National Consumer Disputes Redressal
Reliance General Insurance Company ... vs Vinod Kumar on 20 July, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 157 OF 2016 (Against the Order dated 05/08/2015 in Appeal No. 11/2015 of the State Commission Haryana) 1. RELIANCE GENERAL INSURANCE COMPANY LIMITED 60, OKHLA INDUSTRIAL ESTATE PHASE III, 2ND FLOOR, NEW DELHI ...........Petitioner(s) Versus 1. VINOD KUMAR S/O MR. KANSHI RAM, R/O VILLAGE AND POST OFFICE TEHA, TEHSIL GANAUR DISTRICT SONEPAT HARYANA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER
For the Petitioner : Mr. Vikas Bhadana, Advocate For the Respondent : Mr. Bharat Bhushan Jain, Advocate
Dated : 20 Jul 2016 ORDER
JUSTICE V.K. JAIN (ORAL)
The complainant/respondent got his truck bearing Registration No.HR-42D-4649 insured with the petitioner Company for the period from 20.8.2009 to 19.8.2010. The aforesaid vehicle was allegedly stolen on 16.6.2010. An FIR at Police Station, Samalkha in District Panipat of Haryana was registered on 22.6.2010 and intimation of the theft was given to the insurer on 15.7.2010. The claim lodged by the respondent / complainant with the insurer was repudiated vide letter dated 18.11.2010, which, to the extent it is relevant, reads as under:-
"This is with reference to the subject claim. On receipt of Claim Intimation from you, we had deputed M/s IPSO FACTO to assess/investigate the loss. We are in receipt of survey/investigation report along with relevant claim documents submitted by you. While analyzing the claim documents, we have observed the following:
Ignition key was left inside the ignition switch of the vehicle and the cabin door was also opened.
As per policy condition 5......"The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof of any driver or employee of the insured. In the event of any accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk."
2. Being aggrieved from the rejection of the claim, the complainant approached the concerned District Forum by way of a complaint. The complaint was resisted by the insurer not only on the ground on which the claim had been repudiated but also on the ground that there was delay in lodging FIR and intimating the loss of theft to the insurer.
3. Vide order dated 8.5.2014, the District Forum allowed the complaint and directed the insurer to pay a sum of Rs.7,07,000/- to the complainant along with interest and cost of litigation quantified at Rs.2200/-.
4. Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. Vide impugned order dated 5.8.2015, the State Commission dismissed the appeal filed by the petitioner Company. Being dissatisfied, the petitioner is before this Commission by way of this revision petition.
5. The first question which arises for our consideration in this case is as to whether the complainant had committed breach of the terms of the policy by leaving the key of the vehicle in the vehicle and also not locking the door while leaving the vehicle, while going to a lavatory. As per the terms and conditions of the insurance policy, the insured was required to take all reasonable steps to safeguard the vehicle from loss or damage. Therefore, if the driver of the vehicle wanted to go to lavatory, he ought to have locked the vehicle and taken the key with him instead of leaving it in the ignition. It is not as if the driver was easing himself on the side of the road, keeping the vehicle in his sight, when it was stolen. It is obvious from a perusal of the FIR itself that the driver had visited the lavatory since he all of a sudden felt the urge of going to a lavatory. Had the vehicle been in the sight of the driver, he obviously would have raised an alarm on seeing someone driving away the vehicle taking advantage of the key having been left in the ignition. The very fact that no such alarm was raised by him clearly indicates that the lavatory was at some distance from the vehicle and that is why, the vehicle was not visible to the driver at the time he was in the lavatory. If the driver of the vehicle leaves the key in the ignition and also does not lock the door of the vehicle while going to a place from where the vehicle would not be visible to him, such an act in my opinion, amounts to a failure to safeguard the vehicle from loss or damage. The driver knew that if he left the key in the ignition and the door unlocked, anybody could commit theft of the vehicle taking advantage of his being away from the vehicle. Therefore, it would be difficult to dispute the negligence on the part of the driver of the vehicle.
6. In Arjun Lal Jat Vs. HDFC Irgo General Insurance Co. Ltd. & Anr., Revision petition No.3182 of 2014, decided on 28.8.2014, the driver of the truck left the truck in start condition near All India Institute of Medical Sciences and went out to ease himself. When he returned after 10-15 minutes, the vehicle was found missing. The claim having been rejected, the complainant approached the concerned District Forum by way of a complaint. The District Forum held in favour of the complainant but the State Commission ruled against him. The matter was then agitated by the complainant before this Commission. Dismissing the revision petition, it was interalia held that if the driver leaves the key in the ignition, he would be negligent and the theft taking place on account of his negligence, the insurer cannot be made liable to reimburse the insured.
7. The learned counsel for the complaint relies upon the decision of this Commission in National Insurance Co. Ltd. Vs. Kamal Singhal [IV (2010) CPJ 297 (NC)] referred in para 9 of the order of the State Commission. The aforesaid decision, in my opinion, would not apply to a case where the vehicle is out of the sight of the driver at the time he leaves the vehicle unattended with keys in the ignition and the doors of the vehicle unlocked.
8. The learned counsel for the complainant also refers to a decision of Punjab and Haryana High Court referred in para 10 of the order of the State Commission upholding an order of permanent Lok Adalat, allowing the claim with 25% deduction in a case where the vehicle was lost when parked in front of the house of a relative with keys inside the vehicle. However, in the present case, the vehicle was not parked outside the residence of the insured but was parked on a highway and, therefore, it was vulnerable to theft if the keys were left in the ignition with door of the vehicle unlocked. Therefore, the above-referred decision would not rely apply to the factual situation prevailing in this case.
9. A perusal of the FIR would show that it came to be lodged with the concerned police station only on 22.6.2010. The vehicle was stolen on 16.6.2010 and the theft was detected by the driver on the same day. There is no explanation for delay of 6 days in reporting the theft to the police.
10. As per the terms of a motor insurance policy, the insured is required to lodge immediate FIR with the concerned police station, besides intimating the theft to the insurer. The complainant not only committed delay of 6 days in lodging FIR with the concerned police station, he failed to intimate the theft of the vehicle to the insurer for more than four weeks. The theft of the vehicle was reported to the insurer on 15.7.2010 after 29 days. This was yet another breach of the mandatory terms of the insurance policy taken by the complainant.
11. "In Oriental Insurance Company Limited Vs. Parvesh Chander Chadha, Civil Appeal No.6739 of 2010, decided on 17.08.2010, the car in question was stolen between 18.01.1995 and 20.01.1995. The FIR was lodged with the police on 20.01.1995 but intimation of the said theft was given to the insurance company only on 22.5.1995. The claim having been repudiated on the ground of the breach of the conditions of the policy, a complaint was filed by the insured before the concerned District Forum, seeking compensation along with interest. The complaint was resisted by the insurance company on the ground that he had violated the conditions of the policy by not intimating the alleged theft for almost five months. The District Forum, State Commission as well as National Commission, having ruled in favour of the complainant, the matter was agitated by the insurance company before the Hon'ble Supreme Court. Allowing the appeal filed by the insurance company, the Hon'ble Supreme Court inter-alia held as under:
"Admittedly, the respondent had not informed the appellant about the alleged theft of the insured vehicle till he sent letter dated 22.5.1995 to the Branch Manager. In the complaint filed by him, the respondent did not give any explanation for this unusual delay in informing the appellant about the incident which gave rise to cause for claiming compensation. Before the District Forum, the respondent did state that he had given copy of the first information report to Rajender Singh Pawar through whom he had insured the car and untraced report prepared by police on 19.9.1995 was given to the said Shri Rajender Singh Pawar, but his explanation was worthless because in terms of the policy, the respondent was required to inform the appellant about the theft of the insured vehicle. It is difficult, if not impossible, to fathom any reason why the respondent, who is said to have lodged First Information Report on 20.1.1995 about the theft of car did not inform the insurance company about the incident. In terms of the policy issued by the appellant, the respondent was duty bound to inform it about the theft of the vehicle immediately after the incident. On account of delayed intimation, the appellant was deprived of its legitimate right to get an inquiry conducted into the alleged theft of vehicle and make an endeavour to recover the same. Unfortunately, all the consumer foras omitted to consider this grave lapse on the part of the respondent and directed the appellant to settle his claim on non-standard basis. In our view, the appellant cannot be saddled with the liability to pay compensation to the respondent despite the fact that he had not complied with the terms of the policy.
In the result, the appeal is allowed, the impugned order as also those passed by the District Forum and the State Commission are set aside and the complaint filed by the respondent is dismissed".
This issue was discussed by this Commission at length in Reliance General Insurance Co. Ltd. Vs. Jai Prakash, Revision Petition No.2479 of 2015 and connected matters, decided on 11.1.2016 and after considering the standard form of insurance prescribed by Tariff Advisory Committee established under section 64U of the Insurance Act 1938 and the decision of the Hon'ble Supreme Court in Parvesh Chander Chadha (supra), the following view was taken:-
"12. Since the terms and conditions of the insurance policy, which the insured had issued to the complainant in Parvesh Chander (supra), had not been reproduced in the order of the Hon'ble Supreme Court, we perused the order passed by this Commission in the above referred case. However, the terms and conditions of the policy were not reproduced even in the judgment of this Commission. It however, became evident from a perusal of the judgment that the insurance policy was issued for the period from 17.1.1995 to 16.01.1996. On further examination of the issue, we found that standard form for private car policy was prescribed by the Tariff Advisory Committee from time to time, which is binding upon all the insurance companies. The relevant clause of the insurance policy, applicable at the time the complainant in Parvesh Chander (supra) took the insurance policy, reads as under:
"Notice shall be given in writing to the company immediately upon the occurrence of any accident or loss or damage and 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 a copy thereof shall be forwarded to the Company immediately on receipt of the insured. Notice shall also be given in writing 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 this policy. In case of theft or criminal act which may be the subject of a claim under this policy the insured shall give immediate notice to the police and cooperate with the company in securing the conviction of the offender".
The standard form of the insurance policy applicable to Motor Vehicles was amended by the Tariff Advisory Committee with effect from 01.07.2002 and the revised policy contains the clause extracted in para-8 hereinabove.
13. Section 64 U of the Insurance Act, 1938 provides for establishment of a Committee to be called the Tariff Advisory Committee to control and regulate the rates, advantages, terms and conditions that may be offered by the insurers in respect of general insurance business.
Section 64 UC (1) of the Insurance Act, 1938 to the extent it is relevant, reads as under:
64UC. Power of the Advisory Committee to regulate rates, advantages, etc. -
The Advisory Committee may, from time to time and to the extent it deems expedient, control and regulate the rates, advantages, terms and conditions that may be offered by insurers in respect of any risk or of any class or category of risks, the rates, advantages, terms and conditions of which, in its opinion, it is proper to control and regulate, and any such rates, advantages, terms and conditions shall be binding on all insurers.
Every decision of the Advisory Committee shall be valid only after and to the extent it is ratified by the Authority, and every such decision shall take effect from the date on which it is so ratified by the Authority, or if the Authority so orders in any case, from such earlier date as he may specify in the order.
(4) The decisions of the Advisory Committee in pursuance of the provisions of this section shall be final.
(5) Where an insurer is guilty of breach of any rate, advantage, term or condition fixed by the Advisory Committee, he shall be deemed to have contravened the provisions of this Act".
Thus, the terms and conditions prescribed by the Tariff Advisory Committee uniformly apply to all the insurance policies.
14. On a comparison of the Clause applicable in the year 1995-96 and the clause applicable in the subsequent policies, we find that whereas the previous clause required the insured to intimate the insurance company immediately 'upon the occurrence of any accident or loss or damage', the later clause required him to give such intimation upon the 'occurrence of any accidental loss or damage'. Since theft of a vehicle is also a loss, the earlier clause obviously required immediate intimation of the theft of the vehicle to be given to the insurance company. Therefore, the question which arises for our consideration is as to whether there is any change in the obligation of the insured in this regard, considering that the expression 'accidental loss or damage' is used in the clause contained in the later policies. If the clause contained in the later policies read in isolation, it may give an impression that the notice to the insurance company is required to be given only in the event of the loss or damage to the vehicle due to an accident as it is normally understood, if the insured intends to lodge a claim with the insurer for reimbursement of the loss or damage sustained by him. But, a deeper scrutiny of the later insurance policies, we are satisfied that even a loss or damage, due to theft of the vehicle, is required to be reported to the insurance company immediately after the theft is detected, in case the insured intends to lodge a claim with the insurer for reimbursement of the loss or damage sustained by him.
15. The revised standard form uses the term 'accidental loss' at a number of places, as extracted herein below:
Standard form for private car package policy Whereas the insured by a proposal and declaration dated as stated in the Schedule which shall be the basis of this contract and is deemed to be incorporated herein has applied to the Company for the insurance hereinafter contained and has paid the premium mentioned in the schedule as consideration for such insurance in respect of accidental loss or damage occurring during the period of insurance.
"The Company shall not be liable under this Policy in respect of Any accidental loss or damage and / or liability caused sustained or incurred outside the geographical area:
4 (i) Any accidental loss or damage to any property whatsoever or any loss or expense whatsoever resulting or arising there from or any consequential loss".
The term accidental loss or damage, wherever, it appears in the standard form of the insurance policy will have to be given the same meaning. If the aforesaid term is interpreted to exclude loss due to theft, as the contention of the complainant is, it would imply that the proposal submitted by the insured which forms the basis of the contract of insurance does not provide insurance against theft of the vehicle, and consequently the insurer is not liable to reimburse the insured for such a loss. This obviously is not the case either of the insurer or of the insured. Similarly, this could not have been the intention of the parties to exclude the consequential loss in case of loss or damage to property due to an accident while not excluding such a loss on account of theft of a vehicle. Hence, there is no escape from the conclusion that the substitution of the term 'accident or loss or damage' in the old standard form by the term 'accidental loss or damage' in the new standard form does not change the scope of the insurance policy issued in respect of a motor vehicle and therefore, the decision of the Hon'ble Supreme Court in Parvesh Chander (supra) would equally apply in respect of the insurance policies issued after 30.07.2002 when the revised standard form came into force.
16. For the reasons stated hereinabove, we have no hesitation in holding that the insured was under a contractual obligation to intimate the theft of the vehicle to the insurer immediately after the said theft came to his knowledge and mere intimating the police or lodging an FIR does not amount to sufficient compliance with the terms and conditions of the insurance policy. Since admittedly, there was substantial delay in intimating the theft of the vehicle to the insurance company in both these cases, the insurer was entitled to repudiate the claim on account of the aforesaid default on the part of the insured."
12. The learned counsel for the complainant submits that delay in lodging the FIR and intimating the theft to the insurer was not a ground of repudiation. In my opinion, since the aforesaid plea is based on admitted facts it could be allowed to be taken in the reply of the insurer even if it was not a ground of repudiation. In any case, the complaint is liable to be dismissed on account of failure of the insured to take reasonable steps to protect and safeguard the vehicle.
13. For the reasons state herein above, the impugned orders cannot be sustained and the same are accordingly set aside. The complaint is consequently dismissed, with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER