State Consumer Disputes Redressal Commission
United India Insurance Company ... vs 1.Smt. Santra Devi W/O Sh. Lakhan Pal ... on 12 March, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA First Appeal No.23 of 2014 Date of Institution: 10.01.2014 Date of Decision: 12.03.2014 United India Insurance Company Limited, Geeta Nand Bhawan, Kanode Gate, Rewari through its Branch Manager, through authorized signatory of Chandigarh Regional Office, Smt. Sunita Sharma. Appellant (Opposite Party) Versus 1. Smt. Santra Devi w/o Sh. Lakhan Pal Yadav 2. Lakhan Pal Yadav s/o Sh. Jhutha Ram Yadav, Resident of Village Fazabad, Tehsil Narnaul, District Mohindergarh. Respondents (Complainants) CORAM: Honble Mr. Justice Nawab Singh, President. Mr. B.M. Bedi, Judicial Member. Mrs. Urvashi Agnihotri, Member. For the Parties: Shri Sukaam Gupta, Advocate for appellant. Shri R.S. Sangwan, Advocate for respondents. O R D E R
Justice Nawab Singh, President (Oral):
United India Insurance Company Limited is in appeal against the order dated October 25th, 2013 passed by District Consumer Disputes Redressal Forum (for short District Forum), Rewari. For facilitation, the operative part of the order is reproduced as under:-
this complaint is hereby allowed with a direction to the opposite party to pay Rs.14 lac to the complainant with interest @ 9% p.a. from the date of filing of this complaint i.e. 9.12.2011 till payment maximum within a period of one month from the date of receipt of the copy of this order failing which the awarded amount shall fetch penal interest @ 12% p.a. from the expiry of the said stipulated period till payment. The complainant is also allowed litigation expenses to the tune of Rs.2200/- against the opposite parties.
2. Jeep bearing Registration No.HR-55E-6100 of Pajero SFX BS III make, owned by complainant-Lakhan Lal Yadav (respondent No.2 herein) was insured with opposite party- United India Insurance Company Limited, (appellant herein) from July 24th, 2010 to July 23rd, 2011 for a sum of Rs.17.00 lac. The vehicle was damaged in an accident that occurred on April 28th, 2011. The respondents informed the insurer and the vehicle was got inspected from the surveyor. The respondents brought the vehicle to the workshop namely Akar Cars Vishwakarma Industrial Area, Jaipur. According to the respondents, the appellant had agreed to pay Rs.14.00 lac on non-standard basis but later on their claim was repudiated by the insurer on the ground that there was inordinate delay in giving information by the insured regarding the damage and also that the required documents were not furnished by the respondents alongwith the claim form.
3. The complainants filed complaint under Section 12 of the Consumer Protection Act. The insurer contested the complaint by filing written statement denying the averments of the complainants-respondents.
4. On evaluating the evidence of the parties, the District Forum allowed the complaint as noticed in paragraph No.1 of this order.
5. Learned counsel for the appellant has urged that since the respondents violated the terms and conditions of the Insurance Policy by giving late information to the Insurance Company and on account of not furnishing the required documents, so, no deficiency could be attributed to the appellant for repudiating the claim of the respondents-complainants.
6. The submission made is not tenable in view in view of the latest decision rendered by this Commission in First Appeal No.43 of 2014 titled Shriram General Insurance Company Limited vs. Rajesh Kumar decided on March 10th, 2014, wherein the circular Ref:
IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.2011 issued by Insurance Regulatory & Development Authority pertaining to delay in claim intimation/documents, was taken into consideration and it was held that the insurance company could not repudiate the bonafide claims on technical grounds like delay in information and non-submission of documents. The observation in this connection in Rajesh Kumars case (supra) is as under:-
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 delay of 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 is not 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.
7. In view of above, the contention raised on behalf of the appellant regarding delay in giving information is not tenable.
8. The next limb of the arguments on behalf of the appellant is that since the value of salvage was to be adjusted out the reduced amount of Rs.14.00 lac, as consented and accepted by the respondents, the District Forum erred in granting the entire amount of Rs.14.00 lac.
9. The contention so raised is not acceptable.
The District Forum has rightly taken into consideration the reduced amount consented by the respondents. However, the only modification required is that the respondents would return the salvage to the appellants. It is ordered accordingly. No other interference in the impugned is required.
10. With the above modification in the impugned order, this appeal is disposed of.
11. The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the respondents-complainants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.
Announced:
12.03.2014 (Urvashi Agnihotri) Member (B.M. Bedi) Judicial Member (Nawab Singh) President CL