Delayed Intimation To Insurer Does Not Warrant Total Rejection Of Claims: Delhi State Commission Holds New India Assurance Liable For Deficiency In Service
The Delhi State Commission, presided by Justice Sangita Dhingra Sehgal, Ms. Pinki held that an insurer cannot reject a claim solely on the basis of late intimation by the insured as such an act amounts to deficiency in service. Brief Facts of the Case The complainant, a poor villager, purchased a tractor for agricultural work, financed by the State Bank of India and insured by...
The Delhi State Commission, presided by Justice Sangita Dhingra Sehgal, Ms. Pinki held that an insurer cannot reject a claim solely on the basis of late intimation by the insured as such an act amounts to deficiency in service.
Brief Facts of the Case
The complainant, a poor villager, purchased a tractor for agricultural work, financed by the State Bank of India and insured by the insurer. Due to drought, he moved to Delhi and faced financial difficulties. During his stay, the tractor was stolen, and an FIR was lodged. The police investigated and filed a report. The complainant informed the State Bank and the insurer, submitting the necessary documents, but no action was taken. He filed a writ petition, and the court directed the insurer to address his grievance, but it was ignored. A complaint was filed with the District Consumer Commission, but it was dismissed on technical grounds, citing lack of jurisdiction. Despite having valid insurance, the complainant has not received any payment under the policy. Consequently, the complainant filed an appeal before the State Commission of Delhi.
Contentions of the Insurer
The insurer argued that the claims made by the complaint are baseless and frivolous in nature. It was argued that the District Commission's order was based on proper evidence and analysis. Hence, the insurer requested the State Commission to dismiss the appeal.
Observations by the State Commission
The State Commission observed that the key issue was whether the District Commission erred in dismissing the complainant's case due to delayed intimation to the police and insurer about the theft of the insured vehicle. The complainant had purchased a tractor for agricultural use, insured by the insurer. The vehicle was stolen, and an FIR was lodged. Despite the police concluding the case as 'untraceable,' the insurer rejected the claim, citing a delay in intimation as a policy violation. Referring to similar cases, such as Beena Acharya vs. Manager, Oriental Insurance Co. Ltd. and Oriental Insurance Co. Ltd. vs. Brahmanand Javvadi, the Commission noted that delayed intimation to the insurer does not warrant total rejection of claims if the FIR is filed within a reasonable time and other conditions are met. Courts have previously directed settlement of claims on a non-standard basis in such scenarios. In this case, while there was a delay in informing both the police and insurer, the occurrence of theft was undisputed, supported by the police's untraced report. Guided by precedents, the Commission held that the claim should not be entirely repudiated and awarded the complainant the insurance claim on a non-standard basis. Accordingly, the District Commission's order was set aside, and the appeal was allowed. The State Commission directed the insurer to pay 50% of the Insured Declared Value.
Case Title: Mr. Jasrath Vs. New India Assurance Co. Ltd.
Case Number: F.A. No. 301/2014