State Consumer Disputes Redressal Commission
Shriram General Insurance Company ... vs Rajesh Kumar Son Of Sh. Murari Lal, on 10 March, 2014
STATE
CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA
First
Appeal No.43 of 2014
Date
of Institution: 20.01.2014
Date
of Decision: 10.03.2014
Shriram General
Insurance Company Limited, SCF 26, 1st Floor, Near HDFC Bank,
Sector-14, Gurgaon (Haryana), through its duly constituted attorney Mr. Ashraf
Ali available at Branch Office SCO No.178, Sector 38 Chandigarh.
Appellant
(Opposite Party)
Versus
Rajesh
Kumar son of Sh. Murari Lal, Resident of Village Salhawas, Tehsil Matanhail,
District Jhajjar.
Respondent
(Complainant)
CORAM: Honble
Mr. Justice Nawab Singh, President.
Mr. B.M. Bedi,
Judicial Member.
For the Parties: Shri
Nitin Gupta, Advocate appearing on behalf of
Sh.Sanjeev
Goyal, Advocate for the appellant.
Shri
Deepender Ahlawat, Advocate for respondent.
O R D E R
Justice Nawab Singh, President (Oral):
Shriram General Insurance Company Limited is in appeal against the order dated November 5th, 2013 passed by District Consumer Disputes Redressal Forum (for short District Forum), Jhajjar, whereby Rajesh Kumar-complainant (respondent herein) was granted benefits of insurance in respect of his vehicle which was stolen during the subsistence of the insurance policy. For facilitation, the operative part of the order is reproduced as under:-
it is observed that there is deficiency in service on the part of the respondent. Therefore, it is directed that the respondent shall pay a sum of Rs.4,00,000/- to the complainant on account of theft of his vehicle along with an interest @ 9% p.a. from the date of theft i.e. 9.12.2010 till actual realization of final payment. The complainant is also entitled for a sum of Rs.2,000/- on account of litigation expenses for the present unwanted and unwarranted litigation only due to the deficiency in service on the part of the respondent. The complaint is stands disposed of accordingly.
2. Rajesh Kumar-complainant (respondent herein) got insured his vehicle of Tata Indigo LS make bearing registration No.HR-14-D/1064 with the appellant, vide policy Exhibit C-4, for the period from December 24th, 2009 to December 23rd, 2010. The Insured Declared Value (for short IDV) of the vehicle was Rs.4.00 lacs. The vehicle was stolen on December 9th, 2010 in the area of Surheti, Jhajjar (Haryana) F.I.R. No.758 (Exhibit P5) was lodged in the Police Station, Jhajjar on December 9th, 2010. Respondent gave intimation to the appellant. The appellant appointed Surveyor/Investigator on who investigated the matter and submitted his report dated January 12th, 2011 (Exhibit R-6). Respondents claim was repudiated by the appellant vide letter dated April 26th, 2011 (Exhibit R-1) on the ground that during investigation it was found that the respondent left the key in the vehicle parking it on the roadside and went to answer the call of nature and as such the theft had taken place on account of his negligence.
3. The respondent filed complaint under Section 12 of the Consumer Protection Act, 1986.
4. The appellant contested the complaint by filing written statement denying the averments of the respondent. It was pleaded that the respondent
-complainant had not taken care of his vehicle and left the same un-attended and the respondent left the key in the vehicle parking it on the roadside and went to answer the call of nature and as such the theft had taken place on account of his negligence. It was also pleaded that claim of the complainant was rightly repudiated.
5. On evaluating the pleadings of the parties and the evidence brought on the record, the District Forum awarded compensation as noticed in paragraph No.1 of this order.
6. The solitary submission of the learned counsel for the appellant is that there was delay of 12 days in giving intimation to the appellant, which is in violation of the insurance policy. In support of the contention, reliance has been placed upon JAGDISH PARSHAD versus ICICI LOMBARD GENERAL INSURANCE CO. LTD. II(2013) CPJ 578 (NC).
7. This Commission does not concur with the submission of the learned counsel for the appellant. Indisputably, the F.I.R. was lodged with the Police without any delay and the respondent had informed the appellant-Insurance Company about the theft of his vehicle on December 21st, 2010, that is, after 12 days.
8. The circular dated September 20th, 2011 (Annexure-A) issued by INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY is as under:-
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Ref.
IRDA/HLTH/MISC/CIR/216/09/2011 Date: 20.09.2011 CIRCULAR 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 merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
J.Harinarayan CHAIRMAN
9. It is very clear from the above 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.
10. 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.
11. In the instant case the vehicle was stolen on December 9th, 2010 and F.I.R. was lodged in the Police Station without any delay. Untraced report submitted by the Police is the best piece of evidence to prove that the vehicle was stolen.
12. Thus, the repudiation of respondents claim was contrary to the letter Annexure-A, stated above because intimation to the insurance company after 12 days is not significant in genuine claim of the respondent-complainant. A person who lost his vehicle which was being used by him for earning livelihood 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 claim with the Insurance Company is the last resort. Under these circumstances, it was indeed a deficiency in service on the part of the appellant for repudiating respondents claim on flimsy ground. It would not be fair or reasonable to reject even the genuine claims of the insuree which had been verified and found to be correct by the Surveyor. There may be a condition in the policy regarding delay in intimation but that does not mean that the insurer can take the shelter under that condition and repudiate the claim of the claimant, which is otherwise proved to be genuine. In this view of the matter, the authority in Jagdish Parshads case (Supra) referred to by the learned counsel for the appellant is of no help to him.
13. Hence, the order under appeal requires no interference. The appeal consequently fails and is hereby dismissed.
14. The statutory amount of Rs.25,000/-
deposited at the time of filing the appeal be refunded to the respondent-complainant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.
15. Copy of this order be sent to all the District Fora in the State.
Announced:
10.03.2014 (B.M. Bedi) Judicial Member (Nawab Singh) President CL