National Consumer Disputes Redressal
National Insurance Co. Ltd. vs B. Venkatetaswamy on 6 February, 2014
NATIONAL
CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION
PETITION NO. 2852 OF 2013
(Against order dated
26.04.2013 in First Appeal No. 1073/2011 of the
State Consumer Disputes Redressal
Commission, Andhra Pradesh, Hyderabad)
National Insurance
Co. Ltd.
Through
its Authorized Signatory,
40/343 A,
1st Floor, Tula Complex,
Gandhi
Nagar,
Kurnool-
518 001
Petitioner
Versus
B. Venkataswamy,
S/o B. Naganna,
R/o H. no. 9-10-4-9,
Gandhi Nagar, Kotha Peta,
Dhone-518 222
Respondent
BEFORE:
HONBLE
MR. JUSTICE J.M.MALIK, PRESIDING MEMBER
HONBLE
DR. S.M. KANTIKAR, MEMBER
For the Petitioner : Ms. Neerja Sachdeva, Advocate
For the Respondent : Nemo
PRONOUNCED ON 6th February 2014
ORDER
PER DR. S.M. KANTIKAR, MEMBER
1. The Complainant B. Venkatswamy got his Mahindra Maxx vehicle insured with the OP National Insurance Co. Ltd. for the period from 08.04.2009 to 07.04.2010 for Rs.5,00,000/-. On 07.04.2009, said vehicle was confiscated on the ground of having IMFL liquor bottles in the vehicle and a case in crime No. 49/2009 under section 34(a) of Andhra Pradesh Excise Act was registered at Sanjamala Police Station. The vehicle was in the custody of Deputy Commissioner of Prohibition & Excise, Kurnool (in short DC). On the intervening night of 2/3 October 2009 flood water entered into Kurnool city wherein his vehicle was also damaged. On intimation, the insurance company deputed a Surveyor, who took photographs of the damaged vehicle. As the vehicle was in the custody of Excise Department, he could not get the vehicle repaired till 07.01.2010. When the DC issued proceedings for release of the vehicle, in the first week of February, 2010 he got the vehicle repaired at Kadapa incurring an amount of Rs.1,08,680/-. The OP did not entertain the claim as the intimation was given after 4 months of the alleged damage of the vehicle. The Complainant submitted that the delay in intimation, was due to confiscation of the vehicle by the Excise Department. In spite of addressing letters explaining the reasons for delay in intimation the OP did not settle the claim. Hence, a complaint claiming Rs.1,08,860/- towards the amount spent for repairs together with compensation and costs was filed before the District Consumer Disputes Redressal Forum, (in short, District Forum).
2. The District Forum dismissed the Complaint.
3. Aggrieved by the said order, the Complainant preferred the appeal F.A.1073/2011 before the State Consumer Disputes Redressal Commission (in short, State Commission) contending that the Complainant was not aware of the condition of the vehicle till it was handed over to him on 22.02.2010, and the OP did not investigate into the matter about the genuineness of the claim.
4. The State Commission held that, the Complainant had proved that the vehicle was lying with the Excise Department and as an admitted fact about floods in Kurnool, at that point and therefore, held, repudiation by OP was unjustified, merely because there was delay in making the claim. The State Commission partly allowed the appeal and directed the OP to pay Rs.108,680/- with interest @ 9% p.a. from the date of repudiation, together with costs of Rs.3000/-
5. Aggrieved by the order of the State Commission the Complainant filed this revision petition.
6. At the admission stage, we have heard the Counsel for the Petitioner/OP. The Counsel reiterated his stand taken before the State Commission, and contended that the delay in intimation to the OP is fatal in such cases.
7. We have perused the evidence on record. It was an admitted fact that , the vehicle of complainant was in the custody of the Excise Department , and on 2/3.10.2009, there were unprecedented flood and water entered into Kurnool town. The Complainants vehicle which was parked in the Excise Department premises, was completely damaged. After release of the vehicle, the OP turned a deaf ear to the requests of the Complainant, for settlement of the claim. Thereafter, the Complainant had taken the vehicle to Kadapa, in the first week of February, 2010 and spent Rs.1,08,680/- towards repairs. Ex. A3 comprises of 20 repair bills, filed by the Complainant evidencing the repairs conducted by him.
8. The Counsel for the OP relied upon condition No. 4 in Ex. B1 policy in which it is stated, as follows:
The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient conditions and the company shall have at all times free and full access to examine the vehicle or any part thereof or 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 insureds own risk.
9.
We solely agree with the significant observations made by the State Commission pertaining to delay in making the claim, that the insurance company, cannot repudiate the claim, which is repudiated, as follows:
In this regard it is fruitful to take note of the circular Ref: IRDA/HLTH/MISC/CIR/216/09/2011 dated 20.09.2011 issued by the Insurance Regulatory & Development Authority pertaining to delay in claim intimation/documents submission with respect to:
All life insurance contracts and All non-life individual and group insurance contracts.
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 in 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 policyholders 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.
10. Therefore, we are of considered view that the insurance company cannot repudiate the bonafide claims on technical grounds, like delay in intimation and submission of certain documents. Therefore, the act of OP herein, in closing the claim of complainant, as No Claim is unjustified. Taking into consideration the facts and circumstances of the case, we do not find any need of interference in the well-considered order of the State Commission.
11. Hence, the revision petition is dismissed. No order as to costs.
..
(J. M. MALIK, J.) PRESIDING MEMBER ..
(S. M. KANTIKAR) MEMBER Mss/20