of the deficiency of service and unfair trade practice on the part of the opposite parties. It is also prayed to direct the opposite parties to discontinue the unfair trade practice being made by them and issue corrective advertisement to neutralise the effect of misleading advertisement being made by the opposite parties.
8. The opposite parties have entered appearance and filed written version separately wherein they have denied all the allegations and claims made against the complaint.
9. The first opposite party in the version has admitted that the complainant had purchased the vehicle from them and got the same insured by the second opposite party. The second opposite party offers insurance for vehicle and the complainant opted for the same. He had opted for an extended warranty also. There was no reason for the first opposite party to give any false assurance about the vehicle.
10. The complainant’s vehicle was brought to the first opposite party in May 2013 after the same had met with a major accident. The complainant was abroad and the staff who brought the vehicle wanted the approval of the complainant to start the repair job and also to inform the second opposite party and raise a claim. In June 2013 the complainant came and made a claim before the second opposite party. On receiving the approval of the second opposite party the repair was started.
11. The damage to the engine was extensive and after the accident, the vehicle was driven without even checking the damages and it had resulted in developing more serious damages. The engine oil had drained from the spot and without even checking this, the engine had been run, which caused massive damages to the engine. The complainant approved the repairs and gave his consent and accordingly the repairs were done. The total bill came up to Rs. 2,44,498/- and it was to be paid either by the complainant or by the insurance company. The insurance company refused to pay this amount stating that their liability was limited to own damage claim and that the policy would not cover the damages sustained to the vehicle after it was run without engine lubricants. They thus paid Rs. 23,434/- alone leaving a balance of Rs. 2,21,064/-. Hence the first opposite party demanded this amount from the complainant before taking back the vehicle.
12. The complainant had inspected the vehicle after its repairs and had issued a satisfaction note. Repair charges of the vehicle is to be paid by the owner once the insurance company repudiates the claim. The complainant cannot circumvent payment by filing complaint on flimsy grounds.
13. The complainant approached this Commission and managed to get an order to release the vehicle by depositing Rs. 30,000/-. The order was later modified by remitting a bank guarantee for Rs. 70,000/-. The complainant has to be directed to pay the balance repair charges of Rs. 2,21,064/-. With the above contentions, the first opposite party prays for dismissal of the complaint with costs.
14. According to the second opposite party, the complaint is not maintainable and they are not necessary party to the proceedings. The complainant has approached this Commission with unclean hands concealing material facts. The complainant was abroad at the time of the accident. The own damage claim was lodged only on 05/06/2013 after one month of the accident. On inspection of the vehicle, it was observed that the loss had occurred due to starvation of engine oil causing lack of lubricant. The starvation of engine oil has caused damage to the engine component and it is solely attributable to the failure on the part of the driver to exercise ordinary prudence as expected of every insured. There was violation of policy conditions. The liability of the second opposite party is only for the accidental damage.
15. The surveyor appointed assessed Rs. 23,434/- for the accidental damage caused to the car subject to the terms and conditions of the policy. Accordingly, Rs. 23,063/- was paid after deducting Rs. 373/- towards service charge. There was no delay or latches occurred in processing the claim. There was no deficiency of service or unfair trade practice on the part of the second opposite party. It is, therefore, prayed to dismiss the complaint with costs.
16. The third opposite party has also taken the contention in their written version that they are unwantedly impleaded by the complainant. According to them, the complainant has no case that any of the mischief happened to him in connection with the vehicle is due to any manufacturing defects or deficiency in service on their part. The real grievance of the complainant is with regard to bumper to bumper insurance policy taken from the second opposite party and the third opposite party has nothing to do with that. The third opposite party is not aware of the representation made by the first opposite party with respect to the comprehensive insurance policy and the negotiations and claims between the complainant and the first opposite party and they are not in any way liable for violation, if any, of the same. The first opposite party is only a dealer and this business is done on principal to principal basis between the parties. The first opposite party is not acting as an agent of the third opposite party in matters of insurance and finance. The third opposite party was not intimated of any delay or deficiency in the repairs carried out by the first opposite party. There was no unfair trade practice or deficiency of service on the part of the third opposite party. None of the reliefs sought for is allowable and according to the third opposite party, the complaint is only to be dismissed.                                 
17. The points that arise for determination in this complaint are;                                                                                                                        1. Whether there was any unfair trade practice or deficiency of service  on the part of the opposite parties, as alleged?                        2. What, if any, is the legitimate dues payable to the complainant?                                                                                                          3. Whether the claim for compensation is allowable? If so, what is the quantum and who is liable?                                                      4. Reliefs and costs.
18. Evidence consists of the oral evidence of PW1 and Exts A1 to A9 on the side of the complainant. RW1 was examined on the side of the first opposite party. Exts B1 to B5 were marked on the side of the second opposite party. The third opposite party did not adduce any evidence.
19. Heard. The complainant and opposite parties 1 and 2 filed argument note.
20. Points 1 to 3: These points can be considered together for the sake of convenience and for avoiding repetition in the discussion of evidence. The complainant has approached this Commission with a main grievance that there was neglect on the part of the opposite parties to honour fully the own damage insurance claim preferred by him in connection with the damage caused to his Micra XV Diesel Premium R car bearing registration No. KL-11-AP-9900.
21. The complainant is the registered owner of KL-11-AP-9900 car. The vehicle was duly insured with the first opposite party for the period from 04/12/2012 to 03/12/2013. The premium amount paid for this private car package policy was Rs. 17,943/-. The vehicle met with an accident on 05/05/2013 and damage was caused to the vehicle. A claim for own damage was lodged before the second opposite party on 05/06/2013 with necessary documents. The claim was processed and only an amount of Rs. 23,434/- was found to be admissible and the same was paid to the first opposite party by the insurer on 06/12/2023. The total repair bill amounted to Rs. 2,44,498/-. There is no serious dispute on the above aspects.
22. The dispute is with regard to the balance amount of Rs. 2,21,064/-. According to the second opposite party, the loss in this regard has occurred due to starvation of engine oil causing lack of lubricant since the vehicle was driven after the accident. To be specific, the contention of the second opposite party is that the starvation of the engine oil has caused damage to the internal components and it is solely attributable to the failure on the part of the driver to exercise ordinary prudence as expected of every insured and thus there was violation of condition No. 4 of the policy. Accordingly, the second opposite party considered only the replacement of the oil sump charges, resulting out of external means and the other extension of loss could not be considered.
23. In order to substantiate his case, the complainant got himself examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the invoice dated 30/11/2012, Ext A2 is the copy of the sales certificate dated 04/12/2012,  Ext A3 is the copy of the certificate of registration, Ext A4 is the copy of the motor insurance claim form along with letter and blank satisfaction letter, Ext A5 is the copy of the repair order invoice dated 31/08/2013, Ext A6 is the repair order invoice dated 19/09/2013,  Ext A7 is the  copy of the certificate cum policy schedule, Ext A8 is the copy of the extended warranty certificate and Ext A9 is the letter dated 10/10/2013 issued by the first opposite party.
24. RW1 is the Assistant Manager of the first opposite party. RW1 has filed proof affidavit and deposed supporting and reiterating the contentions in the written version. Ext B1 is the policy certificate with terms and conditions, Ext B2 is the motor claim form dated 05/06/2013, Ext B3 is the letter issued by the complainant, Ext B4 is the motor repair assessment cum processing sheet and Ext B5 is the letter dated 17/06/2013 issued to the complainant.
25. The learned counsel for the complainant has argued that it was on account of the representation and the claims and promises made by the opposite parties especially the first opposite party to the effect that both accident repairs and rectification defects otherwise arising were fully covered by taking the policy in question that the complainant took the comprehensive coverage policy paying a substantial amount as premium. It was submitted that the insurance policy and the terms and conditions were neither provided to the complainant nor explained to him in time. The learned counsel argued that the damage to the internal components is due to the accident and there was no justification for denying the claim stating that the vehicle was allegedly driven after the accident. Further it was submitted that the complainant was made to sign the ‘X’ marked spaces in Ext B3 letter and a blank satisfaction letter was also obtained from him.
26. The learned counsel for the first opposite party submitted that the complainant had opted for the insurance of the second opposite party at the time of purchase of the vehicle and there was no compulsion whatsoever to opt this particular policy of the second opposite party and after the accident the vehicle was repaired to the satisfaction of the complainant and the repair charges are to be paid either by the insurance company or by the complainant. It was submitted that the real aggrieved is the first opposite party, who had to release the vehicle to the complainant as per the interim order passed by this Commission without getting the balance repair charges of Rs. 2,21,064/-. According to the learned counsel, an order has to be passed by this Commission directing either the complainant or the insurance company to pay the said amount to the first opposite party.
27. The learned counsel for the second opposite party argued that the loss has occurred due to starvation of engine oil causing lack of lubricant and it was due to lack of ordinary care of the insured by driving the vehicle after the accident. It was argued that the starvation of engine oil has caused damage to the internal components and the company is not liable to indemnify the insured for extension of loss due to breach of conditions and the liability of the second opposite party is only for accidental damage.
28. In addition to the main grievance of non-sanctioning of the entire motor claim, the complainant has got another grievance that there was delay in delivering back the car after repairs. In this connection, it may be noted that the vehicle met with a major accident causing extensive damage and it was entrusted for repairs on 05/05/2013. The claim was preferred only on 05/06/2013.  Admittedly, the insurance company honoured the claim partly and paid only Rs. 23,434/- to the first opposite party. It has come out in evidence that the complainant was not prepared to pay the balance amount of Rs. 2,21,064/- to the first opposite party and take back the vehicle. As the insurance company did not pay the total bill amount, the complainant is liable to pay the balance amount to the first opposite party and he cannot insist on delivering back the vehicle without paying the balance repair charges. So the first opposite party cannot be found fault with for the delay. It cannot be disputed that the balance amount of the repair bill is to be paid to the first opposite party either by the complainant or by the insurance company.
29. As already stated, the insurance claim was not honoured in full by the insurance company stating the reason that the vehicle was driven after the accident and thereby condition No. 4 of Ext B1 was violated. The said condition reads as follows;

“The insured shall take all reasonable steps to safeguard the vehicle 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 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 insured’s own risk”.

30. The definite case of PW1 is that while the driver was using the car on 05/05/2013 while trying to avoid a collision with an oncoming negligently and rashly driven motor cycle, the vehicle happened to go off road and hit a stone and immediately the accident was reported to the first opposite party and as per their instruction the car was taken to their workshop. In the cross examination, PW1 has asserted that the vehicle was lifted using pick up crane and taken to the work shop. The opposite parties are relying on Ext B3 to contend that the vehicle was driven by the driver after the accident. PW1 has categorically deposed that he was made to sign in the ‘X’ marked space in Ext B3 and that he was not aware of the policy conditions as the documents were not handed over to him. There is no reason to disbelieve PW1 in this regard. Moreover, apart from the bald averments in the written version of the second opposite party, there is absolutely nothing in evidence to show that the damage to the internal components was due to the driving of the car after the accident and not an accidental damage. It is averred in the version of the second opposite party that on inspection of the vehicle they realised the fact that the loss had occurred due to starvation of the engine oil causing lack of lubricant. But the person who inspected the vehicle and came to this conclusion is not cited as a witness and examined before the Commission by the second opposite party. The surveyor and loss assessor who inspected the vehicle and assessed the loss is not examined. The accident, a proximate cause of engine damage, is covered under the insurance policy. The delay in intimating the insurance company about the accident cannot be a valid reason for repudiating the claim, especially in view of the fact that the accident was immediately intimated to the first opposite party and they started the repair work after getting approval from the second opposite party.   
31. The definite case of PW1 is that he was not furnished with the terms and conditions of the policy and even the policy was not furnished him in time. PW1 has asserted that the terms and conditions were not explained to him and he was totally unaware of the same. Eventhough PW1 was subjected to searching cross examination, nothing has been brought out to discredit his version in this regard. It is the duty of the insurance company to disclose the terms and conditions of the policy to the insured and furnish the same to him. The second opposite party has produced Ext B1 policy schedule with the conditions of the policy.  There is absolutely nothing in evidence to hold that the above conditions were furnished to the complainant or explained to him. As stated above, condition No. 4 of Ext B1 sets out the duties of the insured to take all reasonable steps to safe guard the vehicle from loss or damage etc and it provides that in the event of the accident or breakdown, the vehicle shall not be left unattended without proper precaution being taken to prevent further damage and if the vehicle is driven before repairs, any extension of damage or any further damage to the vehicle shall be entirely at the insured’s own risk. Since the said condition was not supplied or explained to the insured in time, the same is not binding on him.
32. In Modern Insulators Ltd Vs Oriental Insurance Co. Ltd. (2000)2 Supreme Court cases 734, the Hon’ble Supreme Court has held that the non-disclosure of the terms and conditions is violation of utmost good faith which is the base of insurance contract. In paragraphs 8 and 9 of the aforesaid decision, it has been held as follows:

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the fact with the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally.

In view of the above settled position of law we are of the opinion that the view expressed by the National Commission is not correct. As the above terms and conditions of the standard policy wherein the exclusion clause was included, were neither a part of the contract of insurance nor disclosed to the appellant respondent cannot claim the benefit of the said exclusion clause. Therefore the finding of the National Commission is untenable in law”.

33. In the order dated 01/12/2014 in Revision Petition No. 3934/2013 (Bajaj Allianz general Insurance Company Ltd. and another Vs Achala Rudranwas Marde) the Hon’ble National Consumer Disputes Redressal Commission has held that non-disclosure of the terms and conditions is violation of utmost good faith which is the base of insurance contract between the parties. If such exclusion clause etc. are not explained or furnished to the insured, the same is not binding on him. The decision of the Hon’ble Supreme Court in Modern Insulators Ltd Vs Oriental Insurance Co. Ltd. was relied upon in the above decision of the Hon’ble National consumer Disputes Redressal Commission.
34. The above dictum is squarely applicable in his case. The terms and conditions of the policy wherein the above condition was included were neither a part of the contract of insurance nor disclosed to the complainant. Hence the insurance company cannot rely on the said condition to deny the claim. The total repair charges amounted to Rs. 2,44,498/- which is due to the first opposite party. The second opposite party paid Rs. 23,434/- the balance is Rs. 2,21,064/-. The second opposite party is liable to pay the said amount.
35. The conduct of the second opposite party including the non-disclosure of the terms and conditions to the insured at the proper time and denying the legitimate claim undoubtedly amounts to gross deficiency of service and unfair trade practice. It goes without saying that the act of the second opposite party has caused mental agony and hardship to the complainant. The complainant is entitled to be compensated adequately. The claim for compensation is Rs. 5,00,000/-. The claim appears to be excessive and exaggerated. However, the complainant is entitled to get a reasonable amount as compensation. Considering the entire facts and circumstances, we are of the view that a sum of Rs. 10,000/- will be reasonable compensation in this case. The complainant is also entitled to get Rs. 5,000/- as cost of the proceedings.
36. The third opposite party is the manufacturer of the vehicle in question and the first opposite party is the authorised dealer. The complainant has no grievance with regard to the vehicle or the repairs carried out. The insurance policy is that of the second opposite party and it is for the said insurance company to allow the legitimate claim and there is nothing to indicate that either the first opposite party or the second opposite party has any role in the matter. Hence the complainant is not entitled to seek any relief from the first and second opposite parties and they are entitled to be exonerated. Points found accordingly.
37. Point No. 4:- In the light of the finding on the above points, the complaint is disposed of as follows;

                  a)  CC.497/2013 is allowed in part.

b) The second opposite party is hereby directed to honour  the insurance claim and pay the complainant a sum of Rs. 2,21,064/-(Rupees two lakh twenty one thousand sixty four only) towards balance repair charges as per Exts A5 and A6, payable to the first opposite party.

c) The second opposite party is directed to pay a sum of Rs. 10,000/- (Rupees ten thousand only) as compensation to the complainant.

d) The second opposite party is directed to pay a sum of Rs. 5,000/- (Rupees five thousand only) as cost of the proceedings to the complainant.

e) The order shall be complied with within 30 days of the receipt of copy of this order, failing which, the amount of Rs.  2,21,064/- shall carry an interest of 9% per annum from the date of this order till actual payment.

f) The first and third opposite parties are exonerated.

Pronounced in open Commission on this, the 31^th day of July, 2024.

Date of Filing: 24/10/2013

                           Sd/-                                                                                               Sd/-

                  PRESIDENT                                                                                   MEMBER                          

APPENDIX

Exhibits for the Complainant :

Ext A1 - Copy of the invoice dated 30/11/2012.

Ext A2  -  Copy of the sales certificate dated 04/12/2012.

Ext A3  - Copy of the certificate of registration.

Ext A4 - Copy of the motor insurance claim form along with letter and blank satisfaction letter.

Ext A5 - Copy of the repair order invoice dated 31/08/2013,

Ext A6 -  Order invoice dated 19/09/2013.

Ext A7 - Copy of the certificate cum policy schedule.

Ext A8 - Copy of the extended warranty certificate.

Ext A9 - Letter dated 10/10/2013 issued by the first opposite party.

Exhibits for the Opposite Party

Ext B1 -  Policy certificate with terms and conditions.

Ext B2 - Motor claim form dated 05/06/2013.

Ext B3 - Letter issued by the complainant.

Ext B4 - Motor repair assessment cum processing sheet.

Ext B5 - Letter dated 17/06/2013 issued to the complainant.

Witnesses for the Complainant

PW1  -  Arshad Abdulla  (Complainant)

Witnesses for the opposite party

 RW1 – Rohith. K (Assistant Manager of OP1)

                           Sd/-                                                                                        Sd/-

                  PRESIDENT                                                                                   MEMBER                          

                                                                                                             True Copy,                                                                                                                

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                                                                                 Assistant Registrar.