Vehicle Fire Insurance Claim: It took 10 years to Kamlesh to finally win against an insurance company, which had denied him insurance claim after his truck was damaged in fire in June 2009. The incident took place in the intervening night of 1st and 2nd June 2009 in which his truck was damaged. His insurance claim of Rs 13.5 lakh was, however, denied by the insurer on the basis of a report of a surveyor, which claimed the "fire was not natural." Kamlesh appealed against the insurer’s decision in State Consumer Disputes Redressal Commission, Lucknow. The insurance company – namely Shriram General Insurance Company Ltd – told the State Commission that its investigator had reported the incident of accident and fire to be "doubtful".
The State Commission, however, rejected the insurer’s claim and concluded in its order dated 11.8.2015:
"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 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 State Commission directed the insurance company to pay Rs 13,50,000 with 9% interest from the date of institution of the complaint till its payment within one month. It also told the insurer pay Rs 10,000 to Kamlesh as litigation expenses. The State Commission further said that if the amount was not paid within the time fixed then the insurer will be liable to pay interest at the rate of 12% on the entire amount to the complainant.
Appeal in NCDRC
The insurance company appealed against the State Commission in National Consumer Disputes Redressal Commission (NCDRC), which observed that the intimation to the respondent was given late (on 3.6.2009). It rejected the claim of the insurer that the truck was deliberately put on fire. However, it reduced the claim amount to 69 per cent on grounds of delay in intimation to the insurer and failure to inform the police in time. The National Commission said to have relied upon the SC decision in Amalendu Sahu vs. Oriental Insurance Co. Ltd. [(2010) 4 SCC 536].
SC Order on 19-11-2019
The matter finally reached the Supreme Court, where Kamlesh’s counsel submitted that there was no delay in intimating the insurance company about the fire incident. The insurer’s advocate, however, opposed the claim, saying there was a delay in intimating the insurance company and the National Commission was justified in reducing the amount.
The apex court went through "Conditions" of the Policy, which had two important points:
– "Notice shall be given in writing to the Company immediately upon the occurrence of any accidental loss or damage; and
– "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 top court observed that as per conditions of the policy, the appellant (Kamlesh) had not violated any rule by not immediately informing the police. Secondly, the incident happened during the night of 1st and 2nd June, 2009 and the intimation was given to the insurance company on 3rd of June, 2009. Hence, "the notice was not delayed on any count and did satisfy the requirements contemplated by the conditions in the policy."
The top court also held that NCDRC was wrong in relying on Amalendu Sahu judgement. In this case, the apex court had "dealt with fact situation where, in violation of the terms of the policy, the vehicle in question was being used for hire." Hence, the top court said, "the principle on the basis of which the admissible claim could be reduced, does not apply."
SC finally set aside the view taken by the National Commission and restored the order of the State Commission. "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," Supreme Court concluded.