UNITED INDIA INSURANCE CO.LTD. Vs. LEELA SHARMA

JUDGEMENT

(1.) The chief objection taken before the learned District Forum Solan, and reiterated before us in appeal against the formers order dated the 25th August, 1992 is that in view of the claim having been repudiated the District Forum ought to have declined to exercise jurisdiction and left the respondent to knock the door of competent civil court. Reliance for this proposition has been placed on the order of the Honble National Commission in Rajdeep Leasing and Finance Pvt. Ltd v. New India Assurance Company, 1992 CPC 88. The learned Forum below duly took the above authority into consideration and held that it has no application to the facts of the present case. The appeal does not disclose how the District Forum has gone wrong in coming to the above finding For this reason as also on merits, we are at one with the learned District Forum.

(2.) Probably the observations in Janta Machine Tools v. Oriental Insurance Co. Ltd, O P No. 12/90, decided on 21 -8 -1990 (NC), have encouraged (though wrongly) the learned Counsel for the appellants to press for adjudication by a civil court rather than by the Redressal Fora constituted under the Consumer Protection Act, 1986 Most likely he has not come across the elaboration that the Honble National Commission subsequently made in Life Insurance Corporation of India, Andhra Pradesh v Shri Bhavanam Srinivasa Reddy, 1991 (2) CPR 587 (NC), and re -affirmed in M/s Raj Kumar and Co. v M/s United India Insurance Company, Iv92(l) CPR 333. These observations reproduced in extenso are to the following effect: - "Any unilateral repudiation of the contract by the Insurance Company on the allegation that there had been a Suppression of relevant material by the insurer at the time of taking policy of insurance will not disentitle the policy holder from approaching the Redressal Forums constituted under the Act seeking an adjudication of the question whether tbe said repudiation was justified in law. In such a case the Consumer Disputes Redressal Forum has not only the jurisdiction but also a duty to investigate into the question whether the charge made by the Insurance Company on the basis of which the alleged repudiation was made is well founded in fact In case it is found as a result of such investigation that the insurance company was justified in repudiating the contract, the complaint petition before the Forum will have to fail ; if, on the other hand, the Forum comes to tbe conclusion that the charge levelled by the insurance company is not substantiated and hence there was no justification for its purported action repudiating the contract of insurance, the contract of insurance will be treated as subsisting and an enquiry will be conducted into the merits as to whether there was any deficiency in service on the part of insurance company so as to entitle complaint to grant of relief under the Act - Thus, it is clear that the jurisdiction of the statutory Redressal Forums to conduct an adjudication into the complaint is in no way affected by the unilateral repudiation of the contract of insurance by the insurer. In the decision rendered by this Commission in the New India Assurance Company Ltd v. M/s. Vipro Electronics Pvt. Ltd, Revision Petition No 12 of 1990 (Reported in I (1991) C P. J. 335) it has been held that the mere fact that the insurer had repudiated his liability in respect of the claim put forward by the* * ¢ * * ¢ ¢. Therefore, merely because tbe insurer has repudiated the insurance claim under the policy unilaterally, it is difficult to hold that the various Redressal Forums constituted under the Consumer Protection Act, I9y6 will have no jurisdiction to deal with the matter. If such a contention of the Insurance Company is accepted then in every case the Insurance Company can get a report from the surveyors and repudiate the claim and thus oust the jurisdiction of tbe Redressal Forums. The Redressal Forums, therefore, are bound to see whether or not the repudiation was made in good faith on valid and justifiable grounds " The position is thus well settled that the Redressal Fora is first bound to see whether or not the repudiation was made in good faith, on valid and justifiable grounds. (Emphasis supplied) It is from this angle that the learned District Forum has carried out tbe exercise, and for this, therefore, the order under appeal cannot be faulted.

(3.) Let us, on our own, see whether the repudiation of the claim of the respondent was done in good faith or on valid grounds and further whether these were reasonably sound grounds In the instant case the claim has been repudiated not at the initial stage of investigation. Whether or not the driver possessed a valid or effective license is one of the few essential queries that normally should have been checked at the very initial stage of investigation of claim. On receipt of report of accident a surveyor was appointed. On receipt of his report another surveyor was appointed. At the instance of the surveyor, of course, in the pay of appellants, the respondent here carried out the required repairs and in older to ensure that there was no objection on this score, he got these carried out in the workshop he was directed to. It was only after the respondent had sought re -imbursement that the appellants held a so -called enquiry behind his back and repudiated the claim.