Harbhajan Singh vs National Insurance Company Limited

THE short question involved in this appeal is as to whether repudiation of the claim by the Insurance Company is arbitrary or not. THE District Forum dismissed the complaint holding the repudiation to be valid vide order dated October 10,1996 that Harbhajan Singh, complainant, has filed this appeal. Harbhajan Singh purchased an insurance policy from National Insurance Company covering risk of his tractor. THE policy commenced from October 31,1990 and it was for an year. THE tractor having been stolen on the night of June 16th and 17th of 1991, the police was informed on June 25,1991. THE Bank from whom loan had been taken (Punjab National Bank) was informed, who consequently informed the Insurance Company. A Surveyor was appointed who made his report dated July 18,1995 on the basis of which the Insurance Company repudiated the claim on August 14, 1995. Hence, District Forum was approached by the complainant claiming compensation. THE Insurance Company took up the plea that the repudiation was valid and based on material collected. This plea found favour with the District Forum and the complaint was dismissed.

WE have heard Counsel for the parties and find force in this appeal. When claim is made before the Insurance Company for the loss suffered on account of theft of the insured articles, the Insurance Company, of course, is called upon to determine if actually theft had taken place for which claim is lodged and if so, how much loss the complainant had suffered. On determination of these questions, the Insurance Company is either to repudiate the claim or settle the same. In the present case, vide letter dated August 14, 1995, the Insurance" Company repudiated the claim. In support thereto, reliance was placed on the report of the Surveyor M/s. Puri Sons Surveyors Private Limited dated July 18, 1995. WE have gone through the report in entirety. The gist of the report is as under : Initially in the FIR 256 of 1991 dated June 17,1991, the actual date of commission of theft was stated to be January 8,1992. This date was subsequently got amended to June 14,1991. As per statement of Harbhajan Singh, complainant, the theft occurred on June 14,1991 when some terrorists, 6-7 in numbers duly armed with weapons intruded into his house and took the keys of the tractor and drove it away/ft is further mentioned that earlier the terrorists had taken away his tractor and returned the same. It was thereafter 10-15 days that again they came and took away the tractor. Thereafter the same was not recovered by the Police.

The Surveyor relying upon this statement of the complainant observed discrepancy with regard to actual date of the theft and that earlier tractor was taken away but was returned and when second time it was taken away it was not recovered. Thus, the Insurance Company came to the conclusion that after theft was committed on June 14, 1991, the tractor was recovered, hence, repudiated the claim and at the same time ignored the finding of the Surveyor that the tractor had been stolen and had not been recovered. It may be observed that minor discrepancies in the evidence may cause doubt to put the Courts to caution in criminal jurisdiction as no conviction can be passed on suspicion or doubt. However, when civil liabilities are under consideration as in the present case, the substratum of the allegation of the theft were required to be taken into consideration. If the factum of theft and non-recovery of the stolen articles is established, there was no justification for the Insurance Company to rely upon certain discrepancies in the evidence produced before the Surveyor in the matter of actual date of commission of theft or time. The Surveyor, of course, gave a firm finding that theft had occurred and the tractor had not so far been recovered. In view of this finding recorded, it was not expected of the Insurance Company to repudiate the claim observing that the factum of previous theft and recovery of the tractor was not disclosed in the claim by the complainant. The repudiation in the circumstances of the present case is arbitrary and non-settlement of the claim amounts to deficiency in rendering service on the part of the Insurance Company. Though the theft took place sometime in June, 1991 and claim was lodged with the Insurance Company at the instance of Punjab National Bank from whom loan was taken for purchase of the tractor by the complainant, it was in 1995, after lapse of about 4 years that the Insurance Company repudiated the claim. Ordinarily it was expected of the Insurance Company to settle the claim within few months. The delay in settlement of the claim parse amounts to deficiency in rendering service and we hold so in the present case. The Surveyor did not assess actual loss suffered by the complainant on account of theft of the tractor. Thus, it would be appropriate to allow the insured amount to the complainant towards the loss suffered. Supreme Court in United India Insurance Company v. M.K.J. Corporation, III (1996) CPJ 8 (SC), has held that compensation by way of interest against the Insurance Companies should not be more than 12% p.a. Since in the present case four years were taken in submission of the report by the Surveyor, the complainant cannot be deprived of the interest on the insured amount for these four years. The Surveyor''s report indicates that the Surveyors were appointed on June 29, 1993, thus, the complainant would be entitled to compensation by way of interest w.e.f. October 1, 1993 on the insured amount : of Rs. 94,000/-. For the reasons recorded above, this appeal is allowed. The order of the District Forum is set aside. The complaint is allowed with the direction to the National Insurance Company to pay a sum of Rs. 94,000/- with 12% p.a. interest thereon w.e.f. October 1,1993 till payment along with Rs. 5,000/- litigation expenses to the complainant Harbhajan Singh. Appeal allowed. ________________