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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.

7. 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

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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.

8. 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

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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.

9. 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.

10. 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

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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.