DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM

Dated this 24^th day of September 2024

Filed on: 07/12/2023

PRESENT:

Shri. D.B. Binu                                                              President

Shri. V. Ramachandran                                                  Member

Smt. Sreevidhia. T.N.                                                     Member

C.C. No. 941/2023

Complainants

1. Safiya Shams W/o late Shams , 7/212, Moolethotty house, Thalakode P.O, Puthenkruz, Kothamangalam, Ernakulam Dist.-686693.
2. Shahanas Shams D/o late shams , 7/212, Moolethotty house, Thalakode P.Q, Puthenkruz , Kothamangalam, Ernakulam Dist.-686693.
3. Asna Shams D/o late Shams, 7/212, Moolethotty house , Thalakode P.O, Puthenkruz, Kothamangalam, Ernakulam Dist.-686693.
4. Shamnad Shams (minor) S/O late Shams aged 14 years, 7/212, Moolethotty house, Thalakode P.O, Puthenkruz , Kothamangalam, Ernakulam Dist.-686693, Represented by her mother Safiya Shams
5. Makkar Ibrahim, Moolethotty house , Thalakode P.O, Puthenkruz , Kothamangalam, Ernakulam Dist.-686693

(Rep. by Adv. Tom Joseph, Court Road, Muvattupuzha 686661)

Vs

Opposite Party

M/s Oriental Insurance Co. Ltd., Kothamangalam Branch Office Elenjickal Mathew Memorial Plaza Church View Junction, Kothamangalam-686691, Represented by its Manager

FINAL ORDER

D.B. Binu, President

1. A brief statement of facts of this complaint is as stated below:

The Complaint filed under Section 35 of the Consumer Protection Act, 2019. The complainants, comprising the wife, children, and mother of the late Shams, are seeking compensation for damages sustained to their car, a Maruti Swift with registration number KL-44A-5004. The car was insured with the opposite party under policy number 441702/31/2023/97, valid from 30.12.2022 to 29.12.2023.

On 13.03.2023, at around 2 pm, the car, driven by Shams, collided with a Taurus lorry (Reg. No. KL-40-P-3890) at Perumbilavu, resulting in the tragic death of Shams and a co-passenger, both of whom succumbed to their injuries. The car suffered extensive damage in the accident. An FIR was registered against the driver of the lorry by Kunnamkulam police, and the complainants appointed an IRDAI-approved surveyor, Sri. M.O. Paulose, who assessed the total loss of the car at Rs. 2,05,000. Following this, the damaged car was sold as a wreck after surrendering its registration certificate to the road transport authorities.

The complainants then lodged an own damage claim with the opposite party. However, the claim was repudiated on 16.10.2023, citing the reason that the registration certificate of the vehicle had been cancelled without prior notification to the insurer, preventing them from appointing a final surveyor to verify the damage.

The complainants stated that the reason for the repudiation is unjustified, as the survey was already conducted by an IRDAI-approved surveyor based on the FIR. They claim that this amounts to deficiency in service and unfair trade practice. The complainants seek Rs. 2,05,000 for the assessed loss and an additional Rs. 50,000 for compensation due to financial loss, mental agony, and hardship caused by the opposite party's refusal to honour the claim.

2. NOTICE:

The Commission issued a notice to the opposite party. However, the opposite party failed to file their version within the statutory period and were consequently set ex-parte.

3. Evidence:

The complainant submitted a proof affidavit along with three documents. The documents in the complaint are marked as Exhibits A1 and A3.

• Exhibit A1 – Copy of the FIR
• Exhibit A2 – Copy of the Motor Survey Report
• Exhibit A3 – Copy of the Repudiation Letter

4. Points for Consideration:

i) Whether the complaint is maintainable or not?

ii) Whether there is any deficiency in service or unfair trade practice by the opposite parties?

iii) If so, whether the complainant is entitled to any relief?

iv) Costs of the proceedings, if any?

                               The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite party. Therefore, the complainant's claims were considered credible and supported by the evidence. The opposite party’s conscious failure to file their written version despite having received the Commission’s notice amounts to an admission of the allegations levelled against them. The case of the complainant stands unchallenged by the opposite party. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).

                    We have carefully considered the submissions made by the complainant and reviewed the entire evidence on record. It is noted that both parties did not file argument notes.

i). Maintainability of the Complaint:

The complaint has been filed under Section 35 of the Consumer Protection Act, 2019. The complainants, being the legal heirs of the deceased insured, fall under the definition of "consumer" as defined in the Act. The complaint seeks redressal for repudiation of a valid insurance claim, which directly relates to deficiency in service. Therefore, the complaint is maintainable.

ii). Deficiency in Service and Unfair Trade Practice:

The primary issue for consideration is whether the opposite party, M/s Oriental Insurance Co. Ltd., was deficient in service by repudiating the claim. The insurance policy was valid at the time of the accident. The complainants provided timely notice of the accident and submitted all necessary documents, including the FIR and the survey report from an IRDAI-approved surveyor assessing the damage to the vehicle at Rs. 2,05,000.

The opposite party repudiated the claim because the Registration Certificate (RC) of the vehicle had been surrendered without prior intimation, preventing them from appointing a final surveyor. However, this reason is untenable. The complainants had already obtained an independent survey from an approved surveyor based on the FIR, which documented the total loss of the vehicle. The cancellation of the RC, following the sale of the wreck, does not negate the damage already assessed by the authorized surveyor. Thus, the opposite party’s refusal to honour the claim amounts to a clear deficiency in service.

The unjustified repudiation of a valid insurance claim constitutes a deficiency in service and unfair trade practice. Similarly, in National Insurance Co. Ltd. vs. Nitin Khandelwal [IV (2008) CPJ 1 (SC)], the Hon'ble Supreme Court ruled that the insured cannot be denied compensation for the loss of the insured property based on technical grounds, especially when there is sufficient evidence to substantiate the claim.

the Hon'ble Supreme Court held that:

“12. Similarly, in Swaran Singh’s case (supra), this court has held as under: "If on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing the requisite type of licence, the insurer will not be allowed to avoid its liability merely for a technical breach of conditions concerning driving licence."

A. Liability of the Opposite Party:

The opposite party, despite receiving notice, failed to file its version within the statutory period and was set ex-parte. This act of non-cooperation further reflects the negligent approach of the opposite party toward the consumer. The complainants' evidence, including the FIR, survey report, and repudiation letter, remained unchallenged and were accepted as credible.

The non-compliance with procedural formalities and failure to respond to a valid claim within a reasonable period amount to negligence and deficiency in service.

In this case, eventhough sufficient time and opportunities were granted to the opposite party the opposite party’s failure to justify the repudiation on substantial grounds and its lack of defence led us to conclude that the opposite party have committed deficiency of service and unfair trade practice towards the complaiant. The complainants have therefore suffered financial loss, mental agony, and hardship due to the opposite party's refusal to settle the claim.

Considering the circumstances and the conduct of the opposite party in not filing a written version or argument notes, it is just to impose the costs on the opposite party.

                                     The tragic loss of life in this case, coupled with the financial strain and emotional hardship faced by the complainants, underscores the need for empathy and fairness in such matters. The complainants, having already suffered the irreplaceable loss of a loved one, should not have been subjected to further distress through the unjustified rejection of their legitimate insurance claim. Insurance companies must stand by their policyholders in times of need, not to evade responsibility on technical grounds. Justice, in this case, is not only a legal obligation but also a moral one, recognizing the profound impact such incidents have on families left to pick up the pieces.

                           We find that issues (i) to (iv) favour the complainants, as they arise from the serious deficiency in service on the part of the Opposite Party. The complainants have endured significant inconvenience, mental distress, hardships, and financial losses due to the Opposite Party's deficient service and unfair trade practices.

In view of the above facts and circumstances, we hold that the Opposite Party is liable to compensate the complainants.

 Hence the prayer is allowed as follows:

1. The Opposite Party shall pay ₹2,05,000/- (Rupees Two Lakhs and Five Thousand only) to the complainants, as assessed by the IRDAI-approved surveyor.
2. The Opposite Party shall pay ₹25,000/- (Rupees Twenty-Five Thousand only) as compensation for mental agony and hardship. This amount is awarded for the deficiency in service and unfair trade practices, as well as for the mental agony and physical hardships endured by the complainants.
3. The Opposite Party shall also pay ₹10,000/- (Rupees Ten Thousand only) as the cost of the proceedings.

The Opposite Party is liable for the fulfilment of the above orders, which must be executed within 45 days from the date of receiving this order. Failure to comply with the payment orders under points I and II will result in payment of an interest rate @ 9% per annum from the date of filing the complaint (07.12.2023) until the date of full payment realization.

Pronounced in the Open Commission on this the 24^th day of September, 2024

Sd/-

D.B. Binu, President

Sd/-

V. Ramachandran, Member

Sd/-

Sreevidhia T.N, Member

Forwarded/by Order

Assistant Registrar

Appendix

Complainant’s Evidence

• Exhibit A1 – Copy of the FIR
• Exhibit A2 – Copy of the Motor Survey Report
• Exhibit A3 – Copy of the Repudiation Letter

Opposite party’s Exhibits

Nil

Despatch date:

By hand:     By post                                                       

kp/                                                              CC No. 941/2023

Order Date: 19/09/2024