Delay alone cannot lead to rejection CONSUMER PROTECTION

Kuldeep Singh took a policy from Shriram General Insurance for his truck. The insurer issued a cover note on October 21, 2010 stating that the truck was insured for ~1.12 million from October 22, 2010 to October 21, 2011.

The truck was stolen on the night between November 9 and 10, 2010. An FIR was lodged and the insurer was also intimated. The police submitted a report on March 29, 2011 that the truck could not be found and the culprits were untraceable. The Judicial Magistrate closed the proceedings. Singh submitted the court order and requested insurer to settle the claim. As the claim was not settled, Singh had a legal notice issued, and then filed a complaint before the Jhajjar District Forum.

The insurer contested the complaint, contending that it was time barred. It stated that intimation of the theft was belatedly given on December 17, 2010, so it was treated as “no claim” and repudiated on January 7, 2011. Even though three letters had been sent subsequently asking Singh to complete the formalities, he had failed to submit the documents, so there was no deficiency in service. The Forum allowed the complaint and ordered the insurer to pay ~1.12 million along with 9 per cent interest from the date of theft. It also awarded ~5,500 as litigation cost. The insurer challenged the order. But the Haryana

State Commission dismissed it.

The insurer then filed a revision petition. The National Commission observed that after repudiating the claim on January 7, 2011, the insurer had appointed a surveyor on March

16, 2011. This indicated that the claim was still being processed. On May 13,

2011, the surveyor had reported that the claim could be settled. After that, the insurer didn’t communicate its decision, despite Singh sending a legal notice on January 15, 2015. The Commission concluded that in the absence of communication about the final decision, there was continuing cause of action, and the complaint was within limitation.

The insurer argued that the policy was issued for the period November 12, 2010 to November 11, 2010, so it did not cover the theft which had occurred on the night of November 9 prior to the policy issuance. The National Commission refused to believe the insurer, as it had not disputed the cover note before the District Forum and the surveyor had confirmed that the policy was in force. As regards delay in intimation, the National Commission relied on the Supreme Court's decision in Om Prakash versus Reliance General Insurance & Anr. that mere delay cannot be the sole ground for repudiation.

Accordingly, by its order of November 6, 2018. delivered by the Bench of Justice R K Agrawal and M Shreesha, the National Commission dismissed the insurer's revision.

Insurer argued that a claim cannot be made on the basis of a cover note but consumer forum dismissed it