Ved Prakash Kajla vs New India Assurance Co. Ltd

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.

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.

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.

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.

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.

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.

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 reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time.

The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurers' stand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured."

As per this circular, which binds all the insurance companies, the power and authority is given to them to condone the delay on merit for delayed claim where the delay is proved to be for the reasons beyond the control of the insured. The said circular, however, was issued after the passing of judgment by this Commission in Trilochan Jane ( supra). In the present case case, the only contention of the insurance company is that they did not condone the delay because the petitioner did not give any reason for delay. It is argued on behalf of the petitioner that his father was in coma during that period and that is why he could not immediately inform the insurance company. It is not a disputed fact that before rejecting / repudiating the claim, the respondent did not made any inquiry into the fact whether delay was justified or not. It is apparent that their own surveyor took almost a year to submit his report of investigation and even after such a long period, he concluded that theft was genuine.

Counsel for petitioner has relied upon the judgment of this Commission in the matter of Shriram General Insurance Co. Ltd. Vs. Ramcharan Dhobi passed in Revision Petition no. 964 of 2015 decided on 19.01.2017 and judgment of Supreme Court in the matter of Om Prakash Vs. Reliance General Insurance and Anr. passed in Civil Appeal No.15611 of 2017 on 04.10.2017, wherein delay in appropriate cases had been condoned. It is submitted on behalf of the respondent that there are contradictory judgments regarding condonation of delay and the matter is subjudiced before the Hon'ble Supreme Court in the matter of Gurshinder Singh Vs. Sriram General Insurance Co. Ltd. & Anr. passed in Special Leave to Appeal ( C) No. 24370 of 2015 and, therefore, it cannot be conclusively said that delay should be condoned. It is apparent from the order of the Hon'ble Supreme Court that Hon'ble Supreme Court has not debarred the Courts or Tribunals from deciding the issue of condonation of delay in informing the insurance company in cases where the theft had taken place and, therefore, this Commission can very well proceed with the matter.

In view of the fact that investigator of the insurance company found the theft to be genuine and that he himself took more than a year to submit the report and that the insurance company failed to point out any prejudice having been caused to it due to delay of 11 days in informing insurance company and in view of the IRDA letter which clearly stipulates that 48 hours timeline of informing the insurance company is not mandatory, I find that order of the State Commission is perverse and hence illegal.

In view of the discussion above, order of the State Commission is set aside and order of District Forum is hereby confirmed. Revision Petition stands disposed of.