Insurance – Insurance companies refusing insurance claim on flimsy grounds and / or technical grounds – Impropriety of – Held: While settling insurance claims, insurance company should not be too technical and ask for documents, which the insured is not in a position to produce due to circumstances beyond his control – On facts, when appellant-insured had produced photocopy of certificate of registration of the insured vehicle (truck) and registration particulars as provided by the Regional Transport Office (RTO), non-settlement of appellant’s claim solely on the ground that the original certificate of registration (which has been stolen) is not produced, can be said to be deficiency in service – Respondentinsurance company ought not to have become too technical and ought not to have refused to settle the insurance claim of appellant on non-submission of duplicate certified copy of certificate of registration, which the appellant could not produce due to circumstances beyond his control – Appellant could not produce such duplicate certificate as the RTO refused to issue the same on ground that due to report of theft of the insured vehicle, details of registration certificate on the computer were locked – Appellant was wrongly denied the insurance claim – He is entitled to the insurance amount along with interest @ 7% from date of submitting the claim – Respondent-insurance company to pay litigation cost, quantified at Rs.25,000/-, to appellant – Consumer Protection – Deficiency in Service.
Allowing the appeal, the Court
HELD : 1. The insurance claim has not been settled mainly on the ground that the appellant has not produced either the original certificate of registration or even the duplicate certified copy of certificate of registration issued by the RTO. However, the appellant did produce photocopy of certificate of registration and other registration particulars as provided by the RTO. Even, at the time of taking the insurance policy and getting the insurance, the insurance company must have received the copy of the certificate of registration. Therefore, the appellant had tried his best to get the duplicate certified copy of certificate of registration of the Truck. However, because of the report of theft of the Truck, the details of registration on the computer have been locked and the RTO has refused to issue the duplicate certified copy of registration. Therefore, in the facts and circumstance of the case, when the appellant had produced the photocopy of certificate of registration and the registration particulars as provided by the RTO, solely on the ground that the original certificate of registration (which has been stolen) is not produced, non settlement of claim can be said to be deficiency in service. Therefore, the appellant has been wrongly denied the insurance claim. [Para 4][567-B-E]
2. In the present case, the insurance company has become too technical while settling the claim and has acted arbitrarily. The appellant has been asked to furnish the documents which were beyond the control of the appellant to procure and furnish. Once, there was a valid insurance on payment of huge sum by way of premium and the Truck was stolen, the insurance company ought not to have become too technical and ought not to have refused to settle the claim on non-submission of the duplicate certified copy of certificate of registration, which the appellant could not produce due to the circumstances beyond his control. In many cases, it is found that the insurance companies are refusing the claim on flimsy grounds and/or technical grounds. While settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control. [Para 4.1][567-F-H]
3. The order passed by the District Consumer Disputes Redressal Commission, dismissing the complaint filed by the appellant and the orders passed by the State Commission and National Consumer Disputes Redressal Commission, confirming the same are hereby set aside. [Para 5][568-A-B]
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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