A. Venkatarami Reddy, President:
1. The complainant purchased one Hindustan Ambassador Deluxe Sedan car in June, 1989 for a sum of Rs. 1,18,694/- manufactured by first opposite party through its dealer i.e. fourth opposite party i.e. Auto Pradeep, Hyderabad, and took a comprehensive insurance policy on 6.6.1989 for Rs. 1,20,000/- with the second opposite party, and the third opposite party is the General Manager, Oriental Insurance Company Ltd. Within a month of supply, even before the permanent registration was allotted to the car, the axle broke down and on a representation made by the complainant, the first opposite party replaced the car with a new one and the second opposite party endorsed the insurance coverage to the new replaced vehicle. Even before the expiry of period of third free service on 11.2.1990 at 5.45 p.m. while the vehicle was being taken out from the garage at the complainant's house as soon as an ignition key was applied, the vehicle caught fire preceded by an explosion. Most of the parts of the Engine were splattered inside the bonnet and the fire was put out by throwing sand by the workers with great difficulty and luckily the complainant and his family members are saved. Immediately the complainant lodged a claim with the second opposite party and also intimated the fourth opposite party i.e. Auto Pradeep the dealer, and the dealer Auto Pradeep estimated the repairs approximately at Rs. 50,000/- and the vehicle was towed to the workshop of the fourth opposite party on 27.2.1990 and the custody of the car was handed over to the fourth opposite party. Thereafter the complainant wrote to the manufacturer through the fourth opposite party stating that due to low quality, substandard and defective machinery used in the manufacture of the car and due to fault, defect, deficiency, imperfection and shortcoming and the poor quality in manufacture, the vehicle caught fire preceded by explosion and asked the first opposite party requesting to deliver a new car, as the vehicle was used little over 300 kms. The complainant further informed that he is a practising Advocate and that due to lack of conveyance he has been spending Rs. 3,000/- per month towards conveyance. But the first opposite party initially informed the complainant that the fire is the result of negligence on the part of the owner/driver. Inspite of the fourth opposite party pointing out that fire broke out not due to any negligence on the part of the complainant and asked the 1st opposite party to review its decision in replacing the vehicle with a new one and the first opposite party on 1.5.1990 changing its earlier stand informed the complainant that it is an accidental fire and advised the complainant to settle the claim with the-Insurance Company and by letter dated 11.5.1990 refused to replace the vehicle.
2. Alleging that on account of the defect in the material, workmanship used in the manufacture of the car, the fire broke out due to poor quality of manufacture amounting to deficiency, imperfection and shortcoming, the above complaint was filed seeking a direction to the opposite parties to refund the price or replace the car with a new one, to refund the full value of insurance policy and for payment of compensation of Rs. 3,000/- per month from February, 1990 till payment.
3. Alongwith the complaint, eight Annexures were filed. Annexure-I being the premium receipt, Annexures-II and III are the insurance policies covering the risk from 4.7.1989 to 3.7.1990 for Rs. 1,20,000/-, Annexure-IV is the claim preferred by the complainant to the Insurance Company, Annexure-V being the damage assessed by Auto Pradeep i.e. fourth opposite party, Annexures-VI and VII are the letters written by the complainant to the first opposite party seeking replacement of car and Annexure-VIII dated 15.5.1990 is a letter from the first opposite party to the complainant rejecting the claim of the complainant for replacement of car with a new one and asking him to settle the matter with the Insurance Company as it is purely an accidental fire.
4. The first opposite party in its version stated that the allegations in the complaint basically involved question of damage suffered due to accidental fire for which the claim has to be made against the Insurance Company, that the complaint is bad for non-joinder of necessary parties, that the fourth opposite party is not an agent of the first opposite party and buys and sells the cars independently and any representation made by the fourth opposite party is not binding on the first opposite party, that under Clause 5 of the Warranty the question of replacing me vehicle with a new one does not arise, and there is no defect or workmanship, quality, and the car is perfectly roadworthy and hence the first opposite party is not liable.
5. Alongwith the counter, the first opposite party filed Annexure-A i.e. warranty card, Annexure-B letter dated 27.2.1990 from the complainant and received by the opposite party No. 1 which was already referred to in the documents filed by the complainant. Annexure C dated 12.4.1990 is a letter from the opposite party to the complainant informing him that the accident might, have happened due to the negligence of driver/mechanic, Annexure-D is a letter dated 3.5.1990 from the complainant to the opposite party and Annexure-E is a reply dated 15.5.1990, to Annexure-D rejecting the request of the complainant for replacement of the vehicle with a new one.
6. The opposite parties 2 and 3 stated in their counter that the allegations in the complaint relate to serious manufacturing defect and not against the opposite parties 2 and 3. They admitted that the subsistance of the policy with regard to the vehicle and it was further pleaded that they have appointed an independent Surveyor who assessed the loss at Rs. 13,671/- and even if the Insurance Company is liable, its liability is only Rs. 13,671/-.
7. The fourth opposite party filed its counter stating that the warranty for defective workmanship was for a period of 12 months or 16,000 kms., and that knowing the cause of fire, as accidental the complaint cannot be entertained.
8. It is to be noticed that during the pendency of the complaint, pursuant to the order of this Commission, the vehicle was sent to Vehicle Research and Development Establishment of Government of India, Ministry of Defence, Research and Development Establishment at Ahmed Nagar for defect investigation. The said vehicle was received by VRDE on 13.7.1991 and in the report several major deficiencies, damages, miscellaneous observations were noted and after detailed examination, it was found by VRDE that the vehicle was already stripped open after fire accident as a result of which large amount of deficiencies/damages have been caused tampering with the important evidence and it is very difficult at this stage to pin-point the defect which caused the fire. However that the damage was caused to the vehicle as a result of fire, that the fire seems to have been caused due to electric short-circuit, that abrupt fire to the spilled over/ splashed fuel due to electric short-circuit might have caused by fire and sound. The damage can be accidental and cannot be conclusively attributed to the defective material or manufacturing defects, as the vehicle has already run 4,235 kms. After completion of the investigation, the vehicle was sent back from Ahmed Nagar to Hyderabad by M/s. Prakash Roadlines and delivered to the fourth opposite party on 14.11.1991 and the fourth opposite party filed an affidavit noting down certain damages caused to the vehicle.
9. The complainant filed a counter stating that the vehicle was in the custody of the fourth opposite party right from 27.2.1990 and that after the order of this Commission the fourth opposite party was contacted by the complainant and the fourth opposite party was unable to move the vehicle as the steering of the car has been removed as substantial damage was caused to the vehicle and therefore, the parts were missing even before it was sent to Ahmed Nagar for investigation.
10. The complainant filed objections to the report stating that explosion can be without explosion of assembly and the vehicle was stripped open and the evidence for determining the cause of fire and explosion was tampered with when the vehicle was in the custody of the fourth opposite party by either the workers of fourth opposite party or technicians of the first opposite party who inspected the vehicle when it was with the fourth opposite party, that the Mechanical Engineer from the Oriental Insurance Company who visited the vehicle immediately after the accident and took photos did not mention about the stripping and tampering of the vehicle and reported that the vehicle caught fire due to short-circuit of electricity. Although the Engineers of the first opposite party were deputed to inspect the vehicle they failed to categories the manufacturing defects, designed defects and the complainant was not informed of the result of that inspection.
11. No oral evidence was adduced by any of the parties and the complainant filed material papers book No. 1 containing his affidavit and Annexures to the complaint and the booklet supplied to the complainant alongwith the vehicle, book No. 2 containing the material papers i.e. starting with the letter dated 27.2.1990 which was written by the complainant to the first opposite party requesting for delivery of new vehicle and letter dated 15.5.1990, whereby the opposite party No. 1 did not accept the request of the complainant for replacement of the vehicle with a new one and also other documents showing that the vehicle was in the custody of the fourth opposite party right from 27.2.1990 till it was sent to VRDE and die same was sent back to the fourth opposite party, and also contains the final survey report dated 18.8.1990 of Venkata Reddy, the Engineer appointed by the Insurance Company who inspected the accident site, book No. 3 containing various decisions of American Courts which the complainant relied upon the book No. 4 relating to Automobile accident reconstruction and data required for re-construction and defects and designs and defects in manufacture, etc., and book No. 5 is the written arguments of the complainant.
12. From the Telegram given to the fourth opposite party and also lodging of claim and also intimation given to the Insurance Company,itcan be seen and it is not in dispute that on 11.2.1990 the car of the complainant purchased from the fourth opposite party manufactured by the first opposite party caught fire and that there was some explosive sound. It is also not in dispute that the car after inspection by the insurance technicians at the house of the complainant was towed on 27.2.1990 to the workshop of the fourth opposite party and the same remained in the custody of the fourth opposite party. The complainant made representations to the first and fourth opposite parties stating that the fire resulting in extensive damage to the vehicle and explosion shattering the engine parts was caused due to the inferior material used, lack of workmanship, manufacturing defects and that therefore, he is entitled for replacement of the vehicle.
13. The fourth opposite party supported the complainant when it wrote a letter to the first opposite party stating that it is not correct to say that the fire occurred due to negligence of the driver/owner, and it requested the first opposite party to review its decision and consider the request of the complainant for replacement of the vehicle with a new one. But subsequently when it came to the question of filing its version, the fourth opposite party supported the version of the first opposite party that the fire was caused accidentally and not due to any defect in manufacturing or deficiency in service or use of substandard material.
14. In view of the pleadings taken by the first and fourth opposite parties and the Insurance Company i.e. opposite parties 2 and 3, the questions that arise for consideration are :
(1)Â Whether the complaint is not maintainable, and it is bad for nonjoinder of necessary party?
(2)Â Whether the complainant is bound by the terms of the warranty and if so, under Clause 5 of the warranty the first opposite party is not liable to replace the damaged vehicle with a new one?
(3) Whether the damage was caused due to accidental fire or due to defect of workmanship? and
(4)Â Whether the Insurance Company is liable to pay the cost of the vehicle?
15. Although a plea was raised in the counter of the first opposite party that the complaint is not maintainable under the provisions of the Consumer Protection Act and is al so bad for nonjoinder of necessary party, it is not shown how and why the complaint is not maintainable.
16. According to the allegations in the complaint, the fire occurred due to manufacturing defects and imperfection and short-comings, inadequacy in the quality of the service to be performed. If there is any defect in the goods supplied or any deficiency in the service for which the complainant paid the consideration, a complaint can be filed under the provisions of the Consumer Protection Act seeking redressal for such defect or deficiency. it is not shown who is the necessary party that is not made a party to the complaint. The complainant made the manufacturer of the vehicle, dealer, as well as the Insurance Company a party. In the absence of any indication as to who is the other necessary. party that is not made a party to these proceedings, we are satisfied that this contention has no basis. We accordingly reject the same.
17. It is next submitted by the learned Counsel for the opposite parties 1 and 4 that under the terms and conditions of warranty, the complainant is not entitled to ask for replacement of the vehicle.
18. Reliance is placed mainly on Clause 5 of the warranty. Clause 5 of the warranty reads "the liability of the Company is limited to exchange or repair as above. Replacement of car any form of liability or loss of time, inconvenience, loss of use of the car or other consequential damage is hereby expressly excluded".
19. It is firstly submitted by the complainant that the terms of the warranty, found in warranty card, were not brought to the notice of the complainant prior to his purchase and that he agreed for the terms and conditions. By merely sending the warranty card subsequent to the purchase alongwith other papers, does not bind the complainant of the terms and conditions mentioned in the warranty card.
20. Even otherwise, the Consumer Protection Act, 1986 conferred the right on every consumer to agitate before the Fora constituted under the Act for any defect in the goods purchased by him for a consideration and for any deficiency in respect of any services hired or availed by the consumer for consideration from the seller and that the defect and deficiency is defined as any fault, imperfection or short-coming in the quality, quantity, potency, parity or standard which is required to be maintained by or under any law for the time being in force in relation to any goods purchased or the services hired.
21. In the instant case, the complainant purchased the vehicle for consideration and therefore, he is a consumer and can maintain the complaint in respect of any defect in the goods, irrespective of the terms and conditions in the warranty. In support of his contention that in the absence of agreement he is not bound by warranty, the complainant has invited our .attention to Photo Production Ltd. v.Securicor, 1978 3 All England Reporter and also George Mitchel (Chester Hall) Ltd.v.finney Lock Seed Ltd., 1983 1 All England Reporter 108, which was affirmed by House of Lords in 1983(2) All England Reporter 737, and also the decision of the Supreme Court AIR1986 SC 1511.Weare, therefore, of the view that the complaint for replacement cannot be rejected on this ground.
22. Hence the main question for consideration is whether the fire followed by explosion or explosion preceding the fire is a result of any manufacturing defect or due to any fault, imperfection or shortcoming in the quality or standard to be maintained.
23. The complainant invited our attention to the decisions of Thomas Moraca v. Ford Motor Company, Supreme Court of New Jersey 1975 page 454; Judgment of the Supreme Court of New York 1972 in Codling v.Pagila; 1973 of the Court of Appeals of Mitrigan in Losinki v. Ford Motor Company; Judgment of Civil Court of Appeal of Texas l966in Ford Motor Company v. Grimes.'Judgment by Court of Appeal, California in O'Neil A. Gherna v. Ford Motor Company; State Farm Mutual Automobile Insurance Company v. Anderson; and Ford Motor Company, Brown Nell v. White Motor Corporation; Judgment of Supreme Court of California in Vander R. Mark v. Ford Motor Company; Judgment of Court of appeal is Rogers and Another v. Parisli, Reported in (1987) 2 All ER 232, Ford Motor Company v.Pittman; Judgment of Supreme Court of Arkaman in Ford Motor Company V. Reid and Dillon v.General Motor Corporation, which were furnished in the paper book No. 3.
24. In these cases, it was held that in a product liability case the person who purchased the product is not required to prove a specific manufacturing defect and he can adduce circumstantial evidence from which an inference can be drawn that the accident was caused by some defect, whether identifiable or not, and that the defects often do not reveal themselves immediately to the purchaser of the product. A defect may lie, latent and hidden for months or years until the right combination of circumstances caused it to manifest itself in product malfunction and mishap.
25. The complainant drew our attention particularly to the decision of Losinski v.Ford Motor Company, referred to earlier, wherein it was held "considering the difficulty of ascertaining potential wiring defects in automobiles, the jury in the present case could well have found against the manufacturer but not die retailer".
26. It is further contended relaying on the Ford Motor Company v. Grimes that "Justice requires that the manufacturer be charged with an implied warranty in favour of the initial retail purchaser that the automobile was suitable for the purposes for which it was sold".
27. We have to first consider on the basis of the evidence adduced in the instant case, whether it can be said that the fire occurred is due to any negligence on the part of the complainant.
28. In this case, although in its letter dated 12.4.1990, the first opposite party took the stand that the incident might have happened due to the negligence of the driver or by any mechanic but by its subsequent letter dated 15.5.1990, they stated that they are sorry to note the inconvenience caused to the complainant as a result of accidental fire which occurred in the engine compartment of the car. Except the allegation in the letter dated 12.4.1990, there is no material adduced by the first opposite party to show that the fire occurred due to any negligence of the driver or by any mechanic. According to the version of the complainant that the car was being taken out from the garage and when the ignition was switched on, the fire broke out preceded by explosive sound. Hence we are of the view that there is no negligence on the part of the driver or mechanic that can be said to have caused die fire. Immediately after the fire was put out by the workers, the complainant sent a telegram to the fourth opposite party and also informed the same to the manufacturer as well as the Insurance Company. The first technical person that inspected the car i.e. Sri M. Venkateswara Rao, the insurance surveyor and loss assessor who holds MIE Electrical and MIE Mechanical degree and is an Engineer reported that the cause of fire could be some short-circuit which would have ignited the over flown petrol, in the process, the engine compartment of the vehicle was severely burnt. The insured put out the fire by using water, sand, etc.
29. In the investigation report of VRDE (Vehicle Research and Development Establishment) it was concluded that the damage caused is as a result of fire due to electric short circuit, and the abrupt fire to the spilled over/ splashed fuel due to electric short-circuit might have caused fire and sound. This report also shows that the fire is a result of electric short- circuit.
30. It is to be seen from the report of VRDE that when the vehicle was inspected by them they found 18 major deficiencies and listed 14 items of damages and also certain miscellaneous observations. One of the miscellaneous observations is that the Engine block in serviceable condition and that the distance covered was 4,238 kms. according to the speedometer. They stated that the vehicle was already stripped open after the fire accident as a result of which large amount of deficiencies or damages have been caused tampering with the important evidence and it is therefore, difficult at this stage to pin-point the defects which caused the fire. But the vehicle was stripped open and major parts have been damaged due to tampering with the important evidence can only either by the dealer i.e. fourth opposite party or by the technical staff including the Engineers of the first opposite party who inspected die vehicle when it was in the custody of the fourth opposite party.
31. Sri Venkateswara Rao, the Surveyor of the Insurance Company who immediately visited the vehicle at the complainant's house after the fire accident did not say that the vehicle was stripped open and the parts were tampered with. When the vehicle was taken to the fourth opposite party, workshop on 27.2.1990 after inspection by the abovesaid Venkatara Rao, the fourth opposite party did not complaint that the car was stripped open and parts were tampered with. In the letters written by the fourth opposite party to the first opposite party on 26.3.1990, it was stated that the vehicle was already in the workshop from 27.2.1990 and in fact the fourth opposite party wrote a letter on 25.4.1990 to the first opposite party requesting it to reconsider its decision and replace the vehicle with a new one. The vehicle did not go out of the custody of the fourth opposite party. In the memo filed on 31.7.1991 on behalf of the complainant, it was stated that the fourth opposite party is unable to move the Ambassador car in his custody to be transported through the transporter as the steering of the car had been removed from the vehicle and several other parts also had been removed and the car was found seriously tampered and that the fourth opposite party has chosen to meddle with the vehicle by removing the original steering of the car and several other parts. The car was sent to VRDE and they noticed the vehicle was stripped open and several parts were tampered with and evidence is destroyed. On account of this the VRDE stated in its report that the damage cannot be conclusively attributed to defective material or manufacturing defect as the vehicle was already run 3,238 kms. Hence in view of the conclusions reached by VRDE under 8(a) and (b) and (c) and that as the vehicle was stripped open and important evidence was tampered with and as the opposite parties 1 and 4 stripped open the vehicle and tampered with the evidence, it can be inferred on account of the Act of the opposite parties 1 and 4, it cannot be conslusively attributed to defective material or manufacturing defect.
32. As the car sold to the complainant was rendered useless on account of the defective wiring resulting in short-circuit, which itself amounts to manufacturing defect, we are satisfied that the vehicle suffered from manufacturing defect and deficiency in the wiring resulting in fire and loss of vehicle.
33. The complainant claimed replacement of the vehicle with a new one. The complaint was filed no doubt in the year 1990. But as the complainant purchased the Ambassador car of 1989 model, and as the 1989 model car has considerably changed thereafter, we are not inclined to direct the opposite parties 1 and 4 to replace the vehicle with a new one.
34. The complainant paid a sum of Rs. 1,18,694/- for the purchase of the car and as the car could not be used, the complainant is entitled for refund of the amount with interest at 18% p.a. from 12.2.1990.
As we have granted interest at 18% p.a. on the said sum of Rs.1,18,694/-, the complainant is not entitled for payment of any amount of compensation at the rate of Rs. 3,000/- per month alleged to have been spent by him towards conveyance and there is also no evidence that he spent the said sum of Rs. 3,000/- per month.
So far as the opposite parties 2 and 3 are concerned, immediately after receiving information, they sent a Surveyor who assessed the loss at Rs. 13,671/- and as they have offered the same, we do not find any deficiency of service on the part of the opposite parties 2 and 3.
Since we have held that the car suffered from manufacturing defect and the fourth opposite party initially indicated to the manufacturer that the fire is not due to the negligence of the complainant and the decision not to replace the vehicle to be re-considered and as the complainant purchased the vehicle from the fourth opposite party-dealer, we are of the view that die opposite parties 1 and 4 are liable for payment of the amount aforementioned.
In the result, the complaint is allowed against the opposite parties 1 and 4 directing them to pay to the complainant a sum of Rs. 1,18,694/- (Rupees one lakh eighteen thousand six hundred any ninety four) with interest at 18% p.a. from 12.2.1990 till the date of payment. They are also further directed to pay a sum of Rs. 2.000/- (rupees two thousand only) to the complainant towards costs of this complaint. The complaint is dismissed against the opposite parties 2 and 3. But without costs.
Complaint allowed.