ORIENTAL INSURANCE CO.LTD vs RAJ KUMAR

ORIENTAL Insurance Company has come up in appeal against the order dated 18.5.1994 passed by the learned District Forum, Narnaul, whereby the appellant-Insurance Company has been directed to pay a sum of Rs. 17,000/- alongwith interest at the rate of 18% p.a. right from 30.9.1993 till the date of final payment.

THE complainant had approached the learned District Forum with the grievance that even though he had purchased a Bajaj Scooter for Rs. 17,000/- vide bill dated 11.1.1992 from M/s. Rohtas Kumar Aggarwal, Narnaul, and he also got the same insured with the appellant-Insurance Company for Rs. 18,000/-, which insurance was valid and was still in force. Despite that, when the scooter of the complainant had been stolen on the intervening night of 28th and 29th of December, 1992, for which F.I.R No. 524 dated 31.12.1992 had also been lodged at Police Station, Narnaul, the Insurance Company had repudiated the claim. In their reply, the Insurance Company pleaded that no doubt the scooter had been insured with them but the third party risk was not covered in the insurance policy originally taken out by the complainant. That is why, the complainant got another insurance policy valid for the period 6.1.1992 to 5.1.1993 covering the risk of third party and as this policy had been obtained by concealing the fact of the earlier insurance policy, the Insurance Company had rightly repudiated the claim. THE learned District Consumer Forum, after examining the matter in detail and considering the record produced by the parties, came to the conclusion that the complainant had led convincing and cogent evidence to establish his case regarding the purchase of the scooter, its insurance to cover the third party risk and its theft during the validity of the insurance policy. However, instead of the claim of Rs. 23,000/-, the claim for Rs. 17,000/- was allowed as this was the purchase price of the scooter. In the appeal before us, the learned Counsel for the the Insurance Company has vehemently pleaded that in view of the fact that the insurance was taken for covering the third party risk by concealing the material facts with regard to the first insurance policy, the claim had been rightly repudiated by the Insurance Company. It was further contended that from this fact it becomes doubtful as to whether the scooter had been stolen later and the insurance policy had been taken out earlier or vice versa. Finally, it was also contended that the rate of interest, i.e. 18% p.a. awarded by the learned District Forum was excessive and should not be more than 10% if at all the claim was to be allowed. On the other hand, Mr. S.K. Mittal the learned Counsel appearing on behalf of the respondent-complainant has reiterated the submissions made before the learned District Consumer Forum.

We have heard the learned Counsel for the parties at length and have gone through the record. Having done so, we do not find any merit in the first two submissions made on behalf of the appellant-Insurance Company. The appellants have not led any evidence in support of their allegation that the second insurance policy was taken out by the complainant-respondent by concealing the fact with regard to the earlier policy, nor have they been able to establish that the insurance had been taken later whereas the theft of the scooter had taken place earlier. Therefore, the firm finding arrived at by the learned District Forum on these two points has to be affirmed and the contentions of the learned Counsel for the Insurance Company have to be dismissed. However, so far as the argument regarding the rate of interest is concerned, we find merit in the same. It has by now been settled by Hon''ble the Supreme Court as well as the Hon''ble National Commission that in the case of claims against the Insurance Companies the rate of interest should generally be 10% whereas in the present case the learned District Forum has awarded interest at the rate of 18%. Accordingly, the appeal is partly allowed and the direction with regard to the rate of interest is modified from 18% to 10% p.a. In the circumstances of the case, there shall be no order as to costs. Appeal partly allowed.