STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1.  Reliance General Insurance Company Limited, SCO No.145-146, 2nd Floor, Madhya Marg, Sector 9, Chandigarh through Rakesh Sonkar, Manager Legal, power of Attorney holder of Reliance General Insurance Company Limited, SCO No.135-137,  IInd Floor, Sector 9C, Chandigarh.

2.  Reliance General Insurance Company Limited, through Rakesh Sonkar, Manager Legal, power of Attorney holder of Reliance General Insurance Company Limited, SCO No.135-137,  IInd Floor, Sector 9C, Chandigarh.

                                  ……Appellants

Versus

Sh. Baljit Singh son of Sh. Kulwant Singh, aged 41 years,  resident of House no.2511, Sector 70, Mohali.

              ....Respondent

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    JUSTICE SHAM SUNDER (Retd.), PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

Argued by:  Sh. Tajinder K. Joshi, Advocate for the appellants.

Sh. Ajit Singh, Advocate for the respondent.

PER  JUSTICE SHAM SUNDER (Retd.), PRESIDENT

1.               This appeal is directed against the order dated 11.01.2012, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, and directed the Opposite Parties (now appellants), as under:-

“In view of the above findings, this complaint is allowed with the following direction to the OPs: -

(i)       to pay an amount of Rs.1,00,000/-  to the complainant being the Insured Declared value of the vehicle;.

(ii)     to pay a sum of Rs.30,000/- to the complainant as compensation for harassment and mental agony.

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

This order be complied with by the OPs, jointly and severally, within 30 days from the date of receipt of its certified copy, failing which OPs  shall be liable to refund Rs.1,30,000/- i.e. (Rs.1,00,000 + Rs.30,000) to the complainant along with penal interest @18% p.a. from the dates of filing the complaint i.e.09.03.2011 till its realization besides payment of Rs.7,000/- as costs of litigation”.

2.               The facts, in brief, are that the complainant (now respondent), got his car (Maruti 800), bearing Regd. No.PB-65-A-8265 (infact PB-65-A-8264), comprehensively insured from the Opposite Parties, for the period from 01.07.2009 to 30.06.2010, (infact 30.10.2009 to 29.10.2010), vide cover note (annexure A/1). The complainant was also issued a single page policy (Annexure A/2), with its backside completely blank. At the time of getting the car, aforesaid, comprehensively insured, premium of Rs.3,547/- (infact 3517/-), was paid by the complainant. It was stated that the Insured Declared Value of the vehicle was Rs.1 Lac. It was further stated that, unfortunately, on 15.11.2009, the said vehicle was stolen. F.I.R. No.432 dated 16.11.2009 (Annexure A/3) was lodged with the concerned Police Station. The Opposite Parties were also intimated about the theft of car, on their toll free numbers. The complainant also informed the agents of the Opposite Parties namely Mr. Mann and Mr. Varun on their mobile numbers. When nothing was heard, the complainant wrote a letter dated 28.1.2010 (Annexure A/4) to the Opposite Parties, and also submitted untraced report u/s 173 Cr.P.C (Annexure A/5). Thereafter, request letters dated 23.11.2010 (Annexures A/6 & A/7), for disbursement of the claim, were sent to Opposite Party No.1, through registered post, as well as by hand. The claim of the complainant was repudiated by the Opposite Parties, vide letter dated 27.11.2010 (Annexure A/8), on the ground, that there was a delay of 80 days, in intimating about the theft, which was in violation of condition No.1 of the Insurance Policy. It was further stated that the repudiation of claim of the complainant,  by the Opposite Parties was illegal and invalid. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.

3.               In reply, the Opposite Parties, admitted that the Maruti car, aforesaid, belonging to the complainant, was got insured by him, for the period from 30.10.2009 to 29.10.2010, vide policy No.2007792311005349 (Annexure R-1). It was stated that a copy of the Insurance Policy alongwith the terms and conditions, was duly supplied to the complainant. It was further stated that the car of the complainant was stolen on 15.3.2010 (infact 15.11.2009), and intimation regarding its theft was received on 3.2.2010 vide letter dated 28.1.2010 (Annexure R-1A). It was further stated that according to condition number 1 of the terms and conditions of the Insurance Policy, intimation was required to be given immediately, after the theft of the car, but, on the other hand, it was given after 80 days of the incident. It was further stated that, an investigator was appointed by the Opposite Parties, who submitted his report dated 15.3.2010 (Annexure R-3). The Opposite Parties, thereafter, sent reminders dated 18.5.2010, 2.6.2010,14.7.2010, and 27.11.2010 (Annexures R-4 to R-7) to the complainant, regarding the reasons for delay, and for furnishing untraceable report, under Section 173 Cr.P.C. It was further stated that the complainant did not respond to the reminders/letters, but submitted the untraceable report under Section 173 Cr.P.C,  issued by the Court of Sh. Amanpreet Singh, Judicial Magistrate 1^st Class, Mohali. However, the Opposite Parties, repudiated the claim of the complainant, vide letter dated 27.11.2010 (Annexure R-7), on the ground,  that the intimation of theft was given after a delay of about 80 days, which was in violation of Condition No.1 of the insurance policy. It was further stated that there was no deficiency, in rendering service, on the part of the Opposite Parties. The remaining averments, were denied, being wrong.

4.               The Parties led evidence, in support of their case.

5.               After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening paragraph of the instant order.

6.               Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.

7.               We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case, carefully. 

8.               The Counsel for the appellants,  submitted that the Insurance Policy, alongwith the terms and conditions thereof, was sent to the complainant, immediately, after the vehicle was got insured by him, from them. It was denied that the complainant was issued only single page policy. It was further submitted that the complainant was sent letters/reminders Annexures R-2 dated 03.02.2010, R-3 dated 15.03.2010, R-4 dated 18.5.2010, R-5 dated 2.6.2010 and R-6 dated 14.7.2010, but he did not send reply to the same. It was further submitted that had the Policy document, alongwith the terms and conditions been not supplied to the complainant, he would have certainly replied to these letters, stating therein that he was never supplied the same, and, as such, he never violated condition no. 1 thereof. He further submitted that since intimation was given by the complainant, regarding the theft of his car, vide letter Annexure R-1/A dated 28.01.2010 i.e. after about 80 days of the incident, there was violation of condition no.1 of the terms and condition of the Insurance Policy Annexure R-1, as a result whereof,  the Opposite Parties were deprived of getting the matter investigated, in a proper manner. He further submitted that since there was a clear-cut breach of condition number 1 of the terms and conditions of the policy, the repudiation of the claim of the complainant was legal and valid. It was further submitted that there was no deficiency,  in rendering service, on the part of the appellants/Opposite Parties, and, as such, the District Forum, fell into a grave error, in accepting the complaint. He further submitted that the order of the District Forum, being illegal and invalid, is liable to be set aside.

9.               On the other hand, the Counsel for the respondent, submitted that at the time of getting his car insured, he was only supplied Annexure A/1, copy of the cover note alongwith Annexure A-2, single page of the policy, the reverse whereof was blank. He further submitted that the complainant was not supplied the complete policy document, alongwith the terms and conditions, at any point of time, by the Opposite Parties.  He further submitted that, under these circumstances, he(complainant) did not know, as to what was condition no.1 of the terms and conditions of the policy, violation whereof,  on his part, was alleged by the Opposite Parties. He further submitted that the documents Annexure R-2 to R-7, were not sent at the correct address of the complainant, as in none of these letters,  Sector number or the phase number,  in which his house is situated, was written. He further submitted that even the complainant did not receive these letters, but the same were fabricated by the Opposite Parties, later on, with a view to support their act of repudiation. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.

10.            The first question, that arises for consideration, is, as to whether, the Policy document, alongwith the terms and conditions thereof, was supplied to the complainant, and, if so, on which date. It was the definite case of the complainant, that he was only supplied the cover note Annexure A-1 and one page of the Policy document Annexure A-2, the reverse whereof was blank. No doubt, in the written reply, it was in clear-cut terms stated by the Opposite Parties, that they supplied the Policy document alongwith the terms and conditions thereof, to the complainant. In case, the same had been supplied to the complainant, by the Opposite Parties, they could furnish the documentary evidence, with regard to the same. They, however, failed to furnish any documentary proof, with regard to supply of the Insurance Policy and terms and conditions of the same, to the complainant, at any point of time, after he got insured his vehicle from them.  In the absence of production of any receipt showing, as to on which date,  the policy and  the terms and conditions were delivered to the complainant, the version set up by the complainant, that he never received the same, duly supported by his affidavit can be said to be correct. It is, thus, held that the Policy alongwith the terms and conditions, was not supplied to the complainant, at any point of time. This, in itself amounts to deficiency, in rendering service, on the part of the Opposite Parties.

11.            Reliance was placed by the Counsel for the Opposite Parties on Annexures R-2 to R-7, the letters stated to have been written to the complainant, on various dates. In none of these letters, either number of the Sector, or Phase number, in which the house of the complainant is situated, was written. All these letters were addressed to “Mr. Baljit Singh, H.No.2522, Mohali Punjab”. Mohali  is a Revenue District and is thickly populated. There may be house number 2511, in every sector/phase in Mohali. In the absence of writing the number of the Sector, or phase number, in which the house of the complainant, is situated, these letters could not reach him, if at all sent to him. Since, these letters were not addressed to the complainant, at his correct address, the submission of the Counsel for the complainant, to the effect,  that the same were never received by him, is proved to be correct. Since these letters were never proved to been received by the complainant, the question of responding to the same by him, did not at all arise. No help, therefore, can be drawn by the appellants, from these letters.

12.            The next question, that arises for consideration, is, as to what was the duty of the Insurance Company, after receipt of the amount of premium. In our considered opinion, it was the bounden duty of the Insurance Company to supply the Policy, alongwith the terms and conditions thereof, to the complainant, as also make him understand of the main features thereof. The Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests) Regulations,2002, framed by the  Insurance Regulatory and Development Authority (IRDA) in exercise of  the powers, vested in it,  under Section 114(A) of the Insurance Act,1938, read with Sections 14 and 26 of the Insurance Regulatory and  Development Authority Act,1999, came into effect from the year 2002. Therefore, the policies which were issued after 2002, were covered under the said Regulations. The Insurance Companies are bound by the aforesaid Regulations, which are mandatory, in nature. These Regulations were framed by IRDA to protect the interests of the policyholders. Regulation 3 is  required to be followed by  the Insurance Companies, so that the terms of the Insurance Policy do not operate harshly, against the insured, and in favour of the insurer. Regulation 3 reads as  under ;

“3. Point of sale—(1) Notwithstanding anything mentioned in Regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties; exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with profits) or non-participating (without profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and, in no case, the premium relatable to health related or critical illness riders in the case of term or group products shall exceed 100% of premium under the basic product. All other riders put together shall be subject to a ceiling of 30 per cent of the premium of the basic product. Any benefit arising under each of the rider shall not exceed the sum assured under the basic product.

Provided that the benefit amount under riders shall be subject to Section 2(11) of the Insurance Act, 1938.

Explanation -—the rider or riders attached to a life policy shall bear the nature and character of the main policy, viz. participating or non-participating and accordingly the life insurer shall make provisions, etc., in its books.

(2) An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest.

(3) Where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately.

(4) Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the end of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract.

(5) In the process of sale, the insurer or its agent or any intermediary shall act according to the code of conduct prescribed by—

(i)        the Authority;

(ii)      The Councils that have been established under Section 64C of the Act; and

(iii)   The recognized professional body or association of which the agent or intermediary or insurance intermediary is a member”.

13.  The aforesaid Regulation makes it clear that—

(i)   the prospectus of insurance product is required to clearly state the scope of benefits, the extent of insurance cover and in explicit manner explain the warranties, exceptions and conditions of the insurance cover. The phraseology used is “mandatory” by providing that it shall be stated clearly;

(ii)    Sub-Regulation (2) provides that an insurer or its agent or other intermediary shall provide all material information in respect of the proposed cover to the insured;

(iii)     Sub-Regulation 4 also provides that if the proposal and other        connected papers are not filled by the prospect, a certificate is required to be incorporated at the end of the Proposal Form from the prospect that the contents of the form and documents have been fully explained to him.

14.         Regulation 3, which has been  extracted above, clearly reveals that it is the duty of the insurer to supply the entire information by issuance of prospectus of any insurance product, stating therein, the scope of benefits, the extent of insurance cover, in an explicit manner, explaining  the warranties, exceptions and conditions of the insurance cover. Not only this, in M/s Modern Insulators Ltd. Vs Oriental Insurance Co. Ltd.I(2000)CPJ1(SC),  the principle of law, laid down, was to the effect, that it is the fundamental principle of Insurance law, that utmost good faith, must be observed by the contracting parties, and good faith forbids either party, from non-disclosure of the facts, which the parties knew. The insured has a duty to disclose all the facts, and similarly it was the duty of the Insurance Company, and its agents, to disclose all the material facts, in their knowledge, as obligation of good faith applies to both equally. It was, thus, the duty of the Insurance Company to disclose all the facts and circumstances, relating to the insurance cover, to the complainant. It was also required of it, to apprise the complainant of the benefits of insurance, exclusion clauses, contained therein, and the warranties referred to, in the same. It was, under these circumstances, the utmost duty of the insurer to supply the insurance Policy and the terms and conditions thereof, to the insured, so as to enable him to go through the same and understand the clauses contained therein. Not only this, it was also the duty of the Insurance Agent or Insurance Advisor to explain the terms and conditions of the Insurance Policy, including the exclusion clauses, contained therein. However, in the instant case, the Opposite Parties, as stated above, failed to prove that the Insurance Policy and the terms and conditions thereof  were supplied to the complainant. In  United India Insurance Co. Ltd. & Anr. Vs S.M.S. Tele Communications & Anr.III(2009)CPJ 246(NC), it was observed that being aware of the existence of the policy, is one thing, and being aware of the contents and meaning of the clauses of the policy, is another. The principle of law, laid down, in the aforesaid cases, is fully applicable to the  facts of the instant case.

15.         Since, it has been held above, that the policy document alongwith the terms and conditions thereof, was not supplied to the complainant, at any point to time, he could not know, as to what is condition number 1, contained therein. No doubt, condition no. 1, under the heading “Conditions” of the Insurance Policy Annexure R-1 placed on the District Forum record by the Opposite Parties, reads  as under:-

“Notice shall be given in writing to the Company immediately upon the occurrence of any accidental loss or damage in the event of any claim and thereafter the insured shall give all such information and assistance as the Company shall require. Every letter, claim, writ, summons and/or process or copy thereof shall be forwarded to the Company immediately on receipt by the insured. Notice shall also be given in writing to the Company immediately the insured shall have knowledge of any impending prosecution or fatal inquiry in respect of any occurrence which may give rise to a claim under this Policy. In case of theft or criminal act which may be the subject of a claim under this Policy the insured shall give  immediate notice to the police and co-operate with the Company in securing the conviction of the offender.

16.         According to condition no. 1 extracted above, the complainant was required to intimate, in writing, to the insurance company, immediately, upon the occurrence of any accidental loss or damage,  in the event of any claim. In New India Assurance Company Limited Vs. Tirlochan Jane, First Appeal No.321 of 2005, decided by the National Consumer Disputes Redressal Commission, New Delhi on 09.12.2009, it was held as under:-

“In the case of theft where no bodily injury has been caused to the insured, it is incumbent upon the respondent to inform the Police about the theft immediately, say within 24 hours, otherwise, valuable time would be lost in tracing the vehicle. Similarly, the insurer should also be informed within a day or two so that the insurer can verify as to whether any theft had taken place and also to take immediate steps to get the vehicle traced. The insurer can coordinate and cooperate with the Police to trace the car. Delay in reporting to the insurer about the theft of the car for 9 days, would be a violation of condition of the Policy as it deprives the insures of a valuable right to investigate as to the commission of the theft and to trace/help in tracing the vehicle.”

There is no dispute, with the principle of law, laid down,  in the aforesaid case. However, as stated above, in the instant case, the Policy alongwith the terms and conditions thereof was not supplied to the complainant, at any point of time, as held above. In the absence of supply of the Policy alongwith the terms and conditions, thereof, the complainant could not come to know of condition number 1, referred to above.  In these circumstances, the mere fact that he intimated the Opposite Parties, after 80 days, of the Commission of theft of the vehicle, could not be said to be sufficient to repudiate his claim. In the absence of supply of Policy alongwith the terms and conditions thereof, condition number 1 of the same, was not applicable to him(complainant). No help, therefore, can be drawn by the Counsel for the appellants/Opposite Parties, from condition number 1, in view of the peculiar facts and circumstances of the case, referred to above. The submission of the Counsel for the appellants, in this regard, being without merit, must fail, and the same stands rejected.

17.         No other point, was urged, by the Counsel for the parties.

18.         The order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

19.         For the reasons recorded above, the appeal, being devoid of merit, is dismissed, with no order as to costs. The order of the District Forum is upheld.

20.         Certified Copies of this order be sent to the parties, free of charge.

21.         The file be consigned to Record Room, after completion

Pronounced.

July 18, 2012

Sd/-

[JUSTICE SHAM SUNDER (Retd.)]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Rg