PER:

Nidhi, Verma, Member

1        The complainant has filed the present complaint by invoking the provisions of Consumer Protection Act under Section 12 and 13 against the opposite parties on the allegations that the complainant Sukhwant Singh was owner of motorcycle Splendor Plus bearing registration No. PB46-U-9928, Engine No. HA10ERFHM04157, Chassis No. MBHLA10CGFHM06084, Model Hero Motocorp Splendor Plus Self, Cubic capacity 100. The complainant has obtained Insurance policy on 10.8.2017 to 9.8.2018 for the above said vehicle and is using the above said vehicle for his daily necessity. On 21.12.2017 the complainant got parked his motorcycle in question in front of the State Bank of India Jhabal and entered the State Bank of India for the purpose to inspect his account and when he came back from the bank his motorcycle was not standing there where he parked his motorcycle, after due search the complainant reported the matter to the police. But the concerned police of P.S. Jhabal failed to search the same and after that the complainant informed to the opposite party i.e. insurance authority and to the local office of the insurance company and the complainant visited the office of local branch number of times but nobody bothered to the request of the complainant and they did not provide the insurance benefits to the complainant. The complainant is deprive from his motorcycle while he purchased for his daily necessity and same was insured with the opposite parties. As such, the complainant is beneficiary of the services of the opposite parties being his consumer. The opposite parties were duly intimated on the same day regarding the theft of above said vehicle. The complainant requested to the opposite parties  for reimbursement of the whole claim for his above said theft vehicle against the insurance company. But the opposite parties later on refused to give claim to the complainant without assigning any reasonable cause. Even, the complainant gave notice to opposite party but they did not reply the same. As per the terms and conditions settled between the complainant and the opposite parties as per the insurance policy, the opposite party is under legal obligation to reimburse the whole claim to the complainant on account of theft of vehicle. The complainant has prayed that the opposite party may kindly be directed to reimburse the whole claim amount to the tune of Rs. 50,000/- alongwith interest at the rate of 18% P.A. to the complainant on account of issuing the above said authority. The opposite party is also liable to pay Rs. 50,000/- as compensation on account of mental and physical harassment caused to the complainant and litigation charges to the tune of Rs. 10,000/-. Alongwith the complaint, the complainant has placed on record his affidavit Ex. C-1, copy of legal notice dated 6.11.2018 Ex. C-2, Photostat copy of postal receipt of legal notice Ex. C-3, Application moved by complainant regarding theft of motorcycle Ex. C-4, Attested copy of Insurance Policy dated 10.8.2017 Ex. C-5.

2        After formal admission of the complaint, notice was issued to Opposite Parties. Opposite Party No. 1 appeared through counsel and filed written version contesting the complaint by interalia pleadings that the complaint is not maintainable either on facts or in the eyes of law and is liable to be dismissed as the complainant has not approached this commission with clean hands and has represented a distorted and incorrect version of the facts before this commission. In fact no cause of action ever arose in favour of complainant and against the opposite party No. 1 to file the present complaint. The complaint under reply is nothing but an abuse of process of law and as such the same is liable to be dismissed.  The insurance policy alongwith its terms and conditions already supplied to the complainant and as such, the complainant is bound by the terms and conditions and exclusion clauses of the said policy. The complainant has concealed the material facts while filing the present complaint by taking plea that the insurance company refused to give claim without assigning any reason. However, this plea is totally wrong incorrect and against the actual facts. The date of loss is 21.12.2017 and date of intimation to the complainant is 17.4.2018. It is submitted that the complainant gave intimation of alleged loss to the police authorities after a lapse of 3 days and to the opposite party No. 1 after a lapse of 126 days without giving any reasonable explanation for the subject delay. The act of the complainant stands in clear violation of condition No. 1 of the insurance policy which states as follows:-

“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 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, inquest 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 offender”

After receipt of intimation of alleged loss, the opposite party No. 1 appointed an investigator, M/s Perfect investigators to independent verify the genuineness of subject loss. During investigations, the investigator submitted his report dated 10.05.18. It may be noted that despite repeated requests and reminders vide letter dated 3.5.2018 followed by letters dated 19.7.2018 and 26.07.18, the complainant did not submit following documents with the investigator/ the opposite party No. 1.

1. Call detail of PCR no. 100 or copy of intimation to police on date of theft intimating theft.
2. Second Original Key.
3. Copy of purchase invoice.
4. Service Record of vehicle
5. Untraced Report certified through court
6. Loan statement
7. Non repossession letter firm financers with current loan a/c statement and NOC

The claim of the complainant could not be processed due to own act and conduct of the complainant in not providing requisite documents and clarification for the delayed intimation of loss to the opposite party No. 1 and police authorities. By intimating the claim at a belated stage to the opposite party No. 1 herein, the complainant has not only violated the terms of the contract but has also deprived the rights of the opponent herein to investigate into the veracity of the claim and initiate steps towards recovery of the vehicle. Without prejudice to the above submission, the liability, if any of the opposite party No. 2 is limited to Rs. 38,744/- less excess clause) When specific phone number was provided to the complainant by the opposite party No. 1 in its closure letter dated 26.7.2018 no clarification was ever sought by the complainant, therefore, there is no necessity of serving any notice by the complainant. The opposite party No. 1 has denied the other contents of the complaint and prayed for dismissal of the same. Alongwith the written version, the opposite party No. 1 has also placed on record affidavit of Sanjay Bhagat Vice President Ex. OP1/1, Affidavit of Er. Shubham Grover ME of Perfect Investigator Ex. OP1/2, Investigation report of Perfect Investigators Ex. OP1/3, Letter dated 3.5.2018 written by investigator to the complainant Ex. OP1/4, closure letter dated 26.7.2018 written by the OP No. 1 to the complainant Ex. OP1/5, Intimation letter showing delay of 126 days in giving first time intimation Ex. OP1/6.

3        Notice of this complaint was sent to the opposite party No. 2 and opposite party No. 2 has duly served but no one appeared on behalf of opposite party No. 2 and consequently, the opposite party No. 2 was proceeded against exparte vide order dated 16.5.2019.

4        We have carefully gone through the record and heard the Ld. counsel the complainant and opposite party No. 1.

5        In the present complaint, the complainant was owner of the Motorcycle spender plus registration No PB46–U– 9928 , has obtained insurance policy on dated 10.08.2017 to 09.08.2018 . On dated 21.12.2017 the complainant got parked his motorcycle in front of the State Bank of India, Jhabal and when he came back from the bank his motorcycle was not standing there . The complainant reported the matter to the police of P.S Jhabal and after that the complainant informed to the OP No. 1. The complainant visited the office of the insurance company -OP No. 1 but nobody bothered to the request of the complainant, then the complainant sent the legal notice to the OP No. 1 on dated 06.11.2018.

6        Opposite party No. 1 stated in its written version that the date of loss is 21.12.2017 and the date of intimation to insurance company is on dated 17.04.2018 . It is submitted that the complainant gave intimation of alleged loss to the police authorities after a lapse of 3 days and to the OP No. 1 after a lapse of 126 days. The act of the complainant stands in clear violation of condition no.1 of the insurance policy, which states as follows:-

“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 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, inquest 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 offender”

7        After receipt of intimation of alleged loss Opposite party No. 1 appointed an independent investigator M/s Perfect investigators to verify the genuineness of subject loss. The investigator submitted his report dated 10.05.2018 . It may be noted that despite repeated requests and reminders vide letter dated 03.05.2018 , 19.07.2018 and 26.07.2018, the complainant did not submitted the required documents with the investigator. The claim of the complainant could not be processed due to own act and conduct of the complainant is not providing requisite documents and clarification for the delayed intimation of loss to the OP No. 1  and police authorities.

8        We have heard the Ld. Counsel and have gone through the documents placed on record. The defence of the OP No. 1 is that:-

1. There is delay of 3 days in giving notice to the police and to the insurance company for 126 days .

2. The complainant has not provided requisite documents to the surveyor after number of intimation.

9        In the present case, the theft took place on dated 21.12.2017 and after searching for his motorcycle himself, the complainant lodged the complaint to the police on dated 23.12.2017 (Ex. C-4), the complainant stated in their rejoinder that the complainant informed the police authorities on the same day when the motorcycle was stolen on dated 21.12.2017 but the police officials made entry regarding the loss of vehicle in their record on 23.12.2017 . Further, the complainant stated that he informed the OP No. 1 on the same time when he informed the police regarding the theft. As per the opposite party it is clear that the complainant has violated the terms and conditions of the policy and as such, claim stands as no claim. But it is common knowledge that a person who lost his vehicle may not straightaway go to the insurance company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. If the reason for delay in making a claim is satisfactory explained such a claim cannot be rejected on the ground of delay. The complainant has placed reliance in Civil appeal No. 653 of 2020 titled Gurshinder Singh Vs Shri Ram General Insurance co. Ltd. And Anr. Of Supreme Court of India and relevant Para No. 16 of the citation is as:-

It is further to be noted that in the event after the registration of an FIR the police successfully recovering the vehicle and returning the same to the insured there would be no occasion  to lodge a claim for compensation on account of the policy . It is only when the police are not in a position to trace and recover the vehicle and the final report is lodged by the police after the vehicle is not traced, the insured would be in a position to lodged his claim for compensation.  As observed by the bench of two learned judges in the case of Om Prakash (supra), after the vehicle is stolen a person who lost his vehicle would immediately lodged the FIR and immediate conduct that would be expected of such a person would be to assist the police in search of the vehicle.  The registration of the FIR regarding the theft of the vehicle and the final report of the police after the vehicle is not traced would substantiate the claim of the claimant that the vehicle is stolen. Not only that but the surveyors appointed by the insurance company are also required to enquire whether the claim of the claimant regarding the theft is genuine or not.  If the surveyor appointed by the insurance company upon inquiry finds that the claim of the theft is genuine then coupled with the immediate registration of the FIR in our view would be conclusive proof of the vehicle being stolen.

In ibid citation, it has rightly held that mere delay in intimating the insurance company about the theft of the vehicle should not be a sheltered to repudiate the insurance claim which has been otherwise proved to be genuine.

10      Further, after receipt of intimation of alleged loss , the OP appointed an independent investigator , M/s Perfect investigators to verify the genuineness of subject loss . Investigator submitted his report dated 10.05.18 (Ex. OP1/3 ) in which observation of the investigator:-

“ considering our investigation & enquiries, we are of the opinion that the insured vehicle theft cause is genuine. There has been no negligence on the part of the insured and last user. However there is delay of 3 days in lodging FIR & 126 days delay in intimating insurance company.”

Hence, from above statement it is clear that , investigator himself admitted the fact of genuineness of the theft and they closed the claim only on the basis of delay in intimation from the complainant. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be on valid grounds.  

11      Otherwise also, it is admitted fact that intimation about theft was given to the Opposite Party with minor delay. This delay in the opinion of the Commission is not such a delay which could compel the insurance company to close or repudiate the claim of the complainant. Otherwise also, a circular dated 20.9.2011 was issued by IRDA, referred to all the insurance companies, which reads as under:-

“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 and 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 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 intimation 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”:

A bare reading of circular shows that if the claim is otherwise payable then it should not be repudiated or rejected simply on the ground of delay and delay is only to be considered when claim is otherwise not made out and is liable to be rejected even if the matter has been reported in time. In case titled as National Insurance Company Limited Vs. Kulwant Singh 2014(IV) CPJ page 62 (NC) the Hon’ble National Commission  observed that the insurance company should not have repudiated the claim merely on account of delay in giving the information to insurance company particularly when there was absolute no delay in lodging the FIR with the police. Moreover, in similar case titled as Reliance General Insurance Company Limited- Petitioner Vs. Sri Avvn Ganesh-Respondent 2012(1) CPJ page 176  in case under Consumer Protection Act, 1986 the intimation of death was given to the insurer with delay and claim was repudiated on the ground that death of insured was intimated after 4 months as against stipulated period of one month. The complainant filed complaint on the allegation of deficiency in service by insurance company, but the same was dismissed, but appeal filed by the complainant was allowed by Hon’ble State Commission. On revision, the Hon’ble National Commission, New Delhi observed that all the conditions for acceptance of insurance claim except point of reporting loss within one month of its occurrence had been substantially  fulfilled and delayed intimation of death of insured due to injuries he suffered on account of accident could not be held to be destructive to insurance claim because the facts and circumstances of death were clearly established on the basis of medical on records as well as  deposition of doctor who attended the insured and it was observed that like in case of theft of moveable insured property, delay in intimation was not prejudicial to the insurer because in such cases, Insurance company was not prevented, because of delay, from carrying out any investigation into the facts and circumstances as to whether the accident and consequent loss fell within the substantive condition of insurance policy and no infirmity  was found in the order and revision petition was dismissed. In the case in hand also, the theft of vehicle in question was reported to the police immediately after the theft. By repudiating the genuine claim of the complainant, it amounts to deficiency in service and unfair trade practice. 

12      Now let’s discussion about the point 2, that the complainant has not provided the requisite documents to the surveyor after number of intimations. It may be noted that despite repeated requests and reminders vide letter dated 03.05.2018 (Ex . OP1/4) , 19.07.2018 (no evidence provided by OP) and 26.07.2018 (Ex. Op 1/5) respectively , the complainant did not submit following documents with the investigator/OP:-

1. Call detail of PCR no. 100 or copy of intimation to police on date of theft intimating theft.
2. Second Original Key.
3. Copy of purchase invoice.
4. Service Record of vehicle
5. Untraced Report certified through court
6. Loan statement
7. Non repossession letter firm financers with current loan a/c statement and NOC

However, to prove their point OP No. 1 placed on record as an evidence, the postal receipt for the letter dated 03.05.2018 sent to the complainant for the requisite documents on dated 08/05/2018 but the OP No. 1 failed to provide any further evidence to prove that they posted letters to the complainant on dated 19.07.2018 and 26.07.2018 for repeated requests and reminders for the documents. On other hand , the complainant stated in their rejoinder that “ the investigator which was appointed by the OP No. 1 visited the spot of loss of vehicle and all the documents which were demanded by him were provided by the complainant, after that the investigator assured to the complainant that claim will released shortly and after waiting for long time the complainant visited the office of the OP No. 1 and later send the legal notice to OP No. 1 (Ex.C-2) . However, in the light of the above discussion, the said act is merely the negligence and deficiency in service on the part of the OP No. 1 and has also resulted in great mental pain, agony, harassment and inconvenience to the complainant and merely delay in intimation the insurance company about the theft of the vehicle should not be a sheltered to repudiate the insurance claim which has been otherwise proves to be genuine. However, the surveyor appointed by the insurance company upon inquiring finds that the claim of the theft is genuine then coupled with the immediate registration of the FIR would be conclusive proof of the vehicle being stolen and same fact of genuine of the theft admitted by the surveyor i.e. M/s Perfect investigators himself in his report ( Ex. OP1/ 3) as such the complaint is hereby allowed with costs in favour of the complainant.

13      The complainant has claimed insurance claim in the present case to the tune of Rs. 50,000/- but as per certificate cum Policy schedule Ex. OP-1/7 the insured declared value (IDV) is Rs. 38,744/- only, as such, the complainant is entitled for Rs. 38,744/- only.

14      By withholding the genuine claim of the complainant for a long time, the opposite party No. 1 has committed deficiency in service on the part of the opposite party No. 1.

15      In light of the above discussion, the complaint succeeds and the same is hereby allowed with costs in favour of the complainant. The opposite party No. 1 is directed to pay the insurance claim of Rs. 38,744/- to the complainant. The complainant has been harassed by the opposite party No. 1 unnecessarily for a long time. The complainant is also entitled to Rs. 10,000/- as compensation on account of harassment and mental agony and Rs 7,500/- as litigation expenses. Opposite Party No. 1 is directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainant is entitled to interest @ 9% per annum, on the awarded amount, from the date of complaint till its realisation. The present complaint against the opposite party No. 2 is dismissed. This complaint could not be decided within prescribed period due to heavy pendency of cases in this commission and COVID-19. Copy of order be supplied to the parties free of costs as per rules. File be consigned to record room.

Announced in Open Commission.

15.03.2023