Karnal District Commission Holds New India Assurance Co Liable For Deficiency In Service, Directs To Disburse Rs. 1.48 Lakhs, Pay Compensation

Brief Facts:

Mr. Rajesh Kumar (“Complainant”) owned a car which was insured with New India Assurance Company Limited (“Insurance Company”). The insurance policy covered the car with an Insured Declared Value (“IDV”) of Rs. 5,21,500/- and zero depreciation. Later, while the Complainant was driving the car in the area of village Kertu, District Shamli (UP), it collided with a stone pillar, resulting in significant damage and rendering the car a total loss. The Complainant, who suffered minor injuries, promptly informed about the damages to the Insurance Company. Despite submitting all relevant documents and appointing a surveyor, the Insurance Company intentionally and deliberately delayed settling the claim. The Complainant, faced with personal health issues and medical treatment, claimed that the Insurance Company neglected the claim, causing the car to remain in the Metro Motors Pvt. Ltd. (“Workshop”). The Complainant made several communications to the Insurance Company but didn't receive a satisfactory response. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Karnal, Haryana (“District Commission”) against the Insurance Company and the Workshop.

In response, the Insurance Company challenged the complaint's maintainability, jurisdiction, locus standi, and cause of action. On the merits, the Insurance Company contended that the Complainant submitted a claim for the vehicle loss on 12.09.2018, which was duly processed. Independent surveyors and an investigator were appointed to assess the loss and investigate the claim. The claim was repudiated as not maintainable/payable, citing a breach of policy terms and conditions, as the vehicle, according to the Complainant's statement, was used exclusively for commercial purposes. The Insurance Company argued that the Complainant failed to comply with claim formalities and denied any deficiency in service or unfair trade practice on its part.

Meanwhile, the Workshop disputed any liability, deficiency in service, or unfair trade practice. It asserted that the Complainant was responsible for parking and estimation charges, as the car has been parked since 07.09.2018. Despite a registered letter requesting the Complainant to allow work on the vehicle or take it back, the Complainant did not respond. Therefore, it insisted on payment of parking charges at Rs. 250/- per day and one per cent estimation charges totalling Rs. 40,000/- and prayed for dismissal of the complaint against it.

Observations by the Commission:

The District Commission noted that the Insurance Company failed to provide any proof of the commercial usage of the vehicle. Further, it noted that the surveyor report submitted by the Insurance Company didn't state the commercial usage of the vehicle. Therefore, the District Commission held the Insurance Company liable for deficiency in service for repudiating the claim. The District Commission held that there is a tendency for insurance companies to rely on technical policy clauses to repudiate or reject genuine claims without substantiating the evidence.

Addressing the Workshop's claim for parking charges at Rs. 250/- per day, the District Commission found an absence of any document from which it could be ascertained that an amount of Rs. 250/- per day was payable to them. Therefore, the District Commission held that the Workshop was not entitled to any such parking charge. Further, the District Commission partially allowed the complaint against the Insurance Company, directing it to pay the loss assessed by the surveyor, amounting to Rs. 1,48,746/-. Further, it directed the Insurance Company to pay Rs. 25,000/- to the Complainant on account of mental agony and harassment suffered by him and Rs. 11000/- for the litigation expenses incurred by him.

Case Title: Rajesh Kumar vs The New India Assurance Company Limited and Anr.

Case No.: Complaint No. 279 of 2020

Advocate for the Complainant: Rohit Gupta

Advocate for the Respondent: Rajesh Gupta

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