Hisar District Commission Holds HDFC ERGO General Insurance Co. Liable For Repudiation Based On Non-Submission Of Immaterial Documents

Brief Facts:

Mr. Sanjay (“Complainant”) owned a motorcycle and valid insurance from HDFC ERGO General Insurance Company Limited (“Insurance Company”), with a sum assured of Rs. 25,300/-. The Complainant's motorcycle was stolen in 2018 and an FIR under Section 379 IPC was filed by him. Despite informing the insurance company about the incident and submitting the required documents, the insurance company rejected the claim. The Complainant made several communications with the insurance company but didn't receive a satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Forum, Hisar (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company argued that the Complainant failed to comply with contractual obligations, did not cooperate, and did not submit necessary documents despite repeated requests. It claimed that the insurance company closed the claim file as 'No Claim'. It contended that the policy terms, conditions, and exceptions were not adhered to by the Complainant, and thus, the insured cannot claim more than what is covered by the insurance policy.

Observations by the District Commission:

The District Commission noted the Complainant promptly reported the theft of his vehicle to the police on the same day, as required by term and condition no. 1 of the insurance policy. Following the lodging of the FIR, the Complainant filed an insurance claim, and the police investigation concluded with a final report accepted by the Learned Judicial Magistrate First Class. It held that the insurance company did not disclose the appointment of any surveyor or investigator to probe the matter.

The District Commission observed that documents such as the previous insurance policy, bank statement, or cancel cheque, alleged by the insurance company to be missing, were not essential for claim settlement. It held that the insurance company did not establish the violation of any term and condition by the Complainant, nor did they prove non-cooperation or failure in contractual obligations.

Subsequently, the District Commission held the insurance company liable deficiency in service and unfair trade practice. Consequently, the District Commission directed the insurance company to pay Rs. 25,300/- (IDV of the vehicle) to the Complainant with interest at 9% p.a. from the date of filing the complaint (10.7.2019) until realization. It was also ordered to pay compensation of Rs. 10,000/- to the Complainant and litigation costs of Rs. 5,000/- incurred by him.