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HARYANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice S.S. Sandhawalia, President; Smt. Basanti Devi,
Member; Mr. Sardar Kulwant Singh, Member.
R.S. OIL & GENERAL MILLS (P) LTD.—Complainant
versus
THE NATIONAL INSURANCE CO. LTD. & ORS.—Opposite Parties
Complaint Case No. 5 of 1991 — Decided on 11.1.1993
Counsel for the Parties:
For the Complainant:Mr. B.S. Gupta, Sr. Advocate with Mr. Sanjay Bansal, Advocate.
For the Opposite Party:Mr. L.M. Suri, Sr. Advocate with Mr. Deepak Suri, Advocate.
Headnote:(i) Consumer Protection Act, 1986 - Sections 2 (1) (g) and 14 - Repudiation of insurance claim - Scope and nature of the inquiry within the consumer jurisdiction - Survey reports or the investigations conducted by an insurer with regard to the claim either itself or got conducted through independent agencies or surveyor concerns are not to be equated with judicial or quasi-judicial proceedings - Merely because the complainant concern was not associated at every stage by the surveyors and investigators in finalising the claim . Their reports do not stand vitiated - Plea that all collection of material must be done after notice to the claimant is patently untenable, liable to be rejected.
Held: To our mind, firstly, the processing of an insured claim by the insurer is not to be made akin with a public inquiry or a full-dress judicial proceeding as such. The collection of the necessary material either by the insurer itself or through the agency of independent surveyors is not inflexibly to be done in the presence of the insured nor is the service of the documents or collected evidence upon him germane to such a proceeding. Undoubtedly, the company should act in all fairness with consideration to its consumer client, yet such a proceeding is not to be converted into a judicial trial. Equally, the ultimate repudiation of a claim by the company is not to be equated with a judicial or a quasi-judicial order. Plainly enough, this is not to be like a judgment with the indicia of application of mind and impeccable reasons in support thereof. Broadly speaking, considerations which may be germane to the judicial process would be alien to commercial transactions carried on in the ordinary course of insurance business.
(para 13)
Yet again, when such a lis is brought before the redressal agencies, it is not to be treated like a , contentious civil suit. That indeed is the province of the plenary courts of law alone. In the beneficent and summary consumer. jurisdiction, the primal scope and nature of the inquiry inevitably is whether there has been a patent deficiency in the insurance services which the company had undertaken to render. The overly strict technicalities of civil procedure are inevitably to be avoided. The whole thrust of tl1e consumer jurisdiction is indeed directed to that larger purpose. Therefore, the core question in such cases should be allowed inevitably to remain simple as to what the insurer had undertaken to perform either under the law applicable or the contract arrived at and in the light thereof whether a deficiency had occurred in the performance of such services rendered. (Para 14)
(ii) Insurance - Claim - "Repudiation of claim - Not necessarily to be a reasoned order.
Held: It is the firm stand of the insurance company that the claim of the appellant apart from having been got processed through three enquiries was equally routed and considered through the hierarchy of its executive offices, namely, at Sonepatand the Divisional Office at Rohtak and the Regional Office at Chandigarh and even a reference was inevitably made to the head office at Calcutta. In this fact situation, it cannot possibly be said that still there was no application of mind by the company. Indeed the submission of the learned counsel for the complainant is yet another facet of the same stance that the satisfaction of a commercial organisation must satisfy the tests of judicial process. We are afraid that this is neither the requirement of law nor of fact and indeed should not be so. (Para 12)
(iii) Consumer Protection Act, 1986 - Sections 2 (1) (g) and 14 - Deficiency-in-service Insurance claim for loss of consignment of 700 tins of mustard oil - Repudiation - Complaint against - Surveys and investigations conducted revealed that the consignment had been misappropriated by the consignee or their staff with the collusion of the carriers or their driver and the apparent connivance of the consignor as well - Consignment ·did not suffer any loss in transit - Fraudulent claim - Repudiation not a case of deficiency-in-service. (Paras 16 & 1?)
Result: Complaint dismissed.
IMPORTANT POINT
In cases of Insurance claim the collection of the necessary material either by the insurer itself or through the agency of independent surveyors is not inflexibly to be done in the presence of the insured nor is the service of the documents or collected evidence upon him germane to such a proceeding.
Mr. Justice S.S. Sandhawalia, President — What is the true scope and nature of the inquiry within the consumer jurisdiction in cases of the repudiation of a claim by the insurer? This has come to be the focal question in this complaint. The facts and merits may be noticed with relative brevity relevant to this issue.
2. The complainant M/s. R.S. Oil and General Mills (P) Ltd. as their name indicates is a Private Company having a manufacturing unit at Sonepat. They despatched 700 tins of mustard oil on the 19th of January, 1988 through M/s. Delhi Deccan Roadways vide Goods Receipt No. 14388 of even date. The value of the consignment was to the tune of Rs. 2,56,296.90 paise and the same before the despatch stood insured with the National Insurance Company Ltd. (hereinafter called the 'Insurance Company') vide Open Cover Policy No. 4400212 (Ann. P.1) dated 19th of January, 1988 for a sum of Rs. 2,73,000/- odd. The truck containing the consignment however, did not reach the consignee-Guwahati Trading Company, Fancy Bazar, Guwahati (Assam) and consequently the complainant vide letters Annexures P.2 and P.3 dated 30th of January, 1988, lodged information with the Insurance Company about the non-delivery of the despatched goods. After obtaining a certificate regarding the non- delivery of goods from the transporters and the consignee, the complainant lodged a claim which was registered vide letter dated 10th of February, 1988 and they were asked to submit the requisite documents therefor which according to the complainant was done. The relevant communications are Annexures P.4 & P.5. Further the complainant simultaneously lodged a claim with the transporters vide letter Ann. P.6 dated 10th of February, 1988. On the request of the Insurance Company documents Annexures P.7 & P.8 were also duly furnished and demand was made for the settlement of the claim. However, the insurers did not settle the claim despite a number of communications addressed to them and when nothing tangible emerged till the 7th of April, 1989, the representative of the complainant-company personally met the officials of the Insurance Company to seek an immediate settlement of their claim. Vide Annexure P.14, dated 10th of April, a Deputy Manager of the Insurance Company indicated assurances to settle the matter. However, the complainants were disagreeably surprised by the Insurance Company's communication Annexure P. 15 dated 12th of April, 1989 to the effect that the issue had been referred for clarification to the Guwahati office and only on receipt of the same, it would receive further attention. It is the case that vide Annexure P. 18, the complainants were assured that their claim would be settled on or be fore 10th of July, 1989 butth is was again not done. However, on the 3rd of November, 1989, the complainants received a communication from the insurers that they should contact Shri D.C. Sharma, Managing Director M/s. Integrated Security Corporation of India, who had been appointed as the investigator in the case so as to enable him to investigate the matter. On the complainants' own showing, Shri D.C. Sharma recorded the statement of the Director of the Company in connection with the marine loss of 700 tins of mustard oil. They also furnished additional information sought by the said Mr. Sharma. Even thereafter, the matter was not settled expeditiously and the complainants were required to submit the final Police investigation report. Thereafter, they were compelled to serve a formal legal notice on the insurers vide Ann. P.28 dated the 7th of January, 1991. However even this elicited no meaningful response, compelling the complainants to knock at the door of this Commission. The relief sought is a sum of Rs. 2,70,000/- being value of the consignment with interest at 18% and also rupees three lacs by way of compensation on account of negligence and non-payment of the claim in time.
3. On notice being issued the Insurance Company put in its written state
