The Delhi State Commission, led by Justice Sangita Dhingra Sehgal, has ruled that an insurer cannot reject a claim solely based on late intimation by the insured, as this constitutes a deficiency in service. The case, Mr. Jasrath Vs. New India Assurance Co. Ltd., involved a poor villager who purchased a tractor for agricultural work, financed by the State Bank of India and insured by New India Assurance Co. Ltd. The tractor was stolen, and an FIR was lodged, but the insurer rejected the claim due to delayed intimation.
The complainant had informed the State Bank and the insurer about the theft, submitting necessary documents, but no action was taken. He filed a writ petition, and the court directed the insurer to address his grievance, but it was ignored. The complaint was then filed with the District Consumer Commission, but it was dismissed on technical grounds, citing lack of jurisdiction. The complainant appealed to the State Commission of Delhi, which observed that the key issue was whether the District Commission erred in dismissing the case due to delayed intimation.
The State Commission referred to similar cases, such as Beena Acharya vs. Manager, Oriental Insurance Co. Ltd. and Oriental Insurance Co. Ltd. vs. Brahmanand Javvadi, and noted that delayed intimation to the insurer does not warrant total rejection of claims if the FIR is filed within a reasonable time and other conditions are met. The Commission held that the claim should not be entirely repudiated and awarded the complainant the insurance claim on a non-standard basis.
The Commission directed the insurer to pay 50% of the Insured Declared Value, setting aside the District Commission’s order and allowing the appeal. This ruling emphasizes that insurers cannot reject claims solely based on late intimation, and that the occurrence of the insured event, in this case, the theft of the tractor, is the primary consideration. The Commission’s decision provides relief to the complainant, who had been struggling to receive payment under the policy despite having valid insurance. The case highlights the importance of considering the circumstances of each case and not rejecting claims based on technical grounds alone.