Interest should be paid from the date of intimation of the theft to the insurance co. by the complainant

In CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LTD. vs TANUSREE MONDAL, revision petition was filed by insurer against order of the State Forum.

In this matter, the respondent–complainant had taken an insurance policy for a sum of Rs.1,16,000/- for her vehicle (Tata Sumo) from the revisionists – opposite party – insurance co., which was in force till 08.08.2008.  Premium of Rs.6,435/- has been paidThe complainant’s vehicle was stolen on 29.06.2008. F.I.R was lodged by the complainant and the contention of insurance co. was that the complainant intimated about the theft of vehicle after expiry of 14 days and as such she had violated the conditions of the insurance policy.

The contention of the complainant was that there was no delay in informing the insurance co. about the theft as she intimated the insurance co. on 01.07.2008 over phone but she was advised to report the theft in writing with a copy of the FIR. The complainant got the copy of the FIR on 10.07.2008, and immediately thereafter, on 11.07.2008, she intimated the insurance co. by registered post, as such there was no intentional delay.

The State Forum found that on 11-07-2008 the O.P.no. 2 was informed through registered post which was admittedly received on 14-07-2008 and agreeing with the District Forum awarded compensation.

The National Forum however agreeing with the lower forums found that State and District Forum have differed on the compensation. 

The National Forum found that there was protracted correspondence between the complainant and the insurance co. including repeated requests etc. by the complainant from the date of intimation of theft by registered post i.e. from 11.07.2008 till the date of filing of consumer complaint in the District Forum i.e. on 05.04.2013, but her claim was not settled. The complainant had a valid policy, she had duly paid the premium, she lodged an F.I.R., she intimated the insurance co., she kept on corresponding and requesting, for a period of about 4 years and 9 months, and was (then) left with no option but to seek remedy under law / approach the consumer forum (in this case). 

The National Forum held that the insurance co. should have been prompt and dutiful in settling the claim within a reasonable period, that is, within a period that appears reasonable per se, and which a reasonable man will not agitate. We do not want to endorse in any manner a proposition that the interest will be paid only (and only) when a consumer (as a last resort in forced duress) approaches the consumer fora. The principle that is correct, and that we want to convey, is that the insurance co. was required to be and should have been prompt and dutiful in settling a bonafide claim, and should in no way nurture any (mis)notion that it can sit over a claim till the consumer in forced duress seeks remedy in the consumer fora. Therefore, it is just, appropriate and necessary that the interest should be paid from the date of intimation of the theft by the complainant to the insurance co. i.e. from 11.07.2008.

We find the State Commission’s observation erroneous that awarding compensation as well as interest is “not tenable under the law”. Interest is to offset the delay in making the due payment promptly and dutifully at the due time. Compensation is for the loss and injury, harassment and difficulty, uncertainty and helplessness,  the other, compensation, is for the loss and injury, the harassment and difficulty, the uncertainty and helplessness. The protracted correspondence and requests, for about 4 years and 9 months, the forced duress to approach the consumer fora, the protracted litigation in one, two, and now three, consumer fora, definitely qualify for just, appropriate and equitable compensation, commensurate with the loss and injury, harassment and difficulty, uncertainty and helplessness. We accordingly find the award of compensation made by the District Forum to be just, equitable, appropriate, reasonable, lawful.