Delay In Informing Insurer Not Critical If Police Notified Promptly: NCDRC Holds Cholamandalam General Insurance Liable For Deficiency In Service

Brief Facts of the Case

The complainant bought a new vehicle and had it insured under a motor policy by Cholamandalam General Insurance. The vehicle was stolen within the cover period. He reported to the police on the same day by making a call to the control room and subsequently filed an FIR. He also reported to the insurer and made a claim for compensation. The insurer, however, denied the claim on the grounds of delay in reporting the theft. The complainant issued a legal notice but received no relief. He then lodged a complaint for the insured value of the car, compensation, and legal expenses before the District Commission. The District Commission allowed the complaint, and the insurer thereafter approached the State Commission of Haryana with an appeal. The order of the District Forum was confirmed by the State Commission, holding the insurer liable to pay ₹7,81,850 along with 9% interest from the date of the complaint and ₹2,200 as the cost of litigation. Aggrieved, the insurer approached the National Commission with a revision petition.

Arguments of Cholamandalam General Insurance

The insurer rejected the claim on the premise that the theft was not reported to them after more than three months. They contended that this delay was against the policy terms, which stipulated intimation on a timely basis. They asserted that the claim rejection was legitimate and that they acted according to policy terms. The insurer also asserted that there was no service deficiency on their part.

Observations by the National Commission

The National Commission noted that the primary question was whether the delay in reporting the theft to the insurer warranted the repudiation of the claim. The commission concluded that the complainant had immediately reported the theft to the police through a control room call, and the FIR was registered within a reasonable time. Even though the insurer was notified later than 107 days, the Commission made its decision based on the ruling of the Supreme Court in Gurshinder Singh v. Shriram General Insurance Company Ltd., (2020) 11 SCC 612, that delay is not essential in the case of giving immediate intimation to the police. The Commission observed that both the District Forum and the State Commission had issued reasoned and fact-based orders, holding the insurer deficient in service. Since there were concurrent findings of fact and there was neither a jurisdictional error nor a legal irregularity, it ruled that no interference was called for under the restricted revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. In support of its rationale, the Commission referred to the following rulings: Rubi (Chandra) Dutta v. United India Insurance Co. Ltd., (2011) 11 SCC 269, Sunil Kumar Maity v. SBI & Anr., Civil Appeal No. 432 of 2022, and Rajiv Shukla v. Gold Rush Sales and Services Ltd., (2022) 9 SCC 31, which insisted that revisional jurisdiction has to be exercised only where there is error of law, jurisdictional excess, or material irregularity. The revision petition was dismissed with no order as to costs.

Case Title: Cholamandalam MS General Insurance Co. Ltd. Vs. Rajesh Kumar

Case Number: R.P. No. 2966 of 2016

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