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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Deepa Sharma, Presiding Member
VED PRAKASH KAJLA - Appellant
Vs.
NEW INDIA ASSURANCE CO. LTD. - Respondent
Revision Petition No. 56 of 2018, (Against the Order dated 10/10/2017 in Appeal No. 37/2017 of the State Commission Rajasthan)
Decided On : 10-08-2018
For the Appellant :Mr. Jayant Kumar, Advocate
For the Respondent:Ms. Shuchi Singh, Advocate
The delay in informing the insurance company should not be a sole ground for rejecting a claim, and insurance companies have the authority to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
Headnote:
Consumer Protection Act - Insurance Claim - Section 21(b) - 1986 - [Section 21(b) of the Consumer Protection Act, 1986] - The court discussed the delay in informing the insurance company about the theft, the genuineness of the theft, and the authority of insurance companies to condone delay on merit for delayed claims. The court referred to the circular issued by the Insurance Regulatory and Development Authority, which advised insurers to develop a mechanism to handle claims with care and caution and to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
Fact of the Case:
The petitioner took an insurance policy for a vehicle, which was later stolen. The insurance company rejected the claim due to delay in informing them about the theft. The State Commission allowed the appeal of the insurance company based on the delay in informing the insurance company.
Finding of the Court:
The court found that the delay in informing the insurance company was not a valid ground for rejecting the claim, especially when the investigator of the insurance company found the theft to be genuine and the insurance company failed to point out any prejudice caused due to the delay.
Issues: The main issue was whether the delay in informing the insurance company about the theft could be a ground for rejecting the claim, and whether the insurance company had the authority to condone the delay on merit for delayed claims.
Ratio Decidendi: The court held that the delay in informing the insurance company should not be a sole ground for rejecting the claim, especially when the genuineness of the theft was established and the insurance company failed to demonstrate any prejudice due to the delay. The court also referred to the circular issued by the Insurance Regulatory and Development Authority, which advised insurers to develop a mechanism to handle claims with care and caution and to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured.
Final Decision: The order of the State Commission was set aside, and the order of the District Forum awarding the insured amount to the petitioner was confirmed. The Revision Petition was disposed of in favor of the petitioner.
ORDER :
Deepa Sharma, Presiding Member. - By this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), Petitioner/complainant in the original Complaint, has challenged the order dated 10.10.2017 of the State Consumer Disputes Redressal Commission Rajasthan (for short "the State Commission") in First Appeal No.37 of 2017.
2. Briefly admitted facts are that petitioner took insurance policy of vehicle Bolero No.RJ 14 UA 5538 from the respondent/insurance company for the period 26.11.2008 to 25.11.2009 and the insured amount of vehicle was fixed at Rs. 4,08,668/-. The vehicle of the petitioner was stolen in the night of 12.03.2009 and FIR No.96 of 2009 under section 379 IPC was lodged to this effect on 13.03.2009.
3. The insurance company was informed about the theft on 23.03.2009 i.e. 11 days after the alleged theft. The insurance company did not take any action and did not pay the insured amount to the petitioner and, therefore, complaint was filed against the respondent in the year 2011. After filing of the complaint, insurance company informed the petitioner vide registered letter dated 19.03.2012 that his claim had been repudiated on the ground of delay beyond 48 hours in informing the theft of the vehicle. The investigator appointed by the insurance company investigated the matter and submitted his report on 09.09.2010 wherein he had stated that genuineness of the theft was not doubted.
4. Vide order dated 30.11.2016, the District Forum allowed the claim of the petitioner while rejecting the objection of the insurance company that that they were justified in repudiating the claim on the ground that they were not informed within 48 hours and awarded insured amount of Rs. 4,08,668/- to the petitioner.
5. On challenge by way of appeal by the respondent/insurance company, the State Commission allowed the appeal of the insurance company solely on the ground of delay in informing the insurance company and that no reason for delay had been furnished by the petitioner.
6. I have heard the arguments of both the parties and perused the record and case laws supplied by the parties. Admittedly, there was delay of 11 days on the part of the petitioner to inform the insurance company of the theft. The sole issue, whether this alone can be ground for rejecting the claim of the insured when their own investigator found that the incident on which the claim is based i.e. theft, was genuine? Counsel for the respondent has relied on the judgment of this Commission in the matter of New India Assurance Company Limited vs. Trilochan Jane passed in First Appeal No.321 of 2005 decided on 09.12.2009 wherein the Coordinate Bench held that delay of 9 days was fatal.
7. The findings of a particular case depends upon the facts and circumstances of the said case. From the facts of this case, it is apparent that investigator of the respondent / insurance company has categorically stated that theft was genuine. Whether the delay in informing the insurance company beyond 48 hours is fatal or whether information is necessarily to be sent to the insurance company within 48 hours is mandatory, has been considered by Insurance Regulatory and Development Authority, who issued a circular dated 20.09.2011 wherein it has been observed as under:
"The insurers' decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.
Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reaso
