1998 1 CPJ 63 ; 1998 1 CPR 1
MADHYA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BHOPAL
Honble Mr. Justice R.K. Varma, President;
Mrs. Saroj Rajwade & Mr. N.K. Vaidya, Members
ORIENTAL INSURANCE CO. LTD.—Appellant
versus
LEKHIRAM—Respondent
Appeal No. 602 of 1995—Decided on 26.7.1997
Act Referred :CONSUMER PROTECTION ACT : S.15
(A) The case revolves around the interpretation of deficiency in service as contemplated under the Consumer Protection Act, specifically focusing on Section 15 regarding the jurisdiction and powers of the consumer forums to adjudicate claims. The core legal dispute concerns whether the repudiation of an insurance claim based on an alleged forgery of a driving licence, and the subsequent delay in settling the claim due to prolonged investigation, constitutes a deficiency in service. The court examined whether the statutory obligations of an insurer to settle claims in a timely and fair manner were breached, and whether the evidence provided to justify the repudiation was sufficient to override the findings of the surveyor.
(B) The primary legal principle discussed is that the repudiation of an insurance claim must be based on conclusive evidence rather than flimsy excuses. Furthermore, administrative clumsiness and the filing of contradictory or redundant documents by an insurer are indicative of a deficiency in service, and the findings of an independent surveyor regarding the cause of an accident carry significant weight in determining liability.
Facts of the case:
A truck owner filed a claim for total loss after the vehicle was burnt in an accident. The insurance company repudiated the claim on the grounds that the driver's licence issued from another state was forged. The District Forum allowed the complaint, directing the insurer to pay compensation. The insurer appealed, attempting to introduce additional documents under Order 41 Rule 27 of the CPC to prove the forgery and arguing that the investigation time did not constitute a deficiency in service.
Findings of Court:
The court found that the documents filed by the appellant were identical to those already on record, differing only in dates, which demonstrated carelessness and a clumsy working manner. The court observed that the surveyor's report indicated the accident was caused by a mechanical failure (broken leaf spring) and not by the driver's lack of skill. The court concluded that the evidence provided did not conclusively prove the licence was forged and that the insurer's attempt to avoid payment was derogatory to fair practice.
Issues:
1. Whether the repudiation of the insurance claim on the grounds of a forged driving licence was legally sustainable.
2. Whether the delay in settling the claim and the manner of handling the investigation amounted to a deficiency in service.
3. Whether the surveyor's report regarding the cause of the accident should prevail over the insurer's allegations regarding the driver's licence.
Ratio Decidendi:
An insurer cannot repudiate a claim based on unsubstantiated allegations of forgery when the surveyor's report attributes the accident to mechanical failure rather than driver incompetence. Carelessness in documentation and the pursuit of flimsy excuses to avoid legitimate claims constitute a deficiency in service.
Result:
The appeal was dismissed, the order of the District Forum was upheld, and the appellant was directed to pay additional costs to the respondent.
(A) The case revolves around the interpretation of deficiency in service as contemplated under the Consumer Protection Act, specifically focusing on Section 15 regarding the jurisdiction and powers of the consumer forums to adjudicate claims. The core legal dispute concerns whether the repudiation of an insurance claim based on an alleged forgery of a driving licence, and the subsequent delay in settling the claim due to prolonged investigation, constitutes a deficiency in service. The court examined whether the statutory obligations of an insurer to settle claims in a timely and fair manner were breached, and whether the evidence provided to justify the repudiation was sufficient to override the findings of the surveyor.
(B) The primary legal principle discussed is that the repudiation of an insurance claim must be based on conclusive evidence rather than flimsy excuses. Furthermore, administrative clumsiness and the filing of contradictory or redundant documents by an insurer are indicative of a deficiency in service, and the findings of an independent surveyor regarding the cause of an accident carry significant weight in determining liability.
Facts of the case:
A truck owner filed a claim for total loss after the vehicle was burnt in an accident. The insurance company repudiated the claim on the grounds that the driver's licence issued from another state was forged. The District Forum allowed the complaint, directing the insurer to pay compensation. The insurer appealed, attempting to introduce additional documents under Order 41 Rule 27 of the CPC to prove the forgery and arguing that the investigation time did not constitute a deficiency in service.
Findings of Court:
The court found that the documents filed by the appellant were identical to those already on record, differing only in dates, which demonstrated carelessness and a clumsy working manner. The court observed that the surveyor's report indicated the accident was caused by a mechanical failure (broken leaf spring) and not by the driver's lack of skill. The court concluded that the evidence provided did not conclusively prove the licence was forged and that the insurer's attempt to avoid payment was derogatory to fair practice.
Issues:
1. Whether the repudiation of the insurance claim on the grounds of a forged driving licence was legally sustainable.
2. Whether the delay in settling the claim and the manner of handling the investigation amounted to a deficiency in service.
3. Whether the surveyor's report regarding the cause of the accident should prevail over the insurer's allegations regarding the driver's licence.
Ratio Decidendi:
An insurer cannot repudiate a claim based on unsubstantiated allegations of forgery when the surveyor's report attributes the accident to mechanical failure rather than driver incompetence. Carelessness in documentation and the pursuit of flimsy excuses to avoid legitimate claims constitute a deficiency in service.
Result:
The appeal was dismissed, the order of the District Forum was upheld, and the appellant was directed to pay additional costs to the respondent.
Counsel for the Parties :
For the Appellant :Mr. Manish Dwivedi, Advocate.
For the Respondent:Mr. Mohan Chouksey, Advocate.
ORDER
Mrs. Saroj Rajwade, Member—This appeal is directed against order dated 8.7.1995 of the District Consumer Disputes Redressal Forum, Betul (hereafter referred to as District Forum) Case No. 98/94. After filing this appeal, the appellant filed an application under Order 41, Rule 27 of CPC on 5.8.1996, with this application the appellant filed two documents. Notice was issued to respondent on this application.
2. Facts of the case briefly stated are that respondent owned a truck No. MP-05-A-2533 (Tata LP) make 1991 valued at 5 lacs of Rupees (including body). This truck was insured with appellant for the period 25.10.1993 to 24.10.1994. This truck met with accident on 30.3.1994 and was totally burnt. Respondent filed a claim with the appellant and completed all formalities expected of him. When his claim was not settled for a long time, he filed a complaint in District Forum, Betul on 29.11.1994 and prayed for direction to appellant to pay him 5 lacs of Rupees with 18% interest for deficiency in service in that his claim was not settled in 3 months. In their reply, the opposite party/appellant in this case informed the District Forum that case was being investigated and it was taking longer time because the validity of driver's licence was being investigated in Assam. However, the appellant repudiated the claim on 31.3.1995 on the grounds that driver of the truck did not have valid licence and the one submitted by the driver was forged. Opposite party/appellant submitted reports of the Surveyor also in the District Forum as well as documents about investigation into the validity of driving licence. The District Forum after hearing both the parties passed an order in which complaint was allowed and the Insurance Company was directed to pay Rs. 2,70,000/- as compensation within two months of order together with Rs. 500/- as costs. If the above order is not complied in two months then interest @ 12% will have to be paid after that date.
3. Appellant in this case has laid great stress on the point that the driving licence of the driver issued in Assam was forged and therefore, repudiation of claim was lawful and cannot be treated as deficiency of service merely because investigation took time. Also investigator of the appellant was sent to Assam for this purpose and his report has been filed as documents enclosed with application made under Order 41, Rule 27 of CPC. Appellants further averred that Surveyor's report about loss should be believed and order of District Forum be set aside, they added in their prayer that if their plea that the licence of driver being forged was not `then the loss as reported by Surveyor be accepted.
4. We have heard both the parties and have carefully gone through the record of the case including documents filed. We have also seen the order of the District Forum. The only point for our consideration is about the validity of the driver's licence. Appellant had earlier filed some documents in District Forum and al so filed some documents in the M.P. State Consumer Disputes Redressal Commission (for short State Commission) after filing appeal on the plea that these were received after the appeal was filed. We are quite surprised to see that documents filed with application under Order 41, Rule 27 CPC although bear dates 22.9.1995 and 27.9.1995 are absolutely identical word by word with the documents filed in District Forum. The only difference is that they bear dates 6.2.1995 and 9.2.1995. What was the purpose of obtaining documents in September, 1995 by sending letters again when they had the documents with them earlier. It is also not understood as to the need to file these documents in the State Commission with application under Order 41, Rule 27, when they were already on record in District Forum. It only shows that appellants' working is clumsy and they are careless in important matters also. Such working is not expected of then and is a pointer towards deficiency in working and therefore of service. We shall now consider the resort of Surveyor. In his report, dated 18.5.1994 under the heading cause and nature of accident (Col. 8), the report states, "vehicle was going from Indore to Pandhurna. Before village Gopalpur all of sudden, front leaf broken, vehicle become unbalanced and overturned and all of sudden fire broke out under the bonnet and the vehicle alongwith goods loaded on it burnt". This report does not indicate even slightly that accident was due to lack of skill in driving of the driver. Why then should the appellant have moved heaven hearth to unearth some excuse to repudiate the claim. From the documents submitted by appellant, it is clear that investigation has been confined in one or more districts of Assam and yet it can not be said that these documents prove conclusively that driving licence issued from Assam State is forged. The view taken by the District Forum in this regard is balanced, rational and logical and therefore, we are in agreement with it. We also agree with the quantum of compensation worked out by the District Forum and therefore, find no reason to interfere with the order of District Forum.
5. As observed by us in earlier paras, the attempt made by the appellant to impress us with their earnestness in work by filing fresh documents have only shown their carelessness. We have also observed with anguish the attempt made by appellant to unearth excuses, how so ever flimsy, to wriggle out of paying claims inspite of report of Surveyor which did not indicate driver's carelessness in this accident. In our opinion, such attitude is derogatory to fair practice expected of them. We would have taken a serious view of such tactics but since respondent has not prayed, we are leaving the matters as they are with the hope that saner sense will prevail with appellants in future. The appeal therefore, fails and deserves dismissal.
6. In the context of discussion in preceding paragraphs the appeal fails and is dismissed Consequently, order of District Forum remains operative. In the circumstances of the case, the appellant shall pay Rs. 2,000/- as costs to respondent and shall bear their own costs.
Appeal dismissed.