Case: Shadi Ram Raghubir Sharan Vs. National Insurance Company Limited

V. BALAKRISHNA ERADI, J.( 1 ) THIS is yet another instance which has come to our notice of an insurance company unduly delaying the settlement of the claim of an insured thereby causing him great harassment, inconvenience and mental pain and expense. ( 2 ) THE revision petitioner who is a small scale trader in Kotdwara, District Pauri in the Garhwal region, had taken out a policy of insurance with the National Insurance Co. Ltd. for a sum of Rs. 50,000/- against loss of money in transit, the area covered being from Kotdwara to Joshimath and back. The policy was to insure for the period from 4-4-1988 to 3-4-1989. One Lallo Mal, an agent of the insured who had collected the sale proceeds belonging to the insured from various stations between Joshimath and Satpuli amounting to Rs. 30,400/- was carrying the said sum in a briefcase while he was travelling in a bus on his way back to Kotdwara. On reaching the destination he found that the briefcase containing money has been stolen. The matter was immediately reported by Lallo Mal to the revision petitioner, who forthwith filed an F. I. R. in the concerned police station. The complainant promptly preferred a claim with the insurance company on the very next day, i. e. , 29-3-1989. Strangely, the insurance company failed to take any action in respect thereof despite repeated representations made to the company in person as well as through letters by the insured. Ultimately, the insured approached the District Forum, Pauri, on 19-3-1991 by filing Complaint No. 7 of 1991, under the Consumer Protection Act. The District Forum found all the points in favour of the consumer and expressly recorded a finding that the insurance company had harassed the complainant and compelled him to seek redressal before the Consumer Forum and that it had taken more than a reasonable time for finally settling the matter arising out of the claim put forward by the insured. In spite of the said finding the District Forum merely ordered payment of Rs. 30,000/- representing the money that was lost and did not award to the complainant any relief by way of interest or compensation.( 3 ) AGGRIEVED by the said decision of District Forum, in so far as it as it has denied to him the relifs of compensation and interest, the revision petitioner preferred an appeal before the State Commission, Lucknow. Unfortunately, that appeal was dismissed by the State Commission in a very summary manner without due application of its mind to any of the points raised in the appeal and without a proper speaking order. ( 4 ) IN our opinion, the disposal of the appeal by the State Commission was clearly vitiated by a material irregularity pertaining to its jurisdiction. The District Forum had also failed to exercise the jurisdiction vested in it by law by not granting to the complainant the reliefs which he was legitimately entitled to in law on the basis of the categorical findings recorded by the said Forum that the insurance company was guilty of deficiency in service in having neglected to settle the claim within a reasonable time and had caused harassment, pain and expense to the complainant. In view of the said conclusion reached by it, it was the duty of the District Forum to award to the complainant interest on the amount which is found to have been covered by the policy as also reasonable compensation for the harassment, pain, inconvenience and expenditure suffered by the consumer.

Decision reasoning: 1[ds]( 4 ) IN our opinion, the disposal of the appeal by the State Commission was clearly vitiated by a material irregularity pertaining to its jurisdiction. The District Forum had also failed to exercise the jurisdiction vested in it by law by not granting to the complainant the reliefs which he was legitimately entitled to in law on the basis of the categorical findings recorded by the said Forum that the insurance company was guilty of deficiency in service in having neglected to settle the claim within a reasonable time and had caused harassment, pain and expense to the complainant. In view of the said conclusion reached by it, it was the duty of the District Forum to award to the complainant interest on the amount which is found to have been covered by the policy as also reasonable compensation for the harassment, pain, inconvenience and expenditure suffered by the consumer.