Haryana

StateCommission

A/595/2015

NATIONAL INSURANCE CO.LTD. - Complainant(s)

Versus

SANJEEV DESWAL - Opp.Party(s)

NITIN GUPTA

24 Sep 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :        595 of 2015

Date of Institution:        15.07.2015

Date of Decision :         24.09.2015 

 

National Insurance Company Limited, through its Branch Manager, Bahadurgarh, District Jhajjar, now represented through the duly authorized signatory of Regional Office-II, National Insurance Company Limited, SCO No.337-340, Sector 35-B, Chandigarh.

 

                                      Appellant-Opposite Party

Versus

 

Sanjeev Deswal s/o Sh. Rajeshwar Deswal, Resident of House No.1763, Sector-1, Rohtak (Haryana).

                                      Respondent-Complainant

 

CORAM:             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Present:               Shri Nitin Gupta, Advocate for appellant.

                             Shri Amardeep Hooda, Advocate for respondent.  

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

National Insurance Company Limited (for short ‘the Insurance Company’)-Opposite Party, is in appeal against the order dated May 27^th, 2015, passed by District Consumer Disputes Redressal Forum (for short ‘District Forum’), Jhajjar, in Complaint No.197 of 2011.

2.      Sanjeev Deswal-Complainant-respondent, got his truck bearing registration No.HR-46F-0246, insured with the Insurance Company, from June 22^nd, 2007 to June 21^st, 2008, vide Insurance Policy (Exhibit C-1) for a sum of Rs.13.00 lacs. During the intervening night of January 26^th/27^th, 2008, the truck was stolen from the area of ‘Ranbir Brick Kiln” located within the jurisdiction of Police Station, Sadar Bahadurgarh, District Jhajjar. On being informed, the Police of Police Station Sadar Bahadurgarh, registered FIR No.25 (Exhibit C-2) on February 1^st, 2008. Intimation to the Insurance Company was also given. The Police submitted untraced report and the same was accepted by Judicial Magistrate Ist Class, Bahadurgarh, vide order dated August 8^th, 2008 (Exhibit C-4). The complainant filed claim with the Insurance Company but the same was repudiated vide letter (Exhibit C-3), stating therein as under:-

“ 1.         Your letter dated 10.06.2010 for reopening the said claim states that you could not complete the requirements of the Company and did not cooperate with the surveyor/investigator for more than 2 years from the date of theft i.e. 26/27-01-2008.

2.           We again sought the valid reason for non-cooperation and delay in completing formalities which was replied vide your letter dated 03-09-2010 that due to multiple limb fracture and spinal problem you remained indisposed from June 2008 to Dec.2009 but you could not substantiate the same with any medical records except 3 X-ray films while replying to Shri R.N. Sharma, Investigator vide letter dated 17-12-2010 and admitted that you did not maintain any medical records. Thus your contention of remaining indisposed for your 2 years cannot be accepted.

3.           You failed to supply the name and address of the ‘Munshi” who was caretaker at the place where the said truck was parked and got stolen in the statement given to our investigator Shri R.N. Sharma.

4.           You failed to provide the loan statement from M/s Kotak Mohindra, the financier of the said vehicle and admitted that you have not cleared the outstanding loan.

5.           Your vehicle was stolen in the intervening night of 26/27-01-2008 but you reported the matter to the police authorities on 01-02-2008 i.e. after the lapse of 5 days which is a breach of policy term and condition of giving immediate notice to the Company and to the police and cooperate with the Company in securing the conviction of the offender.

6.           You have stated in statement dated 08-03-2010 to investigator M/s Royal Associates that your driver Shri Ajmer parked the said vehicle on dated 21-01-2008 and left for some work for few days, thus your said vehicle remained unattended from 21-01-2008 to 26/27-01-2008 which is violation of Policy terms and conditions as to take all reasonable step to safeguard the vehicle from loss.

In view of the above facts you have violated the Policy condition of “Due observation and fulfillment of the terms, conditions and endorsement of this Policy in so far as they relate to anything to be done or complied with by the insured and shall be precedent to any liability of the Company to make any payment under the Policy.”

 

3.      Aggrieved of the repudiation of his claim, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.

4.      The Insurance Company contested the complaint by filing reply reiterating the facts stated in the repudiation letter (Exhibit C-3) and prayed for dismissal of the complaint. 

5.      On appraisal of the pleadings of the parties and the evidence brought on the record, the District Forum vide impugned order accepted complaint and issued direction to the Insurance Company-Opposite Party as under:-

“…….we allow the complaint of complainant and direct the respondent to make the payment of claim/insured declared value of Rs.13,00,000/- to the complainant along with an interest @ 9% p.a. from the date of theft i.e. 26.01.2008 till realization of final payment to the complainant subject to transfer of R.C. and subrogation letter in the name of respondent company by the complainant. The complainant is also entitled for a sum of Rs.2,000/- on account of litigation expenses for the present unwanted and unwarranted litigation only due to the deficiency in service on the part of the respondent. The complaint stands disposed of accordingly.”

6.      The question for consideration before this Commission is as to whether the Insurance Company was justified in repudiating complainant’s claim or not?

7.      In appeal before this Commission, the impugned order has been assailed on two grounds. Firstly, that the driver had left the truck unattended and without exercising due care and caution at an isolated place for so many days due to which the truck was stolen. Secondly, that F.I.R. was lodged with the Police after five days and information to the Insurance Company was given after about nine days from the date of theft. On these two grounds, learned counsel for the appellant-Insurance Company urged that the complainant was not entitled for the benefits of insurance.

8.      The contention raised on behalf of the appellant-Insurance Company is not tenable. So far as the plea that the truck was left un-attended, admittedly the truck was parked at the brick kiln where it was under the care and custody of a ‘Munshi’. Besides that, labour of the brick kiln was also residing in a tent at that place. The reports of surveyor Exhibit R-6 and R-7 in this regard reads as under:-

Exhibit R-6

                   “2.     VISIT TO SITE OF THEFT:

 We visited alleged site of theft i.e. Landravan, Bahdurgarh. Although people informed us that there were some tent of labourers where Insured had parked his vehicle before the theft but Insured did not introduce to any labourers.”

Exhibit R-7

“3.     This truck was stolen from the Bhatha (Brick Kiln) from Landrawan to Kidauli Road. A Munshi was posted whose name I do not remember who use to look after the place. Driver was Ajmer Singh on the stolen vehicle had gone to interview for Haryana Roadways Job. The police had inspected the site and beside this truck no other truck of mine was present there.”

9.      In view of the above said report, it cannot be said that the truck was left un-attended, rather, it was under the care of a ‘Munshi’ employed at a Brick-Kiln.  Therefore, the contention raised in this regard is repelled.

10.    So, far as the plea that there was delay of five days in lodging the F.I.R. and nine days in giving intimation to the Insurance Company, the same is also not tenable. 

11.    In Dwarika Projects Ltd vs. The Oriental Insurance Company Ltd. CP(C)3547/2014, decided on 08.05.2015, Hon’ble High Court at New Delhi, while relying upon the decision of Hon’ble Supreme Court and National Commission, held as under:-

“14.5                    In my view it could not have done so in view of the fact that the claim was genuine as is borne out by its own surveyor's report, and therefore, repudiation on this ground, was contrary to the IRDA's circular dated 20.09.2011. The fact that the respondent has accepted the correctness of the surveyor's assessment of loss is borne out by following assertions made by the respondent in paragraphs 2, 8 and 19(J) of the counter affidavit. For the sake of convenience, the said averments are extracted hereinafter:-

"...2. That the report of the surveyor is a creation under Section 64 UM of the Insurance Act and until and unless it is proved in evidence that the conclusions arrived at by the surveyor in assessing the loss are biased, arbitrary, based on non-application of mind, against records and based on imagination and wrong appreciation of facts by the surveyor, the same cannot be set aside. Therefore, the evidence has to be produced and proved on record by the petitioner to establish that the survey report is wrong and is liable to be set aside..."

"..8. ...It is submitted that the assessment of loss by the surveyor is correct.."

"....19(J). That the contents of Ground J of the petition are wrong as stated and are denied. The assessment of loss by the surveyor is correct..."

14.6. IRDA's circular dated 20.09.2011 clearly says that genuine claims cannot be rejected on account of delay in intimation, and that, the insurer's decision to reject a claim must be based on "sound logic" and "valid grounds". In fact, IRDA has advised the insurers to incorporate additional provisions in the policy documents, which would enable them to condone delay on merits where, it is proved that the delay was beyond the control of the insured. The relevant part of the circular is extracted hereafter:-

"...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.."

14.7 In the present case, given the fact that the floods caused the damage to the subject works, which disrupted the working at the subject site, in my view, in terms of the circular, gave enough reason to condone the delay. The respondent ought to have examined the tenability of the claim on merits. The reliance by the respondents counsel on the judgment of the Commission in the case of HDFC Egro General Insurance Co. Ltd., in my opinion, is misplaced as, firstly, it dealt with a loss caused on account of theft of a vehicle, and secondly, did not take into account the IRDA's circular dated 20.09.2011. The judgment of the Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Parvesh Chander Chadha, had also been pronounced in the context of a theft case and more importantly, prior to the issuance of the IRDA's circular dated 20.09.2011.

14.8 On the other hand, the judgment of the commission in National Insurance Company Ltd. Vs. B. Venkataswamy took into account the aforementioned circular of IRDA, and gave relief even in a theft case, (as the circular makes no distinction as to the nature of the policy) on the ground that it could not reject claims, on technical grounds, like delay in intimation, as long as, the claims were genuine.

14.9 In another judgment dated 18.07.2014, passed in Revision Petition No.2719/2014, titled: National Insurance Co. Ltd. Vs. Kulwant Singh, the Commission has applied the circular and given relief to the insured. In this case, the judgment of the Supreme Court in Parvesh Chander Chadha's case was cited and distinguished.

15.    In this context, I am reminded of the observations of the Supreme Court in Madras Port Trust Vs. Hymanshu International, (1979) 4 SCC 176 whereby, it deprecated the practice often adopted by governmental and public authorities, of denying just claims of citizens on technical pleas, even though the claim lodged with them was otherwise well founded. In this case, the appellant before the Supreme Court took the defence of limitation under Section 110 of the Madras Port Trust Act. The relevant observations are extracted hereinbelow:

"......2. We do not think that this is a fit case where we should proceed to determine whether the claim of the respondent was barred by Section 110 of the Madras Port Trust Act (II of 1905). The plea of limitation based on this Section is one which the court always looks upon with disfavour and it is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the citizen. It is high time that governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens. Of course, if a government or a public authority takes up a technical plea, the Court has to decide it and if the plea is well founded, it has to be upheld by the court, but what we feel is that such a plea should not ordinarily be taken up by a government or a public authority, unless of course the claim is not well-founded and by reason of delay in filing it, the evidence for the purpose of resisting such a claim has become unavailable. Here, it is obvious that the claim of the appellant was a just claim supported as it was by the recommendation of the Assistant Collector of Customs and hence in the exercise of our discretion under Article 136 of the Constitution, we do not see any reason why we should proceed to hear this appeal and adjudicate upon the plea of the appellant based on Section 110 of the Madras Port Trust Act (II of 1905)...."

15.1 While I am conscious of the fact that the observations of the Supreme Court were made in the context of power exercised by it under Article 136 of the Constitution, the aforesaid observations are clearly applicable in the instant case as, it is not the stand of the respondent that, IRDA's circular, is not binding upon it. [See K.P. Varghese vs. Income Tax Officer (1981) 4 SCC 173]. IRDA's circular in fact reflects the view of the court expressed 35 years ago. The stand taken is that the circular is being misread. To my mind, the said circular can be read only, in the manner, as indicated hereinabove.

16.    Having regard to the above, in my view, the petitioner's prayer for setting aside the communication dated 30.09.2013 has to be accepted. Accordingly, communication dated 30.09.2013 issued by the respondent is quashed and set aside”.

12.    In the case in hand the FIR (Exhibit C-2), Untraced Report (Exhibit C-4), statements of witnesses recorded by Police and Investigation Report (Exhibit C-5 to C-10) and the Reports of Surveyor Exhibit R-6 and R-7, are the best piece of evidence to prove the theft of the truck. Therefore, complainant’s claim cannot be rejected merely on technical grounds.

13.    In this view of the above, the order passed by the District Forum requires no interference. Hence, the appeal is dismissed.

14.    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: 24.09.2015

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

CL