Summary
A truck insured with National Insurance for a premium of Rs. 28,880 was stolen on the night of 23–24.03.2013; the owner lodged an FIR the same day and informed the insurer and the RTO. The insurer did not settle the claim because the original registration certificate (stolen with the vehicle) or a duplicate certified copy was not produced, and the RTO refused to issue a duplicate because the registration record had been locked on the theft report. The owner furnished a photocopy of the certificate and the registration particulars supplied by the RTO. The District Commission, State Commission and NCDRC held there was no deficiency in service. The Supreme Court allowed the appeal: the insurer had acted arbitrarily and too technically by demanding documents beyond the insured's control, and awarded Rs. 12 lakhs with 7% interest and costs.
Issues
- Whether an insurer's refusal to settle a theft claim solely because the insured could not produce the original or a duplicate certified copy of the registration certificate — the original having been stolen and the RTO having refused a duplicate because the record was locked after the theft report — amounts to deficiency in service.
Held
- Where the policy was valid, the theft was reported to the police, insurer and RTO on the very day, and the insured produced a photocopy of the registration certificate and the registration particulars supplied by the RTO after trying his best to obtain a duplicate, non-settlement of the claim solely because the stolen original certificate was not produced amounts to deficiency in service; the insurer must in any case have received a copy of the certificate when issuing the policy. (¶ 4)
- Insurers are frequently found to repudiate claims on flimsy or technical grounds. While settling claims an insurer should not be too technical and should not insist on documents which the insured cannot produce owing to circumstances beyond his control; here the insurer acted arbitrarily in doing so. (¶ 4.1)
Result
Appeal allowed; the orders of the District Consumer Disputes Redressal Commission, Durg, the State Commission and the NCDRC (Revision Petition No. 2898 of 2015, 03.08.2021) set aside; Consumer Complaint No. 179/2014 allowed and the insurer directed to pay Rs. 12 lakhs with interest at 7% from the date of the claim and litigation costs of Rs. 25,000 within four weeks.