Hisar District Commission Holds New India Assurance Co. Liable For Wrongful Repudiation Of Genuine Claim

Brief Facts:

The Complainant, who runs a dairy, insured five cows under the policy from New India Assurance Company (“Insurance Company”). These cows were examined by a veterinarian and tagged for identification purposes. The insurance was under the Pandit Deen Dayal Upadhyayay Pashu Beema Yojna of the Animal Husbandry and Dairying Department, Government of Haryana. The Complainant paid a premium of Rs. 500/- out of a total of Rs. 5260/-, with the remainder covered by SDO Animal Husbandry and Dairying Veterinary Hospital. The cows were physically, found healthy, and vaccinated against foot and mouth disease. One cow fell ill and, despite treatment by the doctor died on March 22, 2020. Postmortem revealed progressive anorexia as the cause of death. The Complainant submitted all required documents for the insurance claim, but the claim was denied because the cow died outside the policy period. The denial of the claim was communicated to the veterinarian, not the Complainant, who then served a legal notice without receiving a response. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Hisar, Haryana (“District Commission”) against the insurance company and the hospital.

In response, the insurance company stated the policy was valid from March 22, 2019, to March 21, 2020, and the cow's death on March 22, 2020, was outside this period. It attributed the discrepancy to a clerical error, mistakenly listing the insurance period from April 20, 2019, to April 19, 2020. It argued there was no liability as the policy expired and requested the complaint be dismissed with costs.

The hospital contended that the Complainant was not its consumer, and any dispute was between the Complainant and the insurance company. It described its role as merely a facilitator of the insurance agreement between the Complainant and the insurance company, as per a memorandum of understanding with the Animal Husbandry and Dairying Department, Government of Haryana.

Observations by the District Commission:

The District Commission held that a policyholder cannot be expected to assume that their insurance coverage would end a month before the date stated on the certificate. It noted that the Complainant promptly filed his claim following the cow's death, but the insurance company took four months to repudiate the claim. It held that the insurance company should have issued a corrected policy during the policy period if they detected the clerical error. It noted that the insurance company's failure to notify or correct the policy within the active period meant it could not later benefit from its mistake when a claim was made.

Furthermore, it noted that the insurance company did not respond to the Complainant's representation or the legal notice served. The Complainant successfully demonstrated his entitlement to compensation for the insured cow's death during the policy period. However, the District Commission found no deficiency in service or unfair trade practice on the part of the hospital. Therefore, the District Commission held the insurance company liable for deficiency in services.

Consequently, the District Commission directed the insurance company to pay the Complainant Rs. 72,000/-, the loss amount, with interest at 9% per annum. Additionally, the insurance company was ordered to pay Rs. 12,000/- as compensation and Rs. 10,000/- as litigation expenses to the Complainant.

Case Title: Vikram vs New India Assurance Co. Ltd. and Anr.

Case Number: CC No. 87/2021

Date of Decision: 30.05.2024