Insurance Laws = Mere 8 days delay in informing the company is not ground to reject the claim for theft of Vehicle = It is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims 8 which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act. In the instant case, the appellant has given cogent reasons for the delay of 8 days in informing the respondent about the incident. The Investigator had verified the theft to be genuine and the payment of Rs.7,85,000/- towards the claim was approved by the Corporate Claims Manager, which, in our opinion, is just and proper. The National Commission, therefore, is not justified in rejecting the claim of the appellant without considering the explanation for the delay. We are also of the view that the claimant is entitled for a sum of Rs.50,000/- towards compensation.13. Hence, the appeal is allowed and the orders of the National Commission, State Commission and the District Forum are set aside and the claim petition filed by the appellant is allowed. The 9 respondents 1 and 2 are directed to pay a sum of Rs. 8,35,000/- to the appellant with interest @ 8% per annum from the date of filing of the the claim petition till the date of payment. The payment, as above, shall be made within a period of 8 weeks from today.

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURSIDCITON
CIVIL APPEAL NO. 15611 OF 2017
(Arising out of SLP (C) No.742 of 2015)
OM PRAKASH … APPELLANT
VERSUS
RELIANCE GENERAL INSURANCE
AND ANR. …RESPONDENTS
J U D G M E N T
S.ABDUL NAZEER, J.
1. Delay condoned. Leave granted.
2. The appellant got his truck, bearing Registration
No.HR-21-F-0462, insured with Respondent No.1 herein, i.e.
Reliance General Insurance Company Ltd., w.e.f. 10.03.2010 to
09.03.2011. The said vehicle was stolen from Chopanki, Bhiwari,
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Rajasthan on 23.03.2010 at about 9:00 p.m. Consequently, an
FIR was lodged, on 24.03.2010, in Police Station Tapkura, District
Alwar, Rajasthan, under Section 379 IPC. Thereafter, the
appellant visited the office of the first respondent but the office
was found to be closed. Then the appellant went to the place of
theft and met the driver and then he went to the concerned police
official. On 29.03.2010, the appellant along with the truck driver,
went with the police officials for their assistance to search the
vehicle. The appellant reached his village on 30.03.2010. On
31.10.2010, the appellant lodged the insurance claim with the
respondent-company at Hissar and provided the necessary
documents which were demanded by the respondent-company.
3. Pursuant to the said claim, an Investigator was appointed by
the Respondent-company, who, after verification, confirmed the
factum of theft. Consequently, the Corporate Claims Manager
approved an amount of Rs.7,85,000/- for the said claim of the
appellant. Thereafter, the appellant made several requests and
demands to the respondent-company, inter alia, seeking speedy
processing and disposal of his insurance claim. Finally, the
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appellant served a legal notice, dated 09.08.2011, to the
respondent-company. However, the respondent-company
repudiated the insurance claim of the appellant citing breach of
Condition No. 1, i.e. immediate information about the loss/theft
of the vehicle.
4. Being aggrieved, the appellant filed complaint before the,
District Consumer Disputes Redressal Forum, Hissar (for short
‘District Forum’), under Section 12 of the Consumer Protection
Act, 1986, inter alia, seeking a direction to the
respondent-company for payment of claim amount with an
interest @ 18% per annum, along with compensation of
Rs.1,00,000/- to the appellant. Written statement was filed by
the respondents herein opposing the claim of the appellant. The
District Forum, by order dated 13.06.2013, dismissed the
complaint of the appellant thereby holding that there is no
deficiency of service on the part of respondents.
5. The appellant herein filed an appeal challenging the said
order of District Forum, before the State Consumer Dispute
Redressal Commission, Haryana (for short ‘State Commission’) at
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Panchkula. The State Commission by an order dated 23.10.2013
dismissed the said appeal. This order was challenged by the
appellant by way of Revision Petition before the National
Consumer Disputes Redressal Commission (for short ‘National
Commission’). This Revision Petition has been dismissed by the
National Commission by an order dated 12.02.2014. The
appellant has questioned the legality and correctness of the said
order in this appeal.
6. Learned counsel for the appellant contended that the
appellant, immediately after getting the information about the
theft of the vehicle, went to the place of theft and met the police
officials along with the truck driver. Consequently, he got busy
with the police while visiting many cities in Rajasthan for the
search of the said vehicle and returned to his village on
30.03.2010 and lodged the insurance claim on 31.03.2010 before
the Respondent-company. The appellant has assigned cogent
reasons for the delay of 8 days in lodging the complaint. The
National Commission has dismissed the petition filed by the
appellant without taking into consideration the reasons assigned
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for the delay. It is argued that the Investigator appointed by the
Respondent has verified the factum of theft and that the
Corporate Claims Manager approved the report of Investigator,
thereby recommending the payment of Rs.7,85,000/- towards
claim.
7. On the other hand, the learned counsel appearing for the
respondents submits that as per the Condition No. 1 of the
Insurance Policy, the information of theft ought to have been
given to the respondent-company immediately upon the
occurrence of theft. The claim was filed after a delay 8 days from
the occurrence of theft. In the said circumstance, the National
Commission was justified in rejecting the revision petition.
8. We have carefully considered the submissions of the learned
counsel made at the Bar and perused the materials placed on
record.
9. The appellant, owner of the truck in question, is the resident
of Muzadnagar village, Tehsil Hansi, District Hissar, State of
Haryana. The theft of the vehicle had taken place on 23.03.2010
at Chopanki, Bhiwari, Rajasthan. The FIR was lodged in P.S.
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Tapukra, District Alwar on 24.03.2010 and the claim petition was
filed on 31.03.2010. Dinesh, the truck-driver, had filed an
affidavit before the District Forum stating that the owner of the
truck had reached the place of occurrence of theft and met him
and also the concerned police official. The Police had asked him
and the owner to stay with them in order to help them for tracing
out the truck. The police had also asked them to collect
necessary documents in relation to the said truck. They were,
consequently, busy with the Rajasthan Police in searching the
vehicle. They visited many places in Rajasthan. The police had
compelled the appellant to accompany them while searching the
truck. It is only on 29.03.2010, the appellant went back and
reached his village on 30.03.2010. The appellant had also filed a
similar affidavit before the State Commission explaining the
reasons for the delay in informing theft of the vehicle.
10. Condition No.1 of the Insurance Policy states that notice
shall be given in writing to the company immediately upon the
occurrence of any accidental loss or damage in the event of any
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claim and thereafter the insured has to give all such information
and assistance as the company may require.
11. It is common knowledge that a person who lost his vehicle
may not straightaway go to the Insurance Company to claim
compensation. At first, he will make efforts to trace the vehicle.
It is true that the owner has to intimate the insurer immediately
after the theft of the vehicle. However, this condition should not
bar settlement of genuine claims particularly when the delay in
intimation or submission of documents is due to unavoidable
circumstances. The decision of the insurer to reject the claim has
to be based on valid grounds. Rejection of the claims on purely
technical grounds in a mechanical manner will result in loss of
confidence of policy-holders in the insurance industry. If the
reason for delay in making a claim is satisfactorily explained,
such a claim cannot be rejected on the ground of delay. It is also
necessary to state here that it would not be fair and reasonable
to reject genuine claims which had already been verified and
found to be correct by the Investigator. The condition regarding
the delay shall not be a shelter to repudiate the insurance claims
8
which have been otherwise proved to be genuine. It needs no
emphasis that the Consumer Protection Act aims at providing
better protection of the interest of consumers. It is a beneficial
legislation that deserves liberal construction. This laudable object
should not be forgotten while considering the claims made under
the Act.
12. In the instant case, the appellant has given cogent reasons
for the delay of 8 days in informing the respondent about the
incident. The Investigator had verified the theft to be genuine and
the payment of Rs.7,85,000/- towards the claim was approved by
the Corporate Claims Manager, which, in our opinion, is just and
proper. The National Commission, therefore, is not justified in
rejecting the claim of the appellant without considering the
explanation for the delay. We are also of the view that the
claimant is entitled for a sum of Rs.50,000/- towards
compensation.
13. Hence, the appeal is allowed and the orders of the National
Commission, State Commission and the District Forum are set
aside and the claim petition filed by the appellant is allowed. The
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respondents 1 and 2 are directed to pay a sum of Rs. 8,35,000/-
to the appellant with interest @ 8% per annum from the date of
filing of the the claim petition till the date of payment. The
payment, as above, shall be made within a period of 8 weeks
from today.
14. There will be no order as to costs.
……………………………J.
(R.K. AGRAWAL)
……………………………J.
(S. ABDUL NAZEER)
New Delhi;
October 4, 2017.