Harshita Sharma
Published on: July 14, 2022, 18:09 IST
The Supreme Court observed that an insurer cannot be held liable for a lack of service solely because of a delay in processing the claim and a delay in repudiation.
The dispute arose when a ship that was insured for a sum of Rs. 1,62,70,000, sank in the high sea owing to adverse weather conditions on the sea route between Oman and Pakistan. The lower portion of the vessel was damaged as a result. Consequently, the insured decided to lodge a claim with the insurer. The claim was neither admitted nor repudiated, hence a consumer complaint was filed before the National Consumer Redressal Commission (NCDRC).
After the complaint was allowed by the NCDRC, it took two years for the claim to finally be repudiated by the appellant in 2013. Hence, it was held that the inordinate delay violating Regulation 9 of the Insurance Regulatory and Development Authority Regulations, 2000, constituted a deficiency in services.
As per the evidence presented, the bench notices that statement of complaint copy does not disclose the place of cause of action. The court also pin-pointed the email copy suspecting piracy attack demonstrated at least that the vessel was plying in the prohibited location.
The Court was of the view that the Consumer Forum has very narrow jurisdiction domain to find out if there was any problem with the service and they also can not take such grievances based on dubious story-line having suspicious evidences.
The two-Judge Bench comprising Justices Hemant Gupta and V. Ramasubramanian allowed the appeal and observed that, “The delay on the part of the Insurance Company in securing the Final Survey Report and the further delay in issuing the letter of repudiation, cannot per se lead to the complaint being allowed.”
“The delay in processing the claim and delay in repudiation could be one of several factors for holding an insurer guilty of deficiency in service. But it cannot be the only factor.”