whether the insurance company can repudiate the claims in a case where the vehicle was met with accident and gutted to fire on the plea that notice was given belatedly – No. While granting claim on non-standard basis the National Commission set out in its judgment the guidelines issued by the Insurance Company about settling all such non-standard claims The said guidelines are set out below:- Sl.No. Description Percentage of settlement (I) Under declaration of licensed carrying capacity Deduct 3 years’ difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher (ii) Overloading of vehicles beyond licensed carrying capacity Pay claims not exceeding 75% of admissible claim. (iii) Any other breach of warranty/condition of policy including limitation as to use. Pay upto 75% of admissible claim. Relying upon the above guidelines given by the Hon’ble Supreme Court, it is seen that in the present matter one of the policy conditions has been clearly violated and that being an important condition, I deem it appropriate to allow the insurance claim @ 60% of the IDV of the vehicle. = In respect of an accident which had occurred in the night intervening 1st/2nd June, 2009 in which a truck owned by the appellant was damaged in fire, a claim was raised by the appellant. The claim was however, repudiated by the respondent-insurance company vide letter dated 9.9.2009 on the basis of a report of a Surveyor/Investigator that the fire was not natural.= In our view, there was thus no reason for the National Commission to hold that there was any violation of the requisite conditions on part of the appellant and there was no justification to reduce the claim to the extent of 60% of the IDV of the vehicle. The conclusions drawn and the directions issued by the State Commission, in our view, were quite correct and did not call for any interference. We, therefore, allow this appeal, set aside the view taken by the National Commission and restore the order dated 11.08.2015 passed by the State Commission.

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8796 OF 2019
KAMLESH Appellant(s)
VERSUS
SHRIRAM GENERAL INSURANCE COMPANY LTD Respondent(s)
O R D E R
UDAY UMESH LALIT. J
1) This appeal arises out of order dated 21.6.2019 passed by the
National Consumer Disputes Redressal Commission (“National
Commission” for short) at New Delhi in First Appeal No.797 of 2015.
2) In respect of an accident which had occurred in the night
intervening 1st/2nd June, 2009 in which a truck owned by the
appellant was damaged in fire, a claim was raised by the appellant.
The claim was however, repudiated by the respondent-insurance
company vide letter dated 9.9.2009 on the basis of a report of a
Surveyor/Investigator that the fire was not natural.
3) In the circumstances, Consumer Complaint No.81/2010 was filed
by the appellant before the State Consumer Disputes Redressal
Commission (“State Commission” for short), Lucknow, U.P. alleging
deficiency on part of the respondent. The principal prayer made in
the complaint was:
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“a) That a direction may be issued to the opposite party
no.1 for repudiating the insurance claim of the
complainant amounting to Rs.13,50,000/- in his favour;”

4) The appellant also claimed compensation and costs. In its
counter affidavit the stand taken by the respondent was as under:
“6. That the respondent appointed independent surveyor
Shri S.K. Tiwari for spot survey on intimation of the
alleged fire loss of the insured Truck. The Surveyor
submitted spot report dated 23.6.2009 after inspecting the
spot and vehicle on 3.6.2009. The spot surveyor in its
report apart from pointing out the damages to the insured
truck due to alleged fire, specifically gave observations
to the effect that “it is the case of manipulations and
fabrication. It needs further investigation”. The spot
surveyor also submitted zerox copy of newspaper (Dainik
Jagaran Daily) dated 3.6.2009. The observation of the
spot surveyor to the effect that green grass and leaves
etc. surrounding the burnt parts was well in order i.e.
smiling, is very significant.

  1. That in the light of observations and recommendation
    made by Spot Surveyor, the answering respondent got the
    matter investigated and through Sri Prabhakar Rai,
    Advocate who submitted is detailed report dated 31.8.2009.
    The investigator also categorically concluded in his
    report based upon various facts, statements and
    circumstances that the said incident of accident and fire
    is doubtful.”
    5) The matter was considered by the State Commission and by its
    order dated 11.8.2015. The State Commission rejected the case set
    up by the respondent that there was no natural fire and the vehicle
    was set afire. It was, therefore concluded as under:
    “It is established from the evidence produced by the
    opponent insurance company that the truck of the
    complainant was found in burnt condition at the place of
    accident on the next day of alleged incident. In these
    circumstances, we are of the view that the opponent
    3
    insurance company is deficient in services by repudiating
    the insurance claim of the complainant. The insured value
    of the Truck in question is admittedly Rs.13 Lakh 50
    Thousand. Therefore, we are of the view that the
    complainant is entitled to this amount with interest from
    the opponent insurance company.”
    The claim of the appellant was accepted and following
    directions were issued:
    “The opponent insurance company is hereby directed
    to pay the complainant 13,50,000 with 9% interest from the
    date of institution of the complaint till its payment
    within a period of one month. The opponent will also pay
    a Rs.10,000/- to the complainant as litigation expenses
    within the fixed period.
    If the above amount is not paid within the time
    fixed then the opponent will be liable to pay interest at
    the rate of 12% on the entire amount to the complainant.
    Both the parties will bear their own litigation
    expenses.”
    6) The respondent being aggrieved, filed First Appeal No.797 of
    2015 before the National Commission. It was observed that the
    incident occurred during the night of 1st/2nd June, 2009 but the
    intimation to the respondent was given only on 3.6.2009 and as such
    there was infraction on part of the appellant. Relying on the
    decision of this Court in Amalendu Sahu vs. Oriental Insurance Co.
    Ltd. [(2010) 4 SCC 536], the National Commission quantified the
    claim at 60% of IDV of the vehicle. The matter was considered by
    the National Commission as under:-
    “7. I have given a thoughtful consideration to the
    arguments advanced by the learned counsel for the parties.
    Though it has been argued by the learned counsel for the
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    appellant that the truck was deliberately put on fire to
    get the insurance claim, but no independent proof has been
    filed by the appellant to prove that the damage was stage
    managed. Even the statements of the reporter as well as of
    the sales man of the petrol pump relied upon by the
    investigator have not been filed because those persons have
    refused to give any statement in writing. This appeals to
    logic that if a truck is purchased only 2-3 months back,
    why the truck owner will put the truck into fire, because
    in any case the insurance claim can be awarded to the value
    of IDV at the most. Learned counsel for the Insurance
    Company has not been able to pin point any purpose behind
    the deliberate action of the owner of the truck to put the
    truck on fire. Clearly there is delay in giving intimation
    to the police and no proper justification has been given by
    the complainant. Though, it is true that it is not a case
    of theft where immediate intimation to the police is
    required yet the role of FIR in such a case cannot be
    minimised.
  2. In the present case, the truck body has been burned
    as stated by surveyor/investigator, still the matter could
    not be investigated by the police properly as information
    was given to the police on 06.06.2009 with delay of 4 days.
    It is also important to note that the intimation to the
    Insurance Company has been given on 03.06.2005 whereas the
    condition No.1 of the policy requires that in case of
    accident immediate notice will be given to the Insurance
    Company to enable the Insurance Company to appoint a
    surveyor to have the spot inspection as quickly as
    possible. Here, the surveyor could only be appointed on
    03.06.2005 who could not verify the recovery of truck by
    the crane which is a crucial factor in the present case.
    Definitely the respondent/complainant has violated the
    condition of the policy by not immediately giving
    information to the Insurance Company. The State Commission
    has not given any importance to this delay and has allowed
    the insurance claim for full IDV of the vehicle. Clearly,
    the delay in giving intimation to the Insurance Company is
    an important factor, which should be taken into
    consideration while deciding the insurance claim. As
    observed above, the accident of the vehicle and
    consequently the vehicle catching fire are the proved
    facts, respondent/complainant is entitled to insurance
    claim. Hon’ble Supreme Court in Amalendu Sahu vs. Oriental
    Insurance Co. Ltd. II(2010) C.P.J. 9 (S.C.), has observed:
    “14. In this connection reference may be made to a
    decision of National Commission in the case of New India
    Assurance Company Limited v. Narayan Prasad Appaprasad
    Pathak, reported in (2006) CPJ 144 (NC). In that case also
    5
    the question was, whether the insurance company can
    repudiate the claims in a case where the vehicle carrying
    passengers and the driver did not have a proper driving
    licence and met with an accident. While granting claim on
    non-standard basis the National Commission set out in its
    judgment the guidelines issued by the Insurance Company
    about settling all such non-standard claims. The said
    guidelines are set out below:-
    Sl.
    No.

Description
Percentage of
settlement
(I) Under declaration of licensed
carrying capacity
Deduct 3 years’
difference in
premium from the
amount of claim
or deduct 25% of
claim amount,
whichever is
higher
(ii) Overloading of vehicles beyond
licensed carrying capacity
Pay claims not
exceeding 75% of
admissible claim.
(iii) Any other breach of
warranty/condition of policy
including limitation as to use.
Pay upto 75% of
admissible claim.

  1. Relying upon the above guidelines given by the
    Hon’ble Supreme Court, it is seen that in the present
    matter one of the policy conditions has been clearly
    violated and that being an important condition, I deem it
    appropriate to allow the insurance claim @ 60% of the IDV
    of the vehicle.
  2. On the basis of the above discussion, the first
    appeal No.797 of 2015 is partly allowed and the order of
    the State Commission is modified to the extent that instead
    of full IDV Rs.13,50,000/-, the appellant Company shall
    be liable to pay 60% of the IDV i.e. Rs.8,10,000/- (rupees
    eight lakh ten thousand only). This amount shall be paid by
    the Insurance Company along with 7% p.a. interest from the
    date of filing of the complaint. The litigation expenses
    of Rs.10,000/- awarded by the State Commission is
    maintained. The appellant is directed to comply with the
    order within 45 days from the date of service/receipt of
    this order.”
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    7) In this appeal questioning the correctness of the decision of
    the National Commission, Mr. Ajay Kumar, learned advocate for the
    appellant submitted that the intimation was given as early as
    possible and there was no delay on part of the appellant; that
    reliance on the decision in Amalendu Sahu was not quite correct;
    and that the National Commission ought not to have reduced the
    claim amount.
    Ms. Meenakshi Midha, learned advocate appearing for the
    respondent supported the decision of the National Commission and
    submitted that there was delay in intimating the Insurance Company
    and as such there was breach of warranty/condition of Policy. She
    also submitted that the intimation to Police was given only on
    6.6.2009 and therefore, the National Commission was justified in
    reducing the claim amount.
    8) We have gone through the policy in question. Under the caption
    “conditions” which are part of the Policy, the relevant condition
    states:-
    “1. Notice shall be given in writing to the Company
    immediately upon the occurrence of any accidental loss or
    damage in the event of any claim and thereafter the
    insured shall give all such information and assistance as
    the Company shall require. Every letter claim writ
    summons and/or process or copy thereof shall be forwarded
    to the Company immediately on receipt by the Insured.
    Notice shall also be given in writing to the Company
    immediately the Insured shall have knowledge of any
    impending prosecution, inquest or fatal inquiry in respect
    of any occurrence which may give rise to a claim under
    this Policy. In case of theft or criminal act which may be
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    the subject of a claim under this Policy the Insured shall
    give immediate notice to the police and co-operate with
    the Company in securing the conviction of the offender.”
    9) The aforesaid condition has two limbs:-
    i) Notice shall be given in writing to the Company
    immediately upon the occurrence of any accidental
    loss or damage; and
    ii) In case of theft or criminal act which may be the
    subject of a claim under this Policy, the Insured
    shall give immediate notice to the police.
    The second limb contemplates issuance of immediate notice to
    the police only in cases of theft or criminal act. In the event of
    an occurrence of any accidental loss or damage, the condition does
    not contemplate issuance of any notice to the police.
    10) The case that the appellant came up with was of an accidental
    loss, and, therefore, if no immediate notice was issued to the
    police, there was no infraction on part of the appellant. The
    accident had occurred during the night of 1st and 2nd June, 2009 and
    the intimation was given to the respondent on 3rd of June, 2009. In
    our view, the notice was not delayed on any count and did satisfy
    the requirements contemplated by the conditions in the policy.
    11) The decision of this Court in Amalendu Sahoo (supra) had dealt
    with fact situation where, in violation of the terms of the policy,
    the vehicle in question was being used for hire and, therefore, the
    guidelines, as set out in para 8 of the order impugned herein were
    8
    referred to and relied upon. As there was no violation on part of
    the appellant, the principle on the basis of which the admissible
    claim could be reduced, does not apply.
    12) In our view, there was thus no reason for the National
    Commission to hold that there was any violation of the requisite
    conditions on part of the appellant and there was no justification
    to reduce the claim to the extent of 60% of the IDV of the vehicle.
    The conclusions drawn and the directions issued by the State
    Commission, in our view, were quite correct and did not call for
    any interference.
    13) We, therefore, allow this appeal, set aside the view taken by
    the National Commission and restore the order dated 11.08.2015
    passed by the State Commission.
    14) The appeal is thus allowed without any order as to costs.
    ……………………J.
    (UDAY UMESH LALIT)
    …………………..J.
    (VINEET SARAN)
    New Delhi
    November 19, 2019.