Consumer Protection Act, 1986: s. 24 A – Insurance Claim – Repudiation of – Theft of insured vehicle of the appellant – FIR lodged by the appellant – Insurance company intimated about the theft on the sixth day – Complaint filed by the appellant before the district forum alleging that the Insurance Company was delaying the settlement of the claim – During pendency, repudiation of the claim by the Insurance Company – Thereafter, the complaint dismissed as withdrawn– Filing of the fresh complaint – Award of 75% of the sum assured to the complainant on a non-standard basis – Upheld by the State Commission – However, the National Commission set aside the same – On appeal, held: Having not argued, before the State Commission, as regards the complaint being barred in view of the withdrawal of the earlier complaint, the National Commission not justified, in allowing the Insurance Company to urge that point – Moreover, the National Commission was under the wrong impression that the earlier complaint had challenged the order of repudiation – Complaint was withdrawn by the counsel on the pretext of the case being prolonged by the advocate of the Insurance Company, without having express instructions for withdrawal – For the fault of the counsel, the complainant cannot be made to suffer – Thus, the complaint cannot be thrown out on the threshold of Or.XXIII r.1(4) – Any violation of the condition should be in the nature of a fundamental breach – There was timely intimation to the insurance company about loss or damage – Time gap between the driver alighting from the vehicle and noticing the theft, was very short – It cannot be said that leaving the key of the vehicle in the ignition was an open invitation to steal the vehicle – Even if there was some carelessness, it was not a fundamental breach of the condition warranting total repudiation – On facts, fit case to award the claim at 75% on a non-standard basis – District Forum and State Commission rightly ordered so – Code of Civil Procedure, 1908 – Or. XXIII r. 1(4).
Allowing the appeal, the Court
HELD : 1.1 Having not argued, before the State Commission, the point of the present complaint being barred in view of the withdrawal of the earlier complaint, the National Commission was not justified, on the facts of the instant case, in allowing the respondent-Insurance Company to urge that point therefrom. It is very clear from the order of the State Commission that only two points were argued by the Insurance Company. [Para 5][1250-D-E]
1.2 In any event, interest of justice requires that the appellant, in the peculiar facts and circumstances of this case, should not be non-suited on the ground that his earlier complaint was withdrawn. The National Commission was under the wrong impression that the original Complaint was filed in respect of repudiation of the insurance claim and it proceeded on the erroneous premise that having challenged the repudiation in the Complaint, the withdrawal of the complaint unconditionally on 22.11.2010 was fatal to the appellant. The original Complaint was filed on 11.06.2009 and the respondent-Insurance Company repudiated the claim only on 15.10.2009. The complaint was filed after theft due to non–settlement of claim by the Insurance Company. The repudiation of the claim was made during the pendency of the said complaint, purportedly due to breach of condition no. 1 and 5. The said complaint was withdrawn by the advocate of the complainant on the pretext of the case being prolonged by the advocate of the Insurance Company, without having express instructions for withdrawal of the said complaint. However, for the fault of the advocate, the complainant cannot be made to suffer. Finally, the dismissal of the complaint was made by the National Commission under the wrong pretext that the earlier complaint had challenged the order of repudiation. Thus, the complaint cannot be thrown out on the threshold of Order XXIII Rule (1)(4) CPC and in the peculiar facts, it requires consideration on merits. [Paras 7, 8][1250-G; 1252-A-E]
1.3 A careful perusal of Condition No.1 shows that notice is to be given in writing to the Insurance Company immediately upon occurrence of any accidental loss or damage. The later part of the clause says that in case of theft or criminal act, which may be subject of a claim under the policy, the insured shall give immediate notice to the police and cooperate with the Insurance Company in securing the conviction of the offender. [Para 9][1252F-G]
1.4 There was no breach of Condition No.1 in the instant case. After the incident of theft, FIR was registered the next day. The intimation was also given to the Insurance Company admittedly on 02.07.2008, after six days. The Police have also reported the vehicle as untraced as the records indicate. [Para 10][1255-E-F]
1.5 As regards the alleged breach of Condition No.5 is concerned, it is seen from the record that the driver of the claimant left the key in the keyhole of the vehicle when he got down to search the location where he had to unload the stone dust. The investigator recommended the repudiation of claim because, according to him, steps to safeguard the vehicle insured were not taken by the driver. [Para 11][1255-F-G]
1.6 Any violation of the condition should be in the nature of a fundamental breach so as to deny the claimant any amount. [Para 14][1256-D]
1.7 It is noticed in the repudiation letter that the driver had, after alighting from the vehicle, gone to enquire about the location of and that after he went some distance, he heard the sound of the starting of the vehicle and it being stolen away. The time gap between the driver alighting from the vehicle and noticing the theft, is very short as is clear from the facts of the case. It cannot be said that leaving the key of the vehicle in the ignition was an open invitation to steal the vehicle. [Para 15][1257A-B]
1.8 The present case was an eminently fit case, where the claim at 75% ought to have been awarded on a non–standard basis. Even if there was some carelessness, on the peculiar facts of this case, it was not a fundamental breach of Condition No.5 warranting total repudiation. It was rightly so ordered by the District Forum and affirmed by the State Commission. [Para 16][1258-E-F]
1.9 Where there is some contributory factor, a proportionate deduction from the assured amount would be all that the Insurance Company can aspire to deduct. The plea of the appellant is accepted that in the case at hand, on the facts governing the scenario, Clause (iii) of the table set out in Amalendu Sahoo’s case is attracted and the District Forum and the State Commission were justified in awarding the entire 75% of the admissible claim. The judgment of the National Commission is set aside and that of the District Forum as affirmed by the State Commission is restored. [Paras 19, 20][1259-G-H; 1260-A-B]
National Insurance Company Limited vs. Nitin Khandelwal (2008) 11 SCC 259 : [2008] 7 SCR 1047; Amalendu Sahoo vs. Oriental Insurance Company Limited (2010) 4 SCC 536; Jaina Construction Company vs. Oriental Insurance Company Limited and Another (2022) 4 SCC 527; Gurshinder Singh vs. Shriram General Insurance Co. Ltd. (2020) 11 SCC
612 : [2020] 2 SCR 564; Manjeet Singh vs. National Insurance Company Limited and Another (2018) 2 SCC
108 : [2017] 12 SCR 90; B.V. Nagaraju vs. Oriental Insurance Co. Ltd., Divisional Officer, Hassan (1996)
4 SCC 647 : [1996] 3 Suppl. SCR 22; National Insurance Co. Ltd. Vs. Swaran Singh and Others (2004)
3 SCC 297 : [2004] 1 SCR 180; Lakhmi Chand vs. Reliance General Insurance (2016) 3 SCC 100 – relied on.
Kanwarjit Singh Kang vs. M/s ICICI Lombard General Insurance Co. Ltd. & Anr. SLP (C) No. 6518 of 2018 dated 29.03.2022– referred to.
David Topp vs. London Country Bus (South West) Limited, [1993] EWCA Civ 15; P.Perl (Exporters) Ltd. vs. Camden London Borough Council [1984] QB 342 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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