1. Insurance claim for stolen vehicle repudiated due to delay in intimation — Complaint under Section 12, Consumer Protection Act, 1986. (Para 2 , 3 , 4 , 5 )
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2017 Supreme(SC) 977
SUPREME COURT OF INDIA
R.K. Agrawal, S. Abdul Nazeer, JJ.
Om Prakash – Appellant
Versus
Reliance General Insurance and Anr. – Respondents
Civil Appeal No. 15611 of 2017 (Arising out of SLP (C) No.742 of 2015)
Decided On : 04-10-2017
Advocates Appeared:
For the Appellant :- Harish Pandey, Adv.
For the Respondents:- Garvesh Kabra, Adv.
For the Appellant :- Harish Pandey, Adv.
For the Respondents:- Garvesh Kabra, Adv.
IMPORTANT POINT
A claim should not be repudiated if the delay in lodging the claim is satisfactorily explained.
Headnote:Insurance laws – Appellant’s truck stolen – Lodging claim with respondent company after 8 days – Delay of 8 days satisfactorily explained – Respondent company not justified in repudiating the claim. (Para 12, 13)
Facts of the case:
Appellant’s truck, insured with respondent, was stolen after 10 days of taking out insurance. Appellant, after searching the truck with the help of police and filing FIR lodged claim with respondent. The respondent company repudiated the claim on the ground that theft was not immediately notified to it. District forum dismissed the claim. The State and national Commissions also dismissed the claim.
Finding of the Court:
Respondent company was not justified in repudiating the claim of the appellant.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether delay in informing the insurer of theft justifies repudiation of a genuine claim versus whether such delay was due to unavoidable circumstances. (Para 6 , 7 )
3. Delay in intimation should not bar genuine claims if satisfactorily explained, especially when the theft is verified and the legislation is beneficial. (Para 9 , 11 , 12 )
4. Genuine insurance claims cannot be rejected on purely technical grounds of delay if the reason for such delay is satisfactorily explained. (Para 11 )
5. Appeal allowed — Claim petition granted — Insurance company directed to pay claim amount and compensation with interest. (Para 12 , 13 )
6. Can an insurance claim be rejected solely based on a delay in informing the insurer?
No, if the reason for the delay is satisfactorily explained, a genuine claim cannot be rejected on purely technical grounds. Rejection in a mechanical manner leads to loss of confidence in the insurance industry. (Para 11 )
7. How should the Consumer Protection Act be interpreted regarding insurance claims?
The Consumer Protection Act is beneficial legislation aimed at providing better protection for consumers' interests and therefore deserves a liberal construction. (Para 11 )
8. Does the verification of a theft by an investigator impact the validity of a claim despite a delay in notification?
Yes, it is neither fair nor reasonable to reject genuine claims that have already been verified and found correct by an investigator based solely on a delay in notification. (Para 11 , 12 )
JUDGMENT
S. Abdul Nazeer, J.
Delay condoned.
Leave granted.
2. The appellant got his truck, bearing Registration No.HR-21-F-0462, insured with Respondent No.1 herein, i.e. Reliance General Insurance Company Ltd., w.e.f. 10.03.2010 to 09.03.2011. The said vehicle was stolen from Chopanki, Bhiwari, Rajasthan on 23.03.2010 at about 9:00 p.m. Consequently, an FIR was lodged, on 24.03.2010, in Police Station Tapkura, District Alwar, Rajasthan, under Section 379 IPC. Thereafter, the appellant visited the office of the first respondent but the office was found to be closed. Then the appellant went to the place of theft and met the driver and then he went to the concerned police official. On 29.03.2010, the appellant along with the truck driver, went with the police officials for their assistance to search the vehicle. The appellant reached his village on 30.03.2010. On 31.10.2010, the appellant lodged the insurance claim with the respondent-company at Hissar and provided the necessary documents which were demanded by the respondent-company.
3. Pursuant to the said claim, an Investigator was appointed by the Respondent-company, who, after verification, confirmed the factum of theft. Consequently, the Corporate Claims Manager approved an amount of Rs. 7,85,000/- for the said claim of the appellant. Thereafter, the appellant made several requests and demands to the respondent-company, inter alia, seeking speedy processing and disposal of his insurance claim. Finally, the appellant served a legal notice, dated 09.08.2011, to the respondent-company. However, the respondent-company repudiated the insurance claim of the appellant citing breach of Condition No. 1, i.e. immediate information about the loss/theft of the vehicle.
4. Being aggrieved, the appellant filed complaint before the, District Consumer Disputes Redressal Forum, Hissar (for short `District Forum'), under Section 12 of the Consumer Protection Act, 1986, inter alia, seeking a direction to the respondent-company for payment of claim amount with an interest @ 18% per annum, along with compensation of Rs. 1,00,000/- to the appellant. Written statement was filed by the respondents herein opposing the claim of the appellant. The District Forum, by order dated 13.06.2013, dismissed the complaint of the appellant thereby holding that there is no deficiency of service on the part of respondents.
5. The appellant herein filed an appeal challenging the said order of District Forum, before the State Consumer Dispute Redressal Commission, Haryana (for short `State Commission') at Panchkula. The State Commission by an order dated 23.10.2013 dismissed the said appeal. This order was challenged by the appellant by way of Revision Petition before the National Consumer Disputes Redressal Commission (for short `National Commission'). This Revision Petition has been dismissed by the National Commission by an order dated 12.02.2014. The appellant has questioned the legality and correctness of the said order in this appeal.
6. Learned counsel for the appellant contended that the appellant, immediately after getting the information about the theft of the vehicle, went to the place of theft and met the police officials along with the truck driver. Consequently, he got busy with the police while visiting many cities in Rajasthan for the search of the said vehicle and returned to his village on 30.03.2010 and lodged the insurance claim on 31.03.2010 before the Respondent-company. The appellant has assigned cogent reasons for the delay of 8 days in lodging the complaint. The National Commission has dismissed the petition filed by the appellant without taking into consideration the reasons assigned for the delay. It is argued that the Investigator appointed by the Respondent has verified the factum of theft and that the Corporate Claims Manager approved the report of Investigator, thereby recommending the payment of Rs. 7,85,000/- towards claim.
7. On the other hand, the learned counsel appearing for the respo
