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2016 Supreme(P&H) 3340
IN THE HIGH COURT OF PUNJAB AND HARYANA
RAMESHWAR SINGH MALIK, J.
NATIONAL INSURANCE COMPANY LIMITED – Appellant
Vs.
SANDEEP – Respondent
Civil Writ Petition No. 26178 of 2016
Decided on : 17-12-2016
Advocate Appeared:
For the Appellant :Rajneesh Malhotra, Advocate
Delay in intimation of theft should not prevent settlement of genuine claims, and insurance companies should handle claims with utmost care and caution, avoiding rejection on purely technical grounds.
Headnote:
Legal Services Authority Act - Insurance Claim - Section 22-C - [IRDA Guidelines] - The court upheld the impugned award directing the petitioner-Insurance Company to indemnify the insured for the financial loss suffered due to theft of the insured vehicle. The court emphasized that the delay in intimation of the theft should not prevent settlement of genuine claims, particularly when there is a delay due to unavoidable circumstances. The court highlighted the unfair practice of the insurance company and the need for insurance companies to handle claims with utmost care and caution, avoiding rejection on purely technical grounds. The court urged the Insurance Regulatory and Development Authority to take appropriate remedial measures to ensure the real object of insurance is achieved and to curtail the increasing trend of avoidable litigation.
Fact of the Case:
The insured's vehicle was stolen during the currency of the insurance policy. The insurance company repudiated the claim based on delayed intimation of the theft, leading to the insured seeking relief from the Permanent Lok Adalat.
Finding of the Court:
The court found that the insurance company's rejection of the genuine claim based on technicalities was unfair and upheld the impugned award, directing the insurance company to indemnify the insured.
Issues: Delay in intimation of theft, unfair practice of the insurance company, jurisdiction of the Permanent Lok Adalat, and the need for appropriate remedial measures by the Insurance Regulatory and Development Authority.
Ratio Decidendi: The delay in intimation of theft should not prevent settlement of genuine claims, and insurance companies should handle claims with utmost care and caution, avoiding rejection on purely technical grounds.
Final Decision: The writ petition was dismissed, and the court directed the Insurance Regulatory and Development Authority to take appropriate remedial measures to ensure the real object of insurance is achieved and to curtail the increasing trend of avoidable litigation.
Rameshwar Singh Malik, J.
Present writ petition is directed against the impugned award dated 1.3.2016 (Annexure P-1) passed by learned Permanent Lok Adalat (Public Utility Services), Bhiwani-respondent No.3, whereby application moved by respondent No.1 under Section 22-C of the Legal Services Authority Act, 1987, was allowed, directing the petitioner-Insurance Company to indemnify respondent No.1 for the financial loss suffered by him, on account of theft of his insured vehicle.
Heard learned counsel for the petitioner.
2. The basic and material facts which have gone undisputed are that vehicle of respondent No.1 was insured with the petitioner-Insurance Company. Theft took place during the currency of the insurance policy. Incident of the theft took place during the night of 2.9.2012 and on the very next morning, FIR No. 193 dated 3.9.2012 under Section 379 IPC was got registered, thus, there was no delay on the part of insured-respondent No. 1.
3. The only ground taken by the petitioner-Insurance Company to repudiate the claim of the insured was that petitioner-Insurance Company received intimation regarding theft of insured vehicle on 6.9.2012, i.e. after a gap of three days. Having a threat of repudiation of his claim at the hands of the petitioner-Insurance Company, it seems that respondent No.1 was made to submit his consent to the petitioner-Insurance Company that he would accept the claim on lower side, i.e. an amount of Rs. 4,01,482/- instead of Rs. 5,35,976/-.
4. The only argument raised by learned counsel for the petitioner before this Court is that once respondent No.1 has submitted his consent and petitioner-Insurance Company was ready to indemnify him to the extent of Rs. 4,01,482/-, application of respondent No.1 before learned Permanent Lok Adalat was not maintainable, thus, the impugned award is liable to be set aside.
5. Having heard learned counsel for the petitioner at considerable length, after careful perusal of record of the case and giving thoughtful consideration to the solitary contention raised, this Court is of the considered opinion that argument raised by learned counsel for the petitioner is wholly misplaced, for the reason that it was none of the fault of respondent No.1 for which he should have been made to suffer. In fact, it is so obvious on record that it was an unfair practise adopted by the petitioner-Insurance Company.
6. When respondent No.1 was having an apprehension that his claim may not be repudiated at the hands of petitioner-Insurance Company, he succumbed to the pressure and submitted his consent, which cannot be said to be a consent by free will. In such a situation, neither any estoppel would apply against the insured-respondent No.1, nor learned Permanent Lok Adalat committed any error of law, while entertaining his application under Section 22-C of the Legal Services Authorities Act.
7. During the course of hearing, when confronted with the fact that what was the patent illegality or perversity in the impugned award, learned counsel for the petitioner had no answer and rightly so, it being a matter of record. It is so said, because neither the factum of theft of insured vehicle has ever been in dispute at any point of time, nor it is pleaded or argued case on behalf of the petitioner-Insurance Company that theft of insured vehicle did not take place during the currency of the insurance policy.
8. Further, the FIR came to be registered on the very next morning, i.e. 3.9.2012, whereas the insured vehicle was stolen during the night of 2.9.2012. It is the own pleaded case on behalf of the petitioner- Insurance Company that it received the intimation regarding theft of insured vehicle on 6.9.2012, i.e. after three days, which cannot be said to be fatal under the peculiar facts and circumstances of the case, noticed herein above. Having said that, this Court feels no hesitation to conclude that learned Permanent Lok Adalat was well within its jurisdiction, while passing the impugn
