Can an insurance company deprive the insured of a claim by blaming the service centre or the loss of a vehicle? Definitely not. The claim has to be paid as the insured is not at fault.
Case Study: Sharwan Chhajer owned a Chevrolet Cruze car. It was insured with Reliance General Insurance under a policy valid from October 8, 2010 to October 7, 2011. On December 29, 2010, Chhajer entrusted the vehicle to Regent Automobiles for servicing, and it was to be returned on January 3, 2011.
On January 1, 2011, the workshop informed Chhajer that his car had been stolen for which a police complaint had been lodged on December 31. The insurance company was also informed of the theft on the same date. Chhajer was out of station, but on his return he lodged an FIR.He also lodged a claim with the insurance company , but it was repudiated on the gro und that there was a breach of the policy terms and conditions since the vehicle had been left unattended and its ignition key left in a drawer at the workshop.
Chhajer filed a complaint before the district forum seeking a direction to the insurance company to settle his claim. The service centre was also joined as a party since the insurance company blamed it for the loss. After considering the arguments, the forum directed the insurance company to settle the claim. This order was challenged before the Haryana State Commission, which dismissed the appeal. The insurance company then approached the national commission.
The national commission observed that the car had been entrusted to Regent Automobiles for servicing. Chhajer could not have anticipated that the vehicle would be stolen from the workshop. So it was incorrect to accuse Chhajer ofhaving failed to take reasonable steps to safeguard the vehicle. The insurance company argued that the theft had taken place due to the negligence of the service centre staff who had left the vehicle keys in the drawer of a counter at the workshop. The commission observed that this argu ment was also devoid of merit since the employees too could not have anticipated that someone wouldcome to the workshop, open the drawer of the counter, remove the key and take away the vehicle. The commission concluded that the workshop too could not be blamed for any wilful breach of the policy conditions.
The insurance company then argued that the handing over of the vehicle to the workshop for servicing constituted a contract of bailment, which was governed by the Contract Act. Since the vehicle was stolen while in the custody of the workshop, the workshop should be held liable to make good this loss by paying Chhajer. The company referred to a judgement where a truck was stolen from the parking lot of the Delhi Development Authority (DDA). Even though the loss was reimbursed through insurance, the truck owner had also claimed damages fromDDA. The national commission had held DDA liable for the safety of the vehicle kept in its parking lot. The insurance company sought that Chhajer’s shouldclaim the loss from the workshop.
The commission rejected this argument. It observed that the vehicle was properly insured, so there was no reason to avoid settlement of the claim. The insurance compa ny must first reimburse the loss and later consider adopting suitablelegal proceedings for recovering the amount from Regent Automobiles.
Accordingly , by its order of May 13, 2016 delivered by Justice VK Jain on behalf of the Bench along with Anup Thakur, the national commission dismissed Reliance Insurance’s revision and upheld the order of the district forum in Chhajer’s favour ordering settlement of the claim. Conclusion: A restaurant that offers valet parking service, or a public authority that charges for parking of vehicles, or a workshop where a vehicle is given for repairs or service, are all liable for the safety of the vehicle in their custody . In case of loss, the vehicle owner can make a claim against them, and also against the insurance company .
Source : The Times of India
Date : 13-06-2016