Chandigarh District Commission Holds Oriental Insurance Co. For Wrongful Repudiation Based On Lack Of Route Permit At Time Of Accident

Brief Facts:

Mr. Ramit Singh (“Complainant”) owned a truck which was insured by Oriental Insurance Company Limited (“Insurance Company”) for a premium of Rs. 40,183/-. On 1.3.2021, the truck was involved in an accident in the area of Panjokhra police station, leading to the filing of an FIR. The Complainant reported the incident to the insurance company, who dispatched a surveyor to assess the damages. Following the surveyor's evaluation, the Complainant repaired the truck at the behest of the insurance company, incurring a total bill of Rs. 1,20,400/-. Despite submitting the bill to the insurance company for settlement, the Complainant's genuine claim was not resolved. The insurance company subsequently declared the claim as 'no claim', based on alleged deficiencies in documents. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against the insurance company.

The insurance company contested the Complainant's claim, contending that the surveyor, Shamsher Chand, assessed the loss at Rs. 40,450/- based on the Complainant's estimates. The insurance company further alleged that the Complainant failed to deposit the Haryana government tax during the accident and had an expired National permit. Consequently, the Complainant was asked to provide a national authorization permit, which he couldn't produce. Therefore, the Complainant denied deficiency in services on its part.

Observations by the District Commission:

The District Commission referred to the evidences submitted by the Complainants and noted that the Complainant's National Permit authorization was valid. Further, the Complainant paid consolidated fees of Rs. 16,200/-, allowing the truck to operate in Himachal Pradesh. The accident occurred in District Ambala, Haryana, beyond the permitted state boundaries. The District Commission held that driving without a valid route permit in another state does not violate insurance policy conditions unless there is a complete absence of a route permit. Therefore, it held that the absence of a route permit for Haryana at the time of the accident does not amount to a fundamental breach of the subject policy.

The District Commission held that the surveyor holds significant weight unless proven unreliable. It noted that the surveyor's assessment, in the absence of contradicting evidence, led to a determination of 75% of the assessed loss, therefore, the Complainant was entitled to a claim of Rs. 30,338/-. Consequently, the District Commission held the insurance company liable of deficiency in services.

The insurance company was directed to pay Rs. 30,338/- to the Complainant with 9% interest from the claim closure date. It was also directed to pay Rs. 25,000/- as compensation for mental agony and harassment along with Rs. 10,000/- for the litigation costs incurred by the Complainant.