IMPORTANT POINT
Insurance—Delay in intimation and FIR can be a valid ground for rejection of insurance claim.

JUDGMENT

AVM J. Rajendra, AVSM VSM (Retd.), Member—The present Consumer Complaints No. 687 of 2015 and 688 of 2015 have been filed under Section 21 of the Consumer Protection Act, 1986 (“the Act’) against the Opposite Parties seeking to direct the OPs:—

CC No. 687 of 2015

“i. Direct the opposite parties to make payment of an amount of Rs.1,26,13,266 to the complainant towards settlement of its claims arising under and out of the Insurance Policy No.421800/48/2011/2737 with interest at the rate of 12% per annum, past, pendete lite future;

ii. Direct the opposite parties to pay the complainant appropriate compensation for the loss and expenses incurred by the complainant due to the opposite parties’ failure to discharge the insurance agreement in question;

iii. Pass such other order or direction that this commission may deem fit and proper in the interest of justice’.

CC No. 688 of 2015

i. Direct the opposite parties to make pa3mient of an amount of Rs.1,14,96,531 to the complainant towards settlement of its claims arising under and out of the Insurance Policy No.421800/48/2011/2737 with interest at the rate of 12% per annum, past, pendete lite future;

ii. Direct the opposite parties to pay the complainant appropriate compensation for the loss and expenses incurred by the complainant due to the opposite parties’ failure to discharge the insurance agreement in question;

iii. Pass such other order or direction that this commission may deem fit and proper in the interest of justice’.

2. Since the main facts and contentions are substantially similar in both the Complaint Cases, except for the amounts of the losses, claims etc, both Cases are being disposed of by this common order. For convenience CC No.687 of 2015 is considered as the lead case.

3. Brief facts of the case, as per the complainant, are that on 31.12.2010, the Complainant obtained a ‘Fidelity Guarantee Policy Scheme’ No.42180000/48/2011/2737 for Rs.2,00,00,000 and the policy was valid from 01.01.2011 to 31.12.2011. During an audit conducted on 11.01.2011, it was discovered that officers of the Complainant had misappropriated funds and committed fraud during the procurement of Maize at SWH-Devangere-U-I. Consequently, an FIR was lodged on 02.02.2011, at the RMC Yard Police station in Davangere, registered as Cr No 0005/2011. The Complainant notified the Opposite Party (OP) about the incident vide letter dated 21.09.2011, receipt of which was acknowledged by the OP vide email dated 23.09.2011. Subsequently, the Complainant submitted a ‘Claim Form’ on 24.09.2011, claiming an amount of Rs.1,26,13,266 under the aforementioned Insurance Policy with respect to SWH-Davangere U-I exclusively. On receipt of the claim, OP-2 requested additional documents and details vide letter dated 04.10.2011. The Complainant complied and provided the requested information vide letter dated 13.10.2011. On 14.12.2011, the OP inquired about the reasons for delay in filing the insurance claim. On 27.11.2011, M/s. Cunningham Lindsay International Pvt. Ltd., Surveyors and Loss Assessors/Valuers/Investigators appointed by the OP sought further documentation from the Complainant, followed by additional document requests on 04.05.2012. The Complainant furnished all requested documents to the surveyor vide letter dated 27.03.2013. Thereafter, between 27.1.2014, and 25.02.2014, the Complainant sent several reminders to the OP inquiring about the status of the claim. On 18.03.2014, OP-2 responded, informing the Complainant that the claims were being processed by the regional office. The OP again requested for documents from the Complainant vide letter dated 22.04.2014, to which the Complainant responded by sending the relevant documents on 04.09.2014. On 31.10.2014, the Complainant served a legal notice on the OPs. The OPs subsequently requested additional documents through a letter dated 24.12.2014. Finally, on 06.02.2015, the OPs informed the Complainant that their claim had been closed. Aggri