DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD
Dated this the 29th day of September, 2022
Present : Sri.Vinay Menon V., President
: Smt.Vidya A., Member
: Sri.Krishnankutty N.K., Member
Date of Filing: 12.07.2018.
CC/87/2018
Vipin,
S/o.Kannan,
Pollekkad, Mankara,
Palakkad.
(By Adv.Roshini Suresh) - Complainant
Vs
The Manager,
New India Assurance Company Ltd.,
N.S. towers, Palakkad. - Opposite party
(By Adv.T P George)
O R D E R
By Smt. Vidya A. , Member
Pleadings of the complainant in brief.
- The complainant’s vehicle (motor cycle with Regn.No.KL-09-AL-3194) was insured with the opposite party with policy No.76110031160100009453. The insurance was taken on 01.08.2016 and the policy covers theft as per its terms & conditions.
The complainant usually parks his vehicle in front of his residence at Mankara, Palakkad with all security. On 08.07.2017 morning, the vehicle was found to be stolen from there and he immediately reported the matter to the Ottappalam Police station and case was registered as Crime No.600/2017. After two months, the police informed him that the vehicle was not yet detected. After getting the report as ‘undetected’, the complainant lodged a claim with the opposite party to indemnify his loss. He approached the opposite party many times for the settlement of the amount. The opposite party kept the claim pending for nine months and finally repudiated it stating that the claim was not lodged within 24 hrs. Complainant states that he could file the claim only after getting ‘undetected ‘report from the police.
The denial of the claim without satisfactory explanation has caused irreparable injury, loss and mental agony to the complainant. This is an Unfair Trade Practice and grows Deficiency in service on the part of the insurance company.
Hence this complaint is filed for directing the opposite parties to pay (1) Rs.85,000/-with interest at the rate of 9% per annum from 24.04.2018 and (2) to pay Rs.20,000/- for the mental agony and damages suffered by the complainant and such other reliefs which is fit to be granted.
- The complaint was admitted and notice was issued to the opposite party. The opposite party entered appearance and filed version. Subsequently complainant filed an application. IA 44/2019 to implead supplemental 2nd opposite party and it was allowed. 2nd opposite party also appeared and filed version.
3. Pleadings of 1st opposite party in their version is as follows:-
They admit that the Motor cycle bearing Reg. No. KL-09-AL-3194 was insured with this opposite party for the period from 01.08.2016 to 31.07.2017. They denied the averment in the complaint that on 08.07.2017 the vehicle was found missing from the complainant’s house and a crime was registered before the police and the police after investigation referred it as undetected.
As per the policy conditions, notice shall be given in writing to the company immediately upon the occurrence of any accidental loss or damage and the insured shall give all necessary information to the company. Police after investigation referred the case as undetected and submitted the report before the Hon’ble Chief Judicial Magistrate Court on 31.10.2017. The complainant has submitted the claim form only on 28.12.2017 ie after the lapse of 5 months and 20 days. When the claim was raised by the complainant on 28.12.2017, there was no valid policy and it expired on 31.07.2017.
There was a long delay in submitting the claim form and intimating the incident. So the opposite party lost the chance of investigating the matter immediately to trace out the occurrence and investigation can be effectively done only if the claim is raised soon after the incident.
The claim was repudiated by this opposite party and that was duly intimated to the complainant. The allegation of the complainant that the opposite party kept the claim for 9 months and finally repudiated it without satisfactory explanation is denied. The claim was raised only on 28.12.2017 and the repudiation letter was issued on 24.04.2018. It was rejected as per the terms & conditions of the policy and there is no Deficiency in Service on the part of this opposite party and they prayed for the dismissal of the complaint.
4. Later 1st opposite party filed additional version. They contended in their additional version that the complainant purchased the Motor cycle with vehicle finance from Bajaj Finance Ltd.
The vehicle was hypothecated to Bajaj finance Ltd. from the date of the delivery of vehicle to the complainant on 03.08.2016 and there is an endorsement to that effect in the registration certificate also. As per the agreement with the financier, complainant had to pay a monthly installment of Rs.4665/-. The complainant had defaulted the repayment and there was huge arrears as on the date of the alleged theft. The financier had issued notice demanding the payment, but the complainant did not pay any amount. So the vehicle was seized by the financier and there was no theft as alleged. The real facts were suppressed by the complainant and that made the police to file a report as ‘undetected’. Further they averred that the value of the vehicle shown in the complaint and the compensation claimed is highly excessive. The actual value of the vehicle is less than Rs.50,000/- and the complainant is not entitled to the interest claimed.
5. Subsequently supplemental 2nd opposite party appeared and filed their version. They contended that they are only financier in the present transaction and had extended financial assistance to the complainant for the purchase of the vehicle and not liable for any kind of insurance related claims. 2nd opposite party is not a necessary party and there is no specific allegation against this opposite party and the complaint is to be dismissed.
2nd opposite party further submitted that the complainant was irregular in loan repayment and they sent a demand notice on 07.12.2017 and demanded RS.9310/- towards EMI dues and Rs.1321/- towards other dues and requested to regularize the loan account, but the complainant failed to repay it. Due to the complainant’s failure, 2nd opposite party recalled entire loan vide Recall Notice dated 05.01.2018 and demanded to pay Rs.48,779/- and close the loan account. But the complainant failed to close it. They prayed for the dismissal of the complaint on these grounds. They further prayed for issuing direction to the complainant to remit outstanding dues and close loan account and direct 1st opposite party to release the claim proceed in their favor.
6. Complainant filed proof affidavit in evidence and Ext A1 to A10 marked (A1 series). Marking of Ext A6 to A9 are objected to by counsel for opposite party on the ground that they are indecipherable. Both opposite parties filed proof affidavits and Ext B1 to B5 marked from the side of 1st opposite party. The complainant was cross examined as PW1. Ext B6 & B7 marked from the side of 2nd opposite party. Evidence closed. Complainant & 1st opposite party filed notes of arguments.
From the pleadings of both parties, the following points arise for consideration.
1.Whether there was a delay from the part of the complainant in lodging the claim
with the opposite party and if ‘yes’, what is the reason for the delay?
2.Whether there is any Deficiency in service /Unfair Trade Practice on the part of
opposite parties?
3.Whether the complainant is entitled to the reliefs claimed?
4.Reliefs, as cost and compensation.
7. Point No 1
It is admitted that the complainant’s motor cycle bearing registration number KL-09-AL 3194 was insured with the 1st opposite party for a period from 01.08.2016 to 31.07.2017.
The complainant’s contention is that on 08.07.2017, morning the vehicle which was parked in front of complainant’s residence was found stolen and he immediately reported the matter to the Ottappalam Police station and case was registered as Crime No.600/2017.
The complainant produced the FIR which is marked as Ext A3. From this, the reporting time of the incident is seen as 08.07.2017, 17.00 hrs. So it is clear that, he immediately reported the matter to the nearest police station and crime was registered.
8. The 1st opposite party, insurance company, repudiated the claim for the reason as seen from Ext B3, Repudiation letter dated 24.09.2018 is that “As per the policy conditions, the insured must inform the theft claim to Police station and insurance company within 24 Hours. The intimation of claim was done at our office only after 5 months of incident. So we humbly inform you about our inability to settle the claim”.
The Hon’ble Supreme Court in Jaina Construction Committee Vs Oriental Insurance company Ltd. (Civil appeal No.1069 of 2022, 200 SCC online SC 175) held that, “The FIR was lodged immediately on the next day of occurrence of theft of the vehicle by the complainant. The accused were also arrested and charge sheeted, however, the vehicle could not be traced out. Of course, it is true that there was a delay of five months on the part of the complainant in informing and lodging its claim before the insurance company. Nonetheless, it is pertinent to note that the Insurance company has not repudiated the claim on the ground that it was not genuine. It has repudiated only on the ground of delay.”
The court hence concluded that “when the complainant had lodged the FIR immediately after the theft of the vehicle and when the police after investigation had arrested the accused and also filed Challan before the concerned Court, and when the claim of insured was not found to be not genuine, the Insurance company could not have repudiated the claim merely on the ground that there was delay in intimating the Insurance company about the occurrence of the theft”.
Here in this case, the complainant immediately reported the matter to the police station. The Insurance company did not raise any contention in the repudiation letter that the claim was not geuine. Their only concern was the delay in intimation of claim. So even if there is a delay in loadging the claim with the opposite party, the delay was not found to be intentional. The complainant immediately reported the matter to the Police station and FIR was registered and the delay was mainly due to the delay in getting the report from Police. So point No.1 is answered in favor of complainant.
Points 2 to 4
9. Applying the dictum in the above case the insurance company would not have repudiated the claim on the ground of delay in intimating them when it was properly intimated to the nearest Police station. It is a Deficiency in service on their part in mechanically repudiating the claim without considering all aspects.
10. Subsequently 1st opposite party raised a contention that the vehicle was not stolen as averred by the complainant, but it was seized by the 2nd opposite party, the financier, as the complainant had neglected to repay the loan and a huge amount was due to the opposite parties. But the 2nd opposite party did not raise the contention of seizure of vehicle in their version or proof affidavit. They only submitted that the complainant was irregular in loan repayment and they sent a demand notice to the complainant to pay the outstanding dues and regularize the loan account. But the complainant failed to pay the dues. Ext A10, Lawyer Notice issued by the 2nd opposite party to the complainant dated 05.01.2018, and Ext B5 Demand notice dated 10.05.2018 demands the complainant to repay the loan dues or to return the vehicle to them. So the 1st opposite party’s contention that the vehicle was not stolen, but it was seized by 2nd opposite party, the financier is found to be incorrect.
11. The 1st opposite party in their additional version raised the contention of seizure of vehicle by the 2nd opposite party, financier. They did not raise such contention at the time of repudiating the claim or in their version. Their only reason for rejection of claim was delay in intimation. So after repudiation they cannot go beyond the stand taken in the repudiation letter.
The Hon’ble S.C in Saurashtra Chemicals Vs National Insurance company (Civil Appeal No.2059 of 2015), held that it is settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurance has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint”.
So by applying the dictum laid down by the Hon’ble S.C, the insurance company is not expected to go beyond the reason mentioned in the repudiation letter. They had no case that the complainant’s claim was not genuine in the repudiation letter.
12. Further during hearing, the 2nd opposite party’s counsel submitted that they have not seized the vehicle as alleged by 1st opposite party. So the contention of the complainant that the vehicle was stolen from his premises seems to be genuine and there is Deficiency in service on the part of 1st opposite party in repudiating his claim for which they are liable to compensate the complainant. The complainant would have suffered mental agony when his genuine claim was rejected by the 1st opposite party and this made him file this complaint causing financial loss.
13. Regarding the value of the vehicle, the 1st opposite party has taken a contention that the value of the vehicle is less than Rs.50,000/-. But in the “Policy Schedule cum Certificate of Insurance” which is marked as Ext B1 (Ext A2 is also the same document). Under the column IDV (in) the total value of the vehicle is shown as Rs.94187/-. So the Insured Declared Value of the vehicle is Rs.94,187/-. 1st opposite party has no case that this is an exaggerated value made with the intention to defraud 1st opposite party . They had also received pro-rata premium for the IDV.
Hence the complainant is entitled to get Rs 85000/- being the value of the vehicle together with interest from the date of repudiation.
The 2nd opposite party is only a financier and there is no Deficiency in service on their part and no liability is cast upon them.
In the result the complaint is allowed.
(1) We direct the 1st opposite party to pay Rs.85,000/- with interest at the rate of 9% per annum from 24.04.2018 till payment.
Since the vehicle is under hypothecation with the 2nd opposite party, the 1st opposite party is directed to release the amount due to the 2nd opposite party as per their statement of account. Balance amount, if any shall be paid to the complainant.
(2) 1st opposite directed to pay Rs.5000/- for Deficiency in service,Rs.15,000/- for the mental agony and damages suffered by the complainant and to pay Rs.15,000/- as cost of this litigation.
The opposite party shall comply with the order within 45 days from the date of receipt of copy of this order failing which the opposite party shall pay an amount of Rs.250/- per month or part thereof by way of solatium to the complainant till date of final payment.
Pronounced in open court on this the 29th day of September, 2022.
Sd/-
Vinay Menon V
President
Sd/-
Vidya.A
Member
Sd/-
Krishnankutty N.K.
Member.
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1(series) – Photocopy of registered lawyer notice dated 14.06.2018 with
Acknowledgement card and postal receipt.
Ext.A2 – Insurance policy dated 01.08.2016.
Ext.A3 – F I R dated 08.07.2017.
Ext.A4 – Final Report dated 31.10.2017.
Ext.A5 - Claim repudiation letter dated 24.04.2018 issued by the OP to the complainant.
Ext.A6(sub. to proof)-Copy of receipt issued by the Bajaj finance dated 23.01.2017 to the
Complainant.
Ext.A7- (sub. to proof)- Customer copy of receipts issued by Bajaj finance dated 27.03.2017
to the complainant.
Ext.A8- Customer copy of receipts issued by Bajaj finance dated 31.05.2017 to the
complainant.
Ext.A9- Customer copy of receipts issued by Bajaj finance dated 31.07.2017 to the
complainant.
Ext.A10-Lawyer notice issued by Bajaj finance.
Exhibits marked on the side of the opposite party
Ext.B1 – Policy No.76110031160100009453 for the period from 01.08.2016 to 31.07.2017
with two wheeler package policy clause (true copy)
Ext.B2 – Original claim form dated 28.12.2017 issued by the complainant.
Ext.B3- Copy of the Repudiation letter with Acknowledgement card dated 24.04.2018.
Ext.B4-Photocopy of RC of Veh No. KL 09-AL-3194.
Ext.B5-Copy of notice issued by Bajaj finance to the complainant dated 10.05.2018.
Ext.B6-Loan agreement dated 04.08.2016.
Ext.B7-Statement of account.
Cost : 15,000/- (Rupees Fifteen thousand only) allowed as cost of the proceedings.
