Chandigarh

DF-II

CC/568/2017

Rajinder Kumar Mishra - Complainant(s)

Versus

Cholamandalam Ms General Insurance Pvt. Ltd., Company - Opp.Party(s)

Arjun Kumar Shukla Adv.

12 Mar 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	CC/568/2017
Date of Institution	:	26.07.2017
Date of Decision	:	12/03/2018

 

                                       

                                               

Rajinder Kumar Mishra s/o Sh.Ram Devi Mishra aged 39 years r/o H.no.359, Panchkula, Haryana presently residing at H.No.06, Village Kishangarh, Chandigarh.

                                ...  Complainant.

Versus

 

1.     Cholamandalam MS General Insurance Pvt. Ltd., Company, SCO No.2463-2464, Sector 22-C, Chandigarh through its Branch Manager.  

 

2.     Cholamandalam MS General Insurance Pvt. Ltd., Company, through its Manager/Director, Plot No.120A, Ground Floor Leela Business Park, Marol, Andheri East Mumbai, Maharashtra-400059  (Head Office of OP No.1).

 

…. Opposite Parties.

BEFORE:  SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

 

Argued by:  

Sh.Arjun Kumar Shukla, Adv. for the complainant

Sh.Sanjeev Kumar, Advocate for the OPs.    

                 

 

PER RAJAN DEWAN, PRESIDENT

1.         Briefly stated, the three wheeler bearing registration No.HR-68-A-7497 of the complainant insured with the OPs vide Insurance Policy (Annexure C-2) for the period from 16.09.2015 to 15.09.2016 for IDV of Rs.1,92,375/- was stolen on 11.05.2016 from his residence.  He lodged the FIR No.0077 dated 11.05.2016 in this regard with the Police Station I.T. Park, Chandigarh under Section 379 on the same day. He also informed the financer of the vehicle as well as the OPs regarding the incident on 18.05.2016. It has further been averred that the complainant does not know about the procedure of intimation and that was why delay of 7 days in intimation to the OPs had occurred. According to the complainant, he also submitted the relevant documents along with the untraced report duly accepted by the Learned JMIC, UT, Chandigarh to the OPs but no to effect. It has further been averred that the OPs have illegally repudiated the genuine claim.  Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint.
2.         In its written statement, the OPs have admitted the factual matrix of the case.  However, it has been pleaded that the theft of the vehicle took place on 11.05.2016 and the intimation regarding the same was given after a delay of 7 days on 18.05.2016 in violation of condition No.1 and 9 of the terms and conditions of the Insurance Policy.  It has further been pleaded that the claim was rightly repudiated vide letter dated 03.10.2016 on account of delay in intimation. Pleading that there is no deficiency in service on their part, a prayer for dismissal of the complaint has been made.
3.         The complainant filed rejoinder to the written reply of the OPs controverting their stand and reiterating his own.
4.         We have heard the Counsel for the parties and gone through the documentary evidence on record along with the written submissions of the OPs.
5.         The only question to be determined in this case is as to whether the OPs have rightly repudiated the claim vide its letter 03.10.2016 (Annexure R-4) or not.
6.         The complainant is the registered owner of the vehicle in question and the theft of the vehicle took place during the existence of the Insurance Policy (Annexure C-2) are the admitted facts between the parties.   Moreover, the investigator appointed by the OPs has clearly opined in the conclusion para of its investigation report (Annexure R-3) that the theft of the vehicle in question as alleged by the complainant took place on 11.05.2016. Annexure C-5 is order dated 07.04.2017 passed by the JMIC, Chandigarh whereby the untraced report submitted by the police was accepted.
7.          It is also established from copy of the FIR and the DDR placed on record that that the complainant informed the police officials regarding the theft of the vehicle on the same day of its occurrence and as such no prejudice would have been caused to the rights of the OPs on account of delay intimation because it is the police officials who have to trace the vehicle/investigate the case as per the rules.  Besides this, the complainant has specifically stated that he is not educated and, therefore, he does not know about the procedure of intimation to the OPs and that is why delay of 7 days  in intimation to the OPs has occurred.   Otherwise also, it will not be out of place to mention here that the instructions dated 21.9.2011 issued by the Insurance Regulatory and Development Authority (‘IRDA’ for short), which is binding on the Insurance Company as well, and the same reads as under:-

“INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Ref.IRDA/HLTH/MISC/CIR/216/09/2011Dt: 20.09.2011

CIRCULAR

To:    All life insurers and non-life insurers

Re:   Delay in claim intimation/documents submission with respect to

1.       All life insurance contracts and
2.       All Non-life individual and group insurance contracts

                The Authority has been receiving several complaints that claims are being rejected on the ground of delayed submission of intimation and documents.

                The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specified number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances.

                The insurers decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.

                Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.

                The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurers stand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured”.

8.          It is very clear from the above circular that the insurance company cannot repudiate the bonafide claims on technical grounds like delay in intimation and submission of some required documents. The decision of insurers to reject a claim of the claimant should be based on sound logic and valid grounds. The limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely procedural grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation. It has been further advised in the above said letter that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded.     Had the Insurance Company followed the above said guidelines issued by the statutory authority, present unwarranted litigation would have been easily avoided. However, in spite of the above said positive guidelines issued by IRDA, there is hardly any visible improvement in the working of the insurance companies and the OPs are no exception. The end result of this arbitrary working of the insurance companies is that even poor and genuine-citizens insured are being made to suffer and most of the times, for none of their fault, defeating the very purpose of insurance policies.
9.         Recently, the Hon’ble Apex Court in Om Prakash Vs Reliance General Insurance and Anr. reported in iv (2017) CPJ 10 (S.C) held that condition regarding the delay shall not be a shelter to repudiate the insurance claim which have been otherwise proved to be genuine. In the present case, the fact of theft of insured vehicle is proved and claim is only repudiated on the ground of delayed intimation to OPs. In view of law laid down by Hon’ble Apex Court, the OPs cannot repudiate the genuine claim of the complainant on technical point of delay, otherwise it would erode into the credibility of the insurance company. The above-referred delay is, thus, no ground to reject the genuine claim of the complainant.
10.         In view of the above discussion, the present complaint deserves to be allowed and the same is accordingly allowed. The OPs are directed as under ;-

1. To refund Rs.1,92,375- i.e. the IDV of the vehicle in question to the complainant.
2. To pay Rs.11,000/- as compensation to the complainant for mental agony and physical harassment.
3. To pay Rs.7,500/- as litigation expenses.

This order be complied with by the OPs, within 30 days from the date of receipt of its certified copy, failing which the amount at Sr.No.(i) and (ii) shall carry interest @9% per annum from the date of this order till its actual payment besides payment of litigation costs.

11.         Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

sd/-                           sd/-

Announced		[RAJAN DEWAN]	(PRITI MALHOTRA)
12/03/2018		PRESIDENT	MEMBER