JUSTIC E AJIT BHARIHOKE, PRESIDING MEMBER

            Respondent was the owner of trailer bearing No. RJ-27 GA 8478.  The respondent insured trailer with the petitioner insurance company for the period 20.05.2012 to 19.05.2013. Insured Declared Value of the trailer was Rs.16,50,000/-.  It is the case of the complainant that on the night of 13.11.2012 the trailer was parked near Manglam Petrol Pump, Village Fatehpura, Village Mavli, Udaipur, Rajasthan.  On the morning of 15.11.2012, the trailer was found missing.  The Police Control Room was intimated about the theft on the same day and FIR No. 274 was registered at the concerned Police Station.  It is further the case of the petitioner that complainant intimated the manager of the Opposite Party insurance company about the theft on the same day by calling on his mobile phone.  Written intimation was sent on 22.11.2012.  The insurance claim was filed. The opposite party repudiated the insurance claim on two counts ; (a)  that the theft was reported to the insurance company with the delay of seven days in violation of the stipulation of the insurance contract ; (b) that the insured complainant failed to take necessary steps to protect the interest of the insurance company.   Being aggrieved of the repudiation of the insurance claim, the respondent filed consumer complaint in the concerned District Forum.

2.         The District Forum on consideration of the pleadings of the parties and evidence came to the conclusion that repudiation of insurance claim was not justified and it amounted to deficiency in service.  The District Forum, therefore, allowed the complaint and directed the petitioner as under:

     The complaint of the complainant against the opposite party no.1 to 3 is accepted and it is ordered that:

(1)            Opposite party no. 1 to 3 shall pay claim amount of Rs.16,50,000/- ( Sixteen lac fifty thousand rupees only) and interest thereon from dated 17.01.2013 to the date of actual payment at the rate of 9 percent within two months.

(2)            The opposite party no.4 who is a financer, therefore after the payment of outstanding loan first payment out of above amount, the remaining amount shall be granted to the complainant.

(3)            If failed to pay the above amount within two months, it shall be payable at the annual rate of 18%.”

3.         Being aggrieved of the order of the District Forum, the petitioner insurance company preferred an appeal. The State Commission Rajasthan on re-appreciation of evidence did not find fault with the order of the District Forum.  The State Commission accordingly dismissed the complaint.  The petitioner opposite party therefore has come in revision.

4.         Learned Shri Rajat Khattry, Advocate has contended that impugned order of the State Commission is against the facts as well as law.  It is argued that observation of the State Commission that there is no denial on the part of the opposite party that its local manager was intimated about the theft of the insured trailer on mobile phone is against the record.  To prove his point, learned counsel for the petitioner has taken us through the pleadings of the parties and pointed out that State Commission has failed to appreciate that in para 15 of the written statement filed in response to the complaint it was categorically denied that insured had informed Deepak Tiwari, manager of the opposite party without any delay on 15.11.2012.  Instead it was pleaded that intimation of theft was received for the first time, eight days after the theft on 22.11.2015.   Learned counsel for the petitioner has also taken us through the claim form submitted by the complainant to show that even in the Claim Form, the date of giving information to the insurance company is recorded as 22.11.2012  and there is no mention of any telephonic information of theft given on mobile phone to the official of the opposite party.

5.         Learned counsel for the respondent on the contrary has contended that revisional powers of National Commission are derived from Section 21 (b) of the Consumer Protection Act, 1986 and the said powers are restricted only to the cases pertaining to jurisdictional error committed by the Fora below resulting in miscarriage of justice.  It is argued that in the instant case, both the Fora below have returned concurrent finding to the effect that intimation of theft of subject vehicle was given promptly by calling the concerned official of the insurance company on his mobile phone.  Therefore, this Commission has no jurisdiction to reappreicate the facts.  In support of this contention, learned counsel for the complainant has referred to the judgment of the Supreme Court in the matter of Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd. 2011 (3) Scale 654.

6.         We have considered the rival contentions and perused the record. We find merit in the submissions made by learned counsel for the petitioner.  In the matter of Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd. 2011 (supra), while dealing with the extent and scope of revisional powers of National Commission, Hon’ble Supreme Court has observed as under:

“Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said  power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked.  In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora”.

7.         On reading of the above, it cannot be disputed that revisional jurisdiction of the National Commission flows from Section 21 (b) of the Consumer Protection Act, 1986 and it is limited only to the extent of jurisdictional error or some material irregularity resulting in miscarriage of justice.  In the instant case, on perusal of the pleadings i.e. para 18 of the complaint and the response of the opposite party given in para 15 of the written statement, it is clear that opposite party in the written statement has actually denied the allegation that the complainant intimated the insurance company’s official on mobile phone on the date on which he came to know about the theft.  On perusal of copy of the Motor Insurance Claim Form annexure P-3 placed on the paper book, we find that in the coloumn of ‘Information to  Authority’, the date of intimation of theft given to the authority is mentioned as 22.11.2012.  There is no mention in the claim form that any telephonic information on mobile phone was given by the complainant to any official of the insurance company.  Otherwise also, the onus of proving that telephonic information was given by the complainant to the insurance company was on the complainant.  The complainant could easily have discharged this onus atleast by producing the call record of his telephone number to show that on 15.11.2012, a telephonic call on mobile phone was made by the complainant which could have given rise to a presumption that complainant is telling truth.  In view of the discussion above, in absence of any cogent evidence regarding giving of telephonic information by the complainant to the opposite party on 15.11.2012, we are of the opinion that Foras below finding is against the record.

8.         Now the question arises as to whether repudiation of insurance claim on the ground of failure on the part of the complainant to give immediate information of theft to the insurance company is justified?  In view of the discussion above and the details given in the insurance claim form,  it is clear that respondent complainant had not informed the appellant about the alleged theft till he intimated the opposite party on 22.11.2012. Thus, this is a case of failure on the part of the complainant to give immediate intimation of theft.  The effect of delay in intimating the insurance company about the theft of the vehicle was considered by the Hon’ble Supreme Court in the matter of Oriental Insurance Co. Ltd. Vs. Parvesh Chander Chadha in Civil Appeal No. 6739 of 2010 arising out of SLP ( C) No. 12741 of 2010, wherein Hon’ble Supreme Court has observed as under:

“Admittedly, the respondent had not informed the appellant about the alleged theft of the insured vehicle till he sent letter dated 22.05.1995 to the Branch Manager.  In the complaint filed by him, the respondent did not give any explanation for this unusual delay in informing the appellant about the incident which gave rise to cause for claiming compensation.  Before the District Forum, the respondent did not state that he had given copy of the first information report to Rajender Singh Pawar through whom he had insured the car and untraced report prepared by police on 19.09.1995 was given to the said Shri Rajender Singh Pawar, but his explanation was worthless because in terms of the policy, the respondent was required to inform the appellant about the theft of the insured vehicle.  It is difficult, if not impossible, to fathom any reason why the respondent, who is said to have lodged First Information Report on 20.01.1995 about the theft of car did not inform the insurance company about the incident.  In terms of the policy issued by the appellant, the respondent was duty bound to inform it about the theft of the vehicle immediately after the incident.  On account of delayed intimation, the appellant was deprived of its legitimate right to get an inquiry conducted into the alleged theft of vehicle and make an endeavour to recover the same.  Unfortunately, all the consumer foras omitted to consider this grave lapse on the part of the respondent and directed the appellant to settle his claim on non-standard basis.  In our view the appellant cannot be saddled with the liability to pay compensation to the respondent despite the fact that he had not complied with the terms of the policy.”

9.         In view of the aforesaid finding of the Supreme Court, repudiation of the  insurance claim  by the opposite party cannot be faulted. The State Commission has distinguished the above noted judgment of the Supreme Court by observing that aforesaid judgment is not applicable because in that case intimation of theft was given after a delay of about 2 ½ months.  We are not convinced with the aforesaid distinction drawn by the State Commission.  Seven days delay is a huge delay in case of theft of vehicle because during such a long period, the vehicle can be dismantled and sold or it can be taken out of the territorial boundary of the country which would make the recovery of the vehicle impossible.  Thus, in our view, order of the State Commission cannot be sustained. 

10.       Learned counsel for the respondent has drawn our attention to Circular No. IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.20111 and submitted that in view of the instructions issued by IRDA, the insurance company was not justified in repudiating the claim which is otherwise genuine.

11.       In order to appreciate the above contention, it would be useful to  have a look on relevant circular dated 20.09.2011 which reads as under:

“INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Ref. IRDA/HLTH/MISC/CIR/216/09/2011 Dated: 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 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 affecting various post claims 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"

12.       On reading of the above, it is clear that as per the circular, the insurance companies have been instructed not to reject the otherwise genuine claims on technical ground of delay in intimation of theft if the delay is properly explained.  In the instant case, only explanation for delay in giving immediate intimation of theft in writing is that respondent complainant intimated the official of the insurance company about theft by a call on his mobile phone. The aforesaid plea in view of the discussion above has been rejected as not reliable.  Thus, there is no explanation at all for delay of eight days in reporting theft of the subject trailer to the insurance company.  The IRDA circular is of no avail to the respondent.

13.       For the reasons stated herein above, we allow the revision petition, set aside the impugned order and dismiss the complaint.