Oriental Insurance Company Limited City Branch vs Pragathi Constructions

ORIENTAL Insurance Company Limited, the present petitioner, was the opposite party before the Consumer Disputes Redressal Forum, Bangalore Urban District (District Forum for short), where the respondent had filed a consumer complaint, alleging deficiency in service on the part of petitioner. The District Forum dismissed the complaint, holding that the complainant had failed to submit the claim form resulting in the closure of the claim and further that issue of legal notice belatedly did not extend the period of limitation and, therefore, on both these counts it found no merit in the complaint.

AGGRIEVED with the order of the District Forum, the complainant filed an appeal in the Karnataka State Consumer Disputes Redressal Commission, Bangalore (State Commission for short), who vide the order impugned allowed the appeal and directed the petitioner/Insurance Company to consider the claim of the complainant on his furnishing the documents relating to the damage caused to the vehicle. Faced with the reversal of the order in its favour, Oriental Insurance Company Limited/opposite party has filed this revision petition. Facts of the case are that the insured vehicle of the complainant during the currency of the insurance met with an accident on 9th of July, 1996, resulting in extensive damage. The local police was informed about the accident and the petitioner/Insurance Company was requested to provide the claim form. Allegedly, on the advice of the petitioner/Insurance Company, the complainant got the vehicle repaired in the garage of Arvinda Motors and spent a sum of Rs.1,95,762/-. When a claim for reimbursement of the amount was preferred, the petitioner/Insurance Company repudiated the same vide letter dated 8th of April, 1999, stating therein that the complainant had not submitted the claim form and other details till 31st of March, 1998 and for that reason the file was closed. A legal notice thereafter was issued by the complainant, to which there was no response.

Alleging deficiency in service, a complaint was filed in the District Forum, who as stated above, dismissed the same holding that the complainants averment that he had submitted the claim form on 19th of December, 1996 or that any surveyor had been appointed to assess the damage had not been substantiated by any credible evidence. Further, since the opposite party vide their letter dated 8th of April, 1999 had informed the complainant that his claim file stood closed, he ought to have challenged the same within a period of 12 months but the complainant resorted to issuing of a legal notice on the 11th of January, 2001 and 10th of July, 2001, which would not ipso-facto extend the period of limitation. The District Forum thus did not find any deficiency in service on the part of the petitioner/Insurance Company.

IN the appeal that was preferred by the complainant, the State Commission vide its short order has set aside the order of the District Forum, stating : IN the instant case the insurance company had not taken any steps to consider the case of the complainant for payment of compensation in respect of the damage suffered by the vehicle in the accident. This has made the complainant to file a complaint before the District Forum. The District Forum dismissed the complaint on the ground of delay. No doubt there is some delay in filing the complaint. But the said delay is because of the fact that the insurance company had not taken any steps to consider the case of the complainant for payment of compensation. In the normal course whenever a information is given to the insurance company reporting the accident the primary duty of the insurance company is to appoint a surveyor to inspect the spot and assess the loss caused. In the instant case, the insurance company has not appointed any surveyor to assess the loss. Ultimately the insurance company intimated the complainant that the file is closed somewhere in the year 1999. This has made the complainant to file the complaint before the DF.

TILL now the insurance company has not passed any orders regarding the payment of compensation. If that is so, in our view a direction is to be issued to the insurance company to consider the case of the complainant for payment of compensation. The observations of the State Commission in this order runs contrary to the factual position, inasmuch as while the petitioner/Insurance Company had issued the claim form to the complainant, the State Commission erroneously holds that the Insurance Company had not taken any steps to consider the case of the complainant. Further unless the exact amount of claim was known to them, which was possible only after the complainant had submitted the claim form, it could not be expected of the Insurance Company to undertake any consideration. The order, however, accepts petitioners contention that no surveyor had been appointed to assess the loss contrary to the claim of the complainant that a surveyor in fact had been appointed to assess the loss. The State Commission, however, erred in holding that the Insurance Company had not passed any order since the Insurance Company had closed the claim file as the complainant had failed to submit the claim form with relevant documents. It was only after its repudiation that the complaint was filed. The petitioners case all through has been that, the complainant never submitted the claim nor did they appoint any surveyor to assess the loss but they issued the form so that the complainant could submit it with details and proof of expenditure incurred on repair. At the time of argument before us, learned counsel for the respondent/complainant was asked as to why the complainant failed to pursue or remind the petitioner/Insurance Company with regard to his claim, even if it is accepted that he had submitted the claim on 19th of December, 1996 until 10th of July, 2001, when only a legal notice was issued, to which learned counsel had no answer. The finding of the District Forum that the claim was time barred would be obvious from Condition No.7 of the policy. Condition No. 7 reads as under :- It is also hereby further expressly agreed and declared that if the Company shall disclaim liability to the insured for any claim hereunder and such claim shall not, within 12 calendar months from the date of such disclaimer have been made the subject matter of a suit in a court of law then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.

THUS, when the complainant had been informed by the petitioner/Insurance Company that his claim had been closed vide their letter dated 8th of April, 1999, the claim could not be revived during the year 2001 in the guise of a legal notice. That apart, even under Section 24-A of the Consumer Protection Act, 1986 a complaint for a cause which arose during the year 1999 could not be filed belatedly during the year 2002. The order passed by the District Forum, therefore, was perfectly legal and the State Commission has gone wrong in believing that the petitioner had not taken any action on the complainants request. The order of the State Commission being erroneous is not sustainable and is, therefore, set aside.

THE revision petition for the reasons stated above is allowed and the complaint is dismissed. However, under the facts and circumstances of the case there will be no order as to cost.