The titled complainant has filed the present complaint against the titled opposite party insurers being aggrieved at 'repudiation' (Ex.C3/Ex.C4 of 03.04.2018) of the ‘Total-Loss Insurance Claim’ of his accident-damaged vehicle comprehensively insured vide Policy No.200321723110003720 (Ex.C1) for an IDV of Rs.11,37,982/- ‘Mahindra/Scorpio/S6-PLUS’ Model 2017 Temporary RC # PB-035-CT-AF and Permanent RC # PB-06AN- 7604. The repudiation letter stated that the complainant has breached Terms & Conditions of the related Policy by filing the 'insurance-claim' on 26.02.2018 with a delay of 235 days pertaining to the accident/damage having occurred on 07.07.2017; whereas the insurers need to be intimated of the accident/damage 'immediately' upon occurrence.
2. Sh. Harjinder Singh, a resident of Gurdaspur District had owned the above vehicle that met with an accident on the Amritsar-Pathankot Highway near Naushehra Majha Singh (Ex.C2) DDR No. 07 of 15.07.2017; causing serious injuries to him (the complainant) and 'total-loss' damage to the insured vehicle. The complainant, after having recovered from his injuries, filed the DDR (Ex.C2) with the police and also intimated the OP insurers, completed the requisites formalities and filed the insurance claim with the OP insurer, who appointed its Surveyor and the claim process was initiated. Incidentally, the claim-process progressed smoothly as all requisites were made available and all queries were satisfactorily replied. There has been an overall affirmative assent as to the fact-um of accident and terms of the applicable insurance policy. There was no dissent upon any of the issues like that of ownership of the accident-ed vehicle or validity etc of the driver’s license of the holder driving at the time of the accident.
3. However, the OP insurers repudiated (Ex.C3 & Ex.C4) the insurance-claim vide their letter dated 03.04.2018. The complainant approached the OP insurers many a times and explained the reasons of 'delay' as his getting seriously injured in the accident and time taken in recovering back to normal and file the claim etc. The OP insurers somehow were not convinced and refused to review their resolve. The complainant got them served with the legal notice Ex.C5 and Ex.C6 but even these proved to be of no use and thus prompted the present complaint seeking directive to the OP insurers to settle and pay the claim in terms of the related policy besides Rs.50,000/- as compensation and Rs.50,000/- as cost of litigation. In support of his complaint, the complainant has filed his affidavit along with the above exhibited (Ex.C1 to Ex.C6) documents.
4. The OP insurers appeared upon summoning through its counsel and filed its written reply pleading its prime objection (along with the routine formals) of delay of (Ex.OP1to3/5) 235 days as the loss/damage occurring on 07.07.2017 has been reported on 26.02.2018. Thus, the terms and conditions of the insurance contract have been violated and the claim has been rightly (Ex.OP1to3/4) repudiated and duly intimated on 03.04.2018. Further, the vehicle at the time of accident was not registered as requisite under the Motor Vehicle Act and that absolves the insurers of their liability under the terms and conditions (Ex.OP1to3/3) of the related (Ex.OP1to3/2) insurance policy. The accident-damage was surveyed (Ex.OP1to3/9) and investigated reported (Ex.OP1to3/6) @ Rs.7,87,167/-. The complainant has also made his statement (Ex.OP1to3/7) on the temporary registration and clarifications on delay (Ex.OP1to3/8) in filing the accident-claim etc. On merits, the OP have re-repeated their objections as above; And, in support of prosecution of their defense have filed Affidavits of their Authorized Signatory (Ex.OP1/A) and also of the Surveyor (Ex.OP1/B) along with the above exhibited documents (Ex.OP2 to Ex.OP9) seeking dismissal of the complaint in the interest of justice addressing the same as being without merit.
5. We have duly heard the learned counsels for both the sides, on points of law, and have also thoroughly examined the records with requisite care and caution on the points of fact, as placed before us. We are also inclined to examine the inference it’s ‘scope n spread’ on account of some documents ignored to be produced/ not-produced during the course of proceedings. We observe that the OP insurer have denied the impugned Insurance-Claim vide its repudiation letter (Ex.C3/Ex.OP4) 03.04.2018 for of the prime reason that there's been a delay of 235 days in intimating the loss/damage caused to the insured vehicle in the road-accident. However, it has been an established legal proposition that an insurance claim cannot be repudiated merely for of 'delay' in intimating the insurers.
“Mere Delay In Intimating Insurer Of Vehicle Theft No Ground For Denying Claim, Says S.C.!
A bench comprising Justices Sanjiv Khanna and Bela M Trivedi set aside the NCDRC judgment and held that the mere delay in intimating the insurer was not fatal to the claim when an FIR had been registered promptly.”
“The precise question that falls for consideration before this Court is - whether the insurance company can repudiate the claim in Toto, made by the owner of the vehicle which was duly insured with the insurance company, in case of loss of the vehicle due to theft, merely on the ground that there was a delay in informing the company regarding the theft of vehicle,” the bench said.
Insurers cannot reject claims for delay in intimation:
IRDA (Insurance Regulatory and Development Authority):
Insurance companies cannot mechanically reject claims on technical grounds, such as delay in intimation and submission of documents, particularly if the delay is due to unavoidable circumstances, according to the insurance regulator. Besides benefiting policyholders, whose claims for settlement are rejected on technical grounds, the regulatory move will also help the industry curb unnecessary expenses on litigation and court settlement. The Insurance Regulatory and Development Authority (IRDA) has issued a circular to this effect to life and non- life insurance companies as it has received many complaints on rejection of claims.
The IRDA regulator said policy holders should intimate and submit the required documents to their insurance company within the stipulated time so that the insurer can start post-claim activities such as investigation, loss assessment, provisioning and claim settlement. However, when there is delay in intimation or submission of documents due to unavoidable circumstances, the regulator has emphasized that this should not prevent settlement of genuine claims.
6 We are of the considered opinion at the face of the evidenced-facts as available on the records that there’s have been no willful and/or intentional delay/misrepresentation and/or misstatements of facts and as such the impugned ‘repudiation’ of the insurance-claim, in question, by the OP Insurers had been unwarranted, arbitrary and unfair; neither in accordance with the provisions of the statutory law nor in conformity with the sanctity of natural justice, equity and good conscience. Further, it has violated with impunity the preferred consumer rights of the insured complainant causing him much physical harassment, mental agony and financial loss. Lastly, we hold the insurer guilty of statutory misconduct amounting to ‘unfair trade practices/deficiency in service’ and thus liable to an adverse award under the provisions of the governing statute.
7. In the light of the all above, we partly allow the present complaint and ORDER the herein opposite party insurers to pay the full IDV to the complainant being the amount of the impugned claim along with interest @ 6% PA w.e.f. the date of the complaint besides Rs.10,000/- as compensation and Rs.5,000/- as cost of litigation within 45 days of receipt of the certified copy of these orders otherwise the aggregate awarded amount shall attract an additional interest @ 3% PA from the date of the orders till paid in full.
8. The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.
9. Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to record.
(Naveen Puri)
President.
ANNOUNCED: (R.S.Sukhija)
OCT. 06, 2022. Member.
YP.
