Judgment:
Nawab Singh, President (Oral):
1. This appeal has been filed by Shriram General Insurance Company Limited (for short Insurance Company) against the order dated October 25th, 2013 passed by District Consumer Disputes Redressal Forum (for short District Forum), Panipat, whereby Joginder Singh-complainant (respondent) was granted benefits of insurance in respect of his motorcycle which was stolen during the subsistence of the insurance policy. For facilitation, the operative part of the order is reproduced as under:-
œIn view of above discussion, present complaint succeeds. We hereby allowed the present complaint with a direction to opposite parties to pay Rs.32,500/- sum insured to the complainant with interest @ 9% per annum from the date of filing the complaint till its realization. Cost of litigation quantified at Rs.2200/- is also allowed to be paid by opposite parties to the complainant. This order shall be complied within 30 days from the announcement of this order.?
2. Joginder-complainant (respondent) got insured his motorcycle of Hero Honda Splendor Plus make, bearing registration No.HR-06U--6038 with the appellants, vide policy Exhibit R-2, for the period from January 11th, 2011 to January 10th, 2012. The Insured Declared Value (for short IDV) of the vehicle was Rs.32,500/-. The vehicle was stolen on November 26th, 2011 in the area of Panipat. F.I.R. No.1027 (Exhibit R-1) was lodged in the Police Station, Chandnibagh (Panipat) on November 30th, 2011. The respondent-complainant gave information to the appellants and also submitted claim with them, but his claim was repudiated vide letter Exhibit R-3 stating therein as under:-
œThis is with reference to the claim document submitted by you, it has been observed that loss allegedly took place on 26/11/2011 and the claim was intimated to us on 02/12/2011 as well as to police authorities belatedly as on 30/11/2011 which means that you had not given opportunities to police authorities to investigate the matter immediately on that occurrence which has constituted overall loss. This constitutes serious breach of condition No.1 of the Insurance Policy¦¦¦¦.?
3. The respondent filed complaint under Section 12 of the Consumer Protection Act, 1986.
4. The appellants contested the complaint by filing written statement denying the averments of the respondent-complainant on the ground stated in the repudiation letter Exhibit R-3.
5. On appraisal of the pleadings of the parties and the evidence brought on the record, the District Forum allowed complaint on the terms given in paragraph No.1 of this order.
6. The solitary submission of the learned counsel for the appellants is that the complainant breached the terms and conditions of the policy as the F.I.R. (Exhibit R-1) was lodged after four days and the intimation was given to the appellants-opposite parties after seven days of the theft of motorcycle which took place on November 26th, 2011.
7. It is not in dispute that the vehicle was stolen because F.I.R. (Exhibit R-1) was recorded in the Police Station, Chandnibagh (Panipat) and the Police also filed un-traced report. The Insurance Company was informed on December 2nd, 2011. On the other hand, the Insurance Company has failed to produce any evidence worth the name that the vehicle in question was not stolen.
8. In view of the above this Commission is of the considered opinion that it being a genuine claim of the complainant, cannot be denied in view of the judgment 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 and 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:-
œ6. 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:-
œINSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
Ref. IRDA/HLTH/MISC/CIR/216/09/2011Date: 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. Report of Untraced 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 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.?
9. The case in hand is fully covered by the decision rendered by this Commission in Rajesh Kumars case (supra). The evidence available on the record establishes that it is a genuine claim of the respondent-complainant. F.I.R. No.1027 (Exhibit R-1) is the best piece of evidence to prove the theft of complainants vehicle. Thus, the appellants-opposite parties cannot wriggle out from the responsibility to pay the loss of the respondent-complainant on flimsy grounds.
10. Hence, the order under appeal requires no interference. The appeal consequently fails and is hereby dismissed.
11. The statutory amount of Rs.19,150/- 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.