DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 27th day of March 2024
Filed on: 12/01/2016
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C. No. 21/2016
COMPLAINANT
Nikhil K Davis , S/o. Davis , Kaniyamkudy House, Kumarapuram.PO, Chittanadu, Ernakulam
(By Adv.Tom Joseph, Court Road, Muvattupuzha-686 661)
VS
OPPOSITE PARTY
M/s Sri Ram General Insurance Company Ltd, Branch Office, 41/339, Azad Tower, Ammankovil Cross Road, Ernakulam, Kochi-35, Rep by its Branch Manager.
(Op rep. by Adv.Jacob Mathew, 61-B, Panampilly Nagar, Kochi-36)
F I N A L O R D E R
D.B. Binu, President.
- A brief statement of facts of this complaint is as stated below:
The complaint filed under Section 12 of the Consumer Protection Act. The complainant owns a Bajaj Pulsar motorcycle with registration number KL-40K-4323, insured under policy No. 419011/31/15/002963. The motorcycle was involved in a severe accident on March 16, 2015, resulting in extensive damage to the vehicle and serious injuries to the driver, Mr. Vishnu Anand. Following the accident, an FIR was registered by the Kunnathunadu police, and a claim was subsequently filed with the insurance company. A surveyor assessed the damage, providing a repair estimate of Rs. 30,930/-.
However, the insurance company repudiated the claim on May 14, 2015, citing delayed notification and the driver's lack of a valid driving license as reasons. The complainant disputes the insurer's reasons for repudiation, arguing that the accident was reported within a week, a delay caused by the driver's hospitalization. It is further noted that Mr. Vishnu possessed a valid driving license, and according to IRDI guidelines, the insurer should have processed the claim despite the delayed notification. The complainant suggests that the police FIR should negate any claim of prejudice due to the delayed notification.
The complainant accuses the insurance company of service deficiency for unjustly repudiating a legitimate claim on baseless grounds. They seek compensation for the repair costs amounting to Rs. 30,930 with 12% annual interest from the date of the claim until payment. Additionally, the complainant seeks Rs. 20,000 for mental agony and hardship caused by the wrongful repudiation of the claim, along with the costs of the proceedings. The complainant requests that the Consumer Commission grant the relief outlined due to the insurer's alleged deficiency in service and wrongful claim repudiation.
2) Notice
The Commission sent notice to the opposite party and the opposite party filed their version.
3) THE VERSION OF THE OPPOSITE PARTY
The opposite party stated that the complainant is not a consumer as defined under relevant law, implying that the complaint lacks legal standing. It acknowledges the insurance of the motorcycle but emphasizes that its liability is strictly governed by the policy terms, including timely notifications about accidents, exclusions, and deductions. The complainant reported the accident nine days after its occurrence, which the opposite party deemed late and without satisfactory explanation. This delay is seen as hampering the company's ability to accurately assess the accident and damages.
Upon inspection, the surveyor found the motorcycle dismantled, preventing a proper assessment of the accident's impact. Additionally, it was discovered that the complainant, not having a valid driving license, was driving at the accident time, violating policy terms. The opposite party disputes the necessity and amount of the claimed repair costs, asserting that the vehicle had been prematurely dismantled, affecting the accuracy of the claim.
The repudiation of the claim is based on solid legal and factual grounds, denying any deficiency in service or wrongful denial of the claim. The insurance policy is presented as a contract whose terms must be strictly observed by the insured to validate any claims. The complaint is seen as lacking factual or legal basis, essentially an exploratory litigation by the complainant.
Based on the above points, the opposite party suggests that the complaint lacks merit, both factually and legally, and should be dismissed with the complainant possibly bearing the opposite party's compensatory costs. This summary underscores the insurance company's position that the complaint is not justifiable under the law or the specific terms of the insurance policy, emphasizing procedural compliance, factual accuracy, and the contractual nature of insurance agreements.
4) . Evidence
The complainant had filed a proof affidavit and 4 documents that were marked as Exhibits-A-1 to A-4.
- Exhibit A-1: Copy of the repudiation letter issued by the insurance company.
- Exhibit A-2: Copy of the First Information Report (FIR)and (FIS).
- Exhibit A-3: Copy of the retail invoice issued by M/s JKB Automobiles.
- Exhibit A-4: A copy of the driving license of Vishnu Anand.
The documents filed by the opposite party, alongside their submission, are marked as exhibits as follows:
Exhibit B-1: True copy of the Policy in respect of KL-40/K-4323 motorcycle.
Exhibit B-2: True copy of the motor insurance claim form.
Exhibit B-3: True copy of the survey report.
Exhibit B-4: True copy of the repudiation letter dated 14.05.2015.
Exhibit B-5: True copy of the claim closure report.
Exhibit B-6: True copy of the letter dated 30-03-2015 issued by the opposite party to the complainant.
Exhibit B-7: True copy of the letter dated 06-04-2015 issued by the opposite party to the complainant.
Exhibit B-8: True copy of the letter dated 21-04-2015 issued by the opposite party to the complainant.
5) The main points to be analysed in this case are as follows:
i) Whether the complaint is maintainable or not?
ii) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?
iii) If so, whether the complainant is entitled to get any relief from the side of the opposite party?
iv) Costs of the proceedings if any?
6) The issues mentioned above are considered together and are answered as follows:
In the present case in hand, as per Section 2 (1) (d) of the Consumer Protection Act,1986, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment. A copy of the Invoice was issued by the opposite party. A true copy of the Policy in respect of the KL-40/K-4323 motorcycle. (Exhibits B-1). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 1986 (Point No. i) goes against the opposite party.
Sri.Tom Joseph, the learned counsel representing the complainant, argued that the dispute centers on the insurance company's denial of a damage claim due to alleged late notification and the driver's supposed lack of a driving license. He pointed out that no counter-evidence was presented by the defense. The complainant's side submitted documents Exhibits A1 to A4, with the opposite party offering no evidence. He emphasized that the accident occurred on May 16, 2015, and the FIR, documented as Exhibit A2, was filed on May 19, 2015. Joseph highlighted the relevance of Circular No. IRDA/HLTH/MISC/CR/216/9/2011 dated September 20, 2011, regarding late insurance claims, suggesting it directly applies to this case. As for the claim regarding the driving license, he noted that Exhibit A4, the driving license, counters the insurance company's argument. With the lack of opposing evidence, he concluded that the denial of the claim was unjustified and requested that the complaint be upheld.
Sri. Jacob Mathew. P, the learned counsel representing the opposite party, argued that the complaint was lodged on a speculative basis. He highlighted that the complainant was operating the scooter with a passenger and without a valid driving license, which led to a 9-day delay in reporting the accident. This delay violated the policy terms, which require immediate notification following an accident. Additionally, the FIR was also filed late. The policy mandates that the vehicle must be operated by someone with a valid driving license, and the claim that a passenger was presented as the driver was a tactic to circumvent this requirement, causing delays in the FIR and notification to the insurance company.
The argument further emphasized that the so-called rider's injuries resulted from being the passenger, not the driver, suggesting that the complainant's claim for repair costs was inflated. The insurer's surveyor couldn't inspect the vehicle in time due to its disassembly before the inspection, which was attributed to the delayed notification. This prevented the insurer from assessing the actual damage. The National Commission's stance that delays can be overlooked when the rejection is solely based on such delays does not apply here due to the non-production of a valid driving license and the insurer's missed opportunity to assess the damage.
The opposite party submitted eight documents to support their case. These documents included the policy showing the requirement for a valid driving license, the claim form indicating the notification delay, and a survey report unable to verify the damage or the driver's license. Letters to the complainant requested further information, which was not provided, suggesting the complainant lacked a valid driving license at the accident time.
Given these circumstances, the claim was deemed rightfully repudiated due to violations of policy conditions, such as delayed notification, lack of a valid driving license, and the insurer's inability to assess the damage. Thus, the complaint was suggested to be dismissed with exemplary costs against the complainant.
The complainant pointed out the significance of Circular No. IRDA/HLTH/MISC/CR/216/9/2011, dated September 20, 2011, which pertains to late insurance claims, asserting its direct application to this case. The pertinent section is quoted below:
“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 policyholders 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.”
We have carefully listened to the submissions made at length by the learned counsels representing both the complainant and the opposite party, and have considered the entire evidence on record.
In the matter brought before this Commission under Section 12 of the Consumer Protection Act, involving the complainant, the owner of a Bajaj Pulsar motorcycle bearing registration number KL-40K-4323, and the opposite party, the insurance company, the issues for consideration were whether the complaint is maintainable, the presence of any deficiency in service or unfair trade practice by the opposite party, entitlement of the complainant to any relief, and the determination of the costs of the proceedings.
A. Maintainability and Consumer Status: The complainant's submission, backed by the evidence of the insurance policy and invoice for the motorcycle, unequivocally establishes him as a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986. The fact that a service was availed (insurance) for consideration, which is in dispute, brings this matter squarely within the ambit of the Act.
- Deficiency in Service and Negligence: The core of the complainant's argument rests on the insurance company's refusal to honour the claim based on delayed intimation and the alleged lack of a valid driving license at the time of the accident. The documents submitted, particularly the FIR (Exhibit A-2) and the driving license (Exhibit A-4), alongside Circular No. IRDA/HLTH/MISC/CR/216/9/2011, form the crux of the complainant's case. The circular explicitly states that claims should not be rejected on purely technical grounds and that delays in claim intimation should be condoned if they are beyond the control of the insured. The accident was reported three days post-occurrence, and the driving license was valid, thereby negating the grounds for claim repudiation presented by the opposite party.
The claims were unjustly repudiated on technicalities, courts have consistently ruled in favour of the complainant, emphasizing the spirit of the contract and the insurer's duty to act in good faith.
The case under consideration draws on precedents set by Om Prakash v. Reliance General Insurance and Anr. and National Insurance Company Limited v. Nitin Khandelwal, which address the issue of claim denial.
The Commission, aligning with the reasoning in Om Prakash (CPJ 1 (SC)=2008 11 SCC 259), emphasizes that fairness and reasonableness should prevail over technicalities in the assessment of claims. This principle is especially crucial when there is substantial evidence supporting the validity of the claimant's case. Thus, the current decision underscores the importance of not rejecting legitimate claims solely on the ground of delayed communication with the insurance company, upholding a more equitable approach in claim adjudication.
Upon reviewing the submissions and evidence presented by both parties, it becomes evident that the complainant fulfilled his duty by reporting the accident within a reasonable time frame, considering the circumstances, and by holding a valid driving license. The repudiation of the claim by the opposite party appears to be unjust and lacking in the good faith required in the execution of insurance contracts.
The absence of contra evidence from the opposite party to substantiate their reasons for claim repudiation. The reliance on technicalities in face of the explicit guidelines issued by the IRDA undermines the confidence in the insurance sector and fosters unnecessary litigation, as warned against in the aforementioned circular.
C. Liability of the Opposite Party
Given the above considerations, the Commission finds the opposite party liable for deficiency in service and negligence in the repudiation of the complainant's claim. The evidence presented, supported by relevant case laws and the directives of the IRDA, clearly favors the complainant's position.
We determine that issue numbers (I) to (III) are resolved in the complainant's favour due to the significant service deficiency and the unfair trade practices on the part of the opposite party. Consequently, the complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the opposite party.
In view of the above facts and circumstances of the case, we are of the opinion that the opposite party is liable to compensate the complainant.
Hence the prayer is partly allowed as follows:
I. The Opposite Party shall pay ₹30,930 (Rupees Thirty Thousand Nine Hundred Thirty Only) to the complainant for the repair costs.
II. The Opposite Party shall pay ₹25,000 (Rupees Twenty-Five Thousand Only) to the complainant as compensation. This amount is awarded for the deficiency in service and unfair trade practices, as well as for the mental agony and physical hardships endured by the complainant.
III. The Opposite Party shall also pay the complainant ₹20,000 (Rupees Twenty Thousand Only) towards the cost of the proceedings.
The Opposite Party is liable for the above directions, which shall be complied with within 30 days from the receipt of a copy of this order. Failing this, the amounts specified in Points I and II shall accrue interest at 9% per annum from the end of the 30-day compliance period until fully realized.
Pronounced in the Open Commission on this the 27th day of March 2024
Sd/-
D.B.Binu, President
Sd/-
V.Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded by Order
Assistant Registrar
Forwarded/by Order
Appendix
Complainant’s evidence
- Exhibit A-1: Copy of the repudiation letter issued by the insurance company.
- Exhibit A-2: Copy of the First Information Report (FIR)and (FIS).
- Exhibit A-3: Copy of the retail invoice issued by M/s JKB Automobiles.
- Exhibit A-4: A copy of the driving license of Vishnu Anand.
The documents filed by the opposite party, alongside their submission, are marked as exhibits as follows:
Exhibit B-1: True copy of the Policy in respect of KL-40/K-4323 motorcycle.
Exhibit B-2: True copy of the motor insurance claim form.
Exhibit B-3: True copy of the survey report.
Exhibit B-4: True copy of the repudiation letter dated 14.05.2015.
Exhibit B-5: True copy of the claim closure report.
Exhibit B-6: True copy of the letter dated 30-03-2015 issued by the opposite party to the complainant.
Exhibit B-7: True copy of the letter dated 06-04-2015 issued by the opposite party to the complainant.
Exhibit B-8: True copy of the letter dated 21-04-2015 issued by the opposite party to the complainant.
Date of Despatch :: By Hand :: By Post :
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