In CIVIL APPEAL NO.4071 OF 2022-SC- While settling claims, Insurance Company should not be too technical and ask for documents which insured can’t produce due to circumstances beyond his control: SC Justices M.R.Shah & B.V. Nagarathna [20-05-2022]

Read Judgment: Gurmel Singh v. Branch Manager, National Insurance Co. Ltd 

Tulip Kanth

New Delhi, May 21, 2022: In a case of insurance claim of a stolen vehicle, the Supreme Court has opined that when there was a valid insurance on payment of huge sum by way of premium, the insurance company ought not to have refused to settle the claim on non­submission of the duplicate certified copy of registration certificate as the appellant could not produce the same due to the circumstances beyond his control.

Noticing that in many cases, the insurance companies are refusing the claim on flimsy grounds and/or technical grounds, the Division Bench of Justice M.R.Shah and Justice B.V. Nagarathna asserted, “While settling the 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.”

In this matter, the appellant-original complainant was the registered owner of the Truck and he had insured the vehicle with the respondent-insurance company for the period from August 22, 2012 to August 212013 and paid a sum of Rs 28,880 towards premium. The said vehicle was stolen in March, 2013.When the insurance company refused to settle the claim after registration of the FIR and the submission of the documents, the appellant filed a consumer complaint before the District Consumer Disputes Redressal Commission and the Commission directed him to submit a certified copy of the certificate of registration of Truck.

When the appellant approached the RTO to get a duplicate certified copy of the certificate of registration, the RTO denied to issue the same as due to theft of the Truck, the details regarding registration certificate on the computer had been locked.Thereafter, the appellant submitted an application before the insurance company along with photocopy of the certificate of registration and registration particulars, as provided by the RTO. Despite the above, the claim was not settled and therefore, the appellant filed a fresh consumer complaint which was dismissed by the District Commission. This order was confirmed by the State Commission and thereafter, by the National Consumer Disputes Redressal Commission. Hence, this appeal was filed.

The Bench was of the opinion that the appellant had been asked to furnish the documents which were beyond the control of the appellant to procure and the insurance company had become too technical while settling the claim and acted arbitrarily. Considering that a good amount of premium was paid by the appellant, the insurance company must not have refused to settle the claim on non­submission of the duplicate certified copy, added the Bench.

The Apex Court held that the appellant was entitled to the insurance amount of Rs 12 lakh along with interest at the rate of 7% from the date of submitting the claim and also saddled the insurance company with the liability to pay the litigation cost, which was quantified at Rs 25,000 to be paid to the appellant.