Court No. - 44
Case :- WRIT - C No. - 42534 of 2019 Petitioner :- Manager National Insurance Company Limited Respondent :- Akash Tyagi And Another Counsel for Petitioner :- Nishant Mehrotra
Hon'ble Pankaj Bhatia,J.
Heard learned counsel for the parties.
The present petition has been filed for the following relief:
"(a) issue a writ, order or direction in the nature of certiorari or any other proper writ, order or direction quashing the order dated 11.10.2019 (annexed as Annexure No. 3 to the Writ petition) passed by the Permanent Lok Adalat, Muzaffarnagar (respondent no. 2)"
The submission of Sri Nishant Mehrotra, learned counsel for the petitioner is that in terms of the insurance policy, the intimation of the accidental loss or damage had to be given by the insured immediately. He further argues that in the present case the intimation of the damage caused was given after 20 days to the police authorities. He also argues that in terms of the policy two steps had to be taken by the policy holder, the first step was intimation to the insurance company immediately and second step being intimation to the police authorities.
The written statement filed by the insurance company in the courts below, (Annexure-2 to the writ petition) states that the company admitted that the intimation of the incident which took place on 02.8.2015 was given to the Insurance Company on the very next day i.e. 3.8.2015.
The investigator''s report obtained by the Insurance Company (Annexure-5 to the writ petition) specifically recorded in para 19 under the heading 'conclusion' that the Investigating Officer was of the opinion that the theft of the vehicle is confirmed and the claim is genuine. On the basis of the materials on record, as discussed above, the Permanent Lok Adalat passed an award in favour of the insured which has been challenged. The sole point to be considered is whether the intimation to the police authorities after 20 days was a violation of the insurance policy enabling the insurance company to wriggle out of the liability arising under contract of insurance.
Hon'ble Supreme Court in the case of Om Prakash vs. Reliance General Insurance and another, (2017) 9 SCC 724 has held as under:
“It is common knowledge that a person who has lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.”
It is equally well settled that for denying the payment of the claim, the burden is upon the insurance company to plead and establish that the breach of the policy was such that would render the entire claim as non-payable and affects the rights of the insurance company to get proper investigation done.
Admittedly, the investigator's report as well as the paragraph 4 of the written statement make it clear that the theft took place and the intimation was given on the very next day.
I have no hesitation in holding that the stand taken by the Insurance Company is wholly unfair and does not behove the Insurance Company to deny the genuine claims on flimsy grounds as is being sought to be done by the insurance company by filing the present petition.
The present case highlights the malady of the delays in disposal of insurance claims on account of arbitrary and illegal stands taken by the Insurance Company. The applicant- insurance company is a state within the meaning of Article 12 of the Constitution of India and is bound to act in a fair and reasonable manner. The stand taken by the applicant-company is not only unfair but is completely unreasonable, which has resulted into a claim not being settled for more than four years. The Lok Adalat vide impugned order has directed grant of an amount of Rs. 5,50,400/- alongwith interest at the rate of 6%.
The Hon'ble Apex Court has held that it is a duty cast upon the Tribunals and the courts to ensure that just compensation is paid. In my view, the award of interest at the rate of 6% is wholly unreasonable. Thus the order dated 11.10.2019 is modified holding that the claimant shall be entitled Rs. 5,50,400/- along with 8% interest per annum from the date of application till the payment of the actual amount. The insurance company is further saddled with a liability of Rs. 10,000/- for delay in payment of insurance claim on frivolous grounds and contrary to the document on record and contrary to their own investigator's report.
The Insurance Company is directed to pay the said amount as awarded with costs to the claimant and recover from the officer concerned, the costs of Rs. 10,000/- imposed by this Court.
The writ petition is dismissed with the said directions.
Order Date :- 20.12.2019 Puspendra