Can't Repudiate Genuine Claim On Delay If Explained With Valid Reasons, Nalgonda District Commission Holds United India Insurance Co Liable

Brief Facts:

The Complainant was the mother and nominee of her deceased son, who was a member of the Telangana Transport Drivers and Non-Transport Auto Drivers Social Security Scheme, 2015. The Labour Department of the Telangana State Government provided a Group Personal Accident Policy under the scheme, assuring a sum of Rs. 5,00,000 to each driver. The insurance was with United India Insurance Co. Ltd. (“Insurance Company”). The deceased worked for B. Srinivasulu Electrical Engineering Works Company at JC Bhavan, Miryalguda as a driver. During the course of his employment, while attempting to use light from a generator, the deceased accidentally came into contact with an 11 KV line. This incident resulted in severe burns and injuries. Subsequently, he passed away while undergoing treatment.

The Complainant submitted a claim with all required documents to the Insurance Company. However, she received a letter stating that her claim was repudiated because it was not submitted within the stipulated period of 30 days from the accident date, leading to a delay of 700 days. She argued that due to the COVID-19 pandemic and subsequent lockdowns, she could not gather and submit the necessary documents within the required time frame. However, no resolution was provided.

Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Nalgonda, Telangana (“District Commission”). In response, the Insurance Company stated that as per condition No. 1 of the policy, any intimation about the accident had to be given within one month after the death. This included providing a written notice with full particulars to the company immediately upon any event that could give rise to a claim. The Complainant intimated the Insurance Company 17 months after the accident.

Observations by the Commission:

The District Commission reviewed the evidence, including FIR, PME Report, inquest report, driving license, death certificate, and other relevant documents. It noted that the delay was due to the COVID-19 pandemic and Complainant's health issues, which prevented timely submission. The District Commission found that the Insurance Company repudiated the claim without considering these valid reasons. The District Commission referred to an IRDA Circular and the decision of the NCDRC in National Insurance Co.Ltd. Vs. Hukam Bai Meena and Ors. [IV (2018) CPJ 478], which stated that genuine claims should not be rejected due to delays if there were valid reasons.

Consequently, the District Commission directed the insurance company to pay Rs. 5,00,000/- to the Complainants with 9% interest from the date of filing the complaint until realization. Additionally, the Insurance Company was directed to pay Rs. 30,000/- for mental agony and Rs. 10,000/- for litigation costs.

Case Title: Perampally Nagamma and Anr. vs The Regional Manager, The United India Insurance Co. Ltd.

Case No.: Consumer Complaint No. 69 of 2022

Date of Pronouncement: June 12th, 2024