Smt. Syeda Shahnur Ali, President-in-Charge

The present dispute arises over repudiation of Complainant’s claim by the OP Insurance Company.

Briefly narrated, case of the Complainant, is that she took an insurance policy from the OP being no. 031701 3114P 10330 2280 to indemnify her Tata Sumo Gold vehicle bearing registration no. OR-01Y/5081.  The IDV of the insured vehicle was Rs.3,00,000/- and the said policy was valid for the period from 07-08-2014 to 06-08-2015 (midnight). It is stated that,  during currency of the said insurance policy, i.e., on 14-02-2015 midnight, the insured vehicle got stolen and a diary to this effect was lodged with the Sahadev Khunta P.S. on 16-02-2015 and the said police station, on the basis of such complaint, initiated a case being no. 47 dated 16-02-2015, u/s 395, IPC.  It is claimed by the Complainant that due intimation to this effect was also communicated to the OP Insurer over phone on 15-02-2015 and her claim was docketed being claim no. 0317013114CO50205001/1.  However, the OP, vide its letter dated 22-04-2016, repudiated her claim on the ground that the concerned driver did not have requisite driving license to drive the insured vehicle. Terming such repudiation illegal and arbitrary, Complainant filed this case for relief as per prayer of the petition of complaint.

Case of the OP, on the other hand, is that as per the policy condition, the Complainant was under obligation to give immediate intimation to the OP in writing, which she honoured in its breaches.  Besides, the vehicle in question, as per the registration certificate issued by RTO, Balasore, was a MAXI CAB, which is classified as a transport vehicle under the Motor Vehicles Act. From the searching report of Licensing Authority, Salt Lake, Kolkata, it was found that the driver of the vehicle in question, Biswajit Mahakul was authorized to drive transport vehicle on and from 03-09-2015, whereas the incident took place on 14-02-2015, implying that at the material point of time, the driver did not have valid transport license to drive such vehicle. As the driver drove the transport vehicle with an LMV license, so, the OP, in terms of Clause 3(b) of the insurance policy (General exception) rightfully and legally repudiated the claim of the Complainant.     

We are to decide, whether repudiation of Complainant’s claim by the OP Insurer is justified, or not.  Differently put, whether the Complainant is entitled to any relief, or not.

Decision with reasons

On a careful scrutiny of the documents on record, we find that, there is no dispute as regards the happening of the incident, i.e., stealing of the insured vehicle within the validity period of the insurance policy. There is also no dispute as to the factum of due intimation to the police authority by the Complainant. 

The OP has primarily picked hole with the insurance claim of the Complainant over non-receipt of written communiqué from the side of the Complainant as enumerated in the insurance policy.

It is noteworthy here that the OP has admitted vide its letter dated 22-04-2016 that it received claim intimation dated 23-02-2015 from the Complainant.  But, for the reason best known to it, the OP did not flag the issue of non-receipt of written communication as one of the reasons for repudiation of concerned claim in it’s afore mentioned letter. 

Be that as it may, fact remains that the Complainant has not taken much time to lodge her insurance claim with the OP Insurer.  As a law abiding person, she has given due intimation to the police authority as well. If the OP was so particular about technicalities of the matter, one wonders, what prevented it from repudiating the claim forthwith on receipt of the insurance claim from the Complainant.  Instead, we find that vide its letter dated 03-08-2015, the OP asked for host of papers from the Complainant, ostensibly for the purpose of processing her claim and took more than a year to decide the fate of the claim.  We afraid, one cannot blow hot and cold in the same breathe. 

Notwithstanding the OP expects strictest compliance of the terms and conditions of the insurance policy by an Insuree, it’s own behavior is hardly an example of balance. According to Clause 9 of the IRDA (Protection of Policyholders’ Interests) Regulations, 2002, it is incumbent on the part of an Insurer to appoint a Surveyor within 72 hours of receipt of intimation from the Insured, who in turn is required to furnish his report within 6 months from the date of his appointment and on receipt of survey report, the Insurer is required to decide the fate of a claim within a period of 30 days.  Thus, in terms of IRDA regulations, the OP was under obligation to fix up its mind about settlement/repudiation of Complainant’s claim within a maximum period of 7 months from the date of intimation.  However, as we find, the OP took 14 months to repudiate Complainant’s claim which is double the time mandated by the Regulator. One wonders, how the OP conveniently forgets that charity begins at home.  The desire to pass the buck upon others often diminishes our ability to question and criticize ourselves. Before finding fault with others, it is always desirable to set one’s house in order first.

No doubt, incorporation of intimation clause in a policy document is aimed at enabling the Insurer conduct due enquiry through an Investigator.  Now, whether the Insurer receives due intimation from an Insuree over phone or via mail or letter, it hardly makes a difference in the way of causing due investigation to satisfy itself about the bona fide of a claim. Against such backdrop, putting too much emphasis over written intimation is bound to put the sincerity of purpose of the OP under strain.

In case of accidental damages, appointment of Surveyors on a war footing holds immense significance to conduct spot inspection of the damaged vehicle.  However, in theft related matters the Surveyors, thanks to their lack of infrastructure and expertise to search and intercept a stolen vehicle, merely play second fiddle to the police authorities. So, it can reasonably be inferred that when a claim is lodged over theft of a vehicle, even a slightly delayed intimation to the Insurer does not make much of a difference.  In the instant case, even for the sake of argument, if it is presumed that the Complainant did not give any intimation to the OP on 15-02-2015, as claimed, insofar as the factum of receiving claim intimation dated 23-02-2015 from the side of the Complainant is admitted by the OP, that was akin to written intimation, it cannot be said that the Complainant took inordinate time to convey due intimation to the OP.  While the Survey Report could have thrown due light as to the actual date of intimation by the Complainant, for some obscure reasons, the OP choose to keep it under the sleeve.  In any case, disputing a claim over such poor alibi by an Insurer, that itself pay scant regard to toe the regulatory directive, is not at all tenable.   

It is common knowledge that while processing insurance claims, the yearning for quick closure and repudiate claims by hook or by crook dominate the mindset of settlement officials so strong that they often tend to forsake reality and do not fight shy of uttering rhetoric to serve their purpose. We are afraid, the present case is a classic example where rhetoric has taken precedence over practicality of the matter. 

The OP has marshaled another argument to defend its decision.  It has invoked Sec.3(b) of General exception as contained in the policy to justify repudiation of Complainant’s claim.  True, the driver of the vehicle, i.e., Biswajit Mahakul did not have valid driving license to drive commercial vehicle on the material time/date of happening of the incident.  However, let us not forget that it was not an accidental claim – the vehicle did not meet an accident due to the fault of the driver, but it got stolen by some miscreants, for which the driver cannot be held responsible in any manner. Against such backdrop, putting so much prominence on the D.L. of the driver defies our rational thinking.

In our considered opinion, when an insured vehicle gets damaged due to negligence of the driver holding invalid license, the Insurer is fully justified summoning Sec, 3(b) of the General exception clause under the policy or Section 149 of the Motor Vehicles Act, 1988, otherwise not.  The Hon’ble Apex Court, in the matter of National Insurance Co. Ltd. Vs. Nitin Khandelwal, reported in 2013 (4) CPR 803 (SC) held that, “In the case of theft of vehicle breach of condition is not germane.  The appellant Insurance Company is liable to indemnify the owner of the vehicle,”

In the light of our foregoing discussion and fortified by the solemn decision of the highest Court of the land, i.e., Hon’ble Supreme Court, we find no cogent reason whatsoever to repudiate the Complainant’s claim.  The arbitrary act of the OP Insurer runs counter to the true spirit of an Insurance Policy.  Small wonder, it would make the OP liable to pay compensation and litigation cost to the Complainant together with the claim amount.

Consequently, this consumer case succeeds.

Hence,

ORDERED

that C. C. No. 51/2016 be and the same is allowed on contest against the OP.  The OP is directed to pay Rs. 3,00,000/- to the Complainant being the IDV of the insured vehicle along with a litigation cost of Rs. 5,000/-.  Besides, it is also liable to pay compensation in the form of interest @ 8% p.a. over Rs. 3,00,000/- from the day of filing of the case till full and final payment is made.  In case the order is not complied with within 40 days hence, the Complainant may initiate appropriate execution proceedings against the OP in accordance with law.