SHANMUGAM vs DIVISIONAL MANAGER NATIONAL INSURANCE CO LTD

THE complainant appeals.

THE complainant has insured his bus with the opposite party for an amount of Rs. two lakhs. The bus met with an accident on 22.6.1993. The insurance claim was not being settled. Aggrieved by the indifferent attitude of the opposite party, the complainant approached the District Forum with the following prayer : "to pass an order directing the opposite party to pay a sum of Rs. 1,60,106/ - the claim entitled by the complainant and to furnish the opposite party for the negtigence and the deficiency in service committed to the complainant herein".

The District Forum after hearing the parties decided that the rights and obligations of the parties under the Insurance Contract is a matter to be decided by a Civil Court and that there is no deficiency in service which would justify the intervention of the District Forum.

AGGRIEVED by that order dated 30.4.1996 the complainant filed this appeal.

THE complainant while agreeing that the respective rights and obligations of the parties under the insurance contract is a matter which would not come within the purview of the machinery created under the Consumer Protection Act would however argue that if the Insurance. Company dose not reply to the claim with due diligence or does not disclose reasons for repudiation in such a manner as to satisfy the insured person of the bona fides of the Insurance Company there will be deficiency in service. He relied for this proposition of law on the decision of the National Consumer Disputes Redressal Commission, New Delhi in M/s. Super Teak Wood Industries v. Oriental Insurance Co. Ltd. & Ors., 5 (1995) MIN (CP) NCDRC 211. The learned Counsel for the appellant would say that the repudiation of his claim by the Insurance Company reached him only after he has filed his complaint before the District Forum, that is to say after a long delay from the date of the claim that the reason disclosed for repudiation is the act of over -loading and over -speeding, that even in this case as per the accepted policy in Insurance Companies they have to pay at least 75% of the claim. He concluded that the fact of not settling the claim in that way and not disclosing any reason for departing from that course would tantamount to acting without bona fides and therefore constituted a deficiency in service. He would further add that the Surveyor of the opposite party asked him to give a consent letter for the acceptance of 75% of the amount of damages as assessed by him and that the complainant has given such a letter.

IN view of the stand taken by the parties, the only question which arises for determination is whether there is any deficiency in service

OBVIOUSLY the rights and obligations of the parties in respect of the amount to be paid by the Insurance Company by virtue of the insurance contract is not within the purview of this Commission. Reporting deficiency in service one fact is apparent, that is the delay in reply. The sequence of facts are as follows : 22.6.1993 - Date of accident 23.6.1993 - Spot survey by the Insurance Company on getting the news from newspapers. 28.6.1993 - Report by the insured person to the Insurance Company. 3.8.1993 - Estimate of claims by the insured. 13.8.1993 to - Survey by the Insurance 5.12.1993 - Company on different dates. 4.10.1993 - Date of revised estimate. 15.2.1994 - Report by the Surveyor. 28.3.1994 - Complaint before the District Forum. 21.4.1994 - Receipt by the Insurance Company of the notice dated 4.4.1994 from the Forum. 21.4.1994 - Receipt by the insured person of the repudiation letter by the Insurance Company dated 7.4.1994.

It is stated by the learned Counsel for the opposite party that the fact of over -loading and over -speeding came to their notice on 23.6.1993. The opposite party does not come forward to say that it entertained any doubt on that point, and that it needed time to come to a conclusion. So the Insurance Company could have intimated with due diligence its decision to the insured person so that the latter could take proper course of action knowing what he could expect from the Insurance Company. Having sent a reply which bears the date of 7.4.1994 which was received by the complainant on 21.4.1994, by which time the complainant has already approached the District Forum constituted certainly a long delay for which there is no explanation forthcoming.

THE second act of deficiency relates to the content of the reply given by the Insurance Company to the complainant. The State Consumer Disputes Redressal Commission, Punjab, Chandigarh in Ravi Kumar v. Oriental Insurance Co. Ltd., III (1995) CPJ 2 has observed as follows : "Suffice it to say that subsequently, the National Commission taking into consideration policy decision of the Insurance Companies has hold that in case of some breach of the provisions of Motor Vehicle Act, in the manner of using such motor vehicles there should be proportionate reduction in the amount of damages."

Therefore it was incumbent on the part of the opposite party to state only it was deporting from the established policy and opted for complete repudiation. Therefore it is found that the Insurance Company has not dealt with the claim with due diligence as per the established norms.

TAKING into account the circumstances of the case we find that an amount of Rs. 15,000/ - as compensation for deficiency would meet the ends of justice. It is open to the parties to agitate their rights and obligations under the insurance policy before the proper Court. In the result, the appeal is allowed and the order of the District Forum is set aside. The opposite party is directed to pay an amount of Rs. 15,000/ - to the complainant for deficiency in service. No cost.