Vijayapur District Commission Holds Reliance General Insurance Co. Liable For Wrongful Repudiation Of Valid Claim

Brief Facts:

The complainant was the owner and registered certificate holder of a car. Reliance General Insurance Company (“Insurance Company”) had issued a commercial package policy covering damages to the said car. This policy was valid from 27.06.2021 to 26.06.2022. On 13.12.2021, at around 8:00 PM, the car, driven by the complainant's acquaintance, met with an accident. An FIR was registered at the local police station. The incident was promptly reported to the Insurance Company, which advised the complainant to take the vehicle to the Maruti Showroom in Vijayapur. The complainant followed this advice and submitted all required documents for settlement of the claim.

The Insurance Company made the complainant sign various forms and documents, assuring that the claim would be settled. Subsequently, the Insurance Company's authorized surveyor inspected the accident site and submitted a report. However, the Insurance Company repudiated the claim, citing a 'delay in communicating the accident' as the reason. The complainant had reported the accident to the Insurance Company on 14.12.2021, and after three days, the Insurance Company requested the submission of documents. The complainant had also taken the car to Rohan Garage, where the damages were estimated at Rs. 5,81,198/-, including spare parts and labour charges. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Vijayapur, Karnataka (“District Commission”).

The complainant contended that the Insurance Company was fully aware of the accident but repudiated the claim without properly verifying the records. The complainant then issued a legal notice to the Insurance Company, demanding the settlement of the claim. Despite receiving the notice, the Insurance Company neither responded nor settled the claim.

In response, the Insurance Company stated that the complainant informed them about the accident on 17.05.2022, 170 days after the incident on 13.12.2021, thus violating Condition No.1 of the policy. Furthermore, the Insurance Company asserted that the complainant had used the vehicle on a public road without a valid permit and that the driver lacked a valid license, which constituted a fundamental breach of the policy terms and conditions.

Observations of the Commission:

The District Commission observed that the policy issued by the Insurance Company in the complainant's name was undisputed. It was also established that the policy was in force at the time of the accident. The complainant's claim that the vehicle was damaged in the accident and required repair costs amounting to Rs. 5,81,198/- was contested by the Insurance Company However, the Insurance Company did not dispute the occurrence of the accident or the damage to the vehicle.

A surveyor assessed the damage to the vehicle and determined the loss to be Rs. 3,44,188/-, as documented in the survey report. Although the complainant denied the survey report's accuracy, he did not provide any rebuttal evidence to discredit it. The District Commission noted that the surveyor's report carries significant weight in such cases. Therefore, the District Commission held that the complainant was entitled to Rs. 3,44,188/- for the repair charges.

Based on these findings, the District Commission partly allowed the complaint and directed the Insurance Company to pay Rs. 3,44,188/- for the vehicle damages, Rs. 5,000/- for mental agony and Rs. 2,000/- towards litigation costs.

Case Title: Sri Basavaraj vs The Manager, The Reliance General Insurance Co. Ltd.

Case No.: Complaint No. 123/2023

Advocate for the Complainant: Shri V.H. Galappagol

Advocate for the Opposite Party: Smt. V.P. Jamangoudar

Date of Pronouncement: 19th August 2024

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