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Royal Sundaram General Insurance Company Ltd. v. Anil Kumar Tayal

State Consumer Disputes Redressal Commission

Apr 19, 2023

Judgment

Subsequent
References

CaseIQ

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Structured Summary of the Opinion - State Consumer Disputes Redressal Commission, Uttarakhand

Factual and Procedural Background

The present appeal (First Appeal No. 122/2020) was filed under Section 15 of the Consumer Protection Act, 1986 against the judgment and order dated 06.07.2020 of the District Consumer Disputes Redressal Commission, Haridwar in Consumer Complaint No. 326 of 2016 (Sh. Anil Kumar Tayal Vs. Royal Sundaram Alliance Insurance Company Limited and another).

Brief factual matrix as stated in the opinion:

On 13.09.2013 the complainant (Respondent No.1) purchased a Maruti Swift Dzire ZDI (registration UK08-AC-9801) from Respondent No.2.
The vehicle was insured with the appellant (Royal Sundaram General Insurance Co. Ltd.) for the period 13.09.2014 to 12.09.2015 with an Insured Declared Value (IDV) of Rs. 6,06,794/-.
The vehicle was stolen in New Delhi in the night intervening 11/12.06.2015. An FIR was lodged and the police submitted a Final Report dated 03.07.2015 stating the vehicle was untraced.
The complainant submitted an affidavit dated 19.04.2016 to the insurer stating he had submitted all documents and keys and had no key in his possession (and that any other key may have gone with the vehicle).
The insurer repudiated the claim by letter dated 25.05.2016 citing violation of Condition No. 4 of the insurance policy (insured must take all reasonable steps to safeguard the vehicle).
The District Commission allowed the consumer complaint and directed the insurer (opposite party No.1) to pay the IDV, interest and Rs. 5,000 towards litigation expenses; the complaint was dismissed against Respondent No.2.
The insurer appealed to the State Consumer Disputes Redressal Commission, Uttarakhand. The appeal was heard and decided by a Bench comprising Justice D.S. Tripathi (President) and Mr. U.S. Tolia (Member-II) with the order dated 19.04.2023.

Legal Issues Presented

Whether the insurer validly repudiated the claim on the ground of violation of Condition No. 4 of the insurance policy (i.e., failure to take "all reasonable steps" to safeguard the vehicle), in particular because of factual circumstances relating to ignition keys and delay in intimation?
Whether the District Commission's decision allowing the consumer complaint and directing payment by the insurer suffered from material illegality warranting interference?

Arguments of the Parties

Appellant (Royal Sundaram General Insurance Company Limited) - Primary Defences

The complainant violated the terms and conditions of the insurance policy (Condition No. 4) by not taking proper care/precaution to prevent loss of the insured vehicle.
There was a delay of 14 days in intimating the loss to the insurer after the theft.
On initial investigation only one ignition key was submitted by the complainant's son-in-law; later a second key submitted did not match the original key (grooves, tip shape and size differed).
The insurer's investigation and request for clarification and original documents/keys was met with an affidavit by the complainant stating the second key "might have gone with the vehicle," implying the vehicle may have been left unattended with a key inside, constituting a breach of the safeguard condition and grave negligence.
Accordingly, the repudiation letter dated 25.05.2016 was justified and there was no deficiency in service by the insurer.

Respondent No. 1 / Complainant (Sh. Anil Kumar Tayal) - Stated Position in Record

Complainant alleged theft of the vehicle and claimed under the insurance policy; he submitted an affidavit on 19.04.2016 asserting he had submitted all documents and keys and had no key left in his possession.
The record indicates the complainant did not file a replication to the insurer's written statement to specifically refute the insurer's factual defence concerning keys and delay (as observed by the State Commission).

Respondent No. 2 (Shakumbari Automobiles Pvt. Ltd.)

Respondent No.2 stated it was unnecessarily impleaded and contended that the responsibility to pay the claim rested with the insurance company; it denied deficiency in service on its part.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
First Appeal No. 1060 of 2016; M/s Mahavir Prasad Gupta and Sons Vs. Oriental Insurance Company Limited and another (National Consumer Disputes Redressal Commission), judgment dated 19.01.2017	Affirmed the well-settled proposition that leaving vehicle keys inside the ignition socket amounts to grave negligence by the insured and may justify repudiation of the insurance claim.	The State Commission relied on this precedent to support the conclusion that evidence suggesting keys were left inside (or that the second key "might have gone with the vehicle") is indicia of negligence under Condition No. 4, and accordingly supports the insurer's repudiation of the claim.

Court's Reasoning and Analysis

The State Commission's analysis proceeded in a stepwise manner, based on the record before it:

Admitted facts: the vehicle was insured for the relevant period and was stolen during the currency of the policy. The insurer repudiated the claim by letter dated 25.05.2016 invoking Condition No. 4 (obligation to take reasonable steps to safeguard the vehicle).
The Commission reproduced Condition No. 4 from the policy, which imposes on the insured an obligation to take reasonable steps to safeguard the car and not to leave it unattended without proper precautions.
It recorded the insurer's specific factual defence: initial submission of only one ignition key by the complainant's son-in-law; a delay of 14 days in intimating the loss; on later submission the two keys did not match (different grooves, tip shape, size); and the complainant's affidavit admitting the second key "might have gone with the vehicle."
The Commission observed the complainant had not filed any replication to refute the insurer's written statement containing these factual allegations; thus the insurer's defence stood uncontroverted on the record before the Commission.
From the affidavit and the mismatched keys, the Commission inferred the natural implication that the vehicle was left unattended with an ignition key inside at the time of theft — a matter falling squarely within Condition No. 4 as constituting failure to take reasonable steps to safeguard the vehicle.
The Commission also noted that the complainant did not explain how the vehicle came to be stolen from Delhi given his residence in Haridwar; this omission was treated as suppression of true facts and relevant to assessing credibility and the completeness of the complainant's case.
Relying additionally on the cited National Commission authority (Mahavir Prasad Gupta and Sons v. Oriental Insurance Co.) which treats leaving keys inside the vehicle as grave negligence, the Commission concluded that the insurer was justified in repudiating the claim.
Accordingly, the State Commission found the District Commission's allowance of the consumer complaint to be materially illegal and ripe for interference.

Holding and Implications

Holding:

APPEAL ALLOWED; IMPUGNED JUDGMENT AND ORDER DATED 06.07.2020 IS SET ASIDE; CONSUMER COMPLAINT NO. 326 OF 2016 IS DISMISSED.

Immediate consequences and directions given in the order:

The consumer complaint was dismissed; the insurer's repudiation was held to be justified on the record before the Commission.
No order as to costs was made.
The amount deposited by the appellant with the State Commission was ordered to be released in its favour.
A copy of the order was to be provided to all parties free of cost and uploaded on the Commission's website as mandated under the Consumer Protection Act.

Broader implications:

The opinion applies established contractual and evidentiary principles to uphold an insurer's repudiation where the record demonstrates a breach of a policy condition requiring reasonable precautions (Condition No. 4), and where the insured did not adequately rebut the insurer's factual contentions. The order does not purport to lay down a new principle of law; it relies on existing precedent for the proposition that keys left in the vehicle constitute grave negligence. No broader precedent beyond the application of these established principles was declared in this opinion.

Show all summary ...

STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND

DEHRADUN

FIRST APPEAL NO. 122 / 2020

Royal Sundaram General Insurance Company Limited H.O. Vishranthi Melaram Towers, No. 2/319 Rajiv Gandhi Salai (OMR), Karapakkam, Chennai, Tamil Nadu …… Appellant / Opposite Party No. 1

Versus

1. Sh. Anil Kumar Tayal S/o Sh. Sukhbir Singh Tayal Mahalaxmi Concast Pvt. Ltd.

Plot Nos. D-4, D-5, D-6, Industrial Area Bahadrabad, District Haridwar

…… Respondent No. 1 / Complainant

2. Shakumbari Automobiles Pvt. Ltd. 3Km. Milestone, Roorkee-Delhi Road P.O. Roorkee, Tehsil and P.S. Roorkee District Haridwar through its Proprietor …… Respondent No. 2 / Opposite Party No. 2 Smt. Anjali Gusain, Learned Counsel for the Appellant Sh. Rajeev Acharya, Advocate, holding brief of Sh. Anil Singh Bisht, Learned Counsel for Respondent No. 1

None for Respondent No. 2

Coram: Hon'ble Mr. Justice D.S. Tripathi, President Mr. Udai Singh Tolia, Member-II

Dated: 19/04/2023

ORDER

(Per: Justice D.S. Tripathi, President):

This appeal under Section 15 of the Consumer Protection Act, 1986 has been preferred against the impugned judgment and order dated 06.07.2020 passed by the District Consumer Disputes Redressal Commission, Haridwar (in short "The District Commission") in consumer complaint No. 326 of 2016; Sh. Anil Kumar Tayal Vs. Royal Sundaram Alliance Insurance Company Limited and another, by which the consumer complaint was allowed and the appellant -

opposite party No. 1 was directed to pay an amount of Rs. 6,06,794/- (IDV of the vehicle) to respondent No. 1 - complainant together with interest @6% p.a. from 05.07.2016, i.e., the date of institution of the consumer complaint till payment and Rs. 5,000/- towards litigation expenses. The consumer complaint was, however, dismissed against respondent No. 2 - opposite party No. 2.

2. Facts giving rise to this appeal, in brief, are that according to the consumer complaint, on 13.09.2013, the respondent No. 1 - complainant had purchased a Maruti Swift Dzire ZDI from respondent No. 2, which was allotted registration No. UK08-AC-9801. The said vehicle was insured with the appellant - opposite party No. 1 (insurance company) for the period from 13.09.2014 to 12.09.2015 at an IDV of Rs. 6,06,794/-. During the subsistence of the insurance policy, the insured vehicle was stolen at New Delhi from outside the house in the night intervening 11/12.06.2015. The F.I.R. of the incident was lodged with the Delhi Police and intimation was also given to the insurance company. The police submitted the Final Report dated 03.07.2015 to the effect that the vehicle was untraced. The complainant submitted an affidavit dated 19.04.2016 with the insurance company that he has submitted all the documents and keys of the vehicle with the insurance company and he is not having any key of the vehicle and further that in case the complainant was having any other key of the vehicle, the same has also gone with the vehicle, hence the complainant is not having any key of the vehicle left with him. The complainant received a letter dated 25.05.2016 from the insurance company, whereby his claim was repudiated on the ground of violation of condition No. 4 of the insurance policy, which states that the insured should take all reasonable steps to safeguard the vehicle from loss. Thereafter, the consumer complaint was filed before the District Commission.

3. The appellant - insurance company filed written statement before the District Commission, wherein it was pleaded that the complainant has violated the terms and conditions of the insurance policy, by not taking proper care / precaution to prevent loss to the insured vehicle. As per complainant's version, the son-in-law of the complainant had parked the vehicle outside his residence at around 10:00 p.m. in the night intervening 11/12.06.2015 and in the morning, the vehicle was found missing. On receipt of claim intimation, the insurance company appointed M/s Dynamic Investigations. The son-in-law of the complainant submitted only one ignition key of the vehicle. As there was delay of 14 days' in intimating the loss and further since only one ignition key of the vehicle was submitted, clarification regarding delay was sought from the complainant and he was also directed to submit other original key as well as other necessary documents of the vehicle. On receipt of other ignition key of the vehicle from the complainant, it was noted that the two keys submitted, were not similar and the grooves were not matching. The shape of the tip and size of the two keys were also slightly different. In regard to mismatched key, clarification was sought from the complainant and he was requested to submit the 2^ndoriginal ignition key of the vehicle. In response to the same, the complainant had submitted a letter and affidavit on Non-judicial stamp paper of Rs. 10/- duly notarized, admitting that the 2^ndignition key might have gone with the vehicle at the time of theft and he has no other ignition key of the vehicle in his possession. Thus, it is clear the complainant's son-in-law had kept one ignition key inside the vehicle at the time of theft. Keeping ignition key inside the unattended vehicle, is clear violation of condition No. 4 of the insurance policy, hence the claim was rightly repudiated through letter dated

25.05.2016 and by doing so, no deficiency in service was committed by the insurance company.

4. The respondent No. 2 filed written statement before the District Commission, pleading that it has unnecessarily been impleaded as party to the consumer complaint. The responsibility to pay the claim is that of the insurance company and there is no deficiency in service on their part.

5. After giving opportunity of hearing to the parties, the consumer complaint has been decided by learned District Commission vide impugned judgment and order dated 06.07.2020, thereby allowing the consumer complaint in the above terms. Feeling aggrieved, the appellant - insurance company has preferred the instant appeal.

6. We have heard rival arguments advanced by learned counsel for the appellant & respondent No. 1 and perused the record. None appeared on behalf of respondent No. 2, although service of notice upon respondent No. 2 has already been held to be sufficient vide order dated 05.01.2022.

7. It is admitted that the vehicle in question was duly insured with the appellant - insurance company for the period from 13.09.2014 to 12.09.2015. It is also admitted that the vehicle came to be stolen during the currency of the insurance policy.

8. The complainant's claim was repudiated by the insurance company through letter dated 25.05.2016, copy whereof is Paper No. 25 on the ground that no proper steps were taken by the complainant to safeguard the vehicle from loss, thereby violating condition No. 4 of the insurance policy

9. Condition No. 4 of the insurance policy is reproduced below:

"4. The Insured shall take all reasonable steps to safeguard the Private Car from Loss or Damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the Private Car or any part thereof or any driver or employee of the Insured. In the event of any accident or breakdown, the Private Car shall not be left unattended without proper precautions being taken to prevent further Damage or Loss and if the Private Car be driven before the necessary repairs are effected any extension of the Damage or any further Damage to the Private Car shall be entirely at the Insured's own risk."

10. From the above quoted condition No. 4 of the insurance policy, it is amply clear that the complainant - insured was required to take all reasonable steps to safeguard the insured vehicle from loss. The insurance company has come up with specific defence that the insured failed to submit both the original ignition keys of the vehicle and that only one ignition key was submitted by son-in-law of the complainant. The insurance company has also pleaded that on submission of other ignition key of the vehicle by the complainant, it was noted that the two keys were not similar and the grooves were not matching. It is pertinent to mention here that the impugned judgment and order passed by the District Commission does not show that any replication was filed by the complainant against the written statement filed by the insurance company, so as to refute the defence taken by the insurance company for denying the claim. It would not be out of place to mention here that the insurance company has further pleaded

that the complainant has submitted an affidavit on Non-judicial stamp paper of Rs. 10/- duly notarized, to the effect that the 2^ndignition key of the vehicle might have gone with the insured vehicle at the time of theft and he has no other ignition key in his possession. The factum regarding submission of such an affidavit, is stated by the complainant in para 6 of the consumer complaint. In such circumstances, the natural implication would be that the vehicle was left unattended with ignition key inside the vehicle, hence the complainant was unable to submit the 2^ndignition key of the vehicle and the so-called 2^ndignition key of the vehicle submitted by the complainant, was not matching with the original ignition key submitted with the insurance company.

11. It is further to be noted that the complainant has nowhere mentioned in the consumer complaint as to how the vehicle reached Delhi, from where it came to be stolen. The complainant is based at Haridwar and there is not even a whisper in the consumer complaint as to how the vehicle came to be stolen from Delhi. Against this, the insurance company has specifically stated that the son-in-law of the complainant had parked the vehicle outside his residence in the night and in the morning, the vehicle was found missing. Thus, the complainant is also guilty of not coming with clean hands and has suppressed the true facts.

12. From the above discussion, it is crystal clear that the complainant has not taken reasonable steps to safeguard the insured vehicle from loss, thereby committing violation of condition No. 4 of the insurance policy and in such circumstances, the insurance company was perfectly justified in repudiating the claim. Learned counsel for the appellant cited judgment dated 19.01.2017 of Hon'ble National Commission in First Appeal No. 1060 of 2016; M/s Mahavir Prasad Gupta and Sons Vs. Oriental Insurance Company Limited and another, wherein it was held that it is

well-settled legal proposition that if the keys of the vehicle are left inside the ignition socket, it amounts to grave negligence on the part of the complainant. In the aforesaid case, the complainant nowhere stated in the consumer complaint that the keys were taken by the driver, when he went to attend the call of nature, after parking the vehicle on the roadside. The claim was repudiated on the ground that the insured vehicle was left unattended with the keys inside the vehicle, by the driver when the vehicle was stolen, hence there was negligence on the part of the driver.

13. For the foregoing reasons, we are of the considered opinion that the impugned judgment and order passed by learned District Commission suffers from material illegality, warranting interference by this Commission. Consequently, the appeal deserves to be allowed and the impugned judgment and order passed by learned District Commission is liable to be set aside.

14. Appeal is allowed. Impugned judgment and order dated 06.07.2020 passed by the District Commission is set aside and consumer complaint No. 326 of 2016 is dismissed. No order as to costs. The amount deposited by the appellant with this Commission, be released in its favour.

15. A copy of this Order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986 / 2019. The Order be uploaded forthwith on the website of the Commission for the perusal of the parties.

(U.S. TOLIA) (JUSTICE D.S. TRIPATHI)

Member-II President