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2025 Supreme(Online)(NCDRC) 3607
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
MR. SUBHASH CHANDRA, PRESIDING MEMBER, AVM J. RAJENDRA, MEMBER
Karnataka State Warehousing Corporation – Appellant
Versus
The Oriental Insurance Company Limited – Respondent
CONSUMER COMPLAINT NO. 687 OF 2015 | CONSUMER COMPLAINT NO. 688 OF 2015
For the Appellants/Petitioners:Ms. Padmapriya, Mr. Rishabh Sancheti, Advocate, Mr. Shikhar Bhardwaj, Advocate
For the Respondents:Mr. Ajay Singh, Advocate
Timely notification to insurers as per policy terms is essential to validate claims; delays can result in dismissal.
Headnote:(A) Consumer Protection Act, 1986 - Section 21 - Insurance Policy - Claims Settlement - Complaint dismissed for failure to notify insurer of employee misconduct within 14 days; substantial delays in filing FIR and claim notification contravened policy conditions. - Timely communication is critical for claim assessment. (Paras 4, 10, 12, 14)
(B) Contract Law - Compliance with Terms - Insurers is not liable if terms of policy are breached; delays in claim processing need justification - Claim closure upheld due to non-compliance with policy obligations. (Para 12)
Facts of the case:
The complainant obtained a Fidelity Guarantee Policy for Rs.2,00,00,000, discovered fraud during an audit, and reported it with significant delays. The insurance company denied liability citing lack of timely communication.
Findings of Court:
The Court found in favor of the insurer due to complainant's failure to comply with notification requirements in the policy.
Issues: The case revolved around the notification delays and compliance with insurance policy terms.
Ratio Decidendi: The court emphasized the importance of adhering to insurance policy terms and timely communication regarding claims.
Result: Both complaints dismissed.
| Table of Content |
|---|
| 1. claims arising from insurance policy delay notifications. (Para 3 , 8 , 10) |
| 2. adherence to policy conditions is critical for liability. (Para 4 , 5 , 12 , 13) |
| 3. responsibility of insurer in processing claims. (Para 7 , 9 , 11) |
JUDGMENT
AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER
1. 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 27.01.2014, 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
