Car Theft: National Insurance Asked To Pay Rs2.10 Lakh Claim and Rs30,000 Compensation
Moneylife Digital Team 25 April 2024
While upholding orders passed by fora below, the national consumer disputes redressal commission (NCDRC) directed National Insurance Company Ltd to pay an insurance claim of Rs2.10 lakh for car theft and Rs30,000 for harassment and litigation expenses. NCDRC also rejected National Insurance's contention about the delay in informing the car theft by the consumer. 
In an order earlier this month, the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) (member) says, "In the present case, there are concurrent findings of the facts and revisional jurisdiction of this Commission is limited. On due consideration of the entire matter, I do not find any illegality, material irregularity or jurisdictional error in the impugned order passed by the state commission warranting any interference in revisional jurisdiction under the Consumer Protection Act."
The case is related to the theft of a Maruti Alto, owned by New Delhi-based Mahender Pal Vaid, within the jurisdiction of Timarpur police station. Mr Vaid had insured his car with National Insurance from 7 October 2006 to 6 October 2007. Between 27th and 28 October 2006, the vehicle was stolen. Mr Vaid immediately filed a first information report (FIR) at Timarpur police station and intimated National Insurance.
However, citing delay in informing the incident (car theft), National Insurance rejected the claim. Aggrieved by the repudiation, Mr Vaid filed a consumer complaint before New Delhi district consumer disputes redressal forum-VI seeking the insured amount of Rs2,10,000 with an interest of 24%pa (per annum) and Rs1 lakh each towards mental pain and financial loss. 
National Insurance contended that Mr Vaid did not immediately intimate about the theft of the vehicle and it received the intimation on 19 December 2006 with a delay of 51 days which violated condition No.1 of the insurance policy.
However, the district forum allowed the complaint. Regarding condition no1 of the insurance policy, the forum says, "The reading of the above condition shows that this is in two parts. The first part is for reporting to (the insurance) company in the case of accident or damage. The second part highlighted concerns about criminal acts like theft. In that case, the duty is to give immediate notice to the police and request cooperation with the insurance company in seeking the connection of the offender. Mr Vaid has placed a copy of DD NoIOB dated 28 October 2006 from Timarpur police station informing of theft of vehicle immediately, after theft. In our view, Mr Vaid has complied with the condition, and National Insurance cannot rely on delay in informing the insurer, in view of the condition no1 explained."
"Once the case is sent untraced, that duty ends, and National Insurance cannot repudiate the claim on the ground of delay. The Supreme Court in the case of Nitin Khandelwal, held that breach of conditions is not germane in a case of theft. In this case, National Insurance has not disputed theft but contends delay, which is not thus complaint in evidence para (6) shows that Mr Vaid also informed officials of National Insurance, who waited for an FIR. In these circumstances, we hold guilty of deficiency, and direct National Insurance to pay the claimed amount of Rs2,10,000 as per rules, and also pay compensation of Rs30,000 for harassment and litigation expenses to the complainant," the district forum says.
Aggrieved by the order, National Insurance filed an appeal before the Delhi state consumer disputes redressal commission. While dismissing the appeal, the state commission observed that "...admittedly Mr Vaid informed the police station concerned one hour after the incidence of theft. Condition no1 of the policy called upon the complainant to give immediate notice to the police. The said condition stood complied with. It is not the case of National Insurance that Mr Vaid did not inform the police on the date of the incident. In the circumstances, I am of the considered opinion that the appeal is devoid of merits."  
National Insurance then approached NCDRC with its revision appeal. The counsel for National Insurance argued that Mr Vaid had violated the terms and conditions of the policy. "The policy explicitly states that the claim for theft of the vehicle is not payable if theft is not reported to the police and insurer within a reasonable time of the theft occurred on 28 October 2006. However, National Insurance was informed about the incident only on 19 December 2006, with a delay of 51 days. As a result, repudiation of the claim by National Insurance is justified."
The counsel for Mr Vaid argued in favour of concurrent findings of the impugned orders passed by the fora below.
After hearing both sides, the bench of AVM Rajendra (retd) observed that the main issue in the matter is the delay in intimation to the police and insurance company. Referring to several judgements given by the apex court, he stated that the district forum issued a well-reasoned order based on evidence and arguments advanced before it. "The state commission, after hearing both parties, determined that the district forum's order required no intervention."
"It is a well-settled position in law that revision under section 58(1)(b) of the Act confers very limited jurisdiction on this Commission. I do not find any merit in the present revision petition and the same is, therefore, dismissed. Consequently, the impugned order passed by the state commission is upheld," NCDRC says.
(Revision Petition No430 of 2017 Date: 12 April 2024)
3 months ago
why delay of 18 years, what is the point of having insurance.
Replied to ppindia18 comment 3 months ago
due to lack of judge, mact court and lack of awareness about claim process.
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