An insurance company is guilty of deficiency in service if it arbitrarily and unfairly rejects a claim under an insurance policy.

JUDGMENT - Justice G.G. LONEY, President:---The complainant alleged deficiency in the service of the opposite party viz., the United India Insurance Company for not settling the insurance claim. Shortly stated the facts as alleged are that the complainant is in the business of manufacture, export and import of precious stones. The complainant alleged that it is their regular practice to insure the precious stones during transit for which United India Insurance Company has been granting insurance policies to the complainant to cover the risk during transit. On 17-10-1989, the opposite party granted insurance policy to the complainant to cover one tin box containing cut and polished stones valued at Rs. 3,72,460 at the prevailing rate during transit to Bankok sent by Air Mail. The insurance policy covered all risk clause including theft, pilferage warehouse to warehouse. The complainant alleged that the tin box reached Bankok and it was found that the part precious stones were pilfered during the transit causing loss to the complainant for Rs. 3,28,178/-. The complainant reported the incident on the same day to the Surveyor nominated by the United India Insurance Company and it was investigated by the Surveyor. The Surveyor assessed the loss of 570.54 carots which has been valued at Rs. 3,28,178/-. The complainant alleged that the opposite party, the United India Insurance Company on unjustifiable, frivolous and malicious grounds rejected the complainant's claim and hence the present complaint came to be filed.

2. The opposite party filed its written version opposing complainant's claim on 20-6-1992. The opposite party inter alia stated that the claim is not maintainable as oversea's buyer has no right, title and interest to file the claim. It is also submitted that the rejection of complainant's claim does not fall within the definition of 'deficiency in service'.

3. The complainant filed on record the conditions of the insurance policy in question along with the copy of the policy as well as copy of the survey report and copies of their correspondence with opposite party. The opposite party also filed the delivery receipt of the consignment report of the Surveyor and other correspondence. The complainant has filed his own affidavit. However, opposite party did not file any affidavit.

4. We have heard Shri Prabhawalkar, Advocate for the complainant and Shri A.M. Warnekar, Advocate for the opposite party. The following points arise for our consideration.

i) Whether the complaint is maintainable as a consumer dispute?

ii) Whether this Commission has jurisdiction to decide this complaint?

iii) Whether the facts alleged in the complaint constitute deficiency in the service of the opposite party?

iv) Whether the complainant have been put to loss due to the negligence in the service of the opposite party?

In this complaint, the complainant has alleged that his rightful insurance claim has been rejected by the opposite party on unjustifiable, frivolous and malicious grounds. It is, however, admitted that the complainant was granted insurance policy in question by the opposite party to indemnify the loss or damage caused by theft or pilferage. One of the condition attached to the policy in question is as below :

"In consideration of an additional premium, it is hereby agreed that this insurance covers loss or damage to the subject matter insured caused by theft or pilferage or by non-delivery of an entire package subject to always during the exclusion contained in this insurance."

The aforesaid clause is not in dispute.

Any person who obtains an insurance policy from an insurance company on payment of premium becomes the potential user of the services of the Insurance Company within the meaning of the Consumer Protection Act. Any deficiency in rendering the service including the rejection of the amount claimed under insurance policy arbitrarily, unfairly and lately amounts to deficiency in the service. If the claim is not settled with reas

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