OM PRAKASH VS. RELIANCE GENERAL INSURANCE AND ORS. AIR 2017 SC 4836

MATERIAL FACTS

The Appellant Insured Truck was stolen. The Appellant submitted the insurance claim to the Respondent Company and the fact of the fraud was verified by an investigator authorized by the company. Subsequently, the Corporate Claims Manager granted the Appellant’s amount for the aforementioned claim.
The Appellant subsequently made a range of appeals and queries to the Respondent-company requesting, inter alia, timely approval and disposition of its insurance claim, and the Respondent-company rejected the Appellant’s insurance claim, making reference to the violation of the Imminent Knowledge Condition relating to the loss/theft of the vehicle.
The appellant subsequently sent a complaint to the District Forum, the State Commission, and the National Commission. The National Commission had rejected this petition. In the present appeal, the Appellant challenged the lawfulness and validity of the aforementioned decree.

ISSUES

Whether the National Commission correctly dismissed the revision petition on the basis that, after a delay of 8 days from the incidence of theft, the Appellant filed his claim?

RULE OF LAW

Section 379 of the Indian Penal Code
Section 12 of the Consumer Protection Act, 1986

ANALYSIS

It is a universal understanding that an individual who has lost his vehicle will not go to the insurance company immediately to demand compensation. He will initially make attempts to track the vehicle. Such a claim cannot be dismissed on the basis of delay unless the justification for the delay in submitting a claim is sufficiently and satisfactorily clarified.
It is also important to acknowledge here that dismissing legitimate statements that have previously been checked and established by the investigator to be right would not be fair and rational. The delay state shall not be a refuge for the repudiation of insurance claims which have already been exhibited to be valid and true. The purpose of the Consumer Protection Act is to deliver stronger protection for consumers’ interests. It is a favorable statute worthy of egalitarian development. Although contemplating the contentions made under the Act, this meritorious purpose should not be ignored. In the case at hand, the Appellant offered coherent explanations for the 8-day delay in notifying the Respondent of the occurrence.

The Investigator had evaluated that the loss was credible and the Corporate Claims Manager authorized the compensation for the claim, which was fair and reasonable. Without taking into consideration the reason for the delay, the National Commission was not rational in dismissing the Appellant’s argument. The appeal was therefore approved and the appellant was qualified to claim compensation. Directions are given by the National Commission, the State Commission, and the District Forum were set aside.

CONCLUSION

It is completely true that the owner must instantly notify the insurer after the theft of the vehicle. This situation should not, nevertheless, preclude the settlement of legitimate cases, especially when the gap or the delay in intimating or presenting documents is due to inevitable conditions. The insurer’s determination to deny the claim has to be centered on legitimate and valid reasons. The procedural denial of claims on a solely technical basis would contribute to the deterioration of faith of insured people in the insurance sector. Such a claim cannot be dismissed on a technical basis if the explanation for the delay in making a claim is sufficiently stated.
The Respondents were therefore ordered to pay the sum with interest to the Appellant from the filing date of the petition until the payment date.

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