The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine, the bench observed.
The Supreme Court, in Om Prakash vs. Reliance General Insurance, has observed that though the owner has to intimate the insurer immediately after the theft of the vehicle, this condition should not bar settlement of genuine claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances.
A bench comprising Justice RK Agrawal and Justice S Abdul Nazeer observed that the decision of the insurer to reject the claim has to be based on valid grounds and rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. The claim was rejected on the ground that there has been a delay of eight days in informing the insurer about the theft occurred.
If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the investigator, the bench said.
The court also reiterated that the Consumer Protection Act aims at providing better protection of the interest of consumers and it is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act, the bench said while setting aside the National Commission order.