Nalgonda District Commission Holds Oriental Insurance Co. Liable For Deficiency Of Service

Brief Facts:

Mr Madla Srinivas Reddy (“Complainant”) purchased a Maruti Ertiga ZDI + SMART HYB and insured it with a policy from ICICI Lombard General Insurance Company Limited (“Insurance Company”). While travelling to a pilgrimage site, the vehicle hit a speed bump, causing a noise but no apparent damage. Later, the vehicle broke down near an ISKON Temple due to a damaged headback kit. The complainant had it inspected by a Maruthi Service Station, which estimated a 15-day repair time. Unable to wait, the complainant towed the vehicle to a Maruthi Servicing Centre in Nalgonda and informed the insurance company of an insurance claim. The insurance company denied the claim, citing policy terms that exclude coverage for unauthorized repairs, improper handling, and modifications. The complainant argued that the damage was a mechanical failure and not due to unauthorized repairs. He spent Rs. 1,50,000 on repairs and towing and all the repairs were done only by Maruti Company Authorized Service Centre and not a private unauthorized mechanic. Post that, the vehicle remained idle for three months, from January to March 2020. Resultantly, the complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Nalgonda (“District Commission”) against Maruti Suzuki Company Show Room, Pavan Motors (“Dealer”) and the insurance company.

The dealer argued that the dispute revolved around the Complainant's insurance claim and that they are merely an authorized dealer and service centre for Maruti Suzuki Cars. They emphasized that the decision to approve or deny the insurance claim is solely the responsibility of the car's insurance company.

On the other hand, the insurance company argued that the insurance policy required the Complainant to promptly inform them about any damages to the insured vehicle to allow for a timely spot survey. However, the Complainant notified them of the damages on 02/01/2020, which was 10 days after the incident, and after the vehicle had been towed to Nalgonda and placed at the dealer’s service centre. This delay violated the insurance policy's terms and conditions, and thus, the insurance company cannot be held responsible for it.

Observations by the Commission:

After perusing the documents and surveyor report, the District Commission expounded that the insurance company wrongfully repudiated the Complainant’s claim as the policy was in force at the time of the accident and the vehicle was being driven by the Complainant himself. The bench relied upon the decision in Oriental Insurance Co. Ltd. and another vs Sneha Prabha IV (2018) CPJ 193 (HP) to reiterate that the surveyor report is a substantial piece of evidence and can be used to provide compensation to the Complainant unless there is contrary evidence to show that the surveyor had personal animosity against the Complainant at the time of the accident. Thus, the insurance company was deficient in service. The District Commission cleared the dealer’s liability as the complaint was independent of any manufacturing-related defect and only related to the insurance claim.

Consequently, the District Commission ordered the insurance company to pay Rs. 1,47,238/- to the Complainant towards repair charges, as assessed by the Surveyor and Rs. 26,200/- for towing. The insurance company was also directed to pay Rs. 20,000/- compensation for mental agony and Rs. 10,000/- for litigation costs to the Complainant.

Case: Madla Srinivas Reddy vs. The Manager, Maruthi Suzuki and Anr.

Case No.: Consumer Complaint No. 13 of 2021

Advocate of the Complainant: Sri L. Govardhan

Advocate of the Opposite Parties: N. Narsimha Reddy (For Opposite Party 1) and Sri A. Suresh Babu (For Opposite Party 2)

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