Chandigarh

DF-II

CC/532/2017

Pappu Khan - Complainant(s)

Versus

Iffco Tokio General Insurance Company Limited - Opp.Party(s)

Pardeep Kumar Adv. & Vicky Sharma Adv.

26 Dec 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	532/2017
Date of Institution	:	14.07.2017
Date of Decision	:	26/12/2017

 

                                                

                            

 

Pappu Khan s/o Shujauddin Khan r/o H.No.762/2, Welfare Society, Sector 26, Chandigarh                          

                                      ...  Complainant.

Versus

 

Iffco Tokio General Insurance Co. Ltd., Plot No.2B & C,4^th Floor, Iffco Complex, Sector 28-A,Madhya Marg, Chandigarh through its Manager.

…. Opposite Party.

BEFORE:    SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

SHRI RAVINDER SINGH, MEMBER

 

Argued by:

                   Sh.Vicky Sharma, Adv. for the complainant

                   Sh.Yogesh Gupta, Adv. for the OP.

 

PER RAJAN DEWAN, PRESIDENT

1.           Briefly stated, the motorcycle make Honda Passion Pro bearing registration No.CH-01AM-9733 insured with the OP vide Insurance Policy (Annexure C-1) for the period from 16.07.2015 to 15.07.2016 for IDV of Rs.35,000/- was stolen on 24.01.2016 from Near Beeta Petrol Pump, Manimajra, Chandigarh.  The complainant tried to locate the vehicle but all his efforts proved to be futile.  Thereafter, he reported the matter of the P.S. Manimajra, Chandigarh and the police officials after verifying the details of the case registered the FIR No.34 dated 02.02.2016 under Section 379 IPC.  It has further been averred that he informed the theft of the vehicle to the OP in time and lodged the claim. The OP appointed the investigator who collected the requisite documents. Subsequently, the complainant also submitted the untraced report dated 07.09.2016 accepted by the Learned JMIC, Chandigarh. It has further been averred that instead of paying the claim, the OP vide letter dated 30.01.2016 repudiated the same on the ground that he had not deposited the original key of the vehicle hence, they are unable to entertain the claim and thereby treated the claim as No Claim.  According to the complainant, he had already handed over the key of the vehicle to the investigator. It has further been averred that the vehicle is 2012 model and due to constant and regular use of the vehicle, the keys wear down and due to this reason, he had prepared the duplicate key and after the theft of the vehicle, the same was handed over to the investigator but the OP had wrongly and arbitrarily repudiated the claim. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OP, the complainant has filed the instant complaint.
2.           In its written statement, the OP has admitted the factual matrix of the case.  However, it has been pleaded that the theft of the vehicle took place on 24.01.2016 and the intimation regarding the same was given after a delay of 4 days on 28.01.2016 and the theft was reported to the police after a delay of 9 days on 02.02.2016 in gross violation of condition No.1 of the terms and conditions of the Insurance Policy.  It has further been pleaded that the complainant has failed to provide any of the original keys of the vehicle in question and one key provided was not the original key.  It has further been pleaded that the claim was not tenable as per the terms and conditions of the Insurance Policy and as such the same was closed as ‘No Claim’ vide letter dated 30.01.2016. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on its part, a prayer for dismissal of the complaint has been made.
3.           The complainant filed rejoinder to the written reply of the OP controverting their stand and reiterating his own.
4.           We have heard the Counsel for the parties and gone through the documentary evidence on record alongwith the written submissions of the OP.
5.           The complainant is the registered owner of the vehicle in question and the theft of the vehicle in question took place during the existence of the Insurance Policy (Annexure C-2)  are the admitted facts between the parties.  It is also evident from the untraced report accepted by the JMIC, Chandigarh that the theft of the vehicle in question took place.
6.           The only question to be determined in this case is as to whether the OP has rightly closed the claim as No Claim vide letter dated 30.01.2016(Annexure C-6) or not which reads as under:

          “With reference to your above mentioned, we had deputed Mr.Jagjit Singh Sethi to investigate into the loss. The report of the investigator has since been received.

          Based on the facts of investigator Report, claim form and your statement-we have observed that both the original keys of the lost vehicle have not been provided by you. One key which has been provided to us is  not the original key.

          Here, there is violation of condition No.4 of the policy which provides as under:-

“The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof of any driver or employee of the insured. In the event of any accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk."

          In view of the above, we regret to inform you that the captioned claim is  not tenable under the policy and we are filing the papers as “No Claim”

7.           The perusal of the aforesaid extract shows that the claim of the complainant was closed as ‘No Claim’ by the OP only on the ground that the complainant has failed to submit the original keys of the vehicle in question.  It is apt to mention here that the vehicle of the complainant is 12/2011 Model and due to the constant and regular use of the vehicle, the keys of the vehicle might have worn down or lost somewhere and due to this reason, the complainant had got prepared the duplicate key of the vehicle which was duly submitted to the OP.  It is not the case of the OP that the complainant has left the keys in the ignition of the vehicle when the theft took place. The OP has failed to draw our attention to any clause contained in the terms and conditions of the Insurance Policy that it is mandatory on the part of the insured to submit both the original keys of the vehicle to get the genuine claim in case of theft of the vehicle. Besides this, the OP has repudiated the claim on the basis of the investigator report but the said report has not seen the light of the Court.  It is not understood what is hitch for the OP to place on record the investigator report in support of the repudiation letter. 
8.           In order to deny the genuine claim of the complainant, the OP has even taken new version in its reply regarding delay in intimation to them and lodging of the FIR in respect of the vehicle to the police which was not find mentioned in the repudiation letter of the OP.  However, we do not find any weight in this submission of the OP because the claim of the complainant was not repudiated on the ground of delay in intimation to the OP or in lodging the FIR to the police.  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”.

9.            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 OP is 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.
10.               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 insured/their legal heirs.
11.           Thus, the repudiation of the claim was contrary to the guidelines of the IRDA, stated above because the intimation to the insurance company after 4 days is not significant in genuine claim of the complainant. A person who lost his vehicle which was being used by him for personal use 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 claim with the Insurance Company is the last resort. The complainant has also deposed in his affidavit that the police had registered the FIR only after verifying the details of the case. Under these circumstances, it was indeed a deficiency in service on the part of the OP for repudiating the claim on flimsy ground. It be fair or reasonable to reject even the genuine claims of the insured. There may be a condition in the policy regarding delay in intimation but that does not mean that the insurer can take the shelter under that condition and repudiate the claim of the claimant, which is otherwise proved to be genuine.
12.           In the case of National Insurance Company Ltd. Vs. Kamal Singhal, IV (2010) CPJ – 297 (NC), Hon'ble National Commission has held that “There has been catena of decisions of the National Commission and also Hon'ble Apex Court that the issue is no longer res-integra that in case of theft of vehicle, issue of breach of policy condition(s) was not germane to the issue and we profitably refer to few decisions of the National Commission in the matters of (1) National Insurance Company Ltd. Vs. J.P. Leasing & Finance Pvt. Ltd. (R.P. No. 643/2005), (2) Punjab Chemical Agency Vs. National Insurance Company Ltd. (R.P. No. 2097), (3) New India Assurance Co. Ltd. Vs. Sou. Bahrati Rajiv Bankar, (RP No.3294/ 2009) and (4) National Insurance Company Ltd. Vs. Jeetmal (RP No.3366/2009). There has been a landmark judgment of Hon'ble Apex Court in the matter of National Insurance Company Ltd. Vs. Nitin Khandelwal, IV (2008) CPJ 1 (SC), where the Hon'ble Apex Court held that in the matter of theft of vehicle, breach of conditions of policy was not germane and also held further “the appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy to the loss caused to the insurer.
13.           In view of the above discussion, the present complaint deserves to be allowed and the same is accordingly allowed. The OP is directed as under ;-

1. To refund Rs.35,000/- i.e. the IDV of the vehicle in question to the complainant.
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.

This order be complied with by the OP, 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.

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

Announced

26/12/2017

Sd/-

(RAJAN DEWAN)

PRESIDENT

Sd/-

(PRITI MALHOTRA)

MEMBER

Sd/-

(RAVINDER SINGH)

MEMBER