GURSHINDER SINGH Vs. SHRIRAM GENERAL INSURANCE CO. LTD. & ANR.
IN THE SUPREME COURT OF INDIA/ CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.653 OF 2020
THE ISSUE
As to whether the delay in informing the occurrence of the theft of the vehicle to the insurance company, though the FIR was registered immediately, would disentitle the claimant of the insurance claim.
BRIEF FACTS
1. The appellant had got his tractor insured with the respondent(s) on 19.06.2010.
2. On 28.10.2010, the tractor was stolen and an FIR was lodged on the same day.
3. However, the claim was submitted to the respondent(s) on 15.12.2010.
4. It was rejected on the ground that intimation was given belatedly after 52 days.
5. The appellant herein, therefore, approached the District Consumer Disputes Redressal Forum, Jalandhar, Punjab.
6. The District Forum, relying on the decisions of the National Consumer Disputes Redressal Commission (hereinafter referred to as the ‘National Commission') in the case of Parvesh Chander Chadha (supra) and T.D.P. Gram Sewa Sahakari Samiti Ltd. & Ors. vs. Charanjit Kaur and Ors. allowed the complaint and directed the respondents to pay a sum of Rs.4,70,000/ being the declared insured value of the vehicle to the complainant within one month from the date of receipt of the copy of the order, failing which, the respondents were made liable to pay interest at the rate of 12% per annum from the date of order till payment.
7. Being aggrieved thereby, the respondents preferred an appeal before the State Consumer Disputes Redressal Commission, Punjab (hereinafter referred to as the "State Commission"). The State Commission dismissed the appeal vide order dated
26.03.2013.
8. Being aggrieved by the dismissal of the appeal by the State Commission, the respondents preferred a Revision Petition before the National Commission.
9. The National Commission relying on its earlier judgment in the case of New India Assurance Co. Ltd. vs. Trilochan Jane4 allowed the revision petition thereby setting aside the orders of the District Forum as well as the State Commission and dismissed the complaint.
10. Being aggrieved thereby, the appellant is before this Court.
HON'BLE SUPREME COURT OF INDIA
11. When the matter was heard by the twoJudge bench of this Court, it noticed that though in the case of Om Prakash (supra), the theft of the vehicle was reported to the police on the day after the theft occurred, the intimation was sent to the insurance company much later. This Court took the view that delay in informing the insurance company would not debar the insured to get the insurance claim.
Per contra, it noticed that in the case of Parvesh Chander Chadha (supra), this Court accepted the contention of the insurance company that on account of delay in 4 (2012) CPJ 441 (NC) intimating the insurance company about the theft, though the FIR was lodged immediately, the insurance company was entitled to repudiate the claim of the claimant. Hence, the present appeal.
TERMS OF INTIMATION IN THE POLICY DOCUMENT
12. It will be relevant to refer to Condition No.1 of the Standard Form for Commercial Vehicles Package Policy, which reads as follows:
"1. Notice shall be given in writing to the Company immediately upon the occurrence of any accidental loss or damage and in the event of any claim and thereafter the insured shall give all such information and assistance as the Company shall require. Every letter claim writ summons and/or process or copy thereof shall be forwarded to the Company immediately on receipt by the insured. Notice shall also be given in writing to the company immediately the insured shall have knowledge of any impending prosecution inquest or fatal inquiry in respect of any occurrence which may give rise to a claim under this policy.
In case of theft or criminal act which may be the subject of a claim under this policy the insured shall give immediate notice to the police and cooperate with the company in securing the conviction of the offender."
13. The Apex Court in Om Prakash vs Reliance General Insuarance on 4 October, 2017[CIVIL APPEAL NO.15611 OF 2017] held that;
It further found that the word "immediately"' cannot be construed narrowly so as to deprive claimant the benefit of the settlement of genuine claim, particularly when the delay was explained. It further held, that rejection of the claim on purely technical grounds and in a mechanical manner will result in loss of confidence of policyholders in the insurance industry. It further held, that if the reasons for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. This Court also held that it would not be fair and reasonable to reject the genuine claims which have already been verified and found to be correct by the investigator. It further held, that the condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. This Court observed that the Consumer Protection Act aims at providing better protection of the interest of the consumers. It is a beneficial legislation that deserves a liberal construction.
14. Since the FIR was lodged immediately on the next day of the occurrence of theft of the vehicle by the insured and the vehicle could not be traced out, a delay of about five months in informing and lodging the claim with the insurer would not be fatal.
15. The Court held that when the insurer has repudiated the claim only on the ground of delay, and the claim of the insured was not found to be genuine, the insurer's repudiation could not be sustained.
CONCLUSION
The court has rightly said that the word "immediately" will not be interpreted narrowly, an insurance claim should not be rejected only on the basis of delayed intimation of claim, in case insured has substantially explained cause of delay. The Apex Court further held that rejection of the claim on purely technical grounds and in a mechanical manner will result in loss of confidence of policyholders in the insurance industry.
DISCLAIMER: The case law presented here is only for sharing information with readers. In case of necessity to consult with professionals.
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