“Delay In Providing Information To The Insurance Company Is Not Fatal To Seeking A Claim”: East Delhi District Commission Orders Insurance Company to Pay compensation

The commission examined the facts and ultimately held that the rejection of the complainant's insurance claim amounted to a deficiency in service on the part of the insurance company. As a result, the commission directed the insurance company to pay the complainant the Insured value of the vehicle i.e. Rs. 99,970/-, along with interest at 6% per annum. Additionally, they were directed to compensate the vehicle owner with Rs. 20,000/- for the mental agony and harassment he suffered and pay Rs. 10,000/- as litigation costs.

Brief Facts

The consumer claim was raised by one Adwait Haldar (Complainant), whose E-Rickshaw was insured by Magma HDI Gen., (Opposite Party). The insurance policy was in effect from 30^th June 2017, to 29^th June 2018, with an Insured Declared Value (IDV) of Rs. 99,970/-. As per the complaint, Adwait had paid a premium of Rs. 6,468/- to the insurance company.

On 5^th January 2018, between 12:00 and 12:30 PM, Adwait's E-Rickshaw was stolen. The thieves used a hanky to intoxicate him while he was having tea at a local stall. The incident took place while the vehicle was parked near the tea shop. Following the incident, Adwait was rushed to a hospital on the same day and remained there until 11^th January 2018.

After being discharged, he tried filing an FIR at the local police station but faced difficulties due to some technical issues with the server, and the FIR could only be registered on 14^th January 2018. Adwait promptly notified the insurance company about the incident and, on 17^th January 2018, submitted a claim to them. He provided all the necessary documents to substantiate his claim. Despite this, on 8^th March 2018, the insurance company rejected his claim without providing sufficient reasons. As a result, Adwait filed a consumer complaint, contending that the insurance company's actions were unlawful, unjustified, and constituted a deficiency in their service. He sought a refund of the insurance amount along with compensation.

Arguments of the Insurance Company

In response to the consumer complaint, the insurance company (Magma HDI Gen) admitted that the complainant had an insurance policy for his vehicle. However, they argued that the complainant was not acting in good faith. Their main contention was that there was a significant time gap between when the theft occurred and when the insurance company was notified. Further, the complainant took nine days to register an FIR, which is a legal requirement in cases of theft. The company also highlighted a detail mentioned in the FIR, that the keys of the stolen vehicle were left inside the ignition. The insurance company argued that this was a violation of the insurance policy conditions, as it meant that the consumer did not take reasonable precautions to protect his vehicle.

Observations of the Commission

The East Delhi District Commission noted that the insurance policy was not a point of contention and the insurance company had only rejected the consumer's claim, alleging negligence on his part. While deciding on it, the Commission emphasized that it was not a case of stolen vehicle rather a case of looting vehicle after administering intoxicating object to the driver.

The Commission also found that the delay in filing the police report, which was only three days, was reasonable given the circumstances. They held that the rejection of the consumer's claim by the company was unfair and constituted a deficiency in service on their part.

In their decision, the Commission referred to a judgment of the Hon'ble Supreme Court, Gurshinder Singh vs. Shriram General Insurance Co. Ltd. & Anr, which stated that "delay in providing information to the Insurance Company is not fatal to seeking a claim."

Ultimately, the Commission directed the insurance company (Magma HDI) to pay the consumer the Insured Declared Value (IDV) of the vehicle, which was Rs. 99,970/-, with an interest rate of 6% per year. Additionally, they directed the insurance company to compensate the consumer with Rs. 20,000/- for the mental distress and harassment he endured and to cover Rs. 10,000 in litigation costs. The insurance company was given 30 days to comply with these orders, and if they failed to do so, they would be liable for interest at the rate of 9% per annum.

Case Title: Adwait Haldar vs. M/S Magma HDI Gen Insurance Co. Ltd.

C.C. No.175/2018

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