DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi-110016

Case No. 286/2011

Sh. Raj Kumar                                                      

S/o Late Sh. Shiv Charan

R/o H. No.D-28, Gali No.8,

Jyoti Colony, Shahdara,

Delhi-110032                                                                       ….Complainant

Versus

IFFCO TOKIO General Insurance Company Ltd.                         

Customer Service Centre- Delhi NCR

FAI House, 10 Shaheed Jeet Singh Marg,

Second Floor, Qutub Institutional Area,

New Delhi-110067

Also at:

Corporate Office at 4-5^th floor,

Iffco Tower, Plot No.3, Sector-20,

Gurgaon, Haryana.                                                                   ….Opposite Party

                                                Date of Institution            :         18/08/11  Date of Order        :         04/02/20

Coram:

Ms. Rekha Rani, President

Ms. Kiran Kaushal, Member

Ms. Kiran Kaushal, Member

ORDER

1. On the strength of the present complaint, the complainant is seeking insured value of the vehicle together with Rs. 25,000/- as damages for deliberate harassment, Rs.1 lakh towards mental agony and cost of travelling.  Complainant had purchased a Motor Vehicle Insurance from Iffco Tokio General Insurance Company Limited (OP) on 09/11/2009 for a period of 09/11/2009 to 08/10/2010. The insured value of the motor cycle in question was estimated to be Rs.39,200/-. Copy of the registration certificate of the vehicle and the Insurance Cover Note is annexed as Annexure-A.
   1. Complainant’s motor cycle was stolen from his house on 05/04/2010. The complainant got the FIR registered in Shahdara Police Station and after receiving the final report/untraced report of the aforesaid vehicle complainant submitted claim with OP for receiving insurance amount. Pursuant to the filing of the claim the complainant received a letter dated 06/08/2010 from OP whereby the complainant was asked to submit the original FR under section 173 Cr.P.C. duly signed by the Judicial Magistrate. Thereafter the complainant made available to OP the original FR dated 17/08/10 duly signed by the Metropolitan Magistrate.
   2. But to utter dismay of the complainant, OP vide its letter dated 23/09/2010 rejected the claim of the complainant stating that “inspite of regular reminders we have not received original FR therefore it is presumed that you are not interested in pursuing your claim and we are closing it as “NO CLAIM”.
   3. The complainant  thereafter approached OP several  times stating that the requisite documents have been supplied to OP so there is no valid reason for rejection of his claim but OP did not pay any heed to the grievances of the complainant, hence the present complaint.  
2. The claim of the complainant is resisted by OP stating inter-alia that the complainant has violated the terms and conditions of the policy by not informing the OP immediately upon the occurrence of the theft and also failed to lodge the FIR in time. The vehicle in question was stolen on 15/04/2010 and the FIR has been lodged after a delay of 6 days.  It is further submitted that the complainant initially supplied copy of the untraced report submitted by the police which was not signed by the Judicial Magistrate but as it is mandatory that the untraced report be duly signed by the Judicial Magistrate the complainant was asked to do so. It is next submitted that OP vide letters dated 08/06/2010, 28/06/2010 and 06/09/2010 requested the complainant  to supply copy of the original FR under section 173 Cr.P.C. duly signed by the Judicial Magistrate. The said document was necessary for processing the claim, the complainant failed to provide the same and as result of which OP vide letter dated 23/09/2010 closed the claim of the complainant as “NO CLAIM”. Thus, denying any deficiency of service OP prays for dismissal of the complaint with exemplary cost.
3. Complainant has not filed rejoinder to the written statement of OP. Evidence by way of affidavit is filed on behalf of the complainant. Defence of OP was struck off on 23/11/2012. Complainant in support of his complaint has annexed Insurance Cover Note as Annexure-A, Copy of FIR as Annexure-B, Original letters of OP dated 23/04/2010 & 06/08/10, application filed before Metropolitan Magistrate dated 12/08/2010 and copy of order dated 17/08/2010.
4. Though the defence of OP was struck off, however the Forum shall proceed to consider the defence as the complaint has remained pending for very long.
5. Having heard the submissions made by the complainant and having perused the documents placed on record carefully it is noticed that the complainant lodged an FIR within 6 days of the theft of his vehicle. The vehicle as per the FIR was stolen on 15/04/2010 and the FIR was lodged on 21/04/2010.
6. It is next noticed that the complainant received the FR/untraced report duly signed by Metropolitan Magistrate dated 17/08/2010 appended at page No.18 of the complaint. Thereafter the complainant supplied the same to OP.
7. The Forum is unable to understand as to how after having received the requisite documents, rejection of the valid claim on the ground that the documents/information was received late is justifiable. Complainant has relied on a judgment passed by the Hon’ble Supreme Court in Om Prakash Vs Reliance General Insurance & Anr, reported as (2017) 9 SCC page No. Para 10 of the said judgment is reproduced under for ready reference:

10. It is common knowledge that a person who lost his vehicle may not straightaway go to the insurance company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.

8. The complainant has further relied upon circular No. IRDA/HLTH/MISC/CIR/216/09/2011 dated September 20th, 2011 issued by IRDA. The relevant portion of the same is produced as under:-

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 insurer’s 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.

9. Repudiation of complainant’s claim on the ground of delay in lodging the FIR and giving the requisite documents could have easily been waived off by the OP. The judgment (supra) and the circular mentioned above supports the view that repudiation of claim is unjustified and in gross violation of IRDA circular which envisages condonation of justifiable delay.
10. In view of the discussion above, this Forum is of the opinion that this a clear cut case of deficiency in service on the part of OP for rejecting the valid claim of the complainant merely on the ground of delays. Hence, we allow the complaint and direct the OP to pay the IDV of motor cycle i.e. Rs.39,200/- @ 9% interest per annum to the complainant from the date of filing of the complaint till realization within a period of 2 months from the date of receiving of copy of this order. Additionally OP is directed to pay Rs.10,000/- to the complainant as compensation towards harassment and mental agony.
11. Failing which OP shall be liable to pay Rs.39,200/- @ 12% interest per annum from the date of filing of the complaint till realization.

Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations.  Thereafter file be consigned to record room.  

Announced on 04/02/2020