Haryana

StateCommission

A/1151/2016

CHOLAMANDALAM MS GEN.INSURANCE CO. - Complainant(s)

Versus

MUKESH - Opp.Party(s)

PUNIT JAIN

19 Sep 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No:      1151 of 2016

Date of Institution: 02.12.2016

Date of Decision: 19.09.2017

 

Cholamandalam MS General Insurance Company Limited through Manager Registered & Head Office Dere House, 2^nd Floor, No.2, NSC Bose Road, Chennai.

Local Address: SCO 2463, IST Floor, Sector-22, Chandigarh.

 

                                      Appellant-Opposite Party

Versus

 

Mukesh s/o Sh. Jagan Nath, Resident of Village Ukhlachna, Tehsil and District Jhajjar, Haryana.

                                       Respondent-Complainant

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. Balbir Singh, Judicial Member.

                                                                                                         

Argued by:          Shri Punit Jain, Advocate for appellant.

Shri Satpal Dhamija, Advocate proxy for Shri Sandeep Kotla, Advocate for respondent.

 

                                                   O R D E R

 

BALBIR SINGH, JUDICIAL MEMBER

 

        This appeal has been preferred against the order dated July 28^th, 2016 passed by District Consumer Disputes Redressal Forum, Karnal (for short ‘the District Forum’) in Complaint No.226 of 2011.

2.                Mukesh-complainant (respondent herein) as well his mother Smt. Murti Devi and sister Bimla alias Nirmla, registered owners of tractor (Eicher) bearing registration No.HR-14F-5976 were provided insurance policy by Cholamandalam MS General Insurance Company Limited (for short ‘the Insurance Company’)-Opposite Party, vide cover note No.7841259 (Exhibit C-3) regarding the period from February 10^th, 2010 to February 09^th, 2011 mentioning total Insured Declared Value (IDV) as Rs.5,27,000/-.

3.                On February 12^th, 2010 the above mentioned tractor was taken to Mahuwa, District Dausa, Rajasthan by the complainant and his cousin brother who used to drive the above mentioned vehicle. When the complainant and his cousin brother were taking rest after taking dinner by parking their tractor trolley near a Dharamkanta at Madawar Road, Mahuwa, the above mentioned tractor was stolen during night hours by some unknown person. Efforts were made to search the vehicle and thereafter local Police was informed regarding theft of the vehicle. First Information Report (FIR) No.66 (Exhibit C-4) was registered in Police Station, Mahuwa on February 21^st, 2010 under Section 379 of the Indian Penal Code. The Insurance Company was also informed regarding this occurrence on July 03^rd, 2010. A legal notice (Exhibit C-5) was sent to the Opposite Party-Insurance Company with a request for settlement of the insurance claim. Thereafter, the Opposite Party-Insurance Company repudiated the insurance claim vide letter dated July 06^th, 2010 (Exhibit C-6), mentioning that there was delay in submitting information to the Insurance Company regarding theft of the vehicle. Smt. Murti Devi, co-owner of the tractor vehicle died on August 16^th, 2010 leaving behind the complainant (her son) to succeed her property.

4.                The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 with a prayer to direct the opposite party to make payment of an amount of Rs.5.00 lacs oin account of deficiency in service and on account of un-necessary harassment and mental agony.

5.                The Opposite Party-Insurance Company in its written version has taken plea that the complaint is not maintainable in the present form; that the complaint is bad for non-joinder of necessary parties and that the complainant has no privity of contract to consider him as a consumer. It is admitted fact that the opposite party-Insurance Company provided insurance policy to the complainant and other registered owners of the tractor vehicle regarding the period from February 10^th, 2010 to February 09^th, 2011 vide cover note No.7841259. The opposite party has taken plea that in fact the complainant had arranged the insurance cover of the tractor vehicle from the opposite party in back date in collusion with the agent on the basis of fraud, misrepresentation and undue influence. This fact came to the notice of the opposite party after scrutinizing of the claim filed. The cover note of the insurance policy was issued on February 10^th, 2010 but it was found that the premium amount was deposited in the office of the Insurance Company along with cover note and other documents later on. Moreover, the complainant has caused un-necessary delay in submitting information regarding the alleged occurrence of theft to the opposite party as the opposite party received information on July 03^rd, 2010. Moreover, F.I.R. was also lodged regarding commitment of theft of the tractor vehicle on February 21^st, 2010 under Section 379 of the Indian Penal Code, after more than a period of 11 days from the date of occurrence. In this way, the complainant has violated conditions No.1 and 9 of the terms and conditions of the insurance policy. The opposite party is not liable to pay any amount to the complainant as claimed in the complaint. The opposite party has prayed that the complaint filed by the complainant be dismissed with cost.

6.                Both the parties adduced evidence in support of their respective claims before the District Forum.

7.                After hearing arguments, vide impugned order dated July 28^th, 2016, the complaint filed by the complainant was allowed directing the opposite party to pay the total insured amount to the complainant and other registered owners of the vehicle with interest at the rate of 9% per annum from the date of filing of the complaint and to pay an amount of Rs.5500/-to the complainant on account of un-necessary harassment, mental agony and litigation expenses.

8.                Aggrieved with the impugned order dated July 28^th, 2016 passed by the learned District Forum, the opposite party-appellant has filed the present appeal bearing No.1151 of 2016 with a prayer to set aside the impugned order and to dismiss the complaint filed by the complainant.

9.                We have heard learned counsel for the parties and perused the case file.

10.              It is admitted fact that the complainant Mukesh, his mother Smt. Murti and Sister Bimla @ Nirmala were the registered owners of a tractor (Eicher) bearing registration No.HR-14F-5976. Murti Devi has died and the complainant became owner of the tractor vehicle qua share of Murti Devi also after her death, who died on August 16^th, 2010 as is evident from Death Certificate (Exhibit C-9). It is also admitted fact that the opposite party provided insurance policy to the registered owners of the vehicle vide insurance cover note No.7841259 (Exhibit C-3) regarding the period from February 10^th, 2010 up to February 09^th, 2011. It is admitted fact that theft of the above mentioned insured vehicle took place on February 13^th, 2010 when the same was parked near a Dharamkanta at Mahuwa, District Dausa, Rajasthan.

11.              The Opposite Party-Insurance Company has taken plea that in fact theft of the vehicle was not committed during the insured period as the insurance policy was issued on February 10^th, 2010 and payment of the premium amount was deposited with the opposite party on a later date. The opposite party did not make it clear that on which date the premium amount was deposited on behalf of the complainant. No such document has been produced by the opposite party to prove that the premium amount was deposited after the date of theft of the insured vehicle. Version of the opposite party is that it is an act of fraud and concealment of fact on the part of the complainant as he managed insurance policy from back date in collusion with agent of the opposite party. This version of the opposite party appears to be baseless and it appears that the opposite party has taken this plea so that it may be able to avoid payment of the compensation amount to the complainant.

12.              If any such fraud was committed by the complainant and he managed to obtain insurance policy from back date, the best course for the opposite party was to get registered a criminal case for commitment of fraud against the complainant, agent of the Insurance Company-Opposite Party and those officers of the Insurance Company with whose help this act of fraud could be possible to make the situation more clear. It is strange that a fraud has been committed in the office of the Insurance Company and it did not lodge a criminal complaint against anybody in the Police Station and now did not hesitate to raise a false plea that the complainant has been successful to manage insurance policy in his name with back date with the help of the officials of Insurance Company/agent. If there was delay in payment of the premium amount, that may be possible due to this reason also that the agent of the Insurance Company did not deposit the amount with the company in time after receiving the same from the complainant. In these circumstances, we feel it will be justified to give findings that the insurance policy was provided from February 10^th, 2010 up to February 09^th, 2011 and the incident of theft took place during the insured period.

13.              The claim of the complainant was repudiated merely on two grounds; (i) there is un-necessary delay in lodging F.I.R. and the complainant did not inform the Insurance Company immediately regarding theft of the insured vehicle.  Admittedly, FIR No.66 (Exhibit C-4) was lodged on February 21^st, 2010 in Police Station Mahuwa, Rajasthan. Version of the complainant is that soon after the incident, he informed the Police as well as the Insurance Company regarding commitment of theft of the vehicle but the complainant sent information to the Insurance Company-Opposite Party first time in writing vide letter dated July 06^th, 2010 (Exhibit C-6).  The opposite party-Insurance Company has taken plea that the insured has violated conditions No.1 and 9 of the insurance policy. We have already given findings that the insured has not violated terms and conditions as mentioned in condition No.9 as the opposite party could not establish that the insured has been able to obtain insurance policy with back date fraudulently.

14.              First Information Report No.66 (Exhibit C-4) was registered on February 21^st, 2010 on the basis of statement of the complainant Mukesh Sharma, wherein the complainant has stated that the vehicle was stolen on February 13^th, 2010 at about 1:00 A.M. Thereafter, they made efforts to trace out the vehicle till the date of lodging FIR. In this way, in this case there is a delay of 8 days in lodging FIR regarding commitment of theft of the vehicle. In this situation, we are required to give findings as to whether merely due to this delay of 8 days in lodging FIR, insurance claim of the complainant should be declined or not. Learned District Forum has given few reasons regarding causing delay in lodging FIR stating that in the beginning, a person will make efforts himself to trace the stolen vehicle and if it is not possible to trace the vehicle, in that eventuality, he will like to inform the Police regarding commitment of theft. Moreover, it is also not so easy to get registered a criminal case in the Police Station. Moreover, this fact also cannot be completely ignored that these days Police Officers are also found un-willing to lodge F.I.R. in such matters to avoid increase figure of untraced criminal cases. Sometimes, Police Officials themselves ask the complainant to make more efforts to trace the stolen vehicle. The complainant has taken plea in this case that soon after he informed the Police as well as the Insurance Company regarding commitment of theft of the vehicle but record shows that in writing the complainant first time informed the Police on February 21^st, 2010 and informed the Insurance Company on July 03^rd, 2010. Moreover, if the version of the complainant is true that he informed the Police soon after the incident, in that eventuality it was the duty of the Police to get the case registered soon after or at least to make entries for the time being in the Daily Diary Register. Moreover, some delay might have been caused due to this reason also as the incident took place at a distant place at Mahuwa, District Dausa, Rajasthan and the complainant is resident of a Village in District Jhajjar, Haryana.

15.              Keeping in mind all these circumstances, it does not appear that there was un-necessary delay in lodging FIR. Moreover, as and when a vehicle is not found at the parking place, the owner or driver of the vehicle is also not supposed to take a decision immediately that actually theft has been committed. Sometimes, the vehicles are taken by family members and relatives from the parking place and sometimes the vehicle also may be shifted by the Police or any other competent authority when the vehicle is not parked at a proper parking place.

16.              The complainant, although, has taken plea that he immediately informed the opposite party-Insurance Company regarding commitment of theft of the vehicle but he submitted information to the Insurance Company in writing first time on July 03^rd, 2010.

17.              Even otherwise, the Insurance Regulatory Development Authority (IRDA), which control and regulates the Insurance Companies, issued direction not to reject the genuine claims simply because of delay in registration of FIR and intimation to the Insurance Company. In the instructions of the IRDA it was also mentioned that 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.  Support to this view can be taken from the case law cited as Bharti Axa General Insurance Company Limited vs. Ms. Monu Yadav and another, 2014(4) PLR 861, decided by Hon’ble Punjab and Haryana High Court, Chandigarh.  As per facts of that case, the delay in lodging claim with the Insurance Company was of 54 days. The findings in that case were also given in favour of the claimants on the basis of the guidelines issued by IRDA.  The Insurance Companies were advised that they must not repudiate such claims on the ground of delay especially when the Police have been promptly informed in this regard.

18.              It is very clear from the 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.     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.  In this case the repudiation of complainant’s claim was contrary to the instructions issued by the IRDA, mentioned above.

19.              During the course of arguments, learned counsel for the complainant has argued that the complainant is entitled to receive the total IDV of the vehicle i.e. Rs.5,27,000/-, as it is a case of total loss of the insured vehicle but if this Commission feels there is some minor violation of any term and condition of the insurance policy, in that eventuality also the complainant is entitled to receive at least 75% of the total IDV. In support of his this contention, learned counsel for the complainant placed reliance upon a decision of the Hon’ble Supreme Court of India in case law cited as Amalendu Sahoo Versus Oriental Insurance Company Limited, 2010 CTJ 485 (Supreme Court), wherein it was held that the insurance company cannot repudiate the insurance claim in toto and the insurer is liable to pay 75% of the admissible claim.

20.              Although, circumstances regarding delay in lodging F.I.R. have been explained above in earlier part of this order but still we feel that the complainant should not have caused so much delay in lodging the F.I.R. Moreover, this fact also can be taken into consideration that regarding theft of the vehicle, there is no controversy in between the complainant and the opposite party because surveyor of the Insurance Company Manoj K. Agnihotri, in his report (Exhibit O-5) has also mentioned that he has verified regarding commitment of theft of the vehicle on February 13^th, 2010. The Surveyor mentioned this fact in his report on the basis of statements of complainant and few other persons recorded by the surveyor. Keeping in mind all these circumstances, we feel it will be in the interest of justice to direct the opposite party-Insurance Company to pay only 75% of the total Insured Declared Value Rs.5,27,000/- which comes to Rs.3,95,250/- (75÷100x527000) to the complainant and other registered owners of the tractor vehicle with interest at the rate of 9% per annum from the date of filing of the complaint till its realisation. Findings of the learned District Forum in the impugned order stands modified. Findings of the learned District Forum regarding awarding an amount of Rs.5500/- as compensation on account of un-necessary harassment, mental agony and litigation expenses is also justified and findings of the learned District Forum in this regard stand affirmed. Resultantly, the impugned order dated July 28^th, 2016 passed by the learned District Forum stands modified and the appeal stands partly allowed. The Opposite Party-Insurance Company is directed to pay the awarded amount to the complainant and other registered owners.

21.              The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced: 19.09.2017

(Balbir Singh) Judicial Member

(Nawab Singh) President

 

CL