Insurance company should not be too technical says, Supreme Court

Insurance company

In the case of Gurmel Singh v. Branch Manager, National Insurance Company Limited, The Apex Court said that while settling insurance claims, the insurance company should not be too technical and ask for the documents which the insured is not in a position to produce due to circumstances beyond his control.

A division bench held by Justices MR Shah and BV Nagarathna was hearing an appeal assailing the decision of the National Consumer Disputes Redressal Commission (NCDRC) which had refused to grant relief under the insurance policy to the appellant. The appellant’s truck was insured by the respondent-insurance company for the period from August 22, 2012, to August 21, 2013. The appellant had also paid a sum of ₹28,880 to the company towards premium.

In the year 2013, the insured vehicle of the appellant was stolen. A First Information Report (FIR) was immediately lodged and the appellant also informed the insurance company as well as the Regional Transport Office (RTO) regarding the theft of his vehicle.

After a while, when an insurance company failed to settle the claims, an appellant moved to District Consumer Disputes Redressal Commission (DCDRC), which disposed of the plea directing the appellant to submit duplicate certified copy of the certificate of registration of truck to the insurance company within a month.

The insurance company was directed to settle the claim as per the terms and conditions of the insurance policy within a month after receiving the same. Even after filing an RTO the claim is not settled.

After that the appellant moved to the court in which the court observed that  the appellant had tried his best to get the duplicate certified copy of certificate of registration of the Truck. However, because of the report of theft of the truck, the details of registration on the computer had been locked and the RTO has refused to issue the duplicate certified copy of registration.

Court observed that:

“In the facts and circumstance of the case, when the appellant had produced the photocopy of certificate of registration and the registration particulars as provided by the RTO, solely on the ground that the original certificate of registration (which has been stolen) is not produced, non-settlement of claim can be said to be deficiency in service. Therefore, the appellant has been wrongly denied the insurance claim.”

“The appellant has been asked to furnish the documents which were beyond the control of the appellant to procure and furnish. Once, there was a valid insurance on payment of huge sum by way of premium and the Truck was stolen, the insurance company ought not to have become too technical and ought not to have refused to settle the claim on non-­submission of the duplicate certified copy of certificate of registration, which the appellant could not produce due to the circumstances beyond his control,” the Court said.

Therefore, the Bench set aside the orders passed by the DCDRC Chhattisgarh, State Commission and the NCDRC and held that the appellant is entitled to the insurance amount of ₹12 lakh along with interest at 7 per cent from the date of submitting the claim.

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