NATIONAL INSURANCE CO. LTD. vs SHRAVAN SINGH

This revision is directed against the order of the State Commission Rajasthan, Jaipur dated 08.07.2010 in Appeal No.819/2008 whereby the State Commission allowed the appeal preferred by the respondent complainant, set aside the order of the District Forum and awarded 75% of the insurance claim i.e. Rs.7,83,750/- with 9% interest thereon to the complainant on non standard basis.

Briefly put, the undisputed facts of this case are that complainant had insured his truck for IDV of Rs.10,45,000/- with the petitioner insurance company. The insurance was valid w.e.f. 09.11.2004 to 08.11.2005. According to the complainant, the insured truck was stolen on 22.08.2005. The police was informed but when the police refused to take any action, the complainant filed an application under section 156 Cr. P.C. before the Judicial Magistrate Laxmangarh and on the instructions of Judicial Magistrate, FIR regarding theft was registered on 24.08.2005 being FIR No.97 of 2005 P.S. Govindgarh. It is further the case of the complainant that his insurance claim was repudiated on the ground that claim was not permissible in view of violation of condition no.1 of the insurance contract which require the insured to give immediate information in writing regarding theft of loss caused to the vehicle.

The District Forum on consideration of the pleadings of the parties and evidence came to the conclusion that information of theft of truck was given to the respondent after a delay of one month, which amounted to violation of condition no.1 of the insurance policy and as such, repudiation was justified and dismissed the complaint.

Being aggrieved of the order of the District Forum, petitioner preferred an appeal and the State Commission Rajasthan though agreed with conclusion of the District Forum that information of theft was given after a delay of one month, granted claim of the respondent on non standard basis and directed the insurance company to pay 75% of the IDV i.e. Rs.7,83,750/- to the respondent with 9% interest thereon from the date of complaint besides cost of Rs.3000/-.

Learned counsel for the petitioner has contended that the impugned order of the State Commission is not sustainable for the reason that State Commission has passed impugned order ignoring that condition no. 1 of the insurance policy was violated and judgment of the Hon''ble Supreme Court in the matter of Oriental Insurance Co. Ltd. Vs. Parvesh Chander Chadha in Civil Appeal No. 6739 of 2010 arising out SLP ( C) No.12741 of 2010, wherein it was held that insurer cannot be saddled with the liability to pay compensation to the insured despite the fact that he had not complied with the terms of the policy. It is contended that even the respondent had failed to take proper care of vehicle and left it unattended on the road side which facilitated the theft and this amounts to violation of condition no.5 of the insurance policy. Although the respondent was served with the notice of revision petition, he opted not to appear. Accordingly, he was proceeded ex parte vide order dated 24.04.2015.

I have considered the contentions of learned counsel for the petitioner. On perusal of the orders of the foras below, it is clear that foras below have arrived at a concurrent finding of fact that though the theft of truck allegedly took place on 28.08.2005 but intimation to the insurance company was given after about a month which was received by the petitioner insurance company on 22.09.2005. There is no reason to differ with the aforesaid finding of fact. Now the question is what is the impact of late intimation being given to the insurance company and whether it amounts to violation of terms of the insurance contract? In order to arrive at correct conclusion, it would be useful to have a look on relevant condition no.1 of the insurance policy which reads as under: "CONDITIONS

This policy and the schedule shall be read together and any word or expression to which a specific meaning has been attached in any part of this policy or of the schedule shall bear the same meaning wherever it may appear.

"1. Notice shall be given in writing to the company immediately upon the occurrence of any accidental loss or damage 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 co-operate with the company in securing the conviction of the offender."

On reading of the above, it is clear that as per the insurance contract in the event of loss due to theft, the insured was supposed to intimate the insurance company in writing immediately upon the occurrence. Undisputedly, theft took place on 22.08.2005 whereas intimation of theft was given to the insurance company after about a month. Thus it is clear case of violation of condition no.1 of the insurance contract.

The issue pertaining to effect of violation of condition no.1 came up before the Supreme Court in the matter of Oriental Insurance Co. Ltd Vs. Parvesh Chander Chadha ( supra) wherein Hon''ble Supreme Court held as under: "Admittedly, the respondent had not informed the appellant about the alleged theft of the insured vehicle till he sent letter dated 22.05.1995 to the Branch Manager. In the complaint filed by him, the respondent did not give any explanation for this unusual delay in informing the appellant about the incident which gave rise to cause for claiming compensation. Before the District Forum, the respondent did not state that he had given copy of the first information report to Rajender Singh Pawar through whom he had insured the car and untraced report prepared by police on 19.09.1995 was given to the said Shri Rajender Singh Pawar, but his explanation was worthless because in terms of the policy, the respondent was required to inform the appellant about the theft of the insured vehicle. It is difficult, if not impossible, to fathom any reason why the respondent, who is said to have lodged First Information Report on 20.01.1995 about the theft of car did not inform the insurance company about the incident. In terms of the policy issued by the appellant, the respondent was duty bound to inform it about the theft of the vehicle immediately after the incident. On account of delayed intimation, the appellant was deprived of its legitimate right to get an inquiry conducted into the alleged theft of vehicle and make an endeavour to recover the same. Unfortunately, all the consumer foras omitted to consider this grave lapse on the part of the respondent and directed the appellant to settle his claim on non-standard basis. In our view the appellant cannot be saddled with the liability to pay compensation to the respondent despite the fact that he had not complied with the terms of the policy."

From the above, it is clear that State Commission after coming to the conclusion that intimation of theft was given after one month has erred in allowing the insurance claim to the respondent on non standard basis and the impugned order is in direct conflict with the law laid down by the Hon''ble Supreme Court. Therefore, order of State Commission cannot be sustained. Revision Petition is, therefore, allowed, impugned order of the State Commission is set aside and the complaint is dismissed.

During the pendency of this revision petition, the petitioner has deposited a sum of Rs.11,29,000/- with the District Forum as a pre condition to grant of stay of impugned order, which is stated to have been released to the respondent. The petitioner may apply for restitution of said amount before the District Forum.