Manvendra Singh vs National Insurance Co Ltd

MR. Suresh Chandra, Member-Petitioner Manvendra Singh is the complainant in this case and Respondent Nos. 1, 2, 3 were the opposite parties in the same order before the District Forum. On a consumer complaint filed by the petitioner against the three opposite parties/respondents, the District Consumer Disputes Redressal Forum, Jhunjhunu (''District Forum'' for short) allowed the complaint of the petitioner vide its order dated 3.9.2008. The operative part of the order reads thus: "Therefore, the complaint presented by the complainant under Section 12 of Consumer Protection Act, 1986 against opposite party Nos. 1, 2 is accepted and opposite parties are directed to pay to the complainant a sum of Rs. 10 lakh under the insurance policy and this amount is to be paid from the date of the filing of the complaint i.e. 21.2.2007 along with interest @ 12% per annum along with Rs. five thousand for the mental agony suffered by the complainant and Rs. two thousand as the cost of the complaint within one month. In case of non payment of the amount within one month a penal interest @ 9% per annum will also be paid by the opposite parties to the complainant."

BOTH the complainant and the two opposite parties against whom the District Forum passed the order, approached the State Consumer Disputes Redressal Commission, Rajasthan (Jaipur) (''State Commission'' for short) challenging the order of the District Forum by their respective cross appeals. By its impugned order dated 12.2.2009, the State Commission dismissed the appeal filed by Opposite Party Nos. 1, 2 on merits but reduced the rate of interest on the decretal amount 12% to 9% p.a. Other parts of the order passed by the District Forum were duly upheld. So far as the cross appeal of the complainant regarding the date of effect of the payment of interest and the rate of interest is concerned, the same was dismissed by the State Commission vide the same impugned order. In other words, while the rate of interest payable on the decretal amount has been reduced from 12% to 9%, the rest of the order of the District Forum was kept intact and upheld by the State Commission through the impugned order. Not feeling satisfied with the award in his favour passed by District Forum as modified by the impugned order dated 12.2.2009 passed by the State Commission, the complainant has approached this Commission through the present revision petition. It appears that another revision petition bearing No. 3383 of 2009 filed by opposite parties/respondent Nos. 1, 2 challenging the impugned order has already been dismissed both on the grounds of limitation as well as on merits by this Commission vide its order dated 20.10.2009.

THE issue involved in the present petition is whether after allowing insurance claim of the petitioner by their concurrent finding, the interest on the insurance claim should have been allowed from the date of the incident, i.e., 4.4.2002 or from the date of the filing of the complaint, i.e., 21.2.2007. The petitioner has also raised the issue regarding the rate of interest for which he has pleaded for enhancement. After the initial admission hearing, vide our order dated 22.5.2009, we have held that the reduction of interest from 12% to 9% is quite justified, reasonable and equitable and the same does not call for any interference. Accordingly, a limited notice came to be issued in this petition regarding the issue as to whether the interest should be paid to the complainant/petitioner w.e.f. the date of the accident, i.e., 4.4.2002 instead of 21.2.2007 when the complaint was filed.

WE have heard learned Counsel for the petitioner and the learned Counsel for Respondent Nos. 1, 2.

IT has been submitted on behalf of the petitioner that the State Commission has committed a material irregularity in not considering the fact that the accident in question had taken place on 4.4.2002 and the insurance claim had been lodged by the petitioner/complainant with the OP-Company immediately thereafter and the documents asked for by the OP-Company were also furnished by him. In other words, it is the submission of the learned Counsel for the petitioner that the petitioner/complainant had done everything possible to get his insurance claim from respondents/opposite party Nos. 1, 2 finalised in time. He submitted that it is Respondent Nos. 1, 2 who had failed to settle the claim of the petitioner for almost 5 years and finally repudiated the same vide their letter dated 31.1.2007 after which the complainant/petitioner had to knock the doors of the Consumer Forum. In such a situation, learned Counsel contended that instead of the Fora below upholding the claim of the complainant/petitioner for payment of interest from the date of incident the same has been allowed from the date of filing of the complaint thereby putting him to serious financial loss inasmuch as the complainant/petitioner himself had to pay interest at much higher rates during this period on the money borrowed by him for the purpose of purchasing the vehicle in question.

IN their reply, the opposite parties/respondent Nos. 1, 2 have submitted that in view of the dismissal of their earlier revision petition No. 3383 of 2009 both on limitation as well as on merits by this Commission on 20.10.2009, the impugned order of the State Commission has become final and hence because of the earlier order of this Commission passed on 20.10.2009, the relief claimed by the petitioner cannot be granted through the present revision petition.

WE have heard the arguments of the learned Counsel for the parties and have carefully considered the submissions made and perused the record. So far as the contention of Respondent Nos. 1, 2 to the effect that since the earlier revision petition bearing No. 3383 of 2009 filed by them against the same impugned order of the State Commission has been dismissed both on the ground of limitation as well as on merits and the impugned order of the State Commission thereby has been confirmed by the National Commission on 20.10.2009, the relief claimed by the petitioner now in respect of the date of effect of the payment of interest cannot be granted through the present revision petition is concerned, it is to be noted that revision petition No. 3383 of 2009 filed by the two respondents was dismissed by this Commission on 20.10.2009 at the stage of admission hearing itself without issuing any notice in respect of that petition to the present petitioner. In the circumstances, the petitioner herein did not get any opportunity to present his case before this Commission in regard to the limited question of the date of effect of payment of interest on the decretal amount. In fact, mere perusal of the order of this Commission clearly establishes that the challenge to the/date of effect of the payment of interest on the decretal amount was not under consideration of this Commission. In view of this, we do not accept the plea taken by the respondents and are of the considered opinion that there is no bar against consideration of the limited issue raised by the petitioner herein in regard to the date of payment of interest on the decretal amount. Coming to the merits of the limited issue before us, the general practice in regard to the payment of interest is that the same is held to be payable on expiry of period of three months from the date of repudiation of the claim by the Insurance Company. In the present case, the controversy regarding the date of effect has arisen on account of a long gap of about 5 years from the date of the incident and the date of repudiation. It has been noted by the Fora below and the same is not under dispute that after the occurrence of the incident of the theft and the loot of the truck in question on 4.4.2002, the claim in this regard was lodged by the petitioner with the respondent company immediately thereafter along with police report and other documents. The claim of the petitioner was duly registered by the Insurance Company on 11.7.2002 when the petitioner was also asked to furnish some additional documents and information. The respondent company, however, did not settle the claim on some pretext or the other and eventually repudiated the same after a long gap of about 5 years vide their letter dated 31.1.2007. This inordinate gap of almost 5 years cannot be called a reasonable period required for settling the claim. Since the repudiation of the claim has been held to be wrong and the claim has been finally upheld by the Fora below and confirmed by this Commission, we have to consider the reasonable period which needs to be allowed in the facts and circumstances of the present case to the respondent Insurance Company for settling the claim. Instead of reckoning the period from the date of incident of theft as claimed by the petitioner or from the date that the claim was filed by the petitioner along with necessary documents with the Insurance Company, we would consider it appropriate and reasonable to reckon this period from the date of registration of the claim of the petitioner by the Insurance Company on 11.7.2002 when some further information was called for by the Insurance Company from the petitioner. Allowing the period of about 5 months even from the date of formal notice of the claim of the petitioner taken by the Insurance Company, in our considered opinion, the petitioner is entitled to get interest on his claim w.e.f. 1.1.2003. While holding this view, we are quite conscious of the fact that the petitioner had purchased the truck in question after borrowing the money from respondent No. 3 who obviously would have charged interest from the petitioner on the loan amount. To this extent, we find that the impugned order of the Fora below requires modification. In view of this and taking into consideration the entirety of the facts and circumstances of this case, we hereby modify the impugned order of the State Commission and direct that the petitioner/complainant would get interest on the decretal amount w.e.f. 1.1.2003 till the date of actual payment. Rest of the impugned order shall remain intact. The revision petition is accordingly partly allowed with no order as to costs.