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RAJASTHAN STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, JAIPUR
Honble Mr. Justice Navin Chandra Sharma,
President & Mrs. Firoza Bano, Member
ORIENTAL INSURANCE CO. LTD. & ANR.—Appellants
versus
MAHENDRA PAL GAURI & ANR.—Respondents
Appeal Nos. 562 & 583 of 1992—Decided on 25.4.1995
Counsel for the Parties :
For the Appellant :Mr. B.B. Mathur, Advocate.
For the Respondent:Mr. Ratan Chand Godha, Advocate for Mr. Atul Luhadia, Advocate.
The court held that the repudiation of the claim by the insurance company was in bad faith and that the company was liable to compensate the complainant.
Headnote:
INSURANCE - HOUSE BUILDING LOAN - REPUDIATION OF CLAIM - DELAY IN INTIMATION - CONDITIONS OF POLICY - INTERPRETATION - CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(g) - UNFAIR TRADE PRACTICE - SECTION 14(1)(d) - RIGHT TO BE HEARD - SECTION 15 - RIGHT TO REDRESSAL - SECTION 21 - JURISDICTION OF DISTRICT FORUM.
Fact of the Case:
Complainant obtained a House Building Loan from Life Insurance Corporation of India (LIC) and insured the house through Oriental Insurance Company (OIC). Due to heavy rains, the house suffered damage in January 1991. Complainant informed OIC about the damage on 4.3.1991, but the claim was repudiated on 18.3.1991. Complainant filed a complaint before the District Forum seeking compensation and damages.
Finding of the Court:
The District Forum awarded compensation to the complainant. OIC appealed against the order, arguing that the claim was not covered under the policy conditions and that there was a delay in intimation of the loss. LIC also appealed, contending that it was not liable to compensate the complainant.
Issues: 1. Whether the claim was covered under the policy conditions? 2. Whether there was a delay in intimation of the loss? 3. Whether LIC was liable to compensate the complainant?
Ratio Decidendi: 1. The court held that the claim was covered under the policy conditions. The policy provided that the company reserves the right to treat the claim as no claim if no information/documents are submitted by the insured within a period of six months from the date of loss. However, the complainant had submitted the information within six months of the loss, and therefore, the company's repudiation of the claim was in bad faith. 2. The court held that there was no delay in intimation of the loss. The complainant had intimated the company about the loss on 4.3.1991, which was within six months of the loss. 3. The court held that LIC was not liable to compensate the complainant since the complainant had not sought any relief against LIC in the complaint.
Final Decision: The court dismissed the appeal filed by OIC and allowed the appeal filed by LIC. The order of the District Forum was upheld in respect of OIC and set aside in respect of LIC.
Mr. Justice Navin Chandra Sharma, President — This order will decide Appeal Nos. 562/92 and 583/92 by a common order. Both these appeals arise out of the order of the District Forum, Ajmer dated 18.7.92. While Appeal No. 562/92 has been filed by Oriental Insurance Company, which was opposite parties Nos. 1 & 2 in the complaint filed by the complainant, Appeal No. 583/92 has been filed by the Life Insurance Corporation of India which was opposite party No. 3 in the said complaint.
2. Mr. Ratan Chand Godha, Advocate is present for Mr. Atul Luhadia, Counsel for Oriental Insurance Company. Mr. B.B. Mathur, Advocate is present for Life Insurance Corporation of India. Complainant Mahendra Pal was present in person on 2.8.94 but he did not appear thereafter.
3. We have gone through the order of the District Forum, Ajmer and have heard the learned Counsels appearing for the parties.
4. Complainant Mahendra Pal Gauri had obtained a House Building Loan of Rs. 50,000/- from the Life Insurance Corporation of India under an Insurance Policy pertaining to O.Y.H. Scheme. The complainant constructed a house after receiving the loan and the same was got insured by the Life Insurance Corporation of India through Oriental Insurance Company. According to the complainant, there were heavy rains in the year 1990 and considerable water had accumulated near the house constructed by him. The water made entry in the earth and in January, 1991, the floor of the house had become upset on account of internal displacement of rain. Cracks were also developed in the walls of the house. The complainant contacted the Branch Manager, Oriental Insurance Company and latter assured to send a Surveyor. However no Surveyor was sent and therefore the complainant made an application on 4.3.91 to the Oriental Insurance Company. It is alleged that on 18.3.91 the Oriental Insurance Company repudiated the claim stating that it is not liable under the conditions of the Insurance Policy. The complainant got the house surveyed by Shri S.P. Khanna, Surveyor and he assessed the house at Rs. 27,580/-. The complainant intimated about this assessment, but his claim was repudiated. The complainant therefore filed the complaint claiming Rs. 28,000/- as compensation and further Rs. 10,000/- for mental distress and agony and Rs. 5,000/- as fees paid to the Surveyor.
5. The Oriental Insurance Company filed a version stating that period of insurance was from 1.4.91 to 31.3.92 and according to the terms and conditions of the policy, no compensation was payable by the Insurance Company and the claim was repudiated.
6. It seems that an argument was advanced on behalf of the Oriental Insurance Company before the District Forum that the damage to the house had started in the rainy season in the year 1990 and the floor was damaged in January, 1991. However the complainant informed about the damage to the house on 4.3.91 i.e., after delay. It was also urged on behalf of the Oriental Insurance Company that the claim was not covered under conditions Nos. 7, 8, 9 of the policy.
7. It would appear from the documents filed by the complainant that originally the sum assured was Rs. 50,000/- which was increased to Rs. 1,15,000/- by letter of the Insurance Company dated 4.1.1988.
8. Main reliance was placed by the Oriental Insurance Company on condition No. 4 of the conditions. These clauses provide that the Company reserves the right to treat the claim as no claim if no information/documents are submitted by the insured within a period of six months from the date of loss. It is further directed that in no case whatsoever shall be the Company be liable for any loss or damage after the expiry of 12 months from the happening of the loss or damage unless the claim was the subject of pending action or arbitration. It is also provided in Clause 4(i) of the conditions that on happening of any loss or damage, the insured shall forthwith give notice thereof to the Company and shall within 15 days after the los
