State Consumer Disputes Redressal Commission
Royal Sundaram Alliance Insurance ... vs Charan Singh on 15 March, 2018
Daily Order STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA First Appeal No : 356 of 2017 Date of Institution: 29.03.2017 Date of Decision : 15.03.2018 Royal Sundaram General Insurance Company Limited, Corporate Office Vishranthi Melaram Towers No.2/319, Rajiv Gandhi Salai (OMR), Karapakkam, Chennai Pin Code-600097, through its Managing Director. Appellant-Opposite Party No.1 Versus 1. Charan Singh s/o Sh. Tejpal, Caste Jat, age 32 years, Occupation Agriculture, Resident of Village Likhi, Tehsil Hodal, District Palwal. Respondent-Complainant 2. Rohan Motors Limited, 3695/31/14, Mathura Road, Sanwal Vihar, Palwal City, Tehsil and District Palwal, through agent Sumit Kumar Royal Sundaram General Insurance Company Limited (Royal Sundaram General Insurance Company Limited). Respondent-Opposite Party No.2 CORAM: Mr. Balbir Singh, Judicial Member.
Argued by: Shri Amit Goyal, Advocate for appellant. Shri Karan Singh, Advocate for respondent No.1. None for respondent No.2 (service dispensed with). O R D E R BALBIR SINGH, JUDICIAL MEMBER
This appeal has been preferred against the order dated February 08th, 2017 passed by District Consumer Disputes Redressal Forum, Palwal (for short 'the District Forum').
2. As per version of the complainant Charan Singh (respondent No.1 herein) he purchased a car bearing registration No.HR-50D-8553 (Maruti CIAZ) from Rohan Motors Limited -Opposite Party No.2 with the purpose to earn income for his livelihood on December 11th, 2015 on payment of Rs.8,49,028/-. The above mentioned car vehicle was got insured by the complainant with Royal Sundram General Insurance Company Limited (for short 'the Insurance Company') - Opposite Party No.1 (appellant herein) vide insurance policy No.MOP3282153 mentioning the insurance period from December 11th, 2015 to December 10th, 2016 and total sum assured as Rs.8,38,860/-. On February 14th, 2016 the above mentioned car vehicle was stolen from Bus Stand Gulabad when the car vehicle was with his driver. The complainant was informed regarding theft of the vehicle on February 15th, 2016. The complainant informed the Police as well as the Insurance Company on February 15th, 2016 regarding theft of the vehicle. A criminal case under First Information Report (FIR) No.30 of 2016 was registered under Sections 328, 379-A of the Indian Penal Code at Police Station Hassanpur. Thereafter, the complainant submitted insurance claim and provided all relevant documents to Dheeraj Gupta, Surveyor of the Insurance Company. The insurance claim of the complainant was repudiated vide letter dated May 13th, 2016.
3. The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 with a prayer to direct the opposite parties to pay an amount of Rs.8,38,860/- as insurance claim amount with interest at the rate of 24% per annum; to pay an amount of Rs.2,00,000/- as compensation on account of un-necessary harassment, mental agony and an amount of Rs.2200/- as litigation expenses.
4. The opposite party No.1 - Royal Sundram Alliance Insurance Company Limited in its written version has taken plea that the complaint is not maintainable as the insured vehicle was being used for hire and reward at the time of commitment of theft. Moreover, the insurance company was informed on February 29th, 2016 and thus there was delay of 15 days in giving intimation to the insurance company regarding theft of the vehicle which is violation of the terms and conditions of the insurance policy. The insurance was provided only for domestic use of the vehicle but the same was used for hire and reward. It is pleaded that when the vehicle was taken away by the assailants from Sheesh Pal driver, at that time the assailants three in number were travelling in the car vehicle and the car vehicle was hired for an amount of Rs.1500/-. In these circumstances, the repudiation of the insurance claim of the complainant is justified. The complainant is not entitled to receive any amount as prayed in the complaint. It is prayed that the complaint filed by the complainant be dismissed.
5. Opposite Party No.2 - Rohan Motors Limited filed its separate written version on the plea that the District Forum has no jurisdiction to decide this complaint and that it is not a case of deficiency in service as the complainant is not covered under the definition of 'consumer' as provided under Section 2(1)(d) of the Consumer Protection Act. Relief claimed by the complainant, if any, in the complaint is against the opposite party No.1 - Insurance Company. The opposite party No.2 has been intentionally impleaded as party to the proceedings of this complaint. It is prayed that the complaint filed by the complainant be dismissed with cost.
6. Parties led evidence in support of their respective claims before the District Forum.
7. After hearing arguments vide impugned order dated February 08th, 2017 the complaint filed by the complainant was allowed directing the opposite party No.1 to pay 75% of the Insured Declared Value of the car vehicle; to pay an amount of Rs.5,000/- as compensation on account of un-necessary harassment and mental agony and an amount of Rs.5500/- as litigation expenses. In case the compliance of the order is not made within 15 days, the opposite party No.1 shall be liable to pay an amount of Rs.10,000/- in addition to the above mentioned awarded amount.
8. Aggrieved with the impugned order dated February 08th, 2017, the opposite party No.1 has filed the instant First Appeal No.356 of 2017 with a prayer to set aside the impugned order and to dismiss the complaint.
9. I have heard learned counsel for the parties and perused the case file.
10. During the course of arguments, there was no controversy of any type that the complainant is registered owner of car (Maruti CIAZ) bearing registration No.HR-50D-8553. After purchase the complainant got the above mentioned car vehicle insured with the Insurance Company -opposite party No.1 regarding the period from December 11th, 2015 to December 10th, 2016 mentioning the total IDV as Rs.8,38,860/- vide insurance policy No.MOP3282153 Annexure C-2. On February 14th, 2016 Sheesh Pal driver of the complainant was proceeding towards Hodal from Village Gulabad while driving the car vehicle. Three other persons were also traveling in the same car vehicle. The car vehicle was stolen and taken away by those three persons. Sheesh Pal driver became unconscious after taking poisonous juice provided by those persons. The complainant was informed regarding theft of the car vehicle on February 15th, 2016 and on the same date the complainant informed the Police as is evident from Annexure-7. As per version of the complainant the Police of Police Station Hassanpur and the Insurance Company were informed regarding this incident on the same date. However, First Information Report (FIR) No.30 was lodged on February 17th, 2016. Keeping in mind the above mentioned circumstances, observations can be made safely that the complainant did not cause un-necessarily delay in submitting information to the Police Station regarding commitment of theft of the vehicle. In fact, as and when the owner of vehicle receives information regarding theft of his vehicle, he is also supposed to take some time to form his opinion that the vehicle has been actually stolen. In fact, in the beginning the registered owner is expected to make efforts to trace the stolen vehicle himself. This fact also cannot be overlooked that these days Police Officers also generally avoid recording of FIR in connection with such type of matters to avoid increase in the figure of untraced cases.
11. The insurance claim of the complainant was repudiated on the ground of delay in information to the Police as well as the Insurance Company which is evident from repudiation letter dated May 13th, 2016 (Annexure C-3). The complainant has stated in his complaint that he informed the insurance company on February 15th, 2016. Anyhow it is admitted fact that the insurance claim was submitted by the complainant in writing on February 29th, 2016 just after 15 days from the date of occurrence. The insurance claim form is Annexure-3.
12. The Insurance Regulatory Development Authority (IRDA), which control and regulates the Insurance Companies, issued direction not to reject the genuine claims simply because of delay in registration of FIR and intimation to the Insurance Company. In the instructions of the IRDA it was mentioned that 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 insurer's decision to reject a claim shall be based on sound logic and valid grounds. Support to this view can be taken from the case law cited as Bharti Axa General Insurance Company Limited vs. Ms. Monu Yadav and another, 2014(4) PLR 861, decided by Hon'ble Punjab and Haryana High Court, Chandigarh. As per facts of that case, the delay in lodging claim with the Insurance Company was of 54 days. The findings in that case were also given in favour of the claimants on the basis of the guidelines issued by IRDA. The Insurance Companies were advised that they must not repudiate such claims on the ground of delay especially when the Police have been promptly informed in this regard.
13. It is very clear from the 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. 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 insured/their legal heirs. In this case the repudiation of complainants' claim was contrary to the instructions issued by the IRDA, mentioned above.
14. Findings have already been given that repudiation of the insurance claim of the complainant on the ground of delay in submitting information to the Police as well as the Insurance Company was not justified and the Insurance Company cannot be allowed to repudiate the insurance claim of the complainant on this ground alone. The Insurance Company has also taken plea that it was a case of unauthorized use of the vehicle violating the terms and conditions of the Insurance Policy. The car vehicle was purchased and got insured for domestic and personal use of registered owner of the vehicle whereas the vehicle was being used for hire and reward when the occurrence took place. It is evident from the copy of FIR (Annexure-8) that at the time of lodging FIR the complainant himself in his statement mentioned that when the car vehicle was stolen, at that time the car vehicle was being used for carrying passengers. Apart from it, the surveyor appointed by the Insurance Company also in his report gave his opinion that the car vehicle was being used for hire and reward at the time of occurrence. This opinion was given by the surveyor in his report (Annexure-5) on the basis of contents of the FIR as well as statement of Sheesh Pal driver (Annexure-6) and statement of Charan Singh-complainant (Annexure-7). Charan Singh-complainant and Sheesh Pal driver gave their statements that the car vehicle was being used for hire and reward as the same was engaged by three persons against payment of Rs.1500/-. In these circumstances, findings can be safely given that the car vehicle was being used for hire and reward at the time of theft whereas the same was insured as a private vehicle for personal use.
15. Now question arises as to whether the order passed by the learned District Forum awarding 75% of the total IDV of the vehicle is justified or not. Learned counsel for the complainant has argued that the complainant is entitled to receive the compensation amount as awarded by the learned District Forum on non-standard basis. In support of his this contention learned counsel for the complainant placed his reliance upon two decisions of the Hon'ble Supreme Court. In case law cited as National Insurance Company Limited versus Nitin Khandelwal, IV (2008) CPJ 1 (SC), the Hon'ble Supreme Court held as under:-
"12. In the case in hand, the vehicle has been snatched or stolen. In the case of theft of vehicle breach of condition is not germane. The appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non-standard basis. The Insurance Company cannot repudiate the claim in toto in case of loss of vehicle due to theft."
16. In Amalendu Sahoo Versus Oriental Insurance Company Limited, 2010(2) C.P.J. 9 (Supreme Court), Hon'ble Apex Court held that the insurance company cannot repudiate the insurance claim in toto and the insurer is liable to pay 75% of the admissible claim.
17. Reliance has also been placed upon case law cited as United India Insurance Company Limited versus Bhundu Ram and others, 2017(2) C.P.J. 345 (N.C.)
18. I have closely perused the above cited case laws. Cited case laws above fully support the version of the complainant. As per facts of case law referred above National Insurance Company Limited versus Nitin Khandelwal (Supra), the private vehicle was being used for hire and reward at the time of occurrence and in that case compensation amount was awarded on non-standard basis as 75% of the insured amount. Similar was the view of the Hon'ble Supreme Court in case law referred above Amalendu Sahoo Versus Oriental Insurance Company Limited (Supra).
19. During the course of arguments learned counsel for the appellant-Insurance Company has urged that the complainant is not entitled to receive any amount as claimed in this complaint case as the private vehicle was being used for hire and reward at the time of occurrence and terms and conditions of the insurance policy have been violated. In support of his this contention learned counsel for the appellant-Insurance Company placed his reliance upon another decision of Hon'ble Supreme Court in Civil Appeal No.6739 of 2010, arising out of the SLP(C) No.12741 of 2010, Oriental Insurance Company Limited versus Parvesh Chander Chadha, decided on August 17, 2010.
20. I have closely perused the above cited case law. Cited case law above is of no help to the appellant-Insurance Company in this case as facts and circumstances of the case in hand are somewhat different from the facts and circumstances of the cited case law above. As per facts of case law referred above, the complainant had violated the terms and conditions of the insurance policy as intimation regarding theft of the vehicle was given to the Insurance Company after more than a period of five months and there was delay in giving information to the Police also. As per facts of the case in hand, the only violation of the terms and conditions on the part of the complainant was that the vehicle was being used for hire and reward. In connection with this violation, the decisions of the Hon'ble Supreme Court mentioned above in earlier part of this order National Insurance Company Limited versus Nitin Khandelwal (Supra) and Amalendu Sahoo Versus Oriental Insurance Company Limited (Supra) support the version of the complainant regarding awarding compensation on non-standard basis.
21. On the other side learned counsel for the appellant-opposite party (Insurance Company) placed his reliance upon three decisions of the Hon'ble Supreme Court in case laws Faquir Chand Gulati versus Uppal Agencies Private Limited, 2012(2) C.P.C. 627 (S.C.); Ramjas Foundation and another versus Union of India and others, 2010 AIR (SCW) 7091 and V. Chandrasekaran and another versus Administrative Officer and others, 2012(4) R.C.R. (Civil) 588 (S.C.).
22. I have closely perused the above cited case laws. Cited case laws above are of no help to the appellant-opposite party in any way in this case. Facts and circumstances of the case in hand are quite different from cited case laws. Much discussion of the above mentioned case laws is not needed in this order.
23. As per discussion above in detail, following the view of the Hon'ble Supreme Court as well as of the Hon'ble National Commission in case laws referred above cited by the learned counsel for the complainant, the order of the learned District Forum to allow compensation to the complainant on non-standard basis being 75% of the total Insured Declared Value of the vehicle is perfectly valid and justified.
24. No other point was raised during the course of arguments.
25. As a result as per discussion above in detail, I find no illegality in the impugned order dated February 08th, 2017 passed by the learned District Forum. Hence, findings of the learned District Forum stand affirmed and the appeal stands dismissed.
26. The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification in accordance with rules, after expiry of period of appeal/revision, if any.
Announced:
15.03.2018 (Balbir Singh) Judicial Member CL