Haryana

StateCommission

A/210/2016

CHOLAMANDALAM MS GEN.INSURANCE CO. - Complainant(s)

Versus

RAKESH KUMAR - Opp.Party(s)

RAJNEESH MALHOTRA

06 Sep 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :      210 of 2016

Date of Institution:      11.03.2016

Date of Decision :       06.09.2017

 

Cholamandlam MS General Insurance Company Limited, 1^st Floor, Plot No.6, Pus Road near Metro Pillar No.81, New Delhi-110005 through Manager.

                                      Appellant-Opposite Party No.1

Versus

 

1.      Rakesh Kumar s/o Sh. Sube Singh, Resident of Village Rajpura, Tehsil Narnaul, District Mahendergarh.

Respondent-Complainant

2.      Mahindra & Mahindra Finance Service Limited Opposite Party D.C. Residence Mahendergarh Road, Narnaul, District Mahendergarh.

                                      Respondent-Opposite Party No.2

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. Balbir Singh, Judicial Member.

                                                                                                         

Argued by:          Sh. Rajneesh Malhotra, Advocate for appellant.

                             Ms.Bhawna Grewal, Advocate for respondent No.1.

                             Sh.S.C. Thatai, Advocate for respondent No.2.

 

                                                   O R D E R

 

BALBIR SINGH, JUDICIAL MEMBER

 

         This appeal has been preferred against the order dated December 01^st, 2015 passed by District Consumer Disputes Redressal Forum, Narnaul (for short ‘the District Forum’) in Consumer Complaint No.166 of 2014.

2.                Tractor bearing registration No.HR-35H-3151 (Mahindra DI 575) owned by Rakesh Kumar-complainant (respondent No.1 herein) was insured with Cholamandlam MS General Insurance Company Limited (for short ‘the Insurance Company’)-Opposite Party No.1 (appellant herein) vide insurance policy cover note No.8969581 (Annexure C-2) regarding the period from September 18^th, 2012 to September 17^th, 2013. The total Insured Declared Value (IDV) of the tractor was Rs.5,08,250/-. The tractor vehicle was purchased by the complainant for a consideration of Rs.5,35,000/- and the sale price amount was financed with Mahindra & Mahindra Financial Services Limited-Opposite Party No.2. The complainant used to use his tractor vehicle for agriculture purpose. In those days, the complainant was not having good health and one Manjit Singh, Resident of Village Kheri used to manage land and other affairs of the complainant and also used to drive the tractor vehicle.

3.                On June 16^th, 2013 during night hours, the tractor vehicle was stolen which was parked in front of the house of Majit Singh at Village Kheri. The stolen vehicle could not be traced despite all possible efforts, so information was given to the Police. After conducting inquiry, First Information Report (FIR) bearing No.105 (Annexure C-6) was recorded by the Police under Section 379 of the Indian Penal Code in Police Station, Ateli. The Insurance Company was also informed. The vehicle could not be traced and ultimately the police filed Final Untraced Report under Section 173 Cr.P.C. (Annexure C-7).

4.                The complainant submitted insurance claim along with relevant documents with the Insurance Company but his claim was repudiated by the Insurance Company vide letter dated July 16^th, 2013 (Annexure R-2). The complainant has already made payment of the total loan amount obtained from the opposite party No.2. The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 with a prayer that the opposite party No.1 be directed to make payment of the total sum insured with interest at the rate of 24% per annum; an amount of Rs.60,000/- as compensation on account of un-necessary harassment and mental agony and amount of Rs.20,000/- as litigation expenses.

5.                Mahindra & Mahindra Financial Services Limited-Opposite Party No.2 did not file written version as it was proceeded ex-parte vide order dated January 21^st, 2015.

6.                Cholamandlam MS General Insurance Company Limited-Opposite Party No.1, in its written version has taken plea that the complaint is not maintainable in the present form and that the District Forum has no jurisdiction to decide this complaint. It is admitted that the tractor in question was insured with the opposite party No.1 regarding the period from September 18^th, 2012 to September 17^th, 2013. It is also admitted fact that during the insured period, the tractor vehicle was stolen on June 16^th, 2013 during night hours and intimation in this regard was given to the opposite party No.1 on July 13^th, 2013, after 27 days. A surveyor was appointed by the Insurance Company who submitted his report and considering surveyor’s report, claim of the complainant was repudiated. As per report of the surveyor, theft took place on June 16^th, 2013 and intimation was given to the Police on June 28^th, 2013 after 12 days and F.I.R. No.105 (Annexure C-6) was lodged on that day. Moreover, information to the Insurance Company regarding this incident was given on July 13^th, 2013 after 27 days. In this way, legally and technically as per terms and conditions of the insurance policy, the complainant was required to inform the Police as well as the Insurance Company soon after the incident took place. Moreover, as Rakesh Kumar did not submit the documents despite issuance of letter dated July 15^th, 2013 (Annexure R-3). Keeping in mind these circumstances, the insurance claim filed by the complainant was repudiated. The opposite party No.1 has prayed that the complaint be dismissed with cost.

7.                Parties adduced evidence in support of their respective claims before the District Forum.

8.                After hearing arguments, vide impugned order dated December 01^st, 2015 complaint filed by the complainant was allowed directing the opposite party No.1 to pay the total insured amount along with interest at the rate of 10% per annum from the date of filing of the complaint and to pay an amount of Rs.2200/- as litigation expenses to the complainant.

9.                Aggrieved with the impugned order dated December 01^st, 2015, the insurance company-opposite party No.1 has filed the present appeal No.210 of 2016 with a prayer to set aside the impugned order and to dismiss the complaint filed by the complainant.

10.              We have heard learned counsel for the parties and have perused the case file.

11.              During the course of arguments, there was no controversy of any type that the complainant is registered owner of tractor bearing registration No.HR-35H-3151 which was purchased for a consideration of Rs.5,35,000/- vide receipt Annexure C/9. The above mentioned tractor was provided insurance policy Annexure C-2 by the opposite party No.1 regarding the period from September 18^th, 2012 to September 17^th, 2013 mentioning the total Insured Declared Value as Rs.5,08,250/-.

12.              There was no controversy that during those days, Manjit Singh used to manage the agricultural land and other affairs of the complainant and also used to drive the above mentioned tractor. As per version of the complainant the above mentioned tractor vehicle was stolen on June 16^th, 2013 during night hours when the tractor was parked in front of the house of Manjit Singh. The opposite party No.1 also admitted in its written version that the tractor was stolen during the night hours on June 16^th, 2013 but the complainant caused un-necessary delay of 12 days in lodging FIR and took 27 days to inform the insurance company. In case, the complainant is able to prove his case, the insurance company can be held liable to pay the total sum assured to the complainant.

13.              From the pleadings and evidence on the file it clearly appears that the complainant did not cause un-necessary delay to inform the police regarding this incident. In the complaint as well as affidavit of the complainant, it is clearly mentioned that information was immediately given to the Police but FIR (Annexure C-6) was lodged by the Police on June 28^th, 2013 after necessary inquiry.

14.              Admittedly, theft took place during the night of June 16^th, 2013; the Police was informed as stated by the complainant in his complaint supported by the documentary evidence. It was specifically stated by the complainant that FIR was registered by the Police after investigation. The Police also submitted untraced report (Annexure C-7).  As per version of the complainant in his complaint and affidavit, he informed the Police immediately but the F.I.R. was lodged after 12 days of the occurrence after conducting thorough investigation. In these circumstances, findings cannot be given that the complainant did not inform the Police immediately after the occurrence.  After informing the Police about the theft, it was the duty of the Police to register FIR on the same date and the complainant cannot be blamed for the same. In this case, the Insurance Company had appointed a surveyor who after investigation and collecting evidence submitted his report (Annexure R-5). The surveyor in his report has mentioned in clear words that after collecting evidence, he has confirmed that theft had taken place. In these circumstances, findings can be safely given that the insured tractor vehicle was actually stolen and the delay in lodging F.I.R. has been properly explained.  

15.              Another aspect of the case is that the Insurance Regulatory Development Authority (IRDA), which control and regulates the Insurance Companies, issued direction not to reject the genuine claims simply because of delay in registration of FIR and intimation to the Insurance Company. In the instructions of the IRDA it was also mentioned that 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 insurer’s decision to reject a claim shall be based on sound logic and valid grounds.  Support to this view can be taken from the case law cited as Bharti Axa General Insurance Company Limited vs. Ms. Monu Yadav and another, 2014(4) PLR 861, by Hon’ble Punjab and Haryana High Court, Chandigarh.  As per facts of that case, the delay in lodging claim with the Insurance Company was of 54 days. The findings in that case were also given in favour of the claimants on the basis of the guidelines issued by IRDA.  The Insurance Companies were advised that they must not repudiate such claims on the ground of delay especially when the Police have been promptly informed in this regard.

16.              It is very clear from the 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.

17.              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 insured/their legal heirs.  In this case the repudiation of complainant’s claim was contrary to the instructions issued by the IRDA, mentioned above. No other point was raised during the course of arguments. 

18.              In view of the above, it is proved that the tractor of the complainant was stolen during the subsistence of the insurance policy issued by the opposite party. The Police submitted the untraced report. The evidence led by the complainant has proved that it was a genuine claim of the complainant. It is unfortunate that the insurer takes such flimsy pleas to defeat the genuine claim of the insured. It will be in the interest of justice that the insurer should not rely upon pleas for the purpose of defeating legitimate claims of claimants which are otherwise well founded.

19.              As per discussions above in detail, we find no illegality and invalidity in the impugned order dated December 01^st, 2015. Resultantly, findings of the learned District Forum stand affirmed and the appeal stands dismissed.

20.              The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced: 06.09.2017

(Balbir Singh) Judicial Member

(Nawab Singh) President

 

CL