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PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Honble Mr. Justice A.L. Bahri, President; Mr. Jasbir Singh &
Mrs. Davinder Kaur Bhamrah, Members
UNIVERSAL PROCESSORS—Appellant
versus
ORIENTAL INSURANCE CO. LTD. & ANR.—Respondents
Appeal No. 671 of 1996—Decided on 27.3.1998
Counsel for the Parties :
For the Appellant :Mr. Vikram Chaudhri, Advocate.
For the Respondents:Mr. Ram Kumar, Advocate.
Delay in repudiating an insurance claim and arbitrary repudiation can prove deficiency in service by the insurance company.
Headnote:
Insurance Claim - Burglary - The court held that the repudiation of the claim by the insurance company was arbitrary and delayed, proving deficiency in rendering service. The court directed the insurance company to pay the assessed amount with interest and litigation costs.
Fact of the Case:
The complainant's goods were burglarized, and the insurance company repudiated the claim after appointing multiple surveyors and investigators.
Finding of the Court:
The court found the repudiation of the claim to be arbitrary and delayed, indicating deficiency in service by the insurance company. It directed the insurance company to pay the assessed amount with interest and litigation costs.
Issues: Validity of claim repudiation, delay in repudiating the claim, assessment of loss, and evidence of burglary.
Ratio Decidendi: The court held that the insurance company's delay in repudiating the claim and the arbitrary nature of the repudiation proved deficiency in service. It also emphasized that detailed evidence was not required in summary proceedings under the Consumer Protection Act.
Final Decision: The appeal was allowed, and the insurance company was directed to pay the assessed amount with interest and litigation costs.
Mr. Justice A.L. Bahri, President — This appeal is by the complainant M/s. Universal Processors, Amritsar whose complaint was dismissed by District Forum, Amritsar on April 26,1996. The complainant firm is dealing in the business of cloth at their stores at the premises at Batala Road, Amritsar. They got their goods lying therein insured from Oriental Insurance Company for a sum of Rs. 7,50,000/-. The policy was valid from February 25,1992 to February 24, 1993.
2. On the night intervening 15th and 16th of June, 1992, burlgary took place in premises of the complainant who suffered huge loss of the goods lying therein. A case was registered with the Police. Insurance Company was informed who appointed a Surveyor who assessed the loss at Rs. 1,47,888/-. The Insurance Company was not satisfied with the report of the Surveyor that it subsequently appointed another one in the name of Investigator Fauja Singh Sohal. He submitted his report on April 18,1993 and it appears on the basis of the aforesaid report, the claim was repudiated on November 17, 1993. The complainant approached the District Forum and the Insurance Company took up the plea that the claim had been validly repudiated. Both the parties produced their evidence on affidavits and documents on the basis of which the Impugned Order was passed.
3. The District Forum referred to the several documents produced by the complainant and discarded the same. They referred to purchase of goods by the complainant and received at Amritsar though Gagan Freight Carriers. The complaint was dismissed.
4. Learned Counsel for the complainant appellant has argued that question for consideration in the present case was as to whether repudiation of the claim made on November 17, 1993 (AnnexureA-31) was valid or not. According to him, this repudiation was made after more than a year of the claim made and delay perse in repudiating the claim amounts to deficiency in rendering service. There is force in this contention. It has been held by the National Commission in several cases that the Insurance Companies should settle the claims within 3-4 months of the claim filed. No valid reasons have been put forth about the necessity of appointing the Investigator after the first Surveyor had assessed the loss suffered by the complainant as mentioned above. It has been adversely commented by the National Commission that the practice of appointing one after the other Surveyor has to be deprecated. Furthermore a second Surveyor could not be appointed without the permission of the Inspector of Insurance. The repudiation made by the Insurance Company is arbitrary on the ground of delay as mentioned above and subsequently no cogent reason is contained therein to repudiate the claim. It simply mentions that the claim was not tangible and failed. In support thereof, reference has been made to report of Fauja Singh. As al ready observed above, there was no need of appointment of second Surveyor in the garb of Investigator when the first Surveyor after accepting the documents produced by the complainant and after inspection of the site had found the factum of burglary and loss suffered by the complainant. At this stage, it may be observed, any observations made by Sh. Fauja Singh, Investigator after a year of the burglary in the finding that no evidence of breaking of the gate of the premises was found, is of no importance.
5. When Surveyor appointed by the Insurance Company had assessed the loss, it was not required of the District Forum to go into details of the bills purchased by the complainant when the purchases were supported by cheques to go into thereof. In summary proceedings under the Consumer Protection Act, detailed evidence was not required to be led or discussed. There was no reason to discard the evidence of the complainant that the burglary has taken place on the night of 15th and 16th of June, 1992. The entire approach of the District Forum in deciding the present complaint is not tenable. The r
