Chandigarh

DF-II

CC/162/2018

Rajesh Kumar - Complainant(s)

Versus

IFFCO-TOKIO GENERAL INSURANCE CO. LTD. - Opp.Party(s)

Nitin Sharma Adv. & A.S. Nirmaan Adv.

10 Sep 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	CC/162/2018
Date of Institution	:	14.03.2018
Date of Decision	:	10.09.2018

 

                                       

                                               

Rajesh Kumar s/o Sh.Ram Rattan r/o H.No.56, Vill. Kaimwala, Chandigarh India.

                                ...  Complainant.

Versus

 

1.     IFFCO TOKIO General Insurance Co. Ltd., Regd. Office: IFFCO Sadan C1 Distt. Centre, Saket, New Delhi-110017 through its Managing Director/Authorized Signatory. 

 

2.     IFFCO TOKIO General Insurance Co. Ltd.,  Opp. Bhatta Sahib Gurudwara Chownk, SCO –C/861/862,Main Road Ropar, Punjab, India-140001 through its Managing Director/Authorized Signatory. 

…. Opposite Parties.

 

BEFORE:    SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

SHRI RAVINDER SINGH, MEMBER

 

Argued by:  

Sh.Nitin Sharma, Adv. for the complainant

Sh.Ankur Gupta, Advocate for the OPs.        

                 

 

PER RAJAN DEWAN, PRESIDENT

1.         Briefly stated, the Motorcycle make Hero Splendor Pro bearing registration No.CH-01-AZ-9073 of the complainant insured with the OPs vide Insurance Policy (Annexure C-1) for the period from 20.02.2017 to 19.02.2018 for IDV of Rs.34000/- was stolen on 23.05.2017 from the office parking against which he approached the police authorities and they lodged the FIR after a delay of 11 days for the reasons best known to the police authorities. He alleged to have informed the OPs telephonically on 24.05.2017 regarding the incident. Thereafter he received a message from the OPs that the claim was intimated with reference number and a surveyor was deputed.  It has further been averred that subsequently, the OPs have closed the claim as No Claim vide letter dated 23.01.2018 on account of delay in lodging the FIR and intimating to the OPs. 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 23.05.2017 whereas the FIR dated 03.06.2017 was lodged after a delay of 11 days and the OPs-company was intimated after a delay of 29 days. It has been pleaded that there was violation of condition No.1 of the terms and conditions of the insurance policy and as such the claim was rightly repudiated.  The remaining allegations have been denied  by the OPs, being false. 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.
5.         The only question to be determined in this case is as to whether the complainant is entitled to the claim 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 are the admitted facts between the parties.  Moreover, it is evident from the FIR dated 03.06.2017(Annexure C-2) that the theft of the vehicle took place on 23.05.2017.  The complainant has duly stated in his duly sworn affidavit that he intimated the police authorities on the same date i.e. 23.05.2017 but the police authorities registered the FIR on 03.06.2017.  In our considered view, since the complainant has informed the police authorities on the same day and as such the delay in intimating the OPs is immaterial. Otherwise also, the complainant has no control over the police authorities who lodged the FIR after a delay of 11 days.  In this view of the matter, we are of the considered view that no prejudice would have been caused to the rights of the OPs on account of delay in intimating the claim because it is the police authorities who have to trace the vehicle/investigate the case as per the rules.   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”.

7.          It is very clear from the above circular that the insurance company cannot repudiate the bona fide 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.
8.         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.
9.         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.34,000/- i.e. the IDV of the vehicle in question.
2. To pay Rs.5,000/- as compensation to the complainant for mental agony and physical harassment.
3. To pay Rs.5,500/- as litigation expenses.

10.         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 also carry interest @9% per annum from the date of this order till its actual payment besides litigation expenses.
11.         Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

10.09.2018

Sd/-

(RAJAN DEWAN)

PRESIDENT

Sd/-

(PRITI MALHOTRA)

MEMBER

Sd/-

(RAVINDER SINGH)

MEMBER