Om Prakash vs Reliance General Insurance - Supreme Court Important Judgment
Om Prakash vs Reliance General Insurance - Supreme Court Important Judgment 2017 -
On 4th October, 2017, in the case of Om Prakash v. Reliance General Insurance and Anr. [Civil Appeal No. 15611 of 2017], while dealing with an appeal challenging an order of the National Consumer Disputes Redressal Commission, it was held that the decision of the insurer to reject a “claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay.” It was further held that “it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine.”
It was observed that the Consumer Protection Act “is a beneficial legislation that deserves liberal construction” and “this laudable object should not be forgotten while considering the claims made under the Act.” It was further observed that “it is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances.”
In the instant case, it was held that the appellant had given cogent reasons for the delay of 8 days in informing the respondent about the incident and the Investigator had verified the theft to be genuine and the payment of Rs.7,85,000/- towards the claim was approved by the Corporate Claims Manager, which, was just and proper.”
Accordingly, it was held that the National Commission was not justified in rejecting the claim of the appellant without considering the explanation for the delay, and also that the claimant was entitled for a sum of Rs.50,000/- towards compensation. The respondents 1 and 2 were accordingly directed to pay a sum of Rs. 8,35,000/- to the appellant with interest @ 8% per annum from the date of filing of the claim petition till the date of payment.