INDIRA GUPTA vs Oriental Insurance Co.Ltd

BRIEF facts of the case are that the complainant bought a new Maruti Van No. DL 4CA 5574 in May, 91. She got a comprehensive insurance for the period 23.5.91 to 17.1.92. Contrary to the usual practice of obtaining insurance for one year, insurance was taken upto 17.1.92 to coincide with expiry of date of insurance of another vehicle DDD 5743 owned by the complainant. It slipped out of the mind of the complainant that the period of insurance expired in Jan.,92 and she remained under the impression that since the van was purchased in May, 91, the insurance taken was good upto May, 92. The insurance was not renewed in Jan., 92. However, in June, 92 the complainant again approached the opposite party to renew the insurance and gave a cheque for Rs. 3,386/- dated 10.6.92 on account of premium. For reasons, which are not material for the present purposes, the cheque was not encashed. The complainant remained busy with a marriage in the family and ultimately got the van insured on 20.7.92 when Cover Note No. 471416 for Rs. 1,35,000/- was issued. The cover note contained the engine number and chassis number of the van insured. The van was stolen on 22.7.92. FIR No. 166/92 dated 22.7.92 was registered with PS Roop Nagar and the Insurance Company was informed about the theft on 24.7.92 alongwith a copy of the cover note and registration of the vehicle. The Insurance Company appointed a Surveyor. The complainant furnished whatever documents were required by the Surveyor. The Insurance Company, therefore, appointed another Surveyor named Mr. J.C. Bhagat. Inspite of the fact that all assistance was rendered to the newly appointed Surveyor, the calim was not settled and, accordingly, a complaint which has given rise to the present appeal, was instituted in the District Forum in October, 93. In the written version filed by the Insurance-Company the claim of the complainant was denied on the ground that the same was false and the van had been stolen prior to the taking of the insurance policy. By order dated 18.9.95 District Forum-I dismissed the complaint. Hence this appeal. A detailed reply has been filed by the respondent-Insurance Company.

WE have heared Mr. S.C. Singhal, Advocate for the appellant and Mrs. Chandra Kumari, Advocate for the respondent. In our considered view, the appeal must succeed. WE proceed to give our reasons. It is an admitted case of the parties that Cover-Note No. 471416 dated 20.7.92 was issued by the respondent. The cover-note mentioned the engine number and chassis number of the insured vehicle. Once the cover-note is issued it is to be presumed that it was issued after necessary verification that the vehicle was in existence and intact. The onus of proof shifts to the Insurance Company to show that in fact the cover-note was issued by pratising fraud on the person issuing the same or the cover-note was issued in collusion with the person issuing the cover-note. The suggestion that the officer was made to see the van standing on the road from his office situated on the second floor of a building hardly deserves any serious considertion. A person issuing the cover-note cannot easily disown the same by giving a cock and bull story. It is a matter of responsibility that the parties appoach the Insurance Companies and obtain insurance on payment of premium. The person issuing the cover-note is supposed to know the implications and cannot be allowed to disown the cover-note by saying that he issued the same taking the word of the proposer instead of personally verifying about the subject matter of Insurance Company intact at that time. We are, therefore, quite clear that the story put forward on behalf of the respondent that the vehicle was shown from a distance, cannot be given any credence.

We further find that the explanation offered by the owner that she was under the bonafide impression that the van having been purchased in May, 91, the insurance must have been taken upto May, 92, is at once natural and acceptable.

MERELY because the van was stolen two days after the insurance, is no ground by itself to cast any doubt that the complainant had got the vehicle insured after the theft. Moreover, it has to be remembered that a First Information Report was lodged regarding the theft of the van with the police. It is well known that the law provides for stringent punishment for lodging a false information with the police vide Section 182, IPC. The order recorded by the District Forum shows that the main factors held against the complainant were - (a) report of the Investigator, (b) that in the facts admitted the vehicle remained un-insured from 18.1.92 to 10.6.92, and (c) the vehicle was stolen within two days of taking the insurance. We do not think that any of these factors should have been held against the complainant. The report of the Investigator is not conclusive. It is for the assistance of the Insurance Company and its evidentiary value depends on the merits of the reasons given in support of the conclusion. The explanation offered, how the van remained un-insured for a period of about five months, stands adequately explained. Thereafter, the complainant took action to secure a fresh insurance though it is not material that the policy did not come into existence as the cheque for the premium was returned un-encashed. The fact, that the van was stolen within two days of taking the insurance, can never be a ground for rejecting the claim. There can be cases where loss may occur within a short time of the taking of the insurance. The Insurance Company cannot avoid its liability simply because the loss takes place soon after the issuance of the policy. The Insurance Company is not entitled to any appreciable deduction on account of depreciation as the time gap between the taking of insurance and the loss was two days. The van was stolen and has not yet been recovered. It is clearly a case of total loss.

FOR these reasons, the appeal is allowed. The order of the District FORum is set-aside. The respondent is directed to pay the insured value namely Rs. 1,35,000/- together with 18% interest from the date of loss till the date of payment. The appellant shall also be entitled to costs which we quantified as Rs. 1,500/-. A copy of this order be communicated to both the parties as well as District FORum-I. Appeal allowed with costs.