Haryana

Karnal

79/14

Narinder - Complainant(s)

Versus

Iffco -Tokio General Insurance Co. - Opp.Party(s)

Sh. Rajbir Singh

04 Nov 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No. 79 of 2014

                                                             Date of instt.  25.03.2014

                                                               Date of decision:04.11.2016

 

Narender son of Shri Ram Mehar Singh resident of village Kurlan, Tehsil Assandh, District Karnal.

 

                                                                         ……..Complainant.

                                                Versus

1. Iffco-Tokio General Insurance Company Ltd. Sector-12 Urban Estate, Karnal.

2. Iffco-Tokio General Insurance Company Ltd. Iffco Sadan C1 District Centre Saket, New Delhi 1100017.

                                                                                 …………Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

Before                   Sh.K.C.Sharma……….President.

                   Sh.Anil Sharma…….Member.

 

Present:-      Shri Rajbir Singh  Advocate for complainant.

                    Shri  Y.P.Arora Advocate for opposite parties.

                                     

 ORDER:

 

                        This complaint has been filed by the complainant u/s 12 of the Consumer protection Act, 1986, on the averments that he got insured his motorcycle bearing registration no.HR40-B-3665 with opposite parties, vide policy no.1-GFOFYU P400 Policy # 75373016 valid from 21.01.2011 to 20.01.2012. On 31.03.2011 the motorcycle was stolen from the parking of Board of School Education Bhiwani Haryana by some unknown person. He lodged First Information Report no.115 dated 17.4.2011  in Police Station Civil Line Bhiwani in that regard. The police had completed the investigation and submitted the untraced report before the court of the learned Judicial Magistrate Ist Class, Bhiwani. Information was also given to the opposite parties about the theft of the motorcycle. He lodged claim with the opposite parties and all the formalities were completed, but the opposite parties postponed the matter on one pretext or the other. In this way, there was deficiency in service and unfair trade practice on the part of the opposite parties, which caused him mental pain, agony and harassment apart from financial loss.

2.                Notice of the complaint was given to the opposite parties, who put into appearance and filed written statement disputing the claim of the complainant. Objections have been raised that this forum has no jurisdiction to entertain and try the complaint; that the complainant has no locus standi to file the complaint; complainant has suppressed the material facts from this Forum and that the complaint is a false, frivolous and vexatious.

                   On merits, it has been submitted that policy condition no.1 provides that in case of theft or other criminal act which may be the subject of the claim under the policy, the insured shall give immediate notice to the police and cooperate with the company in securing the conviction of the offender. In the instant case, the intimation of theft was inordinately delayed and the same was reported to the opposite party after a delay of 312 days depriving the company of the timely opportunity to investigate the matter. First Information was also lodged after a delay of 18 days. Therefore, the opposite parties are not liable to pay any compensation to him and the claim was rightly repudiated, vide letter dated 22.3.2012. The other allegations made in the complaint have been denied.

3.                In evidence of the complainant, his affidavit EX.CW1/A, affidavit of Sanjeev Ex.CW1/B and document Ex.C1 to C6 have been tendered.

4.                On the other hand, in evidence of the opposite parties, affidavit of Sanket Gupta Ex.O1 and documents Ex.O2 have been tendered.

5.                We have appraised the evidence on record, the material circumstances of the case and the arguments advanced by the learned counsel for the parties.

6.                The motorcycle of complainant bearing registration no. HR40-B-3665 was insured with the opposite parties and the same was stolen during subsistence of the insurance policy on 31.03.2011. First Information Report regarding theft was lodged with Police Station Civil Lines Bhiwani on 17.04.2011. Claim was lodged with the opposite parties, but the opposite parties repudiated the claim, vide letter dated 22.03.2012, the copy of which is Ex.O2, on the ground that the motorcycle was stolen on 31.03.2011 and intimation to the opposite parties was given on 03.12.2011 after 312 days, which amounted to violation of the condition no.1 of the policy.

7.                Learned counsel for the opposite parties put a great thrust upon the contention that the theft of the motorcycle had taken place on 31.3.2011, but the First Information Report was lodged on 17.04.2011 and the intimation was given to the opposite parties on 03.12.2011 i.e. after delay of 312 days, which was violation of the terms and conditions of the insurance policy, therefore, the opposite parties are not liable to pay any compensation to the complainant.

8.                To wriggle out the aforesaid contention, learned counsel for the complainant vehemently argued that the complainant initially tried to search the motorcycle at his own level and when the same could not be traced out the matter was reported to the police.  Thereafter, intimation was given to the opposite parties. Thus, there was no unreasonable delay on the part of the complainant, but the opposite parties refused to settle his claim on false ground of delay in intimation.

9.                 Insurance Regulatory and Development Authority issued circular dated 20.9.2011, which is reproduced as under:-

“ To: All life insurers and non-life insurers.

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

i.        All life insurance contracts and

ii.       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 merits fort delayed claims where the delay is proved to be for reasons beyond the control of the insured.

          J.Harinarayan

          CHAIRMAN.”

 

10.              It is clear from the above circular that insurance company cannot repudiate the theft claim on technical grounds like delay in intimation and submission of some required documents. The decision of insurer to reject a claim of the claimant should be based on sound logic and valid reasons. 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 technical grounds in a mechanical fashion will result in policy holder losing confidence in the insurance industry, giving rise to excessive litigation. It has further been advised in the said letter that the insurer must not repudiate such claims unless and until the reasons for delay are specifically ascertained, recorded.

             What is the spirit of insurance policy, should be kept in mind by the officials dealing with the genuine claims of the sufferers and the same should not  be rejected on methodological grounds in a mechanical manner. The tendency of insurance companies in rejecting genuine claims is the reason of increasing litigation between the insurers and the insureds/their legal heirs. In this context reference with advantage may be made to orders of the Hon’ble State commission in  Shriram General insurance Company limited Versus Rajesh Kumar 2014(2) CLT 290 and Shriram General Insurance Company Limited Vs. Manoj 2014(3) CLT 447 as well as order of Hon’ble National Commission in National Insurance Co.Ltd. Versus Kulwant Singh IV (2014) CPJ 62 (NC) .

11.              In the instant case, the vehicle of the complainant was stolen on 31.03.2011. The First Information Report was lodged on 17.04.2011. Generally, the owner/Driver of the vehicle first tries to search the vehicle at his own level, but when he fails to trace out the same, the matter is reported to the police. It is also a matter of common knowledge that the police does not register the First Information Report immediately after getting information of theft of any vehicle, either the complainant is asked to trace out the vehicle at his own level or efforts are made by the police for searching the vehicle, but when the vehicle is not traced out, then only the First Information Report is registered. Therefore, it cannot be said that there was any unreasonable delay on the part of the complainant in lodging the First Information Report. Police submitted untraced report, which was accepted by learned Judicial Magistrate 1^st Class Bhiwani, vide order dated 15.12.2012, the copy of which is Ex.C5. It is not the case of the opposite parties that the motorcycle of the complainant was not stolen and the story of theft putforth in the First Information Report was false. Thus, the claim of the complainant regarding theft of the motorcycle was genuine and never disputed by the opposite parties. Under such circumstances, the repudiation of the claim of the complainant by the opposite parties was contrary to the spirit of the letter of Insurance Regulatory and Development Authority, because delay in intimation to the opposite parties after 312 days of theft was not significant in genuine claim of the complainant. A person who lost his vehicle straightway may not go to the insurance company to claim compensation. At the first instance he himself makes efforts to search the vehicle. Filing of the claim with the insurance company is the last resort. Therefore, repudiation of the genuine claim of the complainant on the sole ground of delay in intimation amounted to deficiency in service on the part of the opposite party.

13.              As a sequel to the foregoing discussion, we accept the present complaint and direct the opposite parties to pay Rs.28,000/- as insured amount to the complainant  alongwith interest thereon @ 9% per annum from the date of filing of complaint till its realization. We further direct the opposite parties to pay Rs.5500/- to the complainant on account of mental agony and harassment suffered by him and for the litigation expenses. This order shall be complied within 30 days from the receipt of copy of this order. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 04.11.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                      (Anil Sharma)                 Redressal Forum, Karnal.

                                          Member