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Case Summary: National Consumer Disputes Redressal Commission — Revision Petition No. 3511 of 2013

Factual and Procedural Background

The Respondent (Complainant below) was the owner of a Toyota Corolla bearing registration C.G.-04-CZ-1555 insured under Policy No. 191300/31/2010/8124 for the period 24.01.2010 to 23.01.2011. The vehicle was used as a taxi attached to Hotel Babylon. On 19.05.2010 a person named Mr. Kamlesh took the vehicle and subsequently absconded with it. The driver (Mr. Mukesh Kumar) notified the owner, who attempted to lodge an FIR at Police Station Telibandha, Raipur on 21.05.2010 but was advised to file FIR at Nagpur; an FIR was lodged at Sone Gaon, Nagpur on 24.05.2010.

The Respondent submitted a claim to the Petitioner (Oriental Insurance Co.), which repudiated the claim citing delayed intimation and violation of policy terms, alleging negligence on the part of the driver and other breaches (including an allegation that the vehicle was being plied without permit). Aggrieved, the Respondent filed a consumer complaint before the District Forum (Complaint No. 53 of 2014 as recorded in the opinion). The District Forum, by order dated 02.05.2012, allowed the complaint and directed the insurer to pay Rs. 7,07,000 with interest @6% from the date of filing the complaint, Rs. 10,000 for mental agony, and Rs. 3,000 as litigation charges.

The insurer (Opposite Party before the Fora) appealed to the Chhattisgarh State Consumer Disputes Redressal Commission in First Appeal No.13/110, which dismissed the appeal by order dated 01.07.2013, upholding coverage (including coverage for breach of trust under a comprehensive policy). The Petitioner filed the present Revision Petition (No. 3511 of 2013) before the National Commission challenging the State Commission's order.

Legal Issues Presented

  1. Whether the Petitioner (insurer) validly repudiated the claim on the grounds of violation of the terms and conditions of the insurance policy (i.e., whether there was a material breach of specific policy clauses by the insured).
  2. Whether the Petitioner validly repudiated the claim on the ground of delayed intimation to the insurer and, if so, whether the delay was unreasonable in the circumstances.
  3. Whether the National Commission should exercise its revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986 to interfere with concurrent findings of fact recorded by the District Forum and the State Commission (i.e., whether there was any jurisdictional error or miscarriage of justice warranting revision).

Arguments of the Parties

Petitioner's Arguments (Oriental Insurance Co. Ltd.)

  • Terms and conditions of the insurance policy are mandatory and binding on both parties; the Respondent materially violated those terms.
  • The Respondent failed to intimate the insurer in time (delayed intimation), which justified repudiation of the claim.
  • The loss resulted from negligence on the part of the Respondent (and the Respondent's representative/driver), and therefore the claim is not payable.
  • The insurer asserted that the Complaint was not maintainable because the Complainant did not fall under the category of "consumer" and contended there was an issue regarding jurisdiction of the District Forum (as recorded in the pleadings before the Fora below).
  • The insurer alleged the vehicle was being plied without permit (a ground for repudiation asserted before the Fora).

Respondent's Arguments (Pankaj Sood)

  • The vehicle was taken away fraudulently by Mr. Kamlesh (a case of theft/breach of trust) and hence is covered under the comprehensive insurance policy.
  • The insurer's allegation regarding permit and fitness was unfounded; the Respondent produced copies of permit and fitness before the Fora below.
  • Regarding delay in intimation, the Respondent relied on IRDA guidelines and contended that a legitimate claim cannot be repudiated solely on the ground of delayed intimation; in any event the delay (about 4–5 days as recorded) was reasonable given the circumstances.
  • After proper appreciation of the material, the District Forum and State Commission passed just and fair orders which ought not to be interfered with.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd., (2011) 11 SCC 269 The revisional powers of the National Commission under Section 21(b) are limited: revision may be exercised only where there is a prima facie jurisdictional error or miscarriage of justice; the National Commission must not simply re-appreciate evidence or substitute its view for concurrent findings of fact. The Court relied on this authority to emphasize that it will not re-appreciate or reassess evidence when concurrent findings of two fora are present, and that absence of jurisdictional error precludes interference with the lower fora's conclusions.
Lourdes Society Snehanjali Girls Hostel and Ors. Vs. H & R Johnson (India) Ltd. and Ors., (2016) 8 SCC 286 Reiterates that the National Commission should exercise revisional jurisdiction only where the State Commission or District Forum failed to exercise jurisdiction, acted without jurisdiction, or acted illegally/materially irregularly; it should not set aside concurrent findings of fact based on valid reasons. The Court invoked this precedent to reinforce its conclusion that the National Commission should not disturb concurrent factual findings of the lower fora where there is no illegality or material irregularity; hence no interference in the present revision was warranted.

Court's Reasoning and Analysis

The National Commission first recited the undisputed factual matrix: the vehicle was insured under the stated policy; on 19.05.2010 the offender (Mr. Kamlesh) absconded with the vehicle; the owner attempted to lodge an FIR on 21.05.2010 at Telibandha and ultimately lodged an FIR at Sone Gaon, Nagpur on 24.05.2010; the insurer repudiated the claim on grounds of delayed intimation and alleged breach of policy terms.

The Commission observed that the Petitioner raised two principal grounds in the revision petition: (i) alleged violation of unspecified terms and conditions of the policy, and (ii) delayed intimation. The Commission found that the Petitioner did not satisfactorily demonstrate which specific clause, term or condition of the policy had been violated by the Respondent. The Commission emphasised the contractual nature of insurance policies and stated that nothing should be presumed outside what is written in the policy; it would be improper to invent "pseudo conditions" not clearly laid down in the policy.

On the issue of delay in intimation, the Commission recorded that the incident occurred on 19.05.2010, the first visit to the police station was on 21.05.2010 and an FIR was lodged on 24.05.2010. The insurer itself admitted a delay of 4–5 days; the Commission considered this delay reasonable in the facts and circumstances of the case and noted that the State Commission and District Forum had suitably dealt with the objections raised by the insurer.

The Commission then addressed its limited revisional jurisdiction under Section 21(b) of the Consumer Protection Act, citing binding precedents (Mrs. Rubi Dutta and Lourdes Society) that restrict the National Commission from reappreciating evidence or overturning concurrent findings of fact absent a jurisdictional error, illegality, or material irregularity. Applying those principles, the Commission concluded that the Petitioner had not pointed to any such error or irregularity in the orders of the Fora below.

Given the absence of a demonstrated violation of specific policy clauses, the reasonable explanation for the short delay in intimation, and the binding constraints on revisional interference, the Commission found no ground to interfere with the concurrent findings of the District Forum and the State Commission.

Holding and Implications

REVISION PETITION DISMISSED.

Implications and direct effects:

  • The concurrent orders of the District Forum (order dated 02.05.2012 directing payment of Rs. 7,07,000 with interest @6% from the date of filing the complaint, Rs. 10,000 for mental agony, and Rs. 3,000 as litigation charges) and the State Commission (which dismissed the insurer's appeal) remain intact and enforceable as against the Petitioner.
  • No costs were directed by the National Commission ("No order as to the cost").
  • The National Commission did not lay down any new legal principle; it applied and reaffirmed existing precedents restricting the scope of its revisional jurisdiction under Section 21(b), and therefore no new precedent was created by this order.

Signed: C. VISWANATH, PRESIDING MEMBER

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    ORIENTAL INSURANCE CO. LTD. v. PANKAJ SOOD

    NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

    NEW DELHI

    REVISION PETITION NO. 3511 OF 2013

    (Against the Order dated 01/07/2013 in Appeal No. 110/2013 of the State Commission Chhattisgarh)

    1. ORIENTAL INSURANCE CO. LTD.

    THROUGH DIVISIONAL MANAGER, DIVISION OFFICE

    NO. 3, MADINA BUILDING, JAIL ROAD AT PRESENT

    RING ROAD NO.1, NEAR PACHPEDI NAKA

    RAIPUR

    CHHATTISGARH ...........Petitioner(s) Versus

    1. PANKAJ SOOD

    S/o. SHRI. RAJKUMAR SOOD SADGURU TRAVELS, IN

    FRONT OF C.G. EYE HOSPITAL, TELEBANDHA

    RAIPUR

    CHHATTISGARH ...........Respondent(s)

    BEFORE:

    HON'BLE MR. C. VISWANATH,PRESIDING MEMBER For the Petitioner : Mr. Mohan Babu Agarwal, Advocate For the Respondent : Mr. Rahul Kumar, Advocate Dated : 07 Jul 2021

    ORDER

    1. The present Revision Petition has been filed by the Petitioner against order dated 01/07/2013 passed by Chhattishgarh State Consumer Disputes Redressal Commission, Raipur (for short "State Commission") in First Appeal No.13/110.

    2. Brief facts of the case are that the Complainant was owner of Toyota Corola bearing No.C.G.-04-CZ- 1555. The Complainant had obtained Insurance coverage from the Opposite Party under Policy No.191300/31/2010/8124 for the period from 24.01.2010 to 23.01.2011. The vehicle of the Complainant was used as taxi and it was attached to Hotel Babylon. On receiving a call from the Hotel on 19.05.2010, driver Mr. Mukesh Kumar had taken the vehicle to the Hotel. The car was used by the customer by name Kamlesh. On the next day the vehicle was called again and the driver took the vehicle to the Hotel. He took the vehicle to Nagpur and from there he sent the driver to Mumbai by air, for bringing some important draft. He also made arrangements for stay of the driver at a hotel. Mukesh Kumar reached the hotel and waited for the person from whom the draft was to be collected, but nobody turned up. He tried to contact Mr. Kamlesh but his mobile was switched off. Thereafter the driver informed the Complainant on phone regarding the incident. On receiving telephone call from the driver on 21.05.2010, the Complainant went to lodge the F.I.R. at Police Station Telibandha, Raipur but it was informed that since the vehicle was stolen/taken away by Kamlesh from Nagpur, the F.I.R. should be lodged at Nagpur. Thereafter on 24.05.2010, the Complainant also lodged an FIR at Sone Gaon, Nagpur. Intimation to the Insurer was also given and the claim form along

    1

    with relevant documents was presented before the Insurance Company for settlement of claim. The Insurance Company repudiated the claim on the ground of delayed intimation and violation of terms of the Insurance Policy as the Complainant had lost the vehicle due to negligence of the driver. Aggrieved by the repudiation of the claim, Complainant filed Complaint No.53 of 2014 before the District Forum with the following prayer: -

    "(26) That the complainant Prays. Following relief and cost of the claim before Hon'ble Forum:-

    01. That the opposite Party be ordered to pay to the complainant the I.D.B. value of the vehicle Rs. 7,07,000/- in words seven lakh seven thousand rupees with 18% per cent yearly interest.

    02. The Opposite Party be ordered to pay to the complainant compensation amount Rs. 100000/- in words one lakh rupees.

    03. That Hon'ble Forum be pleased to order Cost of the dispute as well as the relief deeming fit and reasonable in favour of the complainant."

    3. The Complaint was resisted by the Opposite Party stating that Complaint was not maintainable as Complainant did not fall under the category of Consumer and it was beyond the jurisdiction of the District Forum to adjudicate the matter. It was also averred that the Complainant had violated the terms of the Insurance Policy as he had lost the vehicle due to negligence of the driver and the vehicle was being plied without permit. Since it was not a case of theft the Opposite Party was, therefore not liable for payment of claim amount.

    4. The District Forum after hearing Learned Counsel for the Parties and perusing the record, observed that delay in intimation cannot be a ground for repudiation of claim. It observed that the offender ran away with the vehicle fraudulently which amounted to theft, duly covered under the Policy. The Opposite Party committed deficiency in service by not settling the claim of the Complainant. The District Forum, vide order dated 02.05.2012, allowed the Complaint with the following order-

    "The respondent is liable to pay Rs.7,07,000/- (Rupees seven lacs, seven thousand only) along with Interest @ 6% from the date of filing the complaint till Its realization;

    (b) The respondent is liable to pay Rs.10,000/- (Rupee Ten thousand only) for mental agony committed by the complainant due to the said activities committed by the respondent.

    (c) The respondent is liable to pay Rs.3000/- (Rupees Three thousand only) as litigation charges."

    2

    5. Aggrieved by the order of the District Forum, the Opposite Party filed First Appeal No.13/110 before the State Commission. After hearing the Learned Counsels for the Parties and perusing the record, the State Commission observed that the Complainant had obtained comprehensive insurance policy and under the circumstances, even matters of breach of trust were covered. The facts involved in the matter under consideration related to breach of trust, and hence the State Commission observed that the Policy covered the risk suffered by the Complainant. The State Commission dismissed the Appeal.

    6. Aggrieved by the order of the State Commission, the Petitioner/Opposite Party preferred this Revision Petition with the following prayer-

    "(a) to set aside the order dtd. 01.07.2013 of the CHATTISGARH STATE

    CONSUMER DISPUTES REDRESSAL COMMISSION, AT PANDRI, RAIPUR

    passed in APPEAL No. FA/13/110;

    b) and may pass such other or further order as this Hoh'ble Commission may deem think fit in the facts and circumstances of the case."

    7. Heard Learned Counsel for the Parties and have carefully gone through the record. The Learned Counsel for the Petitioner/Opposite Parties submitted that terms and condition of the policy of Insurance are mandatory and binding on both the Parties. The Respondent has committed material violation of terms and conditions of the Insurance Policy by not intimating about the incident in time. The claim of the Respondent was not payable as it was a clear cut case of negligence on the part of Respondent as well as the representative of the Respondent and thus the Petitioner had not committed any deficiency in service and was justified in repudiating the claim.

    8. The Learned Counsel for the Respondent/Complainant submitted that Mr. Kamlesh ran away with the vehicle fraudulently. There is no ground of permit and fitness as averred by the Petitioner. On the contrary, copy of permit and fitness was produced by the Complainant before the Fora below for proper adjudication. Regarding delay in intimation it was submitted by the Learned Counsel that as per the guidelines IRDA, legitimate claim cannot be repudiated on the ground of delayed intimation to the Insurance Company. Learned Counsel for the Respondent stated that Respondent had obtained comprehensive Insurance Policy and after proper appreciation of material before it, the Fora below have passed just and fair order and there is no need to interfere with the same.

    9. It is an admitted fact that Toyota Corolla bearing No.C.G.-04-CZ- 1555 was duly insured by the Petitioner under Policy No.191300/31/2010/8124 for the period from 24.01.2010 to 23.01.2011. On 19.05.2010 Mr. Kamlesh the said offender ran away with the vehicle. On receiving telephone call from driver on 21.05.2010, the Complainant went to Police Station Telibandha, Raipur to lodge F.I.R. but he was informed that as the vehicle was stolen /taken away by Mr. Kamlesh from Nagpur hence FIR should be lodged at Nagpur. FIR was lodged at Nagpur on 24.05.2010. Thereafter the Respondent filed claim form along with relevant

    3

    documents which was repudiated by the Petitioner for violation of terms & condition of the Policy and delayed intimation.

    10. From the above facts and submission it observed that Petitioner filed this petition on two grounds (i) violation of terms and condition of Policy and (ii) delayed intimation regarding incident which occurred on 19.05.2010 by the Respondent.It is observed that Petitioner failed to satisfy this Commission as to which clause, term or condition of Policy was violated by the Respondent. Insurance is contract and nothing shall be presumed which is written down in the contract i.e., Policy. It not just and fair to create pseudo conditions which are not clearly laid down in the Policy by the Insurance Company. Regarding delay in intimation it is observed that the incident took place on 19.05.2010 and on 21.05.2010 the Respondent went to lodge the FIR first at Telibandha and finally at Sone Gaon, Nagpur on 24.05.2010. As admitted by the Opposite Party, they were intimated with a delay of 4-5 days which is very reasonable in the facts and circumstances of the present case. The objections taken by the Petitioner have been suitably dealt with by the State Commission and District Forum.

    11. Jurisdiction of this Commission under Section 21 (b) is very limited. This Commission is not required to re-appreciate and reassess the evidences and reach to its own conclusion. The Court can intervene only when the Petitioner succeeds in showing that the Fora below have wrongly exercised its jurisdiction or there is a miscarriage of justice. It was so held by the Hon'ble Supreme Court in the case of Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd. (2011) 11 SCC 269 has held as under: -

    "13.Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."

    12. Same principle has been reiterated by Hon'ble Supreme Court in the case of Lourdes Society Snehanjali Girls Hostel and Ors. Vs. H & R Johnson (India) Ltd. and Ors. (2016

    8 SCC 286 wherein Hon'ble Supreme Court has held as under:-

    "23. The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has failed to exercise their jurisdiction or exercised when the same was not vested in their or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case,

    4

    the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons."

    13. I find no reason to interfere with the concurrent findings of both the Fora below. The Petitioner has failed to point any illegality or irregularity in the order passed by the State Commission, warranting interference in exercise of Revision jurisdiction of this Commission under the Consumer Protection Act, 1986. Revision Petition is accordingly dismissed. No order as to the cost.

    ......................

    C. VISWANATH

    PRESIDING MEMBER

    5

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    ORIENTAL INSURANCE CO. LTD. v. PANKAJ SOOD
    (Jul 7, 2021)