BEFORE THE DISTT.CONSUMER DISPUTES REDRESSAL FORUM; FATEHABAD.
C.C.No.221 of 2015.
Date of Instt.:05.10.2015.
Date of Order: 03.01.2017.
Sudhir Singh son of Khema Ram resident of village Bhoda Hoshnak Tehsil & District Fatehabad.
..Complainant.
Versus
National Insurance Company Limited near Telephone Exchange, SCF 155-156, CUE-1 Near Telephone Exchange, Hisar Tehsil & District Hisar through its Divisional/Branch Manager.
..Opposite party.
Complaint under Section 12 of the Consumer
Protection Act, 1986
Before: Sh.Raghbir Singh, President. Smt.Ansuya Bishnoi, Member.
Present: Sh.H.S.Garhwal, counsel for the complainant.
Sh.V.K.Mehta, counsel for the Opposite party.
ORDER
Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986.
2. Brief facts of the present complaint are that complainant got insured his vehicle TATA-407 bearing registration No.HR-62/6750 for a sum of Rs.7,15,350/- vide policy No.25331131130150002435 having validity from 05.11.2013 to 04.11.2014 with OP. Said vehicle was stolen on 30.12.2013 when it was parked in front of the house of the complainant. Intimation regarding this was given to the police station and an FIR No.744 dated 31.12.2013 was registered under Section 379 IPC at Police Station Sadar, Fatehabad against unknown persons. It has been further averred that the stolen vehicle of the complainant could not be traced by the police and an untraced report dated 10.06.2014 has already been submitted before the court of learned Chief Judicial Magistrate, Fatehabad by the police. The complainant intimated regarding theft of the vehicle to the OP and requested for the settlement of the claim by submitting all the documents but the insurance company has wrongly and illegally repudiated the claim of the complainant. The complainant also got served a legal notice upon the OP and requested to settle the claim but to no avail. Due to the act and conduct of the OP the complainant has to face financial loss, mental agony and harassment which amounts to deficiency in service on its part. Hence, this complaint. In evidence, the complainant has tendered his affidavit Ex.CW1 and documents Annexure C1 to Annexure C10.
3. On being served, the OP has contested the complaint of the complainant by filing reply taking several preliminary objections such as locus standi, jurisdiction, cause of action and maintainability etc. It is submitted that the intimation regarding the theft of the vehicle was given to the insurance company very late on 16.09.2014 and after considering the documents submitted by the complainant, it was found that at the time of theft of vehicle it was not having valid permit therefore, the claim of the complainant was rightly repudiated as he himself has violated the terms and conditions of the policy. There is no deficiency in service on the part of OP. Other pleas made in the complaint have been controverted and prayer for dismissal of the complaint has been made. In evidence, the OP has tendered affidavit of Sh.Shakti Bhasker, Branch Manager as Annexure R1 and documents Annexure R2 to Annexure R8.
4. Heard. The counsel for the complainant reiterated the averments made in the complaint and prayed for its acceptance whereas the counsel for OP reiterated the averments made in the reply and prayed for its dismissal.
5. Admittedly, Truck of the complainant was insured with OP vide policy Annexure R2 effective from 05.11.2013 to 04.11.2014 midnight. It is case of complainant that the vehicle in question was stolen on 31.12.2013 during the subsistence of the policy and claim lodged by the complainant was not honoured by the OP despite the fact that FIR regarding theft of the vehicle was recorded within 24 hours with the concerned police station as is evident through Annexure C4. On the other hand, it is case of OP that there is violation of terms and conditions of policy as alleged theft had taken place on 30.12.2013 but the OP was intimated on 16.09.2014 and further at the time of theft of the vehicle, it was not having valid route permit, therefore, the claim has rightly been repudiated. The counsel for the OP in support of his contentions has relied upon the case law titled as National Insurance Company Vs. Dr.R.K.Duggal 2002 (3) ACJR 3 wherein it has been held that Insurer and insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. He has further relied upon case law titled as Oriental Insurance Company limited Vs. Sony Cheriyan 1999 (3) PLR 495 rendered by the Hon’ble Apex Court wherein it has been held that Between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account risks covered by the insurance policy. The terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. Counsel for the OPs also relied upon Section 66 (1) of the M.V.Act, which reads as under:
“66. Necessity for permit (1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or counter signed by a regional or State Transport Authority or any prescribed Authority authorizing him the use of the vehicle in that place in the manner in which the vehicle is being used:
Provided that…………..
Provided further that…………..
Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorize the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.
6. Perusal of the case file reveals that the insurance of the truck in question was effective from 05.11.2013 to 04.11.2014 and it was stolen on 30.12.2013 when it was parked in front of the house of the complainant and this fact finds support from Annexure C4 (copy of FIR No.744 dated 31.12.2013). Perusal of Annexure C5 reveals that the police could not trace out the vehicle and finally submitted untraced report before the court which was accepted vide order dated 10.06.2014 passed by learned Chief Judicial Magistrate, Fatehabad.
7. It is established on the case file that the vehicle in question was stolen when it was parked in front of the house of the complainant, therefore, the plea taken by the OP that the vehicle in question was not having valid route permit is not sustainable because at the time of theft it was not being plied on public place and if any vehicle is standing at one’s house and is stolen it does not mean that he is not entitled for any compensation. In the present case the complainant had not taken vehicle to any other place at the time of theft. Had he taken it to any public place then it could have been a different matter. On this point reliance can be taken from case law titled as National Insurance Company Vs. Deepak Gulati decided on 02.11.2016 by Hon’ble State Consumer Dispute Redressal Commission, Haryana in FAP No.250 of 2015. It is pertinent to mention here that the complainant had applied for permit and had also deposited requisite fee on 14.12.2013 with the concerned office which is evident from the report dated 19.08.2016 made by Secretary, Regional Transport Authority, Fatehabad on the back of application (Annexure C8).
8. Now, we deal with another point taken by the OP-insurance company qua delaying in intimation. In the reply, the OP has specifically mentioned that the intimation was given to it on 16.09.2014 after a considerable delay of more than 8 months but in letter Annexure R3 issued by the insurance company to the complainant it has been mentioned that the intimation was given on 06.01.2014 under policy No.25331131130150002435. Perusal of Annexure C3 reveals that the complainant has given intimation about theft of the vehicle to Vipin Motors (P) Limited, Hisar (from whom the complainant had purchased the vehicle in question) on 03.01.2014. There is enough on the file to prove that the stand taken by the OP-insurance company is quite contradictory and does not dis-entitle the complainant for the genuine claim lodged by him qua the vehicle in question. Therefore, we are of the considered view that in the present case there is no delay in giving intimation to the OP-insurance company regarding the occurrence of theft of the insured vehicle. Moreso, if a person who lost his vehicle which was being used by him for earning livelihood straightway may not go to the insurance company to claim compensation and at the first instance he himself makes efforts to search the vehicle and also lodged FIR/DDR with the police. 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 and therefore, it being a genuine claim of the complainant, cannot be denied in view of the judgment rendered by Hon’ble State Consumer Dispute Redressal Commission in First Appeal No.43 of 2014 titled ‘Shriram General Insurance Company Limited vs. Rajesh Kumar’ decided on March 10th, 2014, wherein the circular Ref: IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.2011 issued by Insurance Regulatory & Development Authority pertaining to delay in claim intimation/documents, was taken into consideration and it was held that the insurance company cannot repudiate the bonafide claims on technical grounds like delay in information and non-submission of documents. The observation in this connection in Rajesh Kumar’s case (supra) is as under:-
“6. The solitary submission of the learned counsel for the appellant is that there was delay of 12 days in giving intimation to the appellant, which is in violation of the insurance policy. In support of the contention, reliance has been placed upon JAGDISH PARSHAD versus ICICI LOMBARD GENERAL INSURANCE CO. LTD. II(2013) CPJ 578 (NC).
7. This Commission does not concur with the submission of the learned counsel for the appellant. Indisputably, the F.I.R. was lodged with the Police without any delay and the respondent had informed the appellant-Insurance Company about the theft of his vehicle on December 21st, 2010, that is, after 12 days.
8. The circular dated September 20th, 2011 (Annexure-A) issued by ‘INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY’ is as under:-
“INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
Ref. IRDA/HLTH/MISC/CIR/216/09/2011 Date: 20.09.2011
CIRCULAR
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 merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
J.Harinarayan
CHAIRMAN”
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.
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 insureds/their legal heirs.
11. In the instant case the vehicle was stolen on December 9th, 2010 and F.I.R. was lodged in the Police Station without any delay. Report of ‘Untraced’ submitted by the Police is the best piece of evidence to prove that the vehicle was stolen.
12. Thus, the repudiation of respondent’s claim was contrary to the letter Annexure-A, stated above because intimation to the insurance company after 12 days is not significant in genuine claim of the respondent-complainant. Under these circumstances, it was indeed a deficiency in service on the part of the appellant for repudiating respondent’s claim on flimsy ground. It would not be fair or reasonable to reject even the genuine claims of the insuree which had been verified and found to be correct by the Surveyor. In this view of the matter, the authority in Jagdish Parshad’s case (Supra) referred to by the learned counsel for the appellant is of no help to him.”
9. The case in hand is fully covered by the decision rendered by the Hon’ble State Commission in Rajesh Kumar’s case (supra). The evidence available on the record establishes that it is a genuine claim of the respondent-complainant. F.I.R. No.744 (Annexure C4) is the best piece of evidence to prove the theft of complainant’s vehicle. Since the vehicle of the complainant had been stolen during subsistence of the policy, therefore, the insurance company is liable to indemnify the claim with regard to the vehicle in question for which it had obtained premium to the tune of Rs.28,797/- from the complainant. The case law relied upon by learned counsel for the OP titled as National Insurance Company Vs. Dr.R.K.Duggal 2002 (3) ACJR3 and Oriental Insurance Company limited Vs. Sony Cheriyan 1999 (3) PLR 495 are of no helpful to the case of the OP-insurance company, therefore, these citations are being distinguished.
10. In view of the above discussion this Forum is of considered opinion that the insurance company has wrongly and illegally repudiated the claim of the complainant. Hence, present complaint is allowed. It has come to the notice of this Forum that the alleged vehicle is hypothecated to the HDFC Bank Limited, therefore, the OP-insurance company is directed to release the amount recoverable from the complainant against the loan taken by him at the time of purchasing of the vehicle in question, if any, and further to release the remaining amount in favour of the complainant. The OP-insurance company is further directed to pay interest @ 9 % per annum to the complainant on the insured sum from the date of filing of the present complaint till realization. The OP-insurance company is also directed to pay Rs.10,000/- to the complainant as compensation on account of mental agony, harassment and litigation charges etc. Compliance of this order be made within one month from the date of receipt of copy of this order. Copy be supplied to the parties alongwith concerned bank free of costs. File be consigned after due compliance.
ANNOUNCED IN OPEN FORUM
Dt.03.01.2017.
(Raghbir Singh)
President,
(Ansuya Bishnoi) Distt.Consumer Disputes
Member, Redressal Forum, Fatehabad.
Present: Sh.H.S.Garhwal, counsel for the complainant.
Sh.V.K.Mehta, counsel for the Opposite party.
