Before the District Consumer Dispute Redressal Commission [Central District] - VIII,      5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi

                                      Complaint Case No. 119/16.12.2020

Mrs. Baby w/o Sh. Gautam

R/o 183, Jakhira Huts and Rukhi Market, Rama Road,

New Delhi-110015                                                                                      …Complainant

                                                Versus

Shriram General Insurance Company

1001, LGF, Naiwala, Arya Samaj Road, Karol Bagh,

New Delhi-110005                                                                                       ...Opposite Party

                                                                                    Date of filing:            16.12.2024

Coram:                                                                       Date of Order:            05.06.2024

Ms. Rashmi Bansal, Member -Female

Shri Inder Jeet Singh, President

                                                       ORDER

Rashmi Bansal- Member

By the present order, the Commission is disposing of complaint of the complainant alleging deficiency of service in repudiating her insurance claim without reasonable cause which caused her mental harassment and agony apart from loss of her legitimate claim.

1. Complainant case:
   1. It is the case of the complainant that she got her vehicle, a commercial truck, bearing registration number HR – 73–1576(briefly vehicle)insured from the OP and was issued a single page policy bearing number 101026/31/19/000051 by OP but without any terms and conditions for a sum insured of Rs.9,00,000/- for period from 05.04.2018 to 04.04.2019. The vehicle was a registered commercial vehicle and was being used for the said purpose only. Complainant submits that the said vehicle was given on hire and lease for 12 months from 25.04.2018, for a sum of Rs.50,000/- per month to Shri Raj Kumar and an agreement was also executed between the complainant and the said Shri Raj Kumar.
   2. Complainant pleads that the said lease amount was paid by Shri Raj Kumar for sometime and thereafter it was stopped and accordingly complainant has requested him for return of the vehicle  Shri Raj Kumar has taken the vehicle to Bihar driven by Shri Ranjit Kumar. When the brother-in-law of the complainant went to take the possession of the vehicle, it was not found there but missing from the place, where it was parked by the driver. As such, a complaint was lodged by the brother-in-law of the complainant with the police stating that Shri Raj Kumar in collusion with the driver had stolen the vehicle and had misappropriated the money. Accordingly, an FIR u/s 406/420/379 IPC was registered and challan was filed by the police. After investigation, police has arrested the accused but vehicle could not be recovered and at later stage the police had also released the accused person. The complainant notified the OP and has filed claim for the loss of vehicle and provided all the documents as sought by the OP through letter dated 10.05.2019, but despite being in receipt of all the documents, OP did not settle the claim of the complainant and finally vide letter dated 07.10.2019,has repudiated the claim of the complainant on the ground that FIR registered by the police, against Shri Raj Kumar and his driver Shri Ranjit Kumar was u/s 406/420/379 IPC, which represents a breach of trust, cheating and dishonestly inducing of delivery of property. The repudiation letter further reads that actually the vehicle was not stolen but Shri Raj Kumar and his driver Shri Ranjit Kumar either dismantled or sold the vehicle and this being a case of criminal breach of trust, is not covered under the policy terms and conditions; therefore, in view of the above facts, it is established that the vehicle has not been stolen and her claim was repudiated as no claim.
   3. Complainant further pleads that OP has wrongly repudiated her claim as firstly no terms and conditions were provided by the OP except a single page policy and secondly, the breach, which was committed by Shri Raj Kumar, has no relevance as the FIR was registered u/s 379 IPC, which fact was totally overlooked by the OP while repudiating the claim. The vehicle has also not been recovered from the possession of Shri Raj Kumar or Shri Ranjit Kumar. Complainant submits that the vehicle has been taken away without her consent and permission, therefore, the claim is payable under the policy.  The complainant prays for the claim amount of Rs.9,00,000/- being sum assured alongwith interest at the rate of 18% p.a., damages and compensation of Rs.1,00,000/-for her sufferings of mental harassment, agony and litigation cost. Complainant in her pleadings has relied upon decisions in Oriental insurance company Ltd and another vs. Rohit Kumar Gupta and others[1994 (1) consumers Law today 651]; Deepak Agency vs. Oriental insurance Co Ltd [III(1995) CPJ 38]; S. Bhagat Singh vs.  Oriental Insurance Co Ltd[II (1991) CPJ 700]and New India Assurance Co. Ltd. Vs. Neerja Singh, [RP 2164/2018].
   4. In support of her case, the complainant has filed, the copy of the policy, copy of agreement, copy of police record, copy of RC, permit, fitness and permit and the copy of the repudiation letter dated 07.10.2019

2. OP case:
   1. OP filed its written statement admitting the policy in question for the period from 05.04.2018 to 04.04.2019 on comprehensive basis for total IDV of Rs. 9,00,000/- subject to terms and conditions of the policy. The said vehicle was handed over to one Shri Raj Kumar on a lease contract basis for 12 months on 25.04.2018 and the same was in custody and control of the lessee Shri Raj Kumar but failed to pay the agreed lease amount to the complainant because of which brother of the complainant approached them for the money and to take back the possession of the vehicle from them. The said vehicle has been taken to Bihar, driven by Shri Rajiv Kumar. They informed the complainant that vehicle was parked at some place and that she can take that from that place but the brother of the complainant did not find the same on 22.08.2018 and then filed a police complaint accusing Raj Kumar and Ranjit Kumar for misappropriation of the vehicle alleging that the vehicle is stolen under conspiracy and was sold by them;  an FIR dated 22.08.2018 was registered u/ss 406/420/379 IPC; whereas the actual date of loss is not confirmed by the complainant and thereafter, OP was informed regarding theft of the insured vehicle vide intimation sheet dated 03.09.2018 and on the basis of that information, OP registered the claim of the complainant and appointed an independent investigator for investigating the incidence and collecting necessary documents for processing the claim of the complainant. After due enquiry, the investigator has submitted its report dated 11.11.2018. The charge-sheet was also filed by the police before the court of JMFC, Lakhisarai, Bihar.
   2. OP pleads that the vehicle was on bailment under custody and control of Shri Raj Kumar/lessee, whereas no premium was paid for running the vehicle under lease as it would have increased the risk of losses and no endorsement was made for running the vehicle on such a highly amount/fees of Rs. 50,000/ pm , whereas the value of vehicle is only Rs.9 lakh, which implies that the entire cost of the insured vehicle (truck) would be recovered within one and half year, which was a trap in which complainant got trapped. The OP cannot be made a scapegoat and cannot be made liable for any such kind of fraud. Further, the insured vehicle was used for the commercial purpose and was not being used by the complainant for her livelihood that too under  the supervision or custody of  complainant or her family member, therefore, the OP cannot be made liable and responsible for the act of the complainant.
   3. OP also submits that as per investigation and final report furnished  by the police, it stands established that misappropriation of the insured vehicle by Shri Raj Kumar and his driver Shri Ranjit Kumar amounts to criminal breach of trust and it was sold by them after dismantling it. Actually, the insured vehicle was not stolen. Therefore, claim is not covered under terms and conditions of policy and the claim of the complainant was repudiated as no claim vide letter dated 07.10.2019. The eOP, in its reply, has relied upon United India Insurance vs. M/s Harchand Rai Chandan Lal, JT, 2004(8) SC 8,that the terms of the contract have to be read strictly. The OP further relies upon Davinder Singh vs. New India Assurance Co Ltd III (2003) CPJ 77 (NC) dealing with the issue of delay in informing to the company. OP prays for dismissal of the complaint.
   4. OP has filed copy of the policy in question along with terms and conditions, copy of claim intimation sheet, investigation report dated 11.11.2018, final report, repudiation letter dated 07.10.2019,
3. Complainant has filed his rejoinder/replication denying the case of the OP but she reiterated her complaint besides that the insured vehicle, the truck, was being run for her livelihood.
4. Both the parties have filed their evidences by way of filing affidavits with the support of documents.
5. The parties were given opportunity to make file written arguments, they have filed their written arguments following by oral submission by them.
6. The  rival contentions are considered by the Commission in view of material on record.
   1. Before deciding the matter on the disputes on merit, an issue raised by the OP is to be decided first with respect to the use of the vehicle in question for commercial purpose and that there was no endorsement or no premium paid on the lease. The OP has filed the policy alongwith its T&C, which clearly mentions that policy is for the public carrier and that it is a Motor Commercial Vehicle (Package Policy), accordingly premium was paid.  Moreover, the said policy was in continuation of the previous policy. When a commercial policy is taken for a commercial vehicle then it is implied that it will be used for the commercial purpose, especially when OP itself has mentioned in the policy that it will not be used for carrying passengers and only meant for carriage purpose. It is not exclusive determinant as other aspect are also be seen. The complainant in her pleadings mentions that the was being run by the complainant for her livelihood vis a vis there is no contrary evidence by the OP to rebut this plea of complainant.  The documents proved shows that the vehicle was under loan and for repaying the loan amount, the said vehicle would have been given on hire, it is not barred under law or policy, nor any objection was raised by the OP in its evidence. Moreover, there is no supporting document/evidence for its plea has been proved by the OP, therefore, in the absence of the same, it cannot be construed that the complainant was involved in  exclusive commercial activity, or she had number of vehicles, including the vehicle in question and was generating profits by using the said vehicle for commercial purpose or to the contrary she had only the said vehicle in question and was using it for earning her livelihood. The burden to prove this plea  was on the OP but it has failed to prove it. By merely stating that the said vehicle is being used for commercial purpose and not for earning livelihood is not sufficient. Thus, complainant is a ‘consumer’ and the objection of the OP bears no merit and hence dismissed.
   2. The second objection of the OP is with respect to 11 days delayed information to OP about the theft of the insured vehicle. The documents on record shows that FIR was lodged with the police on 22.08.2018m which on the same date on which complainant's brother did not find the insured vehicle. In Gurshinder Singh vs Shriram General Insurance Co. Ltd. & Anr CA No.653 of 2020 (Arising Out of S.L.P.(C) No. 24370 of 2015)  held that delay in providing information to the Insurance Company is not fatal to the seeking of claim.“para 20 -  when an insured had lodged the FIR immediately after the theft of a vehicle occurred and when the police after investigation have lodged a final report after the vehicle was not traced and when the surveyors/ investigators appointed by the insurance company have found the claim of the theft to be genuine, then mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the claim of the insurance.”  Therefore, in view thereof, the plea of the OP (with respect to the delayed intimation)  is not sustainable.
   3. On merit, there is no dispute that the vehicle in question was insured, against a loss on account of, inter alia, burglary, housebreaking or theft, therefore, the only question for consideration is whether the loss of the vehicle in the facts and circumstances of the case, can be construed to be covered by theft or not?
   4. The FIR shows that the case was registered under various sections 406/420/379 of IPC. It pertains to offences of criminal breach of trust under sec. 406 IPC; theft u/s 379 for theft apart from cheating u/s 420 IPC. There is nothing on record to show that Driver or Shri Raj Kumar had misappropriated or converted the vehicle to their own use or had disposed of the said vehicle. The surveyor in its report had concluded that they have collected preliminary investigation report of the police but found that till date of police investigation the accusation on hirer Raj Kumar and driver Ranjit Kumar are found true. This shows that repudiation of the claim of the complainant is based just upon self-styled presumptions or assumptions but not on any concrete finding of police investigating agency or otherwise by the court of JMFC. The fact in police report is that the vehicle remained untraced.
   5. The police in its report also mentions of theft of the vehicle and it was not recovered, therefore, this cannot be said that vehicle was not stolen.  It substantiates the claim of the claimant. The presumption of criminal breach of trust being derived by OP does not qualify the case for application of the exclusion clause of the policy. Even if it is assumed, just for the sake of arguments, that the accused persons had dishonestly misappropriated the insured vehicle, even then, the vehicle was taken away without complainant’s consent and information and such act amounts criminal wrong and such risk is not excluded under the policy as vehicle was not recovered by the police. Therefore, the present case is fully covered under the policy. The cases being relied upon by OP are not applicable to the situation of present case as the facts of the case are different. However, the case New India Assurance Co. Ltd. Vs. Neerja Singh (supra),, relied upon by the complainant, is squarely applicable to the situation of this case.
   6. After considering the facts and circumstances of the case and documents on record, it is concluded that the present case falls within the policy terms and conditions; the exclusion clause is not applicable and OP could not deny the claim of the complainant in a mechanical manner and the repudiation of the claim is arbitrary, unwarranted and unjustified on the part of the OP, which is deficiency in service on the part of the OP and therefore, OP is liable to pay the total loss amount to the complainant in terms of the insurance policy and it is liable to compensate the complainant appropriately to the tune of 25,000/- in lieu of harassment and mental agony. The complainant has claimed interest at the rate of 18% p.a. but the circumstances determine it as 6%pa on the sum insured amount. This is also noticed from the R/C of the vehicle that the complainant had hypothecation agreement with ‘Durga Motors and General Finance Co., the financer, who has preference right on the insured amount because of insurable interest.
7. By considering all the above factors and conclusions, the  OP is directed to pay the insured amount of Rs. 9,00.000/-[being IDV of the vehicle] along with interest @ 6% p.a. from date of filing the complainant (i.e. 22.12.2020) till realisation of amount (which is subject to further directions given in next paragraph), compensation of Rs. 25,000/- besides litigation cost, which is determined as Rs.10,000/-.
8. Further to secure the interest of financer, OP is directed to release the amount due towards the complainant, subject to furnishing details of actual balance amount and requisite documents by the financer. The excess amount, if any left with OP [after paying amount to financer] shall be payable by the OP to the complainant. The financer will inform both the complainant and the OP with statement of account in writing of balance amount in account of complainant immediately on preparing the same. Further, the financer & the OP will also inform the complainant immediately on tender of payment by OP and received by financer. The OP & the financer will complete these formalities within six weeks (42 days)  from the receipt of this order,  requisite documents to OP and of balance amount payable to financer.  Further, the complainant will also cooperate to furnish required documents as per law, if so asked by the OP in writing. The OP is also directed to pay the amount within six weeks (42 days)  from the date of receipt of documents from the other side (the complainant and the financer) under acknowledgment. 

           In case amount is not paid within six weeks from the date of such documents, the OP will be liable to pay interest at the rate of 9% per annum (in place of 6%pa) on amount of Rs.9,00,000/- from 22.12.2020  till its realization.  In case complainant and the financer do not furnish further details required of amount and other requisite documents within 42 days, then such period of six weeks or other longer period will be excluded, while computing interest @ 6% pa, or 9% pa as the case may be.

9. Announced on 05.06.2024.
10. The copy of the order be given to both the parties in terms of the CPA Rules 2019 and thereafter file be consigned to record room.

                                                                                                                                                                                                                          [Rashmi Bansal]                                           

                                                                                                                         Member (Female)

[Inder Jeet Singh]

                                                                                                                                     President