Haryana

Karnal

297/2014

Rahul Sharma S/o Jai Parkash - Complainant(s)

Versus

National Insurance Company Ltd - Opp.Party(s)

S.K. Rana

29 Aug 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No. 297 of 2014

                                                             Date of instt.04.11.2014

                                                               Date of decision:29.08.2016

 

Rahul Sharma aged about 40 years son of Shri Jai Parkash Sharma, resident of village and Post Office-Daha Jagir, District Karnal.

 

                                                                   ……..Complainant.

                                                Versus

National Insurance Company Limited, Karnal Division Office, through its Divisional Manager.

                                                                            ………… Opposite Party.

                     Complaint u/s 12  of the Consumer Protection Act.

 

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

                    Sh.Anil Sharma…….Member.

 

Present:-      Sh. S.K. Rana Advocate for the complainant.

                    Sh. A.K.Vohra Advocate for the Opposite party.

                  

 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 car bearing registration no.HR05-S-0313 with the opposite party, vide insurance policy no.35101031116130584232, valid from 15.01.2012 to 14.01.2013. The said car was taken by Maya Ram for visiting Holy Places alongwith his family members. While the car was being driven by Sanjeev Kumar, the same fell into ditches and in the said accident Sanjeev Kumar and two children of Maya Ram namely Harish Kumar son and Neha daughter died on the spot. Maya Ram remained confined to bed in the hospital and he was not in a position to disclose anything to anyone about the accident due to shock of untimely death of his son and daughter. However, First Information Report no.21 dated 17.5.2012 was registered in Police Station Sangrah regarding the said accident. Harish Kumar Chopra Surveyor of the opposite party visited the spot and as per his direction the car was kept in the Farm House of Mr. Dev Saini at village Navada and estimate was obtained from M/s Sumeet Motors, Paonta Sahib. He was informed about the accident after some days and then he met Maya Ram, but he was not in a position to tell about the accident. He lodged the claim with the opposite party and submitted all the requisite documents. However, the opposite party illegally repudiated the claim, vide letter dated 25.11.2013, on the ground that the car was overloaded at the time of accident and there was delay in intimation. In this way, there was deficiency in service on the part of the opposite party, which caused him mental pain, agony and harassment apart from financial loss.

2.                Notice of the complaint was given to the opposite party, who put into appearance and filed written statement controverting the claim of the complainant. Objections have been raised that the complaint is not maintainable; that the complainant has no locus standi and cause of action; that the complainant has suppressed the material facts; that this forum has no jurisdiction to entertain and try the complaint and the complaint has been filed just to harass the opposite party.

                   On merits, it has been submitted that the car was registered for carrying 5 persons including driver, but from the First Information Report it is clear that the car was overloaded and as such the same was being driven in violation of terms and conditions of the insurance policy. Moreover, intimation regarding the accident was given to the opposite party after about 2 months, whereas according to condition no.1 of the policy intimation was required to be given immediately, Thus, the complainant violated the terms and conditions of the insurance policy, therefore, his claim was rightly repudiated.

3.                In evidence of the complainant, his affidavit Ex. CW1/A and documents Ex.C1 to C14 have been tendered.

4.                On the other hand, in evidence of the opposite party, affidavit of Yash Pal Ex.O1, affidavit of Ashok K. Sood Ex.O2 and documents Ex.O3 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.                The factum of accident and damage to the car in the said accident has not been disputed. Ashok Kumar Surveyor and Loss Assessor appointed by the opposite party inspected the damaged car and assessed the loss. The copy of his report is Ex.O5, according to which the loss was assessed as Rs.1,81,274/-. The claim of the complainant was repudiated vide letter dated 25.11.2013, the copy of which is Ex.O6, on two grounds that the car was overloaded at the time of accident and that there was delay in intimation to the opposite party.

7.                Learned counsel for the opposite party put a great thrust upon the contention the accident had taken place on 17.5.2012, but intimation to the opposite party was given by one Joginder Singh vide intimation letter dated 9.7.2012, the copy of which is Ex.O3. According to condition no.1 of the policy intimation was required to be given immediately after the accident. Thus, delay in intimation amounted to violation of condition of policy, therefore, the claim of the complainant rightly repudiated on that ground.

8.                The argument advanced by the learned counsel for the opposite party cannot be accepted being devoid of force. The complainant was not travelling in the car at the time of accident. As per the version of First Information Report the family of one Maya Ram was travelling in the car and the same being driven by Sanjeev Kumar. In the said accident one son and one daughter of Maya Ram and driver Sanjeev Kumar died at the spot, whereas Maya Ram, his wife Smt. Santosh and Kuldeep Kumar sustained injuries. In the letter of intimation Ex.O3 it was specifically mentioned that the delay in intimation was due to the fact that the driver and some other persons had died in the accident and some persons were getting treatment for injuries sustained by them. In such a situation, it could not be possible for the complainant to give intimation regarding the accident and damage to the car to the opposite party immediately after the accident. Intimation could be given only after getting information about the accident and verifying the facts from the injured persons. Thus, there was reasonable explanation for not giving intimation of the accident immediately after the accident. Even if, it is accepted that there was unreasonable delay in giving intimation to the opposite party, then also the opposite party was not justified in repudiating the claim of the complainant on this 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 IV (2014) CPJ 62 (NC) National Insurance Co.Ltd. Versus Kulwant Singh.

11.              In the instant case, the opposite party appointed investigator, who investigating the case and submitted report, the copy of which is Ex.O4. He found that the accident had taken place on 17.5.2012 as the car fell down in a Khud as a result of which Harish Kumar, Neha and Sanjeev Kumar died at the spot and Maya Ram, his wife and Kuldeep Kumar sustained injuries. The surveyor appointed by the opposite party assessed the loss and submitted report Ex.O5 and as per his report the car was badly damaged. Thus, repudiation of the genuine claim of the complainant by opposite party was contrary to the spirit of the letter of Insurance Regulatory and Development Authority, because intimation to insurance company after few days of the accident was not significant in genuine claim of the complainant. Under such circumstances, repudiation of the claim of the complainant on the ground of delay in intimation was not justified.

12.              Learned counsel for the opposite party further laid emphasis on the contention that the car was registered for carrying 5 persons including driver, but 6 persons were travelling in the car at the time of accident and thus the complainant violated the condition of the policy, therefore, his claim was rightly repudiated on this ground also.

13.              The copy of the Registration Certificate Ex.C5 shows that the seating capacity in the car was of 5 persons including the driver. The insurance policy was also issued by the opposite party mentioning the seating capacity of 5 persons, as is evident from the copy of the insurance policy Ex.C7. Thus, there was overloading of one person in car at the time of accident. However, without going into any controversy and treating it as violation of the policy, the complainant is entitled to get compensation on non-standard basis as held by Hon’ble Supreme Court in Amalendu Shaoo Vs. Oriental Insurance Company Ltd.  2010 CTJ 485= ii (2010) CPJ 9 (SC).

14.              As a sequel to the foregoing discussion, we accept the present complaint and complainant is held entitled to get compensation on non-standard basis i.e. 75% of the loss suffered by him as per the report of the Surveyor. The loss was assessed by the surveyor as Rs.1,81,274/-. Accordingly the opposite party is directed to pay 75% of Rs.1,81,274/-which comes to Rs.1,35,955/- alongwith interest thereon @ 9% per annum from the date of filing of complaint till its realization. We further direct the opposite party 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: 29.08.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member