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ORISSA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CUTTACK
Honble Mr. Justice S.C. Mohapatra,
President; Dr. R.N. Panigrahi & Mrs. J. Patnaik, Members
GOPICHAND AGARWALA—Complainant
versus
NATIONAL INSURANCE CO. LTD. & ANR.—Opp. Parties
C.D. Case No. 63 of 1992—Decided on 26.4.1993
For the Complainant :M/s. K.N. Jena & D.K. Mohapatra, Advocates.
For the Opposite Parties :M/s. M. Sinha, Gobind Ch. Sahoo & Bhimsen Sahoo, Advocates.
The failure of an insurer to finalize a claim for over 20 years is a deficiency in service, but the insurer is not liable for negligence if it has a reasonable basis for denying the claim.
Headnote:
INSURANCE - DEFICIENCY IN SERVICE - INSURANCE CLAIM - DELAY IN SETTLEMENT - LIMITATION - CONSUMER PROTECTION ACT, 1986 - SECTIONS 2(1)(d), 2(1)(g), 3, 12, 14, 15 - INTERPRETATION AND APPLICATION.
Fact of the Case:
Complainant purchased a chassis on hire purchase scheme with finance from Urban Cooperative Bank, Baripada. He obtained insurance policy from Hindustan General Lisurance Society Limited for the period between 3.2.70 and 2.2.71. On 30th November, 70, the truck was stolen, for which claim was made with Hindustan Insurance. Bank having taken steps to realise the loan amount and insurer not having settled the claim, this complaint has been filed on 12.3.92.
Finding of the Court:
The court held that the complainant was a consumer in respect of the service rendered by the insurer, and that the insurer's failure to finalize the claim was a deficiency in service. However, the court also held that the insurer was not negligent in its handling of the claim, and that the complainant had not suffered any loss as a result of the delay.
Issues: 1. Whether the complainant is a consumer in respect of the service rendered by the insurer? 2. Whether there was deficiency in service on the part of the insurer? 3. Whether the insurer was negligent in its handling of the claim? 4. Whether the complainant suffered any loss as a result of the delay in settlement of the claim?
Ratio Decidendi: 1. The court held that the complainant was a consumer in respect of the service rendered by the insurer, since he was the beneficiary of the insurance policy and had paid the premium. 2. The court held that there was deficiency in service on the part of the insurer, since it had failed to finalize the claim for over 20 years. 3. The court held that the insurer was not negligent in its handling of the claim, since it had conducted an investigation and had a reasonable basis for denying the claim. 4. The court held that the complainant had not suffered any loss as a result of the delay in settlement of the claim, since he had not taken any steps to pursue his claim in a timely manner.
Final Decision: The court dismissed the complaint with costs.
Mr. Justice S.C. Mohapatra, President— Deficiency in insurance and banking services is grievance of complainant.
2. 2.Case of complainant is that he purchased a chasis on hire purchase scheme with finance from Urban Cooperative Bank, Baripada, opposite party No.2. On purchase, he obtained insurance policy from Hindustan General Lisurance Society Limited whose assets and liabilities have been taken over by opposite party No.1. Risk in respect of the truck was covered under comprehensive insurance policy for the period between 3.2.70 and 2.2.71. On 30th November, 70, the truck was stolen, for which claim was made with Hindustan Insurance. Bank having taken steps to realise the loan amount and insurer not having settled the claim, this complaint has been filed on 12.3.92.
3. 3.Opposite Party No.1 stated its case in reply to the complaint. It has decided the claim on the ground that the complaint is barred by limitation, complainant being a mere hirer, complaint at his instance is not maintainable, actual owner of the vehicle having omitted to make any claim, grievance of complainant is not tenable in law. Claim in the complaint is not to be adjudicated since it involves complicated facts and is only entertainable in Civil Court. Possession of the truck having been taken away from the possession of the insured forcibly, the claim that there was burglary of the truck is not covered under the risk. It is the further case that complainant intimated the insurer, Hindustan Insurance on 7.12.70 that on 30th Nov. '70, at early hours, one Nagraj, employee of M/s. Siremull Hirachand has taken away the truck on the point of gun and pistol. An enquiry was made by Hindustan Insurance where it was found that the very chassis was subject-matter of two transactions, one by complainant under agreement with opposite party No.2 and another by his son-in-law with Hiremull Hirach and, a financier of Madras. The very chasis was registered under the Motor Vehicles Act in Baripada as ORM 1357 and at Keenjhar as ORJ 2710. A surveyor was appointed by opposite party No. 1 who after conducting an enquiry independently submitted a report to the similar effect. Urban Cooperative Bank, the financier of complainant, intimated a dispute under the Orissa Cooperative Societies Act in which award has been made against the complainant. Opposite Party No. 1 has been made a party at the appellate stage in that dispute where complainant lost. Complicated question of fact being involved, Civil Court ought to go into the question.
4. 4.Opposite Party No.2 has not stated any case despite notice. Large number of documents have been filed by both the parties. On account of assertions and counter-assertions, it is first to be examined whether the complainant is a consumer; whether opposite party Nos. 1 & 2 were rendering service to the complainant; whether there was deficiency in service rendered; whether the deficiency in service was on account of negligence of the opposite parties and whether the complainant has suffered for which his claim for compensation of Rs.5 lakhs is justified.
5. As regards opposite party No.2 the question of deficiency in service or negligence need not be gone into since from the documents it is clear that opposite party No.2 has initiated a recovery proceeding under the Orissa Cooperative Societies Act and all questions can be adjudicated in that forum. Since under Section 3 of the Act, this Act is in addition to other laws in force and is not to be inconsistent with them, we are not inclined to deal with the question of deficiency in service by opposite party No. 2 in view of the earlier proceeding under the Orissa Cooperative Societies Act between the banker, opposite party No. 2 and complainant. A1-though insurer, opposite party No.1, is made a party, we are inclined to hold that complainant had justifiably added insurer as a party in appeal when the bank did not prefer to add the insurer. Accordingly, complaint as against opposite party No.2
