United India Insurance Co. Ltd vs S. Davinder Singh
2021 Latest Caselaw 90 j&K

         HIGH COURT OF JAMMU AND KASHMIR                         S. No. 207
                    AT JAMMU


CJ Court


Case: FAO(D) No. 23 of 2019
United India Insurance Co. Ltd.                               ...Appellant(s)
                                  Through: Sh. Vishnu Gupta, Advocate

                         v/s
S. Davinder Singh                                          .... Respondent(s)
                                  Through: Sh. Suneel Malhotra, Advocate

CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE ALI MOHAMMAD MAGREY, JUDGE


                                     ORDER

PANKAJ MITHAL, CJ:

1. The appellant, United India Insurance Company Limited has

preferred this appeal under Section 17 of the Jammu and Kashmir Consumer

Protection Act., 1987 challenging the judgment/order dated 19.07.2019

passed by the Jammu and Kashmir State Consumer Dispute Redressal

Commission, Jammu (hereinafter refer to as 'The Commission'), allowing the

complaint of the respondent- S.Davinder Singh.

2. The respondent's Tipper (Mini Truck) bearing registration No.

JK0BB-7871 was stolen on 23.04.2014. The said Truck was duly insured with

the appellant. In respect of the said incident, FIR was lodged on 26.04.2014

and the appellant was informed of it on 28.04.2014.

3. The appellant repudiated the claim of the respondent vide letter

dated 12.05.2016 on the sole ground of violation of Condition No. 5 of the

Insurance Policy.

4. The Commission allowed the complaint holding that there is no

violation of the Condition No. 5. The respondent had taken reasonable care to

safeguard the vehicle and the same was parked at the Service Station. The

incident had taken place on 23.04.2014 and the FIR was lodged on 26.04.2014

without wasting any time and as such there was no delay. The appellant was

also informed of the theft of the vehicle promptly. The appellant cannot take

new grounds to defeat the claim of the respondent other than those taken in the

letter of repudiation.

5. Sh. Vishnu Gupta, learned counsel for the appellant argued that

the respondent is not entitled to any claim as he had violated not only

Condition No. 5 but Condition No. 1 also of the Insurance Policy. The FIR

was not lodged immediately and even information of the incident was not

given to the appellant within time.

6. In support of his submissions, learned counsel for the appellant

made effort to rely upon certain decisions of the National Consumer Disputes

Redressal Commission, New Delhi, wherein it has been stated that where the

vehicle has been left unattended, it would mean that proper care was not taken

to park it and as such disentitles the claimant for the relief.

7. In one of the cases of the National Commission cited, the keys of

the vehicle were left in the Car itself on account of which the vehicle was

stolen, it was held that it violated the terms and conditions of the Policy.

8. In order to test the above arguments, it is important to first refer to

the letter of repudiation No. D/RSS/48/2016 dated 12.05.2016 of the appellant

by which the claim of the respondent was denied/repudiated. The said letter

reads as under :-

"UNITED INDIA INSURANCE CO. LTD.

BRANCH OFFICE-1 RAIL HEAD COMPLEX BAHU PLAZA JAMMU

D/RSS/48/2016 dated 12/05/2016

TO SHRI DAVINDER SINGH S/O SHRI UJJAGAL SINGH R/O H.NO. 84/3 DIGIANA ASHRAM JAMMU RE. YOUR THEFT CLAIM PERTAINING TO TIPPER NO. JK02BB-7871 DEAR SIR, THIS IS TO INFORM YOU THAT COMPETENT AUTHORITY HAS BONAFIDELY CONSIDERED YOUR CLAIM AND DECIDED TO REPUDIATE THE SAME IN VIEW OF BREACH OF CONDITION NO. 5 OF POLICY BY SHICH READ AS UNDER:-

THE INSURED SHALL TAKE ALL REASONABLE STEPS TO SAFEGUARD THE VEHICLE FROM LOSS OR DAMAGE AND TO MAINTAIN IT IN EFFICIENT CONDITION" AND "THAT THE VEHICLE SHALL NOT BE LEFT UNATTENDED WITHOUT PROPER PRECAUSTIONS BEING TAKEN TO PREVENT FURTHER DAMAGE" AS PER THE ADMITTED FACTS AS SUBMITTED BY YOU AND AS CONFIRMED FROM REPORT OF INVESTIGATOR. THE TIPPER HAD BEEN LEFT ABANDONED PARKED AT ISOLATED PLACE

WITHOUT MAKING ARRANGEMENT FOR THE SAFETY AND SECURITY AND WITHOUT KEEPING ANY PERSON INSIDE THE VEHICLE OR AROUND THE VEHICLE TO TAKE CARE OF THE VEHICLE SAFETY.

PLEASE NOTE THAT IN VIEW OF CONDITION NO. 5 OF POLICY AND ADMITTED FACTS, CLAIM RAISED BY YOU IS NOT PAYABLE AND IS HEREBY REPUDIATED.

NO FURTHER CORRESPONDENTCE IN THIS BEHALF SHALL BE ENTERTAINED.

SD/ SR. BRANCH MANAGER UNITED INDIA INSURANCE CO.

BAHU PLAZA JAMMU."

9. A reading of the aforesaid letter reveals that the competent

authority on considering the claim of the respondent decided to repudiate the

same in view of the breach of Condition No. 5 of the Policy. There is no

mention in the said letter that the claim was refused on the ground of violation

of any other condition, much less Condition No. 1. There is no averment in the

said letter that the respondent is not entitled to the claim as the FIR was lodged

with the delay or the information of the incident was given late to the appellant.

So the only ground on which the claim of respondent was refused was violation

of Condition No. 5.

10. Condition No. 5 of the Insurance Policy reads as under :-

"5. The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any

accident or breakdown, the vehicle shall not be left unattended without proper precautions being taken to prevent further damage or loss....."

11. The Commission has elaborately dealt with the aforesaid

condition and has recorded that it is in two parts. The first part is regarding

taking of reasonable steps to safeguard the vehicle and to maintain it in

efficient condition. The other part is in relation to any accident or breakdown

of the vehicle in which case it should not be left unattended without proper

precautions so as to prevent further damage. The second part of leaving the

vehicle unattended without proper precautions is in respect of accident or

breakdown to prevent further damage or loss. It is not applicable where there

is no accident or breakdown or the vehicle is simply parked at proper place.

12. The Commission further recorded that Sh. Sarv Dhaman Bhalla,

the investigator had filed affidavit that he had personally investigated into the

matter which revealed that the vehicle had been parked at the Service Station.

Thus, it cannot be said that the vehicle was parked at the unsafe place,

inasmuch as, it is not the case of the appellant that the vehicle was parked at a

lonely or at a deserted place where chances of loss or theft is conceivable.

13. In view of the aforesaid finding of the Commission, we are of the

opinion that the loss of vehicle was not due to any negligence of the

respondent. In fact no negligence has been proved.

14. Sh. Vishnu Gupta, learned counsel for the appellant relied upon

the affidavit of the respondent wherein it has been stated that duplicate key of

the vehicle as well as the original documents were kept inside the vehicle. It is

but natural and obvious for the owner of the vehicle to keep the documents in

the vehicle itself as they are always required during the checking. Moreover,

the same is not the ground for repudiation of the claim as it is not covered by

Condition No. 5. The Commission in its order also returned findings and

observed that the FIR was lodged on 26.04.2014 and the Insurance Company

was intimated of the incident on 28.04.2014 and as such there is no inordinate

delay either in lodging of the FIR or intimating the appellant of the incident.

15. In Galada Power and Telecommunication Limited v. United

India Insurance Company Ltd. and Another, (2016) 14 SCC 161, it has been

held that the condition regarding delay shall not be a shelter to repudiate the

insurance claim which is otherwise genuine.

16. A similar view has been expressed in OM Parkash v. Reliance

General Insurance and Another, 2018 (1) CPR 907 (SC), wherein it has been

stated that delay in intimation if any should not come in way of the claimant so

as to deny him the genuine claim.

17. This apart, the delay in lodging the FIR or intimating the incident

to the appellant or even breach of Condition No. 1 of the Insurance Policy are

not the grounds on which the claim of the respondent has been refused. There

is no such mention of these grounds in the repudiation letter dated 12.05.2017

and as such these grounds could not be permitted to have been agitated either

before the Commission or in appeal before this Court. The correctness of any

offending action has to be adjudged on the basis of reasoning contained in the

order which cannot be supplemented at the stage of litigation.

18. The law on this score is well settled in case of Saurashtra

Chemicals Ltd. (Presently known as Saurashtra Chemicals Division of

Nirma Ltd.) v. National Insurance Co. Ltd., 2015 (1) CPJ 351 (SC),

wherein the Supreme Court expressed the opinion that it is a settled position

that the Insurance Company cannot travel beyond the grounds mentioned in the

letter of repudiation. If the Insurance Company has not taken delay in

intimation as a specific ground in letter of repudiation, it cannot do so at the

stage of hearing of the complaint before the Commission.

19. The Commission has allowed the claim of Rs. 24,89,000/- as per

the consent letter of the parties dated 29.04.2015 with interest @ 9% per

annum from the date of filing of the complaint till its payment which was

directed to made within six weeks, failing which interest @ 12% per annum

was directed to be paid.

20. The vehicle was purchased for Rs. 26,20,201/- and was insured for

a sum of Rs. 27 Lakhs. However, the parties agreed for the settlement of the

claim of Rs.24,89,000/-. Therefore, we find no error or illegality on the part of

the Commission in decreeing the said claim.

21. Sh. Vishnu Gupta, learned counsel for the appellant contends that

the award of interest @ 9% per annum and @ 12% per annum is excessive and

is against the settled principle. He relied upon a case of Chanderkanta Tiwari

v. New India Assurance Company Ltd. & Anr, Civil Appeal No. 2527 of

2020, a decision of the Supreme Court, wherein in respect of a claim under

Section 163-A of the Motor Vehicles Act, interest @ 6% per annum was

granted on the total compensation awarded.

22. Sh. Suneel Malhotra, learned counsel for the respondent places

reliance upon three Judges Bench of the Supreme Court in the case of

Gurshinder Singh v. Shriram General Insurance Co. , Civil Appeal No. 653

of 2020 decided on 24.01.2020, wherein in a case arising from the

Consumers Dispute Redressal Forum, the court permitted interest @12% per

annum on the entire amount awarded.

23. The above decisions in no manner lays down any principle as to

the exact rate of interest which is permissible in such cases. The rate of 6%

interest awarded in the case of payment of compensation under the Motor

Vehicles Act, cannot be applied to a case of settlement by the Consumer

Forum on account of deficiency in service by the Insurance Company.

24. In the case regarding claim against the Insurance Company,

before the Consumer Forum, the three Judges Bench of the Supreme Court has

rather awarded interest @ 12% per annum in the case of Gurshinder Singh

(Supra).

25. Therefore, in the totality of facts and circumstances of the case,

if the Commission in the present case has awarded interest @ 9% per annum

and @12% per annum in the event of default in payment of award within time

stipulated, we do not find it to be proper to interfere with the same.

26. The appeal in the sum and substance lacks merit and is dismissed

with no order as to costs.

        (ALI MOHAMMAD MAGREY)                              (PANKAJ MITHAL)
                        JUDGE                               CHIEF JUSTICE
Jammu
09.02.2021
Tilak

                     Whether the order is speaking?     Yes/No
                     Whether the order is reportable?   Yes/No