NEW DELHI: The West Bengal state consumer commission has directed a car dealer and insurer to compensate a customer after his Renault Duster met with an accident while it was in the dealer’s custody for servicing. The commission held that the dealer had no explanation for why the vehicle was being driven from Kharagpur towards Haldia and set aside the insurer’s rejection of the claim. The order was passed on September 29, 2026.Why did the customer approach the commission?According to the commission order, Rajesh Dubey bought the Renault Duster for Rs 15,23,736 on April 27, 2017. He insured it for the period from April 26, 2017, to April 25, 2018, with an insured declared value of about Rs 12.87 lakh.On March 2, 2018, the complainant handed over the vehicle to the authorised dealer for periodic servicing and repairs to minor scratches. On March 16, he was informed by police that the vehicle had met with an accident while travelling from Mecheda towards Haldia. The FIR recorded that it had collided with the rear of a trailer that had allegedly stopped suddenly. The collision caused substantial damage and the person driving the vehicle died.Dubey alleged that he had neither authorised nor known about the vehicle being taken from the dealer’s premises towards Haldia. He sought an insurance claim, but the insurer later denied it, citing delay and discrepancies in workshop records.Why did the commission hold the dealer responsible?The bench of judicial member Rajes Guha Ray and member Santanu Saha noted that the dealer’s own defence contained an admission that after repairs, the vehicle was being taken from its Kharagpur workshop towards its Haldia branch when it met with the accident.It said the dealer had a duty to take reasonable care of the vehicle while it was in its custody and could not use it beyond the purpose authorised by the owner.“The dealer has not explained why a vehicle entrusted for servicing was being driven from Kharagpur towards Haldia. No document establishing the complainant’s consent to that movement has been produced,” the commission noted.It rejected the dealer’s reliance on a workshop clause permitting test driving. The commission said such a clause could not be treated as an unrestricted permission to take the customer’s vehicle on an unexplained journey. It also held that insurance coverage did not remove the dealer’s duty of care.The commission therefore held the dealer and its branch manager guilty of deficiency in service and made them responsible for the uninsured part of the proven physical loss, besides harassment and loss of use.The insurer had argued that the accident was reported about 25 days later and that the delay breached the policy conditions. The commission, however, noted that the accident had been reported to police and the damaged vehicle remained available for inspection.It said the insurer should have appointed a surveyor, examined the police and workshop records and assessed whether the vehicle had suffered partial, total or constructive total loss.“Repudiating the claim without undertaking that exercise was arbitrary and constituted deficiency in service,” the commission further held.It therefore set aside the repudiation of the insurance claim.The commission said the exact physical loss could not be determined without an independent assessment. It directed the insurer to appoint a licensed surveyor within 15 days. The surveyor must assess the damage and submit a report within 45 days.The insurer must then pay the policy-admissible amount within 30 days of receiving the survey report, with 9 percent annual interest from April 4, 2019. The dealer must pay any balance between the assessed loss and the amount payable by the insurer, subject to the limits specified in the order.Apart from the vehicle damage claim, the commission ordered:
- Rs 3 lakh compensation and Rs 50,000
litigation costs against the dealer and its branch manager. - Rs 50,000 compensation and Rs 25,000 litigation costs against the insurer.
- These amounts will carry 9 percent annual interest if not paid within 45 days.
Thus, the fixed compensation and litigation costs total Rs 4.25 lakh, apart from the insurance payout and any amount payable by the dealer towards the assessed vehicle loss.