A petition in Tilak Raj Vs United India Insurance Co. Ltd. & Ors. for revision was made by a complainant questioning the State Commission order of 18 September 2018. The State Commission had previously reaffirmed the rejection of his complaint by the District Consumer Forum, Patiala. The case concerned denial of an insurance claim for a stolen tractor.
Case Background:
The complainant was the registered owner of a Sonalika 60 HP tractor (year 2015 model) with registration number PB-11-BR-3490. The tractor was insured by United India Insurance Co. Ltd. from 25 February 2016 to 24 February 2017.
On 11 September 2016, the complainant's father was driving the tractor to pick up a trolley in a nearby village when the vehicle had a breakdown. He proceeded to call for a mechanic, but when he came back, the tractor was stolen. At first, the officials at Police Station Amloh were notified, but they indicated that the theft was within the authority of Police Station Bhadson. A wireless message was communicated to PS Bhadson forthwith, and subsequently, an FIR (No. 0097) was lodged under Section 379 IPC on 29 September 2016.
The complainant reported the theft to the insurance company on 3 October 2016, since the 1st and 2nd of October were holidays. But the Branch Manager did not act immediately and requested the complainant to come later after a few days. The complainant finally provided formal intimation again on 20th October 2016.
Repudiation of Claim:
The insurer rejected the claim on 6 March 2017, under the grounds of delay of approximately 40 days in reporting the theft to the insurer. It made a contention based on Condition No. 1 of the policy, under which there should be immediate report of any theft.
The complainant turned to the District Forum to claim the insured amount of Rs. 4,75,000 along with interest and compensation. The District Forum, however, rejected the complaint, and that rejection was upheld by the State Commission afterwards.
Legal Considerations:
The complainant had placed reliance upon Supreme Court judgments, namely Om Prakash vs. Reliance General Insurance Co. Ltd. (2017) and Gurshinder Singh vs. Shriram General Insurance Co. Ltd. (2020). In the above-cited cases, the Supreme Court had held that real theft claims ought not to be declined simply due to delay in intimation to the insurance company, particularly where an FIR was registered immediately and the theft was confirmed as real.
The Supreme Court explained that the original responsibility for recovering the stolen car is with the police, and the delay in informing the insurer cannot by itself invalidate an otherwise genuine claim.
Conclusions in the Current Case:
Upon reviewing the evidence, it was discovered that:
- The father of the complainant had reported the theft to PS Amloh on the same day. A wireless message was also sent to PS Bhadson.
- A later FIR was lodged, and police reports assured that the tractor could not be recovered.
- No evidence had been found to prove that the claim was false or that the complainant conspired in the mishap.
The reason behind the delay in reporting to the insurer was acceptable as initial attempts had been made, but procedural lapses caused delays in formal notice.
It was concluded that both the District Forum and the State Commission were in the wrong for taking an excessively technical perspective and rejecting the claim.
Final Decision:
The revision bench overruled the order of the State Commission. It asked the insurance company to pay the complainant Rs. 4,75,000, along with 8% per annum interest from the date of complaint till payment. On delay after a period of four weeks, the insurer would have to pay higher interest at the rate of 10% per annum. Litigation expenses of Rs. 50,000 were also ordered to be paid to the complainant.
Conclusion:
The ruling reinforced the dictum that true claims under insurance policies cannot be denied on technical grounds such as delay of a minor nature. In theft, so long as the FIR is registered in time and the claim is found to be true, insurers cannot get out of liability based solely on delay in intimation.
Section 397., Indian Penal Code - 1860
Indian Penal Code, 1860
