National Insurance told to pay over 2 lakh compensation. ‘Cover was in previous car owner’s name, but complainant has insurable interest’
A district consumer disputes redressal forum has directed the National Insurance to compensate complainant by paying over ?2.30 lakh after it was alleged that the firm had wrongly repudiated a claim seeking compensation for a car that was stolen.
‘Ownership transferred’
While the insurance company contended that the policy was under the previous owner’s name at the time of the theft, the consumer panel held that the complainant has “insurable interest” in the vehicle as the ownership of the car had already been transferred by then. Directing the insurance firm to compensate the complainant, the Bench said, “Needless to say that where a person is neither the owner nor has an insurance policy in his or her name, he or she ceases to be having an insurable interest in the vehicle. The question arises as to what will happen in the case where registration certificate [RC] is in the name of a different person.”
“Since the complainant was the legal owner of the vehicle at the time of the theft, she cannot be said to be having no insurable interest in the car even if the insurance policy was not in her name,” the consumer forum added. The observations came when complainant Satnam Kaur approached the consumer panel alleging that the company had wrongly repudiated her claim despite providing relevant documents.
It was alleged that the vehicle in question was stolen within a month of her buying it. Further, the complainant contended that the insurance claim was repudiated as the policy was under the previous owner’s name.
However, the insurance firm argued that the complainant did not have an insurable interest as the policy was not under her name.
“It has been further stated by National Insurance that though the RC was in the name of the complainant but she did not take steps for getting insurance of the vehicle transferred in her name. It is prayed that the complainant be dismissed,” the consumer forum said.
Directing the insurance firm to pay over ?2.30 lakh to the complainant, the district forum said, “In the present case the complainant was very much the owner of the vehicle stolen. Therefore she was having insurable interest in the vehicle and the repudiation claim was highly unwarranted and unjustified which amounted to deficiency on the part of the insurance firm.”
Policyholder fined Rs. 5000 for seeking wrong claim :
Ganesh Anand Bhat, the proprietor of Shree Ganesh Agencies, owned two adjacent shops at Mulund. He had taken a shopkeeper’s insurance policy from New India Assurance which covered only one shop. A fire occurred in which both the shops were gutted, and the goods stored were destroyed.
Bhat lodged an insurance claim. A surveyor was appointed who assessed the loss for both the shops but observed that the claim would be payable only for one shop which had been insured. The claim was settled by paying Rs. 21 , 16,666 which was accepted by Bhat without protest.
Bhat later filed a complaint before the Additional Forum for Mumbai Suburban District, contending that he should also be reimbursed the loss pertaining to the other shop. The Forum dismissed the complaint on the ground that the discharge voucher showed that the claim has been accepted in full and final settlement.
Bhat challenged this order before the Maharashtra State Commission. He attempted to make out a new case that both the shops were covered under the policy, but there was a mistake in mentioning only one shop. During the pendency of the proceedings, Bhat expired. His widow Rekha and daughters Varsha and Anushka continued with the litigation as the legal heirs.
Sapna Bhuptany, the Advocate defending New India Assurance, argued that since only one shop was covered under the policy, the refusal to pay for the loss in respect of the other shop was justified. She argued that refusal to settle a claim for the shop which was not insured could not be termed a deficiency in service or unfair trade practice.
Besides, once the claim was accepted in full and final settlement without lodging any protest, the insured could not be permitted to raise any dispute subsequently.
By its order of March 13, 2019, the Commission considered the claim in respect of the second shop to be bogus and contrary to the coverage mentioned in the policy. Since the appeal was filed to pursue a fraudulent claim for the other shop which was not insured, the State Commission dismissed the appeal with costs of Rs, 5000 payable by Bhat to the insurance company.
Late plea of coercion not acceptable.
In another judgment involving the appointment of an arbitrator, the Supreme Court emphasized that a mere plea of fraud, coercion or undue influence by one party is not enough to get an arbitrator appointed unless the allegations are backed by satisfactory evidence on record.
In this case, United India Insurance vs Antique Art Exports Ltd, the company had purchased a policy covering fire and special perils. There was an accident in the factory and two claims were made. The insurer paid both and the exporter sent a reply accepting the computation made by the insurer and attaching a final discharge voucher.
However, after 11 weeks, the exporter alleged that the vouchers were given under duress, It moved the Delhi High Court, requesting it to appoint an arbitrator. The high court appointed one on the ground that since there were allegations of duress, the issue should be settled in arbitration.
The insurer appealed to the Supreme Court. It set aside the high court order observing that it committed a manifest error by passing the order mechanically and pointing out the delay in raising the complaint after sending the discharge voucher.