Haryana

Karnal

62/13

Avadh Bihari - Complainant(s)

Versus

National Insurance Company - Opp.Party(s)

Sh. Redhey Shyam

19 Sep 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No. 62 of 2013

                                                             Date of instt.  01.02.2013

                                                               Date of decision:19.09.2016

 

Avadh Bihari son of Shri Neki Ram, resident of Fatehpur Pundri, District Kaithal.

 

                                                                         ……..Complainant.

                                                Versus

1. The National Insurance Company Limited , through its Divisional Manager, Karnal.

2. The Branch Manager, The National Insurance Company Limited, Branch Office Railway Road at Karnal.

                                                                                 …………Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

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

                   Sh.Anil Sharma…….Member.

 

Present:-      Shri Radhy Shyam  Advocate for complainant.

                    Shri  Parveen Daryal 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.HR08H—0266 with opposite parties, vide policy no.420500/31/11/620002575 valid from 02.12.2011 to 01.12.2012. On 02.01.2012 at about 12.30 p.m. his son had taken the motorcycle for attending his duty at Karnal Motors, Sector-3, Karnal and parked the motorcycle nearby G.T. Road at the place meant for parking motorcycles/scooters of employees working in Karnal Motors. After completing his duty when his son came out, he found that the motorcycle was stolen. Thereafter, his son reported the matter to the Police by moving an application and First Information Report no.5 dated 02.01.2012 was registered in Police Station City Karnal. Soon after the incident he informed the opposite parties and submitted requisite papers. The officials of the opposite parties told that claim would not be given unless police submitted untraced report and he was asked to wait for sometimes. Police could not trace out the motorcycle and submitted untraced report which was accepted by learned Chief Judicial Magistrate, Karnal, vide order dated 12.06.2012. Thereafter, he submitted the untraced report to the opposite parties, but the claim was not paid to him despite repeated visits. Ultimately, he got served legal  notice dated 02.01.2013. Reply to the said notice was given by the opposite parties submitting therein that intimation of the theft of the motorcycle was not given immediately and thus, there was violation of condition no.1 of the Policy. The plea raised by the opposite parties was false. Infact, the insurance policy was lying in the motorcycle at the time of theft of the motorcycle on 02.01.2012, therefore, he approached the opposite parties on the same day, informed about the theft and applied for duplicate copy of the insurance policy, which was supplied to him on 4.1.2012. Thus, it was clear that the opposite parties were informed about the theft without any delay. Therefore, repudiation of the claim by the opposite parties, vide letter dated 3.1.2013, was deficiency in service and the same caused him mental as well as physical 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 complainant has no locus standi and cause of action to file the complaint; that the complaint is not maintainable in the present form; that the complicated questions of law and facts are involved, which cannot be decided by this Forum in summary manner; that the complaint is malafide of misuse of provisions of law and that the complainant has not approached this Forum with clean hands.

                   On merits, the factum of insurance of motorcycle of complainant for the period from 2.12.2011 to 1.12.2012 has been admitted. It has been submitted that as per terms and conditions of the insurance policy it was obligatory on the part of the complainant to intimate about the theft to the opposite parties immediately, but he informed the opposite parties regarding the alleged theft after the expiry of more than 9 months on 22.10.2012. Thus, he violated the terms and conditions of the insurance policy, therefore, his claim rightly repudiated, vide letter dated 3.1.2013.

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

4.                On the other hand, in evidence of the opposite parties, affidavit of  S.S.Bodhan Divisional Manager Ex.O1 and documents Ex.O2 to Ex.O8 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 motorcycle of the complainant bearing registration no.HR-08H-0266 was insured by the opposite parties for the period of 2.12.2011 to 1.12.2012 and the same was stolen on 2.1.2012 during subsistence of the policy. First Information Report regarding theft was lodged in Police Station City Karnal. The complainant lodged claim with the opposite parties, but his claim was repudiated on the ground that as per condition no.1 of the policy he was bound to give intimation of the theft immediately, but he gave intimation on 22.10.2012 after long delay of more than 9 months and thus, violated the condition of the policy.

7.                The complainant has alleged that intimation regarding theft of the motorcycle was given immediately to the opposite parties. He further submitted  that the insurance policy was also lying in the motorcycle at the time of theft, therefore, on 2.1.2012 he applied to the opposite parties for obtaining duplicate copy of the insurance policy, which was supplied to him on 4.1.2012. The duplicate copy of insurance policy has been produced as Ex.C10 to Ex.C12. A perusal of Ex.C12 clearly indicates that the same was issued on 4.1.2012. This fact lends support to the plea of the complainant that the original policy was in the motorcycle at the time of theft, therefore, he applied for the duplicate on 2.1.2012 and gave intimation regarding loss of the insurance policy and theft of the motorcycle to the opposite parties immediately. No doubt the complainant has not produced any document indicating that he had given intimation to the opposite parties in writing regarding theft of the motorcycle, but the plea raised by him cannot be disbelieved altogether in view of the afore discussed facts and circumstances. The opposite parties must have supplied the duplicate copy of the policy on the application of the complainant, therefore, the application was most material document, which could indicate as to whether the complainant gave intimation of the theft while applying for duplicate copy of the policy or not, but the opposite parties have not produced such application, therefore, an adverse inference is to be drawn against the opposite parties. Moreover, even if it is accepted that there was delay in giving intimation of theft to the opposite parties then also the opposite parties were not justified in repudiating the claim of the complainant on such technical ground.

8.                 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.”

 

9.                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) .

10.              In the instant case, the theft of the motorcycle had taken place on 2.1.2012. First Information Report regarding the theft was lodged on the same day. Police could not trace out the motorcycle, therefore, untraced report was submitted, which was accepted by learned Chief Judicial Magistrate Karnal, vide order dated 12.06.2012, the copy of which is Ex.C14. Opposite parties have neither raised dispute regarding theft of the motorcycle nor led any evidence in this regard. Under such circumstances, even if, there was delay in intimation regarding theft, 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.

11.              As a sequel to the foregoing discussion, we accept the present complaint and direct the opposite parties to pay Rs.19,995/- 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: 19.09.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member