NATIONAL INSURANCE COMPANY v. KULWANT SINGH

theft immediately to the Insurance Company and therefore it ought to have reported to them on 12.04.2012 itself. In support of his contention, the learned counsel relied upon the decision by the Honle Supreme Court in Oriental Insurance Co. Ltd. vs. Parvesh Chander Chadha, Civil Appeal No. 6739 of 2010, decided on 17.08.2010 and the decision of this Commission in New India Assurance Co. Ltd. vs. Trilochan Jane, First Appeal No. 321 of 2005, decided on 09.12.2009. (4) A perusal of the decision of the State Commission would show that the State Commission, in allowing the appeal filed by the Insurance Company, relied upon a circular dated 20.09.2011, issued by the Insurance Regulatory And Development Authority (IRDA). The said circular reads as under:- IRCULAR To : All life insurers and non-life insurers Re:

Delay in claim intimation/documents submission with respect to i. All life insurance contracts and ii. All Non-life individual and group insurance contracts The Authority has been receiving several complaints that claims are being rejected on the ground of delayed submission of intimation and documents. The current contractual obligation imposing the condition that the claims shall be intimated to the insurer with prescribed documents within a specified number of days is necessary for insurers for effecting various post claim activities like investigation, loss assessment, provisioning, claim settlement etc. However, this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances. The insurersdecision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation. Therefore, it is advised that all insurers need to develop a sound mechanism of their own to handle such claims with utmost care and caution. It is also advised that the insurers must not repudiate such claims unless and until the reasons of delay are specifically ascertained, recorded and the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time. The insurers are advised to incorporate additional wordings in the policy documents, suitably enunciating insurersstand to condone delay on merit for delayed claims where the delay is proved to be for reasons beyond the control of the insured. J. HARINARAYAN CHAIRMAN (5) The learned counsel for the petitioner submits that the aforesaid circular applies to only Life Insurance Policies and Health Insurance Policies, but does not apply to the General Life Insurance Policies such as Motor Vehicle Insurance Policies. However, a careful perusal of the circular does not support the contention raised by the learned counsel. It would be seen from a perusal of the circular that it refers not only to Life Insurance contracts, but also to ll Non-life individual and group insurance contracts Non-Life Insurance includes not only Health Insurance, but also the General Insurance such as Insurance of Motor vehicles. In the second paragraph of the circular, IRDA observed that the IRDA, inter-alia, referred to oss assessmentby the insurer. The loss assessment does not come in Health Insurance, it comes in General Insurance such as accident or theft of Motor vehicles. The body of the circular does not give any indication that its scope is confined to Life Insurance and Health Insurance policies. Even after order of the State Commission, the petitioner has not taken any clarification from IRDA to the effect that the circular dated 20.09.2011 applies only to Life Insurance Policies and Health Insurance Policies and does not apply to General Insurance Policies such as insurance policies of Motor Vehicle. Therefore, we cannot accept the contention raised by the learned counsel for the petitioner in this regard. (6) It is an admitted case that the theft was reported to the concerned Police Station immediately after it was

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detected on 12.04.2012. Thus there was no delay in reporting the theft to the police. As regards the delay in reporting the theft to the Insurance Company, the complainant gave the following explanation in the complaint:- . That the said vehicle of the complainant was stolen on the intervening night of 11.04.2012/12.04.2012 at 3.00 a.m. from Gurunanakpura Mohalla, Fatehabad Tehsil & District Fatehabad and the intimation about the theft of the said vehicle was given to the police and F.I.R. No. 162 dated 12.04.2012 was registered in PS: City, Fatehabad Tehsil & District Fatehabad under section 379 of Indian Penal Code and the complainant also intimated immediately the respondent about the theft of his above said vehicle but the respondent did not take the information in writing about the theft of vehicle under the garb that the written information shall be taken only after all the formalities in this regard have been completed such as F.I.R., registration certificate and policy number etc. have been submitted by the complainant with the respondent. It is stated that policy and registration copy of the vehicle were in the stolen vehicle and as such the complainant thereafter obtained the duplicate copy of policy of insurance from Ratia office since the same was not given to the complainant from the respondent Fatehabad Office. The complainant had made the payment of Rs. 50/- for taking the duplicate copy of policy of insurance. The complainant for the purpose of getting the benefits of insurance of the said vehicle from the respondent completed all the formalities of the respondent as directed by the respondent and the complainant was assured that the sum insured shall be paid to the complainant very soon. In our view, considering the explanation given by the complainant for the delay in reporting the matter to the Insurance Company, it should not have repudiated the claim, merely on account of delay in bringing the theft to its knowledge, particularly when there was absolutely no delay in lodging the FIR with the police. It is not as if the circumstances of theft conveyed to the Insurance Company were different from the circumstances of the theft conveyed to the police. Therefore, no prejudice was caused to the Insurance Company on account of 4/5 days delay in bringing the theft to its knowledge. Had the complainant not been prompt in reporting the theft to the police, it could probably have seen some merit in the repudiation of the claim, but when the matter was immediately reported to the police, the insured had nothing to gain by delaying the report of the matter to the Insurance Company. (7) As regards the decision of the Honle Supreme Court in Parvesh Chander Chadha (supra), we find that in the said case, the theft took place on 18.01.1995 and the matter was reported to the police on 20.01.1995, whereas the report was given to the appellant after four months on 22.05.1995. Thus, there was delay of more than four months in reporting the matter to the Insurance Company. Moreover, the judgment does not indicate that any plausible explanation was given by the insured for not bringing the matter to the notice of the Insurance Company immediately after the theft had taken place. On the other hand, in the case before us, the complainant/insured had given a plausible explanation, which has been accepted by the State Commission and we see no reason to take a different view as regards the plausibility of the said explanation. (8) As far as the decision of this Commission in Trilochan Jane, (supra) is concerned, we find that there was a delay of nine days in reporting the matter. Even the theft in the FIR with the police was lodged after two days and the insured did not give any explanation to the Insurance Company for the delay in reporting the matter to the police and to the Insurance Company. It was in these circumstances that this Commission held that the Insurance Company was justified in repudiating the claim. Moreover, the circular issued by IRDA came much later, this judgment having been rendered on 09.12.2009. (9) For the reasons stated hereinabove, we find no merit in the revision petition and the same is, therefore, dismissed.

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......................J

V.K. JAIN

PRESIDING MEMBER

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DR. B.C. GUPTA

MEMBER

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