DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Complaint Case No.: 604 OF 2010

Date  of  Institution  :   17.09.2010

Date   of   Decision  :   05.08.2011

Col. (Retd.) Gurdip Singh S/o Late S.Sadhu Singh, R/o 1528, Sector 11-D, Chandigarh – 160011, Aged about 86 years (Senior Citizen)

                                                                                    ---Complainant.

V E R S U S

1]          United India Insurance Co. Ltd., through its Senior Divisional Manager, SCO 183-185, Sector 17-C, Chandigarh.

2]          United India Insurance Co. Ltd., through its Chief Regional Manager, SCO 123-124, Sector 17-B, Chandigarh.

3]          United India Insurance Co. Ltd., through its Chairman-cum-Managing Director, 24, Whites Road, Chennai

---Opposite Parties

BEFORE:            SHRI LAKSHMAN SHARMA                    PRESIDENT

                        SMT. MADHU MUTNEJA                   MEMBER

                        SH.JASWINDER SINGH SIDHU            MEMBER

Argued By:            Sh.R.M.Dutta, Advocate for the complainant.

Sh.Amanpreet Singh, Advocate for the OPs.

PER MADHU MUTNEJA, MEMBER

1]             The instant complaint has been filed for non-payment of the complete IDV amount of the insured vehicle by the OPs to the complainant.

                The complainant had purchased a new Hyundai Car I-10 for Rs.3,50,000/-.  The vehicle was duly insured with the OPs.  The said car was stolen on 30.10.2008 from Boganvilla Garden Parking, Sector 3, Chandigarh.  The complainant lodged an F.I.R. with the Police Station Sector 3, Chandigarh on the same day and also telephonically informed the OPs.  An Investigator was appointed by the OPs.  After complete investigation and submission of all relevant documents by the complainant, the complainant was very surprised when the OPs offered to settle the claim on sub-standard basis with 75% of the IDV, stating that the vehicle did not possess a permanent registration number.

                The complainant then approached the Senior Authorities of the OPs requesting for payment of  the complete IDV.  Meanwhile, he also contacted the Registration Authority where he was told that the car could be registered even beyond the period of 3 months of temporary registration.

                The complainant then submitted a letter of subrogation and power of attorney to the OPs as he was given to understand that full IDV would be paid to him.  However, when he went to collect the cheque, he was surprised to receive Rs.2,62,000/-. When the complainant protested, he was told that if he would not accept this amount, the claim would be disallowed.  After accepting the amount, the complainant has filed the instant complaint with the prayer that the OPs be directed to pay balance amount along with legal expenses and compensation.

2]             After admission of the complaint, notices were sent to the parties. 

                The OPs in their reply have taken the preliminary objection that the complaint is not maintainable as the car of the complainant was not permanently registered on the date of theft.  As non-registration is a violation of Section 39 & 41 of the Motor Vehicles Act, the claim was not payable as per terms & conditions of the policy.  The OPs have also taken certain preliminary objections regarding the benefit of no-claim bonus, which had been taken by the complainant for his old vehicle before the policy was transferred to his new vehicle. 

                On merits, the OPs have reiterated the above submissions and thus prayed for dismissal of the complaint.

3]             Parties led evidence in support of their contentions.

4]             We have heard the ld.Counsel for the parties and have perused the record.

5]             The basic dispute is regarding non-payment of 25% of the IDV of the stolen vehicle, which was duly insured with the OPs.  The OPs after receipt of claim from the complainant paid him 75% of IDV on non-standard basis.  They have relied on a judgment of Hon’ble National Commission, New Delhi, cited below, to prove their stand.

New India Assurance Company Limited Vs. Narayan Prasad Appaprasad Pathak, (2006) CPJ 144 (NC) wherein the Hon’ble National Commission set out the guidelines issued by the insurance company about settling all such non-standard claims. One of such guidelines is as under:-

iii)       Any other breach of warranty/ condition of policy including limitations to use. : Pay upto 75% of admissible claim.

                Relying on the above judgment, the OPs have prayed for dismissal of the complaint as they have already paid 75% of the IDV to the complainant.

                The Surveyor Report, if any, has not been placed on record by either of the parties to show the assessment of claim. 

6]             The complainant has placed on record the following judgments in support of his case:-

i)      National Insurance Company Vs. Pawan Kumar, 2004(2) CPC 243, Hon’ble State Commission, Uttaranchal, Dehradun, wherein it has been held:-

“Consumer Protection Act, 1986 – Section 15, Insurance – Registration of Car – The car was temporarily registered – Registration had expired when car was stolen – Claim was repudiated on the ground that it had no registration at the time of theft – Registration or non registration is not relevant for grant of claim – Had registration of car been necessary Insurance Company should not have issued the policy for an unregistered car – Order of District Forum accepting claim of Rs.2,42,000/- with Rs.1,000/- as costs upheld.”

ii)       New India Assurance Co. Ltd. and Anr. Vs. Ajay Kumar, 2001(1) CPC 70 (Hon’ble State Commission, Punjab),:-

“Consumer Protection Act, 1986 – Section 14 and 2 – Insurance claim – Car theft – Final settlement of claim – Complainant’s insured vehicle was stolen within period of insurance policy – District Forum accepted claim of Rs.3,60,000/- with 12% p.a. interest and cost – Claim challenged within averments that  complainant had finally accepted the claim at Rs.3,27,500/- - The contention could not be proved by cogent evidence – The plea of depreciation of price to be charged from complainant found not tenable as depreciation value was nil – Order of District Forum not open to challenge – Plea of final settlement of claim not accepted – Appeal dismissed.” 

                Hence, relying on the above judgments, the complainant has demanded payment of the balance IDV of the vehicle. 

7]             As per Motor Vehicles Act, if the owners applies for registration beyond the prescribed period, the delay may be condoned by paying the requisite fine to the Registering Authority.  There is no provision in the Motor Vehicles Act for denial of registration beyond the prescribed period.

8]             When the cover note was issued at the time of sale of the vehicle, the registration was temporary. The OPs have not shown any clause in the cover note that the insurance policy would come into effect only after permanent registration of the vehicle. 

9]             Again there is no clause in the insurance policy to state that insurance would stand automatically cancelled if the registration of the new vehicle was not done within the stipulated period/time of three months as provided under The Motor Vehicles Act. 

                Hence on the date of theft, the insurance policy was well in force.  The plea of the OPs that the complainant is not entitled to the full claim is thus not justified.  The non-settlement of claim on full IDV clearly amounts to deficiency in service on the part of OPs.  The balance 25% is thus in our opinion payable.

10]            In view of the above observations, this complaint is allowed.  The OPs are directed to jointly & severally pay the following amounts to the complainant:-

i)         Rs.88,000/- being the balance IDV of the vehicle.

ii)        Rs.10,000/- as compensation for the harassment caused to the complainant.

iii)    Rs.7,000/- to the complainant as costs of litigation.

                This order be complied with by OPs within 30 days from the date of receipt of its certified copy, failing which OPs shall jointly & severally be liable to pay Rs.98,000/- along with interest @12% per annum from the date of this order till the date of actual payment to the complainant besides payment of Rs.7,000/- as costs of litigation.

                Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

05.08.2011

                                                           (LAKSHMAN SHARMA)

PRESIDENT

(MADHU MUTNEJA)

MEMBER 

(JASWINDER SINGH SIDHU)

MEMBER

Om/-