Pranav B Prem

The National Consumer Disputes Redressal Commission (NCDRC), comprising AVM J. Rajendra (Retd.) and Dr. Justice Sudhir Kumar Jain, dismissed a revision petition filed by Cholamandalam MS General Insurance Company and upheld concurrent findings of the District and State Commissions, holding the insurer liable for deficiency in service. The Commission clarified that a delay in informing the insurer about the theft of a vehicle cannot be treated as fatal to the claim when the insured promptly informs the police.

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In this case, the complainant, Rajesh Kumar, had purchased a new Hyundai Verna, insured under a motor insurance policy issued by Cholamandalam MS General Insurance Company. The policy was valid from 18.06.2008 to 17.06.2009. On 01.10.2008, the vehicle was stolen. The complainant immediately called the police control room at 8:35 PM the same day and subsequently lodged FIR No. 740/2008 on 04.10.2008 at Rohtak, Haryana. He later filed a claim with the insurance company.

However, the insurer repudiated the claim on 15.01.2009 on the ground that the theft had been reported to them only after a delay of over three months (107 days), which they alleged was in breach of the policy conditions. The complainant served a legal notice, but the company stood by its repudiation. Aggrieved, he approached the District Consumer Disputes Redressal Forum, Rohtak, seeking the insured value of the vehicle, compensation, and litigation expenses.

The District Forum allowed the complaint by directing the insurer to pay ₹7,81,850 along with 9% interest from the date of the complaint (10.05.2010), and ₹2,200 as litigation expenses. The Forum also stated that if the insurer failed to pay within one month of the complainant completing the necessary formalities (including transfer of registration certificate and subrogation letter), the amount would attract interest at 12% per annum from the date of the decision.

Challenging this decision, the insurer filed an appeal before the State Commission, Haryana. The State Commission, however, dismissed the appeal and upheld the District Forum’s findings. It noted that the vehicle had been stolen during the currency of the policy, and the complainant had promptly informed the police. It held that the mere delay in informing the insurance company could not be used to repudiate a genuine claim, relying on previous decisions of the Punjab and Haryana High Court. Specifically, the State Commission referred to National Insurance Company Ltd. v. Ravi Dutt Sharma [Civil Writ Petition No.9716 of 2011], wherein it was held that informing the police promptly suffices and a delay in informing the insurer alone does not invalidate the claim.

Undeterred, the insurer approached the NCDRC under Section 21(b) of the Consumer Protection Act, 1986, arguing that the complainant had violated the policy terms which required immediate intimation to both the police and insurer. The insurer relied on multiple Supreme Court and National Commission precedents to justify their position and emphasized the complainant’s 107-day delay in notifying them.

However, the NCDRC rejected this argument. It noted that there was no delay in informing the police and that an FIR was registered within a reasonable timeframe. The Commission emphasized that the Supreme Court in Gurshinder Singh v. Shriram General Insurance Co. Ltd., (2020) 11 SCC 612, had settled that delay in informing the insurer does not automatically defeat the claim if the police were informed immediately. The complainant, in his affidavit, also stated that he had submitted the untraced report to the insurer after receiving it.

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The NCDRC stressed that both the District Forum and the State Commission had delivered detailed, well-reasoned, and fact-based orders. It held that under the limited revisional jurisdiction conferred by Section 21(b), the National Commission cannot interfere unless there is a jurisdictional error, legal irregularity, or perversity in findings. The Commission cited several Supreme Court decisions reinforcing this principle, including Rubi (Chandra) Dutta v. United India Insurance Co. Ltd [(2011) 11 SCC 269], Sunil Kumar Maity v. SBI [Civil Appeal No. 432 OF 2022 Order dated 21.01.2022 ], Rajiv Shukla v. Gold Rush Sales and Services Ltd [(2022) 9 SCC 31]

Finding no error, irregularity, or excess of jurisdiction, the National Commission dismissed the revision petition filed by Cholamandalam General Insurance Company. The orders of the District and State Commissions holding the insurer liable were upheld, and the insurer was directed to comply. No order as to costs was made by the NCDRC.

Appearance

For the Petitioner: Mr. N.K Chauhan Advocate (VC)

For the Respondents: NEMO

Cause Title: Cholamandalam MS General Insurance Co. Ltd. V. Rajesh Kumar 

Case No: Revision Petition No: 2966 OF 2016  

Coram: Hon’ble Avm J Rajendra AVSM VSM (Retd.) [Presiding Member], Hon’ble Dr. Justice Sudhir Kumar Jain [Member]