Car Damaged in Service Centre’s Custody? You Don’t Have to Claim Your Own Insurance

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

TL;DR: When your vehicle is in an authorised service centre’s custody and their driver causes an accident, the centre is a bailee and owes you a duty of care. A vague “pickup/drop at customer’s risk” line won’t automatically free them from liability, especially if the full terms weren’t given to you at the time of handover. You can file a consumer complaint and recover repair costs, compensation, and more, without touching your own insurance.

Arjun Mehta’s new Mahindra XUV700 had barely run 3,000 kilometres when he handed it over for its first free service in early March 2025. The dealership, Silverline Mahindra at Baner, Pune, had arranged pickup. Their driver was behind the wheel. Another car slammed into the rear. Tailgate crushed, bumper hanging, side panels scuffed. The car hadn’t even reached the workshop. What followed was a textbook blame-shift. The service centre insisted Arjun claim his own comprehensive insurance. They pointed to a one-liner: “Pickup and drop will be on customer risk.” When Arjun asked for the full terms and conditions applicable on the handover date, the CRM sent a WhatsApp image — undated, no version number, no reference. Nothing in writing from the GM either. When Arjun visited with his brother, the GM told the brother to leave只是因为 he wasn’t the owner. Escalations to Mahindra’s customer care manager, Ankur Sharma, went nowhere. The vehicle sat idle for over a month. A local lawyer had told Arjun he had no choice but to claim his own insurance. That’s when he knocked on the door of the Chamber of Advocate Sudhir Rao. The matter demanded immediate strategic handling. Advocate Sudhir Rao and his office argued that a bailment relationship had been created, triggering the dealership’s statutory duty of care under the Indian Contract Act. The so-called risk clause, they contended, was never properly incorporated into the contract because the detailed T&C were not provided at the point of signing. The case was filed before the District Consumer Disputes Redressal Commission, Pune, and in a swift order, the commission directed Silverline Mahindra to repair the vehicle at its own cost and pay compensation for mental agony and loss of use. The domain-specific expertise Advocate Sudhir Rao brought to the table cut through the dealership’s standard deflection playbook.

Key Facts of the Case

• Vehicle was about three months old, handed over for its first free service to an authorised Mahindra dealership in Pune.
• The dealership arranged the official pickup; the accident occurred while their representative was driving.
• Damage included the tailgate, rear bumper, skid plate, and left-side body panels.
• The dealership relied on a “pickup/drop at customer’s risk” statement, but the signed acknowledgement did not contain the detailed terms.
• After the accident, the CRM sent an undated, unidentified T&C image via WhatsApp. Repeated requests for the official applicable T&C were ignored.
• The GM asked the owner’s brother to leave during a meeting, saying he wasn’t the owner. No action was taken despite escalation.
• The vehicle remained unavailable for repairs for over a month.
• Advocate Sudhir Rao’s office established a clear bailment relationship and deficiency in service, securing relief through the consumer commission.

The Direct Legal Answer

Can the service centre force me to claim my own insurance when the vehicle was damaged in their custody?

No. Once you hand over your car to an authorised service centre for service, and their employee drives it, the centre becomes a bailee. Under Section 151 of the Indian Contract Act, a bailee must take as much care of the goods as a person of ordinary prudence would. An accident caused by their driver is prima facie negligence. They cannot compel you to claim your own insurance. They must either repair the damage themselves or claim from their own garage or third-party insurance. Your comprehensive policy is a contract between you and your insurer — you aren’t obligated to use it when someone else is legally responsible.

Does a general “pickup/drop at customer’s risk” clause make me liable?

Not automatically. Such clauses are interpreted strictly. If the detailed terms and conditions were not provided at the time you signed the pickup acknowledgement, they never became part of the contract. Even if they were, a blanket clause cannot exempt a bailee from liability for its own negligence — that would be against public policy. A court or consumer forum will examine whether the clause was brought to your notice before the accident. Here, the dealership sent an undated, unverified image only after the damage. That’s legally weak.

What if the T&C were provided only after the accident via WhatsApp?

Enforceability is severely compromised. A term not communicated at or before the time of contract formation is not binding. The dealership’s failure to produce a dated, signed, or referenced version of the T&C that you saw and agreed to will weigh heavily against them. It suggests an attempt to introduce terms retrospectively. You have a strong argument that the clause is not part of the contract.

Can I require the dealership to handle the third-party claim instead of using my insurance?

Yes. As the bailee, the dealership is answerable for the loss. They should take up the matter with the third party’s insurer or pursue the negligent driver themselves. You are not required to become an intermediary. Demanding that you handle the police and insurance process on your own is a deficiency in service under Section 2(11) of the Consumer Protection Act, 2019.

Can I claim transportation expenses, loss of work time, and mental harassment?

Absolutely. A consumer complaint can seek compensation for all consequential losses — rental car costs, leave taken from work, mental agony, and even diminution in resale value if the accident history affects the car’s market price. The consumer commission has wide powers to award compensation for harassment.

Is the manufacturer also liable?

If the manufacturer’s customer care team endorsed the dealership’s stand without independent inquiry, that can constitute an unfair trade practice under Section 2(47) of the Consumer Protection Act. You can make Mahindra a party to the consumer complaint, especially if their inaction prolonged your suffering.

Should I send a legal notice first?

It is advisable. A lawyer-drafted legal notice under Section 38(1) of the Consumer Protection Act, 2019 (before filing a complaint) crystallises your demand and often forces a settlement. If the opposite party fails to respond appropriately, it strengthens your case before the consumer forum.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Don’t sign any document at the service centre after the accident that could be construed as a settlement or waiver. Insist on a written accident report and the driver’s details. Notify your own insurer as a precaution — merely informing them, not filing a claim — so you don’t lose your rights later if things turn. This category of case involves nuanced contractual and bailment arguments that a general practitioner may not spot immediately; engaging an advocate who regularly handles consumer disputes and insurance liability matters typically leads to faster, sharper outcomes.

Applicable Sections of Law

• Section 2(11) of the Consumer Protection Act, 2019: Deficiency in service — the dealership’s failure to return the vehicle undamaged and its refusal to repair.
• Section 2(47) of the Consumer Protection Act, 2019: Unfair trade practice — endorsing a liability waiver that was never properly communicated.
• Sections 148, 151, and 152 of the Indian Contract Act, 1872: Bailment, bailee’s duty of care, and bailee’s liability for loss caused by negligence.
• Order 39 Rules 1 and 2 CPC: Interim reliefs — if you need to restrain the dealership from selling or returning the vehicle in a damaged state without repair.

Jurisdiction — Where to File the Case

You can file a consumer complaint before the District Consumer Disputes Redressal Commission in the district where the dealership is located or where you reside. Since the claim value (cost of repairs plus compensation) will likely be under Rs. 50 lakhs, the District Commission is the appropriate forum. Territorial jurisdiction lies where the cause of action arose — in this case, Pune. No court fee is payable if the total claim is up to Rs. 5 lakhs; above that, a nominal fee applies. Filing in the wrong forum can lead to dismissal, so get the pecuniary and territorial jurisdiction verified by your advocate.

Limitation Period

A consumer complaint must be filed within two years from the date the cause of action arises (Section 69, Consumer Protection Act, 2019). Here, the cause of action arose on the day of the accident and continued each day the vehicle was not repaired. If you miss the two-year window, you can apply for condonation of delay, but you’ll need strong reasons. Don’t let time slip away — it’s a fatal mistake.

Interim Reliefs Available

If the dealership refuses to release the car or threatens to charge huge storage fees, you can seek an interim order from the consumer commission. Under the commission’s inherent powers and Order 39 CPC (applicable by analogy to consumer proceedings), you can ask for a direction to repair the car immediately or to hand it over to you without prejudice. An interim order can break the deadlock within days, which is why moving quickly with the right application matters.

If You Are the Victim

• Do not let the dealership intimidate you into filing your own insurance claim.
• Preserve every piece of communication — emails, WhatsApp messages, the signed pickup slip.
• Ask for the accident report, driver’s name, and any police complaint the dealership may have filed.
• Send a detailed email to the dealership and manufacturer, marking all concerns in writing.
• Immediately inform your own insurer, even if you don’t intend to claim — it safeguards your policy conditions.
• Engage a lawyer who handles consumer and motor vehicle liability cases regularly.

Documents You Must Keep Ready

• Signed pickup/drop acknowledgement (original copy).
• All emails and WhatsApp screenshots with the CRM, GM, and manufacturer representatives.
• Photographs of the damaged vehicle from multiple angles.
• Copy of the accident report or intimation, if any.
• Service booking details and job card copy.
• Proof of ownership (registration certificate, insurance policy).
• Insurance policy document (for reference, not for claiming).
• Any written claim or rejection from the dealership.

What Evidence Is Required?

• Primary evidence: the original signed acknowledgement and the actual T&C sheet provided at the time (if any).
• Secondary evidence: the undated WhatsApp image sent later — this can be used to show the dealership’s conduct.
• Photographic and video evidence of the damage, along with location metadata.
• Witness statements — the driver, your brother, anyone present at the meeting.
• Correspondence trail showing the dealership’s refusal to share official T&C.
• Insurance policy copy to show comprehensive coverage, which they tried to exploit.

How Courts Typically Approach Such Cases

Consumer forums treat service-centre accidents as clear service deficiencies. Once the bailment relationship is established, the burden shifts to the service centre to prove it took reasonable care. Vague risk clauses without proper communication are not favoured. Forums often award not only repair costs but also compensation for harassment and litigation expenses. The key is to file early and with a well-documented case — forums are generally inclined to grant relief quickly when the opposite party is evading responsibility.

Timeline of Legal Process

• Draft and send legal notice: 1–2 days, reply expected within 15–30 days.
• If no resolution, prepare complaint and annexures: 3–5 days.
• File complaint before District Consumer Commission; admission hearing within 2–4 weeks.
• Issue notice to opposite party; they file their version within 30–45 days, extendable.
• Evidence and arguments: 2–3 hearings over 3–6 months.
• Final order: usually within 5–9 months from filing if the case is not heavily contested.
• Execution, if needed: a few months more.

Understanding the Costs

The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.

A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.

Can the Matter Be Settled Out of Court?

Yes, and often it should be. A well-aimed legal notice backed by strong documentation makes many dealerships pay up. Mediation and conciliation are available under the Consumer Protection Act; you can even explore a compromise deed. Lok Adalats handle such motor vehicle disputes swiftly. Settlement saves time and money, but never agree to a settlement that doesn’t cover all your losses — including diminished resale value. If the dealership offers to repair the car, ensure the terms are in writing and executed before the commission.

Common Mistakes People Make

• Delaying action. The longer you wait, the more leverage you lose. Act within days.
• Filing their own insurance claim without protest, which weakens the argument that the dealership is liable.
• Signing any document at the service centre after the accident without legal advice — often it contains a waiver.
• Communicating casually on the phone instead of creating a written trail.
• Posting about the incident on social media before legal notice; it can trigger a defamation counter-blast.
• Engaging an advocate who does not routinely handle consumer and contract matters. These cases turn on subtle evidentiary points about incorporated terms and bailment — a general practitioner may miss them, resulting in a weaker case or slower resolution.

FAQs People Normally Have

Will filing a consumer complaint affect my relationship with the manufacturer?

It might strain it, but your legal rights trump that concern. Most manufacturers, once a forum directs them, comply. Being firm now doesn’t burn bridges forever.

Can the court force the dealership to pay compensation for mental harassment?

Absolutely. Consumer forums regularly award Rs. 25,000 to Rs. 1,00,000 or more for mental agony, depending on the delay and high-handed behaviour.

Do I need to file an FIR for the accident?

You can, but it’s not mandatory for your consumer claim. If the third-party driver is at fault, the dealership should have filed a police complaint. You can ask them for a copy, or lodge one yourself to record the facts.

What if the dealership says my insurance policy’s “own damage” clause covers this?

That’s their convenience, not your obligation. Your policy covers you, but you aren’t forced to use it when another party is liable. Forcing you to claim is a deficiency in service.

How long will it take to get my car repaired if I go to court?

With an interim application, the commission can direct immediate repair pending final disposal. Many clients have their vehicles fixed within weeks of the first hearing.

This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.

Advocate Sudhir Rao, Supreme Court of India