National Insurance Co.Ltd vs CHAMKAUR SINGH

THIS appeal is by the National Insurance Company who was directed by District Forum, Sangrur, vide order dated February 20,1997 to pay a sum of Rs. 20,000/- with 12% p.a. interest thereon w.e.f. November 17,1994 till payment along with Rs. 300/- litigation expenses to the complainant Chamkaur Singh.

CHAMKAUR Singh got his Scooter Bajaj Chetak No. PB 13-C 0680 insured from National Insurance Company on payment of Rs. 308/- as premium sum of Rs. 20,000/- for the period of one year commencing from August 17,1994. On the following night, the Scooter was stolen and report was lodged with Police Station on August 18,1994 at Police Station, Sangrur. The Scooter was purchased by the complainants on February 14,1994. Claim was lodged with the Insurance Company which was repudiated that the District Forum was approached. The National Insurance Company contested the claim by submitting version, inter alia, on the point that the Insurance Company was informed very late and thus Condition No. 1 of the policy was violated. The Insurance Company was informed about the loss on September 10,1995. On that account, the claim was repudiated. Both the parties led their evidence on affidavit and documents. The District Forum, vide impugned order, accepted the complaint and directed payment of the amount insured with cost as stated above. There was some discussion on fraud being played on the Insurance Company by taking the policy on the day the theft was committed, the District Forum observed that Insurance Company did not take any action to make use of situation as stated above to be made basis for repudiating the claim. Mr. Munishwar Puri, learned Counsel for the Insurance Company has referred to Clause 1 of the insurance policy, certified copy of which has been produced during arguments, which, reads as under: Notice shall be given in writing to the Company immediately upon occurrence of any accident or loss or damage and 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 summon and/or process 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 of fatal inquiry in respect of any occurrence which may give rise to a claim under this policy. In case of theft or other 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.

The contention is that repudiation of the claim was validly made in view of the term of the policy as referred to above. The repudiation letter is Ex. C-10 as produced on the District Forum file. It is dated November 28, 1995. It makes reference to the appointment of Mr. Harjit Singh as Investigator who had reported that since the matter was reported to the Company late, basic Condition No. 1 of the policy was violated. Thus, on that account, the claim was repudiated. The question for consideration in this appeal is as to whether repudiation of the claim is arbitrary or not. We notice that on receipt of the claim, the Insurance Company made enquiry from the complainant, vide letter dated July 3,1995 (Annexure C-9), to explain as to why matter was reported to the Company late and not immediately after the occurrence of loss. Ex. C-12 is the reply of the complainant to the aforesaid query. It is to the following effect: "As my scooter No. PB-13-C-0680 was stolen on 17.8.1994 immediately lodged FIR in the police station. As the police could not trace out my scooter, only then I moved for claim. Any how I was not aware of the fact that I should inform you at the time of theft of my scooter".

THE terms and conditions of the policy do not indicate that if claim was not filed immediately after the occurrence, the same could not be entertained. If some such clause had been prescribed in the policy, the position would have been different, that after expiry of the agreed time the claim could not be entertained but that is not the position. THE condition referred to above is only considered as directory and the claim could not be repudiated only on the ground that it was not made immediately after the loss occurred. It was open to the Insurance Company to get the matter investigated if there was attempt to defraud the Insurance Company. THE report of the Investigator has not been produced on the record regarding the actual time of Commission of theft and the actual time of taking the policy. Since no time of commencement of the policy was mentioned in the cover note which was issued by the Development Officer of the Insurance Company (Ex. C-3), under the law the policy commenced w.e.f. mid night of the previous day i.e. mid night of 16-17 August, 1994. THE theft having occurred on August 17, 1994, the policy would be applicable. THE repudiation of the claim in the present case was thus arbitrary. THE ground given by the complainant for delayed submission of the claim was not considered or referred to. Learned Counsel for the appellant has argued that District Forum was not justified in the facts of the present case in granting interest w.e.f. November 17, 1994. In fact, there was delay on the part of the complainant to intimate the Insurance Company and after allowing reasonable time for settlement of the claim, the interest should be awarded thereafter. There is force in this contention. The Insurance Company was informed of the loss on September 10,1995, although the theft had taken place on August 17, 1994. Allowing three months time there from the claim should have been settled by December, 1995. Thus, the interest payable @ 12% p.a. should be w.e.f. December 19,1995 till payment.

FOR the reasons recorded above, this appeal is partly allowed. The order of the District FORum is modified as above. There will be no orders as to costs in this appeal. Appeal partly allowed.