Haryana

Karnal

266/2014

M/s Vishal Udyog - Complainant(s)

Versus

National Insurance Company Ltd - Opp.Party(s)

Sandeep Sharma

15 Sep 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No. 266 of 2014

                                                             Date of instt.  19.09.2014

                                                               Date of decision:15.09.2016

 

M/s Vishal Udyog, VPO Madhuban District Karnal through partner.

 

                                                                         ……..Complainant.

                                                Versus

1. National Insurance Company Limited, Hero Honda Vertical 101 106, bmc House N 1 Cannaught Place New Delhi-110001 through its General Manager.

2. National Insurance Company Limited G.T. Road, Near Bus Stand Karnal through its Branch Manager.

                                                                                 …………Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

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

                   Sh.Anil Sharma…….Member.

 

Present:-      Shri Sandeep Sharma Advocate for complainant.

                    Shri  Sanjeev Vohra 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.HR05AA-9685, chassis no.MBCHA10F2A9H09493,  Engine no.HA10EFA9H12452 from opposite parties, vide policy no.35100731106200929261, agency code no.93290101, valid from 23.8.2010 to 22.09.2011. On the night of 23.09.2010, he gave the information to the police control room regarding theft of the motorcycle. On the next day, he lodged First Information Report no.872 dated 24.09.2010 in Police Station City Karnal. Thereafter, he gave information to the opposite party regarding theft of the motorcycle. He also visited the office of opposite party no.2 and lodged his claim alongwith all the relevant documents, but official of the opposite party no.2 prolonged the matter on one pretext or the other. Lateron, he was told by the official of opposite party no.2 that the claim was rejected, but no satisfactory reply was given. Therefore, he filed complaint against the opposite party on 6.9.2012, which was disposed of by this Forum, vide order dated 20.06.2014 and direction was given to the opposite parties to consider his claim within 30 days after presentation of the claim. As per the direction of this Forum he filed his claim again with the opposite parties, but the opposite parties denied to pay the claim. Such acts and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, which caused him mental pain, agony and harassment apart from financial loss.

2.          Notice of the complaint was given to opposite parties, who put into appearance and filed written statement controverting the claim of the complainant. Objections have been raised that the complaint is not maintainable and that the complainant has not approached this Forum with clean hands.

                   On merits, it has been submitted that as per condition no.1 of the Policy intimation was required to be given immediately upon the occurrence. The complainant failed to give any intimation of theft of motorcycle to the opposite parties. On receiving documents from the complainant on 20.08.2014 the claim was considered and the same was rightly repudiated and duly conveyed to the complainant, vide letter dated 03.09.2014. The other allegations made in the complaint have not been admitted.

3.                In evidence of the complainant, his affidavit Ex.C1 and documents Ex.C2 and C3 have been tendered.

4.                On the other hand, in evidence of the opposite parties, affidavit of  R.K.Goswami Ex.O1 and documents Ex.O2 to Ex.O7 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.                It is admitted fact that the motorcycle of the complainant bearing registration no.HR05AA-9685 was insured with the opposite parties and the same was stolen by some person during subsistence of the insurance policy on 23.09.2010. First Information Report regarding the theft was lodged by the complainant on 24.09.2010.  As per case of the complainant, the claim was lodged by him with opposite parties, but the same was repudiated by the opposite parties without any sufficient reason.

7.                Learned counsel for the opposite parties laid stress on the contention that the motorcycle of the complainant was allegedly stolen on 23.09.2010, but he did not give any intimation immediately to the opposite parties,  whereas according to condition no.1 of the Insurance Policy he was bound to give intimation to the opposite parties immediately after the theft. Thus, complainant violated the mandatory condition of the Insurance Policy, therefore, his claim was rightly repudiated.

8.                The complainant has alleged that intimation regarding theft of the motorcycle was given by him after lodging the First Information Report. Generally, the insured persons inform the insurance company on telephone or orally regarding loss/damage and thereafter claim is lodged after few days. No record of such telephonic message or oral intimation is maintained. Therefore, the plea raised by the complainant that he immediately intimated the opposite parties cannot be discarded altogether. Moreover, even if it is accepted that till filing of the previous complaint no intimation was given regarding theft of the motorcycle to the opposite parties, then also the opposite parties were not justified in repudiating the claim of the complainant on such technical ground.

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 motorcycle of the complainant was stolen on the night of 23.09.2010.  He alleged that he gave information to the Police Control room regarding theft of the motorcycle on the next day i.e. 24.9.2010.  First Information Report no.872 was lodged in Police Station city Karnal. Thus, it is emphatically clear that there was no undue delay on the part of the complainant in giving intimation to the police and lodging the First Information Report regarding theft of the motorcycle. It is pertinent to note that the opposite parties have neither alleged nor led any evidence that the motorcycle of the complainant was not stolen. The motorcycle was not traced out by the police. Therefore, under such a situation the repudiation of the claim by the opposite parties was contrary to the spirit of the letter of Insurance Regulatory and Development Authority, because delayed intimation to the insurance company 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 and filing of the claim with the insurance company is the last resort. Therefore, under such a situation repudiation of the claim of the complainant on the ground of delayed intimation was not justified and the same amounted to deficiency in service on the part of the opposite parties.

12.              As a sequel to the foregoing discussion, we accept the present complaint and direct the opposite parties to pay Rs.38,642/- 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: 15.09.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member