The main legal point established in the judgment is the obligation of the Insurance Company to declare a vehicle as a total loss and pay the claim when it is extensively damaged, as well as the prohibition of unfair trade practices under the Consumer Protection Act, 1986.

ORDER

Ms. Rumnita Mittal, Presiding Member - The vehicle of the Complainant met with an accident and was extensively damaged. The Insurance Company - O.P. No. l instead of declaring it as total loss and paying the claim of the insured amount directed for repairs of the vehicle in connivance of O.P. No. 2, the authorized service centre and dealer of the manufacturer of the car and since the repairs have not made the vehicle in question road worthy, the complainant has approached this Commission seeking reliefs mentioned in the prayer clause together with compensation of Rs. 7 lakh towards loss of use of vehicle and harassment and mental agony as well as cost of litigation.

2. The facts leading to the filing of the instant complaint, briefly stated are that the complainant had purchased a Ford Endeavour Sports Utility Vehicle (SUV) for Rs. 13,57,000, registered as a Private Vehicle in the name of the complainant vide registration No. DL 3C AN 0889 from O.P. No. 2, who are the Authorised Dealers and Repairers of the Ford India Pvt. Ltd.

3. The said vehicle was got insured from O.P. No. l, ICICI Lombard General Insurance Company Ltd., at the instance of O.P. No. 2, after payment of premium of Rs. 50,550 providing insurance cover vide Cover Note No. PC 1534231 dated 28.2.2006 for the period 28.2.2006 to 27.2.2007.

4. On 8.12.2006, the said Ford Endeavour met with an accident near Ludhiana while the complainant was coming back from Jallandhar to Delhi, along with his daughter. The vehicle of complainant was driven by his driver. It was badly damaged as it hit with a truck which sped away after the accident. Intimation was also given to police regarding this accident.

5. The front side body of the vehicle was pressed backwards and was crushed like a paper. The front portion of the vehicle including the Engine portion was damaged so badly that the vehicle became immobile after the accident. The vehicle, at the time of accident was found to be having some manufacturing defects as the mechanism of Safety Air Bags failed activation as they did not inflate. The front wind screen of the vehicle also gave way after the impact and small glass pieces split from the front wind screen as splinters pierced the face of complainant.

6. O.P. No. 2 was informed about the vehicle getting damaged in the accident who in turn informed the O.P. No. 1 i.e. Insurance Company about the damages caused to the vehicle. The vehicle, as guided, was then towed to Delhi and was parked in the workshop of O.P. No. 2 for inspection and assessment of loss.

7. The technical officials of O.P. No. 2 inspected the vehicle very minutely and upon examining the vehicle for the cost of repair submitted an estimate of Rs. 14,00,000. O.P. No. 2 also informed that the body shell has been damaged and the chassis has cracked and that both of them need replacement. It was also informed that these two parts alone will cost Rs. 4,45,000 and Rs. 89,000 respectively.

8. The vehicle was got insured from O.P. No. l at the instance of O.P. No. 2, at the time of selling the same to complainant. An insurance claim under the category of Own Damage Claim was then lodged with O.P. No. l. O.P. No. l was requested to pay the sum insured in the policy as the cost of repair as estimated was more than the cost of new vehicle. It was informed to the complainant by the staff of O.P. No. 2 that O.P. No. l has recommended to treat the vehicle as total loss since major damages have been caused. The request was, however, declined by the O.P. No. l for the reasons best known to them. The complainant's vehicle was a total loss as per the opinion of the mechanical engineer/technical officials of O.P. No. 2 as they opined that even if the vehicle is totally repaired then too there were chances of its being not perfectly road worthy. The complainant in view of the total loss agreed to accept the IDV Insured's Declared Value of the vehicle, since the vehicle was only 10 months old at the time of getting damaged.

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