State Consumer Disputes Redressal Commission
National Insurance Co. Ltd vs Baljeet Kaur on 17 July, 2008
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 17.07.2008 Appeal No. FA-08/408 (Arising out of Order dated 22.02.2008 passed by the District Consumer Forum(Central), Kashmere Gate, ISBT, Delhi in Complaint Case No. 263/07) 1.
National Insurance Co.
Ltd. Appellants Through Regional Office-1, Through Jeevan Bharti Tower-2, Ms. Shantha Level-4, 124, Devi Raman, Connaught Place, Advocate New Delhi-110001.
2.National Insurance Co. Ltd., D.O. No.II, Deen Dayal Upadhaya Bhavan, 3rd Floor, 7-E, Jhandewalan Extension, New Delhi 110055.
Versus Mrs. Baljeet Kaur Respondent 160, IInd Floor, North Avenue, M.P. Flats, New Delhi-110001.
New Delhi.
CORAM:
Justice J.D. Kapoor President
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor, President (Oral)
1. This appeal is directed against the order dated 22.02.2008 passed by the District Forum whereby the appellant has been directed to pay the insured sum of Rs. 84,000/- with interest @ 9% on account of theft of the vehicle and Rs. 5,000/- as compensation and Rs. 2,000/- as cost of litigation. Feeling aggrieved the appellant has preferred this appeal.
2. The impugned order has been assailed mainly on the premise of inordinate delayed information of theft of the vehicle given by the respondent to the appellant company and also the vehicle having not been transferred in the name of the respondent.
3. The case of the respondent leading to the impugned order, in brief, was that she got her Maruti car No. DL-6C E 3742 insured with the appellant vide Insurance Cover Note No. DR 0984354. The cover note was effective from 6.9.04 to 5.9.05. The IDV of the vehicle was Rs. 84,000/-. Unfortunately the car was stolen on 1.5.05 when it was parked in Gurudwara Rakabganj Sahib, New Delhi. The complaint was lodged with local police vide FIR No. 115/05 u/s 379 IPC, PS Parliament Street. The respondent also informed appellant about the theft of the car. Appellant appointed Surveyor. The respondent extended full cooperation to the appellant and its surveyor. Lastly appellant repudiated the claim on the ground of inordinate delay in informing the appellant about the theft of the vehicle. The respondent termed the repudiation the claim on this false ground as deficiency in service on the part of the appellant and prayed for directions to appellant to pay a sum of Rs. 1,00,000/- with interest, cost and compensation.
4. The appellant rejected the complaint by pleading that as per terms, loss must be reported to it immediately. Further that respondent informed it on 27.5.05 while the car was stolen on 1.5.05 and further that vehicle No. DL-6C E 3742 was not registered in the name of respondent and hence she was not having insurable interest in the vehicle. The appellant denied any deficiency in service on its part. Appellant filed evidence by way of affidavit of Sh. Shyam Kumar Gupta, Divisional Manager.
5. We have perused the impugned order closely and find that the report of theft of the vehicle was lodged immediately i.e. on the same date with the police against FIR No. 115/05 u/s 379 IPC. Admittedly the respondent intimated the company about the theft of vehicle on 20.7.05 while lodging the claim. Though there is a term of contract that the information should be given immediately to the insurance company within 15 days but such a term is of not mandatory nature and is at the most directory and delay if any has to be considered in the given facts and circumstance of the case.
6. Wherever a criminal offence takes place and report is lodged with the police, insurance companies are de-barred from appointing any agency independently for investigation of theft or reject the claim for delayed information about the theft. Had the report not been lodged with the police, appellant could have availed the benefit of relevant clause of the contract. However, it can appoint surveyor to assess the loss. Insurance companies cannot run parallel investigation. Under Criminal Procedure Code, investigation into criminal offence falls within the domain of police. Once the police has given the report as untraced there is no option left with the insurance companies than to take the allegation of the respondent of theft as true for the purpose of deciding the claim.
7. What is relevant for indemnification of loss against insurance cover is whether theft of the vehicle has taken place or not and in this regard it has no option than to act upon the report of the police.
8. Even otherwise if the police finds that a person has lodged a false report he can be prosecuted for the offence u/s 182 of the IPC. As regards the insurable interest of the respondent, we do not find any merit in the contention of the counsel for the appellant as the respondent got the insurance policy on 6.9.04 and also filed a copy of Form No. 29 & 30 showing that she was the owner of the car. The verification of the insurable interest is required to be carried out at the time of issuing the policy and not at the time of processing the claim.
9. Even otherwise the change in the name of the person in the insurance policy or in the registration certificate is official formality. Subsequent purchaser is the actual owner of the vehicle and as such is entitled for insurance amount as there is presumption of insurable interest having been impliedly transferred in the name of subsequent purchaser particularly if there is no objection from the original owner.
10. In case of total loss of the vehicle, insured is entitled to the market value at the relevant time and the insured is not entitled for entire insurance claim. There is a term in the insurance policy that insurance company will be liable to pay the market value and, in our view, once the market value of the vehicle is assessed at the time of issuing the insurance cover or the insurance policy, the insurance company is not entitled to reopen the issue and reassess the market value at its whim or caprice. The experience shows that in such cases the insurance companies have been assessing the market value to half of the value of the insured value which on the face of it is unacceptable. In such cases market value has to be assessed by way of depreciated value @ 5% per year for passenger vehicles and 10% for commercial vehicles.
11. Proceeding on the aforesaid premise, we do not find any reason to issue notice to the respondent and partly allow the appeal by modifying the impugned order that the insurance company shall pay the insurance amount of Rs. 84,000/- less 5% depreciated value and maintain rest of the order.
12. The payment shall be made within one month from the date of receipt of this order.
13. Bank Guarantee/FDR, if any furnished by the appellant, be returned forthwith.
14. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record room.
15. Announced on 17th day of July, 2008.
(Justice J.D. Kapoor) President ysc