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2023 Supreme(Online)(Del) 18819
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Not Mentioned, Not Mentioned
Oriental Insurance Co. Ltd. v. Sujap Singh
Revision Petition No. 123 of 2018
An insurance claim may be repudiated due to failure to transfer the policy upon the insured's death; however, undue delay and poor handling by the insurer can warrant compensation for mental harassment.
Headnote:(A) Insurance Policy - Clauses related to transfer upon the death of the insured - Claim repudiated due to non-transfer of the policy in three months - The court emphasizes the paramount importance of adhering strictly to policy terms and the lack of insurable interest when terms are not followed. (Paras 4, 25)
(B) Consumer Rights - The Consumer cannot claim unless in compliance with the insurance policy's terms regarding transfer after the insured's death - The Commission did consider the unfair treatment and awarded compensation for mental harassment. (Paras 24, 25)
Facts of the case:
The Respondent No. 1's father was the original insured who died, and the truck was stolen after death. The claim was filed but repudiated by the insurance company for non-compliance with policy conditions regarding transfer.
Findings of Court:
The claim was not maintainable due to non-transfer of policy, but compensation for harassment was granted given the insurer's undue delay and demands.
Issues: Whether the policy lapsed due to non-transfer by the legal heirs and the sufficiency of the insurance company’s action post-claim initiation.
Ratio Decidendi: The court upheld that failure to comply with policy transfer leads to lapse of insurable interest, limiting the legal claim against the insurer, while acknowledging the insurer’s poor handling of the claim process.
Result: Revision allowed and compensation of Rs.1,00,000 awarded.
| Table of Content |
|---|
| 1. the sequence of events surrounding the insurance claim and policy coverage. (Para 1 , 2 , 4) |
| 2. arguments regarding the transfer of the insurance policy upon the insured's death. (Para 3 , 5 , 6) |
| 3. legal perspective on policy terms adherence and implications for claims. (Para 8 , 10 , 12) |
| 4. conclusion about the claim validity and insurer's responsibility for consumer harassment. (Para 24 , 25) |
1. This Revision Petition has been filed by the Petitioner / Opposite Party No. 2 challenging the impugned Order dated 2.4.2018 passed by the State Commission, Delhi, in First Appeal No. 740/2011. Vide the said Order, the State Commission had allowed the Appeal while setting aside the Order dated 17.11.2011 passed by the District Consumers Disputes Redressal Forums (V) (North West District), Shalimar Bagh, Delhi in Case No. 828/07.
2. The brief facts of the case are that the Respondent No. 1 / Complainant's father, Late Sh. Amarjeet Singh, was the registered owner of the truck bearing No. HR - 38 - J - 2818 and had taken an Insurance Policy bearing No. 31/2005/02960 for his truck for a period from 8.9.2004 to 7.9.2005 for a sum of Rs.7,00,000. The Policy holder, Late Sh. Amrajeet Singh, expired on 3.11.2004, and the truck was stolen on the night of 22nd / 23rd May, 2005. It was submitted that the FIR was lodged in this regard and an intimation regarding theft was also given to the Insurance Company on 26.5.2005. However, the claim was repudiated vide letter dated 18.04.2007 despite submission of all relevant information and documents by the Complainant. Hence, the Complainant had filed a complaint before the District Forums being aggrieved by the act of the Opposite Party in repudiating the claim and had sought relief of the insured value of Rs.7,00,000 along with other ancillary reliefs.
3. The Opposite Party No. 2 appeared before the District Forums and resisted the Complaint and denied all the allegations thereby denying deficiency in service on its part. It was submitted that the Complaint is without any cause of action and is liable to be dismissed. It was contended by the Opposite Party No. 2 that as per terms and conditions of the Insurance Policy in the event of death of the sole insured, the Policy does not lapse immediately but remains valid for a period of three months from the date of death of insured or until expiry of Policy (whichever is earlier) and during such period, the Legal Heirs of the Insured may apply for the transfer of Policy to their name or obtain a new Policy. And in the present case, the Policy of Late Sh. Amarjeet Singh was not transferred after his death on 3.11.2004 and subsequently the vehicle was stolen on 22.5.2005. It is further submitted that the Complainant got the vehicle transferred in his name on 18.5.2006 i.e., after the theft which is violation of condition No. 10 of the Insurance Policy. It was further contended that there is no insurable right of the Complainant in the vehicle in question since the insurance of the vehicle had already expired after three months from the date of death of the Insured, i.e. on 3.2.2005. It was further submitted that at the time of theft of the vehicle, the Policy was not in force and the same had already lapsed as per the terms of the Policy and the Opposite Party had rightly repudiated the claim. Hence, the Opposite Party No. 2 prayed for dismissal of the complaint.
4. The Ld. District Forums vide its Order dated 17.11.2011 dismissed the complaint of the Complainant and observed that :
"As is clear from a bare reading of Clause 10 (ibid), on the death of the assured, the policy would remain in operation for a period of 3 months to allow the LRs of the deceased to get it transferred in their names or purchase a new policy. In the case in hand the assured had expired on 3.11.2004 which means the policy had lapsed on 3.2.2005 i.e. on the expiry of 3 months. It is not disputed that the complainant or for the matter any other LR of the deceased had not
