Haryana

Karnal

CC/302/2015

Pahup Singh S/o Kishan Singh - Complainant(s)

Versus

United India Insurance Company Limited - Opp.Party(s)

Ashok Rana

06 Jan 2017

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                               Complaint No.302 of 2015

                                                             Date of instt.:07.12.2015

                                                              Date of decision:06.01.2017

 

Pahup Singh son of Shri Kishan Singh resident of House no.41, Sector-6 Urban Estate, Karnal.

 

                                                                   ……..Complainant.

                                      Vs.

1.  United India Insurance Co. Ltd. through its Divisional Manager,Division office, Durga Bhawani Complex, near Bus Stand, Karnal.

2. The United India Insurance Co. Ltd. through its Manager head office: 24, whites Road, Chennai.

                                                                        ………… Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

Before                   Sh.K.C.Sharma……….President.

                   Sh.Anil Sharma…….Member.

 

Present:-      Sh. Ashok Rana Advocate for the complainant.

                    Sh. Y.P.Arora Advocate for the Opposite parties.

                  

 ORDER:

 

                        This complaint has been filed by the complainant u/s 12 of the Consumer protection Act 1986, on the averments that his motorcycle bearing registration no.HR05AF-3161 was insured with opposite parties. The same was stolen by unknown person from Gurgaon on 21.8.2013 and the First Information Report no.426 dated 21.08.2013 was lodged by his son Deepak on the same day in Police Station Sector 10 Gurgaon. He lodged claim with opposite parties, but the opposite parties postponed the matter on one pretext or the other. A letter dated 29.10.2014 was sent by opposite parties demanding the untraced report and the copy of the letter sent to the Registration Authority about the theft of the vehicle. He submitted the required documents, but his claim was repudiated, vide letter dated 3.12.2014. Such acts and conduct of the opposite parties amounted to deficiency in service and unfair trade practice, due to which he suffered mental pain and agony apart from financial loss.

2.                Notice of the complaint was given to opposite parties, who appeared and filed written statement disputing the claim of the complainant. Objections have been raised that this Forum has got no jurisdiction to entertain and try the present complaint; that the complainant has no locus standi to file the complaint; that the complainant is estopped from filing the complaint by his own acts and conduct; that complicated questions of law and facts are involved which cannot be decided by this Forum in summary manner and that there was no deficiency in service on the part of the opposite parties.

                   On merits it has been submitted that the motorcycle was stolen on 21.8.2013, but the intimation regarding theft was given by the complainant to the opposite party on 31.12.2013 i.e. after the gap of four months ten days whereas according to the policy condition no.1 “ notice shall be given in writing to the insurance company immediately upon the occurrence of any accidental loss or damage.”. Thus, the complainant has failed to comply with the policy condition, therefore, his claim was rightly repudiated vide letter dated 3.12.2014.

3.                In evidence of the complainant, his affidavit EX.CW1/A and document Ex.C1 to C6 have been tendered.

4.                On the other hand, in evidence of the opposite parties, affidavit of S.S.Vasudeva Deputy Manager has only been tendered.

5.                We have appraised the evidence on record, the material circumstances of the case and the arguments advanced by the learned counsel for the parties.

6.                The motorcycle of complainant bearing registration no. HR05AF-3161 was insured with the opposite parties and the same was stolen during subsistence of the insurance policy on 21.08.2013. First Information Report regarding theft was lodged with Police Station Sector-10 Gurgaon on the same day. Claim was lodged with the opposite parties, but the opposite parties repudiated the claim, vide letter dated 3.12.2014 on the ground that the motorcycle was stolen on 21.08.2013 and intimation to the opposite parties was given on 31.12.2013 after four months ten days, which amounted to violation of the condition no.1 of the policy.

7.                Learned counsel for the opposite parties put a great thrust upon the contention that the theft of the motorcycle had taken place on 21.08.2013, but the intimation was given to the opposite parties on 31.12.2014  after delay of four months 10 days, which was violation of the terms and conditions of the insurance policy, therefore, the opposite parties are not liable to pay any compensation to the complainant.

8.                 Insurance Regulatory and Development Authority issued circular dated 20.9.2011, which is reproduced as under:-

“ 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 merits fort delayed claims where the delay is proved to be for reasons beyond the control of the insured.

          J.Harinarayan

          CHAIRMAN.”

 

9.                It is clear from the above circular that insurance company cannot repudiate the theft claim on technical grounds like delay in intimation and submission of some required documents. The decision of insurer to reject a claim of the claimant should be based on sound logic and valid reasons. 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 technical grounds in a mechanical fashion will result in policy holder losing confidence in the insurance industry, giving rise to excessive litigation. It has further been advised in the said letter that the insurer must not repudiate such claims unless and until the reasons for delay are specifically ascertained, recorded.

             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. In this context reference with advantage may be made to orders of the Hon’ble State commission in  Shriram General insurance Company limited Versus Rajesh Kumar 2014(2) CLT 290 and Shriram General Insurance Company Limited Vs. Manoj 2014(3) CLT 447 as well as order of Hon’ble National Commission in National Insurance Co.Ltd. Versus Kulwant Singh IV (2014) CPJ 62 (NC) .

10.              In the instant case, the vehicle of the complainant was stolen on 21.08.2013. The First Information Report was lodged on the same day. It is not the case of the opposite parties that the motorcycle of the complainant was not stolen and the story of theft putforth in the First Information Report was false. Thus, the claim of the complainant regarding theft of the motorcycle was genuine and never disputed by the opposite parties. Under such circumstances, the repudiation of the claim of the complainant by the opposite parties was contrary to the spirit of the letter of Insurance Regulatory and Development Authority, because delay in intimation to the opposite parties after four months ten days of theft was not significant in genuine claim of the complainant. A person who lost his vehicle 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 the claim with the insurance company is the last resort. Therefore, repudiation of the genuine claim of the complainant on the sole ground of delay in intimation amounted to deficiency in service on the part of the opposite parties.

11.              As a sequel to the foregoing discussion, we accept the present complaint and direct the opposite parties to pay the insured amount to the complainant  alongwith interest thereon @ 9% per annum from the date of filing of complaint till its realization. We further direct the opposite parties to pay Rs.5500/- to the complainant on account of mental agony and harassment suffered by him and for the litigation expenses. This order shall be complied within 30 days from the receipt of copy of this order. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 06.01.2017

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                      (Anil Sharma)                 Redressal Forum, Karnal.

                                          Member