Judgment:
Nawab Singh, President (Oral):
National Insurance Company Limited is in appeal against the order dated January 22nd, 2014 passed by District Consumer Disputes Redressal Forum (for short District Forum), Hisar, whereby the complaint filed by Avtar Singh, seeking benefits of insurance in respect of his vehicle, which was stolen during the subsistence of the Insurance Policy, was accepted. For facilitation, the operative part of the order is produced as under:-
œ¦¦¦this complaint is hereby allowed, with a direction to the opposite parties to pay Rs.7,15,278/- i.e. insured amount, to the complainant with interest @ 9% per annum from the date of theft i.e. 28.1.2012, till payment. Complainant is also hereby awarded compensation of Rs.10,000/- for his harassment, mental agony etc. and litigation expenses of Rs.2200/- against the opposite parties.?
2. Avtar Singh-complainant (respondent herein) got his vehicle bearing registration No.HR-20-V-0266 insured with National Insurance Company Limited-opposite parties (appellants herein), vide policy Annexure C-2, from January 20th, 2012 to January 19th, 2013. The Insured Declared Value (for short IDV) of the vehicle was Rs.7,15,278/-. During the intervening night of January 27/28th, 2012, the vehicle was stolen in the area of Tilak Nagar, Delhi. He immediately informed the Police vide application dated January 28th, 2012 (Exhibit R-5). F.I.R. No.43 (Exhibit C5) was lodged in the Police Station, Tilak Nagar, West Delhi on February 2nd, 2012. Respondent gave intimation to the Insurance Company on February 14th, 2012. vide Annexure C-7. The claim submitted by the respondent was repudiated by the appellants vide letter dated November 23rd, 2012 (Annexure C-11).
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 made in the complaint. It was stated that the respondent -complainant did not take care of his vehicle and left the same un-attended during night hours outside the house. It was further stated that there was delay of six days in lodging F.I.R. and delay of 19 days in giving intimation to the Insurance Company and therefore the respondent was not entitled to any claim on account of violation of the terms and conditions of the insurance policy.
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. In appeal before this Commission, learned counsel for the appellants has urged that respondents claim was rightly repudiated as per the terms and conditions of the insurance policy because there was delay of six days in lodging the F.I.R. and of 19 days in giving intimation to the insurer. In support of his contention learned counsel for the appellants has referred to the following judgments:-
Joginder Singh Versus New India Assurance Co. Ltd., I(2013) CPJ 69 (NC), Kuldeep Singh Versus IFFCO TOKIO General Insurance Co. Ltd., II(2013) CPJ 189 (NC) and Mallikarjun Versus Oriental Insurance Co. Ltd. and Anr, I(2013) CPJ 662 (NC).
7. This Commission does not concur with the submission made on behalf of the appellants. A perusal of the computer generated copy of Zonal Integrated Police Network (Annexure A-3), shows that immediate message was flashed to Control Room on January 28th, 2012 at 12:22:10 A.M. and the Police the spot but still the Police did not register the F.I.R. for three days. Thus, no negligence could be attributed to the respondent-complainant for delay in lodging the F.I.R. as immediate information was given to the Police.
8. The second argument raised was that the Insurance Company was not informed immediately after the vehicle was stolen. Mere late intimation cannot be the sole ground for repudiation respondents claim 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 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/216/09/2011 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. 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. It has been clearly mentioned in the claim form Annexure C-7 by the respondent that he had to attend his ailing mother and so could not inform the Insurance Company for 7-8 days as mentioned in Annexure A-6. In the opinion of this Commission the delay in intimation has been satisfactorily explained. This being so, the contention raised on behalf of the appellant regarding delay in giving information is not significant. So, the appellants have rightly been held deficient in service for repudiating respondents claim. In this view of the matter, the judgments referred to by the learned counsel for the appellants are of no help to him.
10. Hence, the order under appeal requires no interference. The appeal is consequently fails and is hereby dismissed.
11. 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.