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DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice J.D. Kapoor, President & Mr. Mahesh Chandra, Member
UNITED INDIA INSURANCE CO. LTD.—Appellant
versus
VIJENDRA KUMAR BHATIA—Respondent
Appeal No. A-130 of 2001—Decided on 11.10.2004
Counsel for the Parties :
For the Appellant :Mr. Sameer Nandwani, Advocate.
For the Respondent:Mr. A.C. Mittal, Advocate.
Unjustified repudiation of insurance claim and the award of normal interest to consumers
Headnote:
Insurance - Vehicle Insurance - Unjustified Repudiation of Claim
Fact of the Case:
The appellant appealed against the order directing payment of insured value of a stolen vehicle with 15% interest, which was repudiated by the appellant due to alleged suppression of facts in obtaining insurance.
Finding of the Court:
The court found that the repudiation of the claim was unjustified, as the vehicle was insured without physical examination and the registration certificate indicated it was newly purchased.
Issues: Unjustified repudiation of insurance claim, rate of interest for compensation
Ratio Decidendi: The court reduced the rate of interest from 15% to 12% to align with normal market rates, emphasizing that consumers should be awarded normal interest without unjust enrichment.
Final Decision: The appeal was dismissed, but the rate of interest was reduced from 15% to 12% for the insurance claim, and any refunded premium was to be adjusted.
Mr. Justice J.D. Kapoor, President—Feeling aggrieved of the order dated 14.12.2000 whereby the appellant has been directed to pay the insured value of the vehicle purchased by the respondent with 15% interest on account of total loss, the appellant has preferred this appeal.
2. Admittedly the Maruti car in question was purchased on 11.3.1994 from M/s. Rohtas Motors, Ghaziabad and brought to Delhi by the respondent who got it insured for Rs. 3,65,000/- from the appellant on 18/21.3.1994. Unfortunately after one week the vehicle in question was stolen and a claim was preferred by the respondent for the said amount. However, the said claim was repudiated for the reasons that the respondent had obtained the insurance of the vehicle by suppression of facts and the premium amount was refunded to him for doubtful bona fides as after investigation by a leading detective agency it was revealed that the vehicle in question was not physically inspected by the employee of the company, who was deputed for giving the insurance and the insurance cover was issued without any verification of the vehicle.
3. Even if this contention is accepted still the fact remains that the appellant had insured the vehicle for Rs. 3,60,000/- against premium of Rs. 10,593/- which was accepted without physically examining the vehicle. Even otherwise physical examination of the vehicle would not have mattered much as the registration certificate of the vehicle in question shows that it was a newly purchased vehicle from M/s. Rohtas Motors, Ghaziabad. Therefore, the repudiation of the claim for the reasons as provided by the appellant was unjustified.
4. However, the indulgence which we feel inclined to show in such matters is to reduce the rate of interest as the consumer should be awarded normal interest which is available in the market as under the garb of protecting the interest of the consumer, the consumer cannot be made rich unjustly. We do not find any merit in the appeal so far main claim is concerned and dismiss the same but with modification to the rate of interest by reducing it from 15% to 12%. The premium, if refunded, shall be adjusted.
A copy of this order as per the statutory requirements, be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to record room.
Appeal dismissed.
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