Punjab

Patiala

CC/14/252

Amanpreet Singh - Complainant(s)

Versus

The Manager M/s Megma Fincorp. - Opp.Party(s)

Sh Jasprit Singh

08 Jul 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

PATIALA.

 

                                      Complaint No. CC/14/252 of 22.9.2014

                                      Decided on:         8.7.2015

 

Amanpreet Singh son of S.Inderjit Singh resident of Village Kalyan, Tehsil & District Patiala, Punjab.  

 

                                                                   …......Complainant

                                      Versus

 

The Manager, M/s Megma Fincorp. Insurance Company Ltd., Opposite Head Post Office, Patiala.

 

                                                                  ….............Op

 

                                      Complaint under Section 12 of the

                                      Consumer Protection Act.

 

                                      QUORUM

 

                                      Sh.D.R.Arora, President

                                      Smt.Neelam Gupta, Member

                                      Smt.Sonia Bansal,Member

                                     

                                                                            

Present:

For the complainant:       Sh.J.S.Aujla , Advocate

For Op                 :           Sh.Amit Gupta,Advocate

                                     

                                         ORDER

D.R.ARORA, PRESIDENT

1. It is the case of the complainant that he got his tractor make Swaraj 855 bearing registration No.PB-11-BF-2853, engine No.473030SSL13377 and chassis No.WRCL61929978688, purchased for Rs.6,20,000/-, insured with the Op for the sum insured of Rs.5,89,000/-.
2. On 23.1.2014, Sh.Nirmal Singh S/o Ram Chand, the driver of the said tractor had gone to the factory at Channo (Sangrur) for taking peels of peas in the tractor-trolley. He  left Channo for loading the peels of the peas at night and he had been coming on the Patiala-Sangrur road so as to reach his village Kalyan falling in District Patiala and when at about 4PM he turned towards village Jahlan Dhablan falling on Patiala-Sangrur road and when he was driving the tractor at a slow speed because of speed breaker  falling on the road that in the mean time two hair cut men came from behind and they parked their motor cycle in front of the tractor. They hit the driver on his right ankle and right leg with sticks and pulled him from the tractor who got scared. Both the miscreants detached the trolley from the tractor and one of them drove away the tractor while the other left on his motor cycle.
3. The driver informed the complainant about the said incident and the complainant accompanied by the driver lodged FIR No.22 dated 24.1.2014 with P.S.Pasiana under Section 182 /34 IPC. The intimation was also given to the OP regarding the theft of the tractor and the complainant also requested the op to disburse the insurance amount. The surveyor of the Op conducted the enquiry having obtained the copy of the FIR, insurance policy and other documents from the complainant. The Op had assured the complainant to disburse the claim amount after a gap of six months on the condition that the tractor is not traced out and the untraced report is obtained.
4. It is further averred that the police of P.S.Pasiana after enquiry prepared the untraced report dated 29.6.2014, which was handed over to the Op but the Op failed to disburse the claim amount despite the requests made by the complainant.
5. The complainant visited the office of the Op at Patiala many a times, who referred the matter to their Chandigarh office with all the requisite documents. The complainant even visited the Chandigarh office and performed all the formalities as required by the Chandigarh office but the Op put off the matter under one or the other pretext and failed to disburse the insurance amount, which resulted into the harassment and the mental agony experienced by the complainant. The complainant professes agriculture and therefore, he had to hire the tractor @ Rs.20,000/- per month and therefore, he is entitled to the amount of the hire charges paid by him. The complainant got the Op served with a legal notice dated 23.8.2014 through his counsel but to no effect. Accordingly the complainant brought this complaint against the Op under Section 12 of the Consumer Protection Act,1986 ( for short the Act) for a direction to the Op to pay him Rs.5,89,000/-, the insured amount with interest; to pay him Rs.50,000/- by way of compensation on account of the harassment and the metal agony experienced by him and further to pay the hire charges paid by the complainant for hiring the tractor.
6. On notice, the Op appeared and filed the written version having raised certain preliminary objections, interalia , that the complainant has concealed material information from the Forum and therefore, the complaint is liable to be dismissed; that the complainant had got no cause of action to the file the complaint against the Op and that the complainant is estopped from filing the complaint by his act and conduct. As regards the facts of the complaint, the Op has not denied the complainant having got his tractor in question insured with the Op.As regards the version of the incident in which the complainant had suffered the loss of his tractor, it is averred that the complainant be obliged to prove the same. Similarly, the Op did not deny the complainant having lodged FIR No.22 dated 24.1.2014 with P.S.Pasiana under Section 182 /  34 IPC. It is averred that the claim of the complainant is pending due to the non submission of the documents of the vehicle. It is however, the plea taken up by the Op in the preliminary objections that the claim of the complainant was repudiated on account of non submission of “(1) certified true copy CJM accept FRT ,(2) current recovery status  of TV obtained from NCRB (3) original RC,(4) form 35 duly signed by the financer, (5)current loan account status and (6) non reposition letter from financer”
7. It is also the plea taken up by the Op that there   occurred violation of the policy conditions in as much as the vehicle is registered for private purpose i.e. for agricultural use but at the material time of loss the same was attached with a trolley and was being used for commercial purposes on a public road and therefore, there is a violation of the condition, ‘Limitation as to use’. Similarly it is alleged that there occurred a gross negligence on the part of the driver as the broken key was submitted. Similarly it is averred that there occurred violation of condition No.1 as there occurred  a delay regarding the intimation of the loss, which had occurred on 24.1.2014 but the intimation was given to the insurer on 5.2.2014 The Op has also detailed out the condition No.1 in this regard. Ultimately it is averred that there was no deficiency of service on the part of the Op and is not liable to pay anything to the complainant unless the complainant fulfills the formalities in respect of the submission of the documents. Ultimately, it was prayed to dismiss the complaint.
8. In support of his complaint, the complainant produced in evidence Ex.CA, his sworn affidavit, Ex.CB the sworn affidavit of Sh.Nirmal Singh alongwith the documents Exs.C1 to C6 and his counsel closed the evidence.
9. On the other hand, the counsel for the Op closed the evidence by suffering a statement and without having lead any evidence.
10. The parties failed to file the written arguments. We have heard the learned counsel for the parties and gone through the evidence on record.
11. Ex.OP7, is the copy of letter dated 27.1.2014 written by the Op to the complainant on the subject: Claim No. C/14/100018/4107/2/05012201, Policy No.P0014400002/4/07/228529, Regd. No.PB 11BF 2853, date of loss 24.1.2014 and informed: “Gross violation under policy condition No.1 as delay in intimation observed (Loss on 24.1.2014 and intimation to insurer on 5.2.2014).We therefore, regret out inability to make good the loss suffered by you at our end due to violation of policy terms , conditions warranties and exclusions”.
12. Sh.Amit Gupta, the learned counsel for the Op also submitted that there occurred a delay of 13 days in giving the intimation by the complainant to the Op. It is the plea taken up by the Op that the complainant had given the intimation through his mobile phone No.8968185297 at 13:02 PM on 5.2.2014 with regard to the theft of the insured vehicle having taken place on 24.1.2014 at 4.30am at call center through No.1800 3002 3202.In this regard, it is the plea taken up by the complainant that after the incident his driver had informed him about the theft and at this the complainant alongwith driver lodged FIR No.52 dated 24.1.2014 with P.S.Passiana under Sections 382/34 IPC.The intimation was also given to the Op regarding the theft of the tractor and he requested the Op to pay the insurance claim. Nothing is disclosed by the complainant as to how the intimation was given to the Op.
13. Ex.C3, is the copy of the FIR No.22 dated 24.1.2014 lodged by Nirmal Singh s/o Ram Chand with P.S.Passiana, District Patiala. The statement  of said Nirmal Singh was recorded by ASI Jagjit Singh of P.S.Passiana at 11.30AM on 24.1.2014. As per the statement of said Nirmal Singh , the act of extortion had taken place at 4:00AM. After the incident he had visited the house of Sh.Hakam Singh R/o village Rajgarh , a relative of the owner of the tractor, and informed him the entire incident. Habans Singh informed Amanpreet Singh(complainant) telephonically and on his having arrived, Nirmal Singh informed him the entire incident and thereafter both of them had left for lodging the information with the police. Thus, it would appear that the information regarding the extortion of the tractor was lodged with the police by the driver namely Nirmal Singh immediately.
14. It was submitted by Sh.Amit Gupta, the learned counsel for the Op that it is provided under condition no.1 of ‘Commercial Vehicle Insurance policy wording’ produced alongwith Ex.OP9, the copy of certificate of Insurance-cum- schedule: “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 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 the policy. In case of theft or criminal act which may be  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”.
15. Thus a perusal of condition no.1 would go to show that under two conditions, notice shall be given in writing to the company immediately upon the occurrence (i) When there is any accidental loss or damage in the event of any claim and (ii) when 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 the policy.
16. The case of the complainant is not covered by either of the two conditions in as much as the tractor No.PB 65 TC-02221 make Swaraj 855 was taken away by the miscreants by inflicting injuries on the person of the driver with the help of a stick (danda).Therefore, it would appear that the complainant was not enjoined upon under condition no.1 to give any intimation in writing to the Op regarding the incident. In the case of the citation First Appeal No.1510 of 2012 Randhir Singh Vs. Cholamandlam MS General Insurance Co.Ltd. & others, decided by the Hon’ble State Consumer Disputes Redressal Commission Punjab, Chandigarh, on 20.11.2014, similar condition verbatim was involved and the Hon’ble State Commission interpreted the said condition No.1 with the observation: “This condition consists of two parts; the first part relates to accidental loss or damage and the second part relates to the theft or criminal act. Where the loss or damage is accidental, it is mandatory to give a notice in writing to the insurance company immediately upon the occurrence of such an accident and thereafter the insured is to give all the information and assistance as required by insurance company. In case of theft the only requirement was to give immediate notice to the police and co-operate with the insurance company in securing the conviction of the offender. There is no other term or condition in the insurance policy regarding giving of the intimation. As it was a case of theft of vehicle, so the complainant was required to give immediate notice to the police. There was no requirement of giving immediate intimation to the insurance company. The District Forum, while recording the finding in favor of the opposite parties-Insurance Company, mis-directed itself by holding that there was breach of condition no.1 in not giving the immediate information to the insurance company itself”.
17. Moreover, in the case of the citation First Appeal No.58 of 2014 Shriram General Insurance Company Limited and others Vs. Joginder Singh, decided on 13.5.2014, the Hon’ble State Consumer Disputes Redressal Commission Haryana,Panchkula, made a reference to the circular dated September 20^th,2011 , issued by ‘INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY   as under:

:INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Ref:IRDA/HL TH/MISC/CIR/216/09/2011  dated 20.09.2011

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 limitation 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”.

It was observed by the Hon’ble State Commission Haryana at Panchkula, “9. It is very clear from the above circular, that the insurance company cannot repudiate the bonafide claims on technical grounds like delay in intimation and submission of some required documents. The decision of insurers’ to reject a claim of the claimant should be based on sound logic and valid grounds. The limitation 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 procedural grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation. It has been further advised in the above said letter that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded.

10.    What is the spirit of Insurance Policy, should be kept in mind by the  officials dealing with the genuine claims of the sufferers and the same should not be rejected on methodological grounds in a mechanical manner. The tendency of Insurance Companies in rejecting genuine claims is the reason of increasing litigation between the insurers and the insureds/their legal  heirs.

11.    In the instant case the vehicle was stolen on December 9^th,2010 and F.I.R. was lodged in the Police Station without any delay. Report of ‘Untraced’submitted by the Police is the best piece of evidence to prove that the vehicle was stolen.

12.    Thus, the repudiation of respondent’s claim was contrary to the letter Annexure-A, stated above because intimation to the insurance company after 12 days is not significant in genuine claim of the respondent-complainant. A person who lost his vehicle which was being used by him for earning livelihood straightway may not go to the Insurance Company to claim compensation. At the first instance he himself makes efforts to search the vehicle. Filing of claim with the Insurance Company is the last resort. Under these circumstances, it was indeed a deficiency in service on the part of the appellant for repudiating respondent’s claim on flimsy ground. It    be fair or reasonable to reject even the genuine claims of the insuree which had been verified and found to be correct by the surveyor. There may be a condition in the policy regarding delay in intimation but that does not mean that the insurer can take the shelter under that condition and repudiate the claim of the claimant, which is otherwise proved to be genuine. In this view of the matter, the authority in Jagdish Parshad’s case(Supra) referred to by the learned counsel for the appellant is of no help to him”.

18. Sh.Amit Gupta, the learned counsel for the Op placed reliance upon the citation Revision Petition No.3765 of 2014 National Insurance Co.Ltd. Versus Sukram Pal, decided on 14.1.2015 by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, so as to contend that if immediate intimation of the theft of the vehicle is not given to the insurance company, it will not be possible for them to verify the alleged theft as also the circumstances of surrounding the alleged theft.A late intimation obviously defeats the aforesaid purpose since, on account of the passage of time, the evidence which could be available immediately on the happening of the theft may not be available to the representative of the insurance company. It was observed by the Hon’ble National Commission that not only the delay in intimating the loss of the vehicle to the insurance company was abnormal, the same being more than six months, there was no convincing explanation for the said delay. He also placed reliance upon the citations Revision Petition No.4749 of 2013 titled as Shriram General Insurance Co.Ltd. Versus Mahender Jat, decided on  16^th December,2014 by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi and Revision Petition No.793 of 2014 Ramesh Chandra Meghwanshi Versus The Oriental Ins.Co.Ltd., decided on   6^th February,2015 by the Hon’ble National Consumer Disputes Redressal Commission, New Delhi, touching the similar  point of delay in giving the intimation to the insurer.
19. We have considered the submissions and are of the considered view that a perusal of condition No.1 of ‘Commercial Vehicle Package Insurance Policy wording’ being a part of certificate of Insurance-cum-Schedule Ex.OP9, does not oblige the insured to give notice in writing to the company immediately upon the occurrence in the case of loss of the insured vehicle by way of extortion and notice has to be given only under two circumstances i.e. (i) when there is accidental loss or damage in the event of any claim and secondly when the insured shall  have knowledge of any impending prosecution, inquest, fatal injury in respect of any occurrence which may give rise to a claim under the policy. It is specifically provided under condition No.1 that in case of theft or criminal act, which may be the subject of a claim under the policy, the insured shall give immediate notice to the police and co-operative with the company in securing the conviction of the offender . It is no where provided in condition No.1 that in case of theft or criminal act, the insured shall give immediate notice to the insurance company.  Thus, we are of the considered view that condition no.1 does not oblige the complainant to give any intimation in writing immediately to the insurer regarding the incident. The case of the complainant regarding the taking away of his tractor by the culprits by way of extortion appears to be very much genuine because the complainant immediately on coming to know about the incident lodged the FIR ( copy Ex.C3) with the police of P.S.Passiana on 24.1.2014 at 11.30AM. The complainant has also produced in evidence Ex.C2, the copy of the report submitted under Section 173 CrPC by the SHO P.S. Passiana having concluded that  no clue regarding the tractor No.PB 65 TC 0221 make Swaraj 855 snatched away by the extortionists could be traced out and therefore, the police filed the untraced report. ‘Un-traced Report’ submitted by the police is the best piece of evidence to prove that the vehicle was stolen. Therefore, it would appear that the repudiation of the claim of the complainant vide letter Ex.OP7 runs contrary to circular letter dated September 20^th , 2011, referred to as annexure A in the citation Shriram General Insurance Company Limited and others Vs. Joginder Singh, (supra) because intimation to the insurance company after 13 days is not significant in a genuine claim of the complainant, particularly when as observed , it was not obligatory on the part of the complainant under condition no.1 to give such intimation in writing in case of theft/extortion .In the case of the said citation , it was observed by the Hon’ble State Commission Haryana at Panchkula that by virtue of the circular annexure (A) as referred to in the said citation, the insurance company cannot repudiate the bonafide claims on technical grounds like delay in intimation and submission of some required documents. The decision of insurers’ to reject the claim of the claimant should be based on sound logic and valid grounds. The limitation 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 procedural grounds  in a mechanical fashion will  result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.
20. In our case, the Op repudiated the claim of the complainant on the ground of delay in giving the intimation to it without caring to see that the claim of the complainant was genuine, who had not lost even a single day in reporting the matter to the police vide FIR ( Ex.C3). Therefore, viewing the case of the complainant in the light of the circular referred to as Annexure A in the citation Shriram General Insurance Company Limited and others Vs. Joginder Singh, (supra) and the fact that condition no.1 did not enjoin upon the complainant to give intimation in writing regarding the theft/extortion, the repudiation of the claim of the complainant cannot be up held by the Forum. We therefore, accept the claim and direct the Op to make the payment of Rs.5,89,000/,  the IDV of the insured vehicle with interest @9% per annum from the date of the repudiation i.e. 27.1.2014 till final payment. In view of the facts and circumstances of the case, complaint is accepted with costs assessed at Rs.5000/-.The order be complied by the Op within one month on receipt of the certified copy of the order.

Dated: 8.7.2015

 

                   Sonia Bansal                 Neelam Gupta                        D.R.Arora

          Member                         Member                                  President