Using pick-up & drop for car service? Know legal risk
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Before you continue reading How financially free are you? Most people overestimate their financial freedom. Discover your Financial Freedom score through a quick survey Calculate My Score Will the insurance company honour such a claim since the car owner did not cause the accident and neither was he driving? Will the insurance claim depend on whether the service centre appointed driver was in sane mind, non-alcoholic and had a valid driving licence? What happens if an accident occurs after the car goes inside the authorised company service centre? Recently, a car owner shared an incident on social media where he used the 'pick-up and drop' service offered by the service centre, but the driver got into an accident and crashed the car. The service centre told the car owner to file an insurance claim, promising they would cover the cost,but if the insurance didn't pay, then the customer would have to foot the repair bill for the car.The service centre's reasoning was based on a waiver the customer signed when handing over the car, which stated: "Vehicle will be driven at owner's risk, any damage will be debited against the consumer's insurance and they only provide pick up and drop service as a courtesy".Advocate Amitraj Kaushal, practicing in the Supreme Court of India, told ET Wealth Online that a pre-printed waiver of this nature is not legally absolute as the Indian contract law does not permit a service provider to contract out of liability arising from negligence, recklessness, or deficient service merely through boilerplate clauses.When the service centre takes possession and control of the vehicle, Kaushal says a bailment relationship is formed according to the Indian Contract Act, which requires a duty of reasonable care.Kaushal says: "Any clause shifting all operational risk to the customer without genuine negotiation may be scrutinised as unfair, unconscionable, and contrary to public policy.
Such disclaimers can mitigate exposure, but they cannot extinguish liability for the acts of the service centre's own driver."Keep reading to know more about the legal remedy for such a situation.Love Kumar Gupta, Managing Partner at L & D Advocates & Solicitors (LDAS Chambers) says the mere fact that the vehicle was being driven by a service centre executive, and not by its owner, does not, in law, entitle the insurer to repudiate or avoid liability for payment of the admissible claim amount.According to Gupta, an insurer may validly deny liability only when there is a breach of following conditions, like when the vehicle is driven by a specifically excluded person, by an individual who is not duly licensed, or by a person disqualified from holding or obtaining a driving licence during the relevant period.Gupta says: "Accordingly, the burden lies upon the insurer to establish that the insured has wilfully breached or violated the aforesaid conditions."The car owner's insurance company can put up a valid defence to claim immunity from their liability on the ground that the driver of the service provider suffers from any incapacity on account of being insane, alcoholic or for not holding a valid driving license.However, Gupta points out that even in case such a defence is established, courts in similar cases have directed the insurer to satisfy the claim in the first instance, while reserving its right to recover the amount so paid from the delinquent party.Gupta says: "This doctrine of "pay and recover," firmly embedded in Indian motor accident jurisprudence, has been consistently recognised and upheld by the Hon'ble Supreme Court of India."Can the car dealer or its manufacturer be held legally liable for this?The authorised dealer can certainly face liability because it is directly engaged in the service arrangement and exercises operational control over the pick-up and drop-off process.Kaushal says: "Its responsibility stems from agency, negligence, and custodial duty."The manufacturer's liability is less automatic; it depends on whether the dealer acted as an authorised representative within the brand's structured service ecosystem.Kaushal says: "If the service was marketed under the manufacturer's banner or standards, vicarious or reputational liability may be argued.
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