Non-Disbursal Of Policy Amount, Jodhpur District Commission Holds United India Insurance Co. Liable

Brief Facts:

Mr Ramdas (“Complainant”) had insured his vehicle, a Ford Figo, with the United India Insurance Company Limited (“Insurance Company”). During the insurance coverage period, the Complainant's son, Ashok, encountered a sudden breakdown of the car whilst he was driving the car. Despite multiple attempts to start the vehicle, it did not restart. Due to lockdown restrictions and a curfew in place, the police instructed him to leave the car at the location for a quick departure. Unable to find a mechanic or assistance on the spot, the Complainant's son secured the vehicle by locking it and keeping the key with him. However, when he returned the next morning at 8:00 AM, the car was not there. Despite inquiries, the Complainant couldn't locate the vehicle. Thereafter, the Complainant reported and filed an FIR for theft to the Sur Sagar police station on the same day. The Complainant also informed the Insurance Company via email. The claim was rejected by the Insurance Company, citing abandonment of the vehicle in a deserted condition, which they deemed a violation of insurance terms. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-II, Jodhpur, Rajasthan (“District Commission”).

In response, the Insurance Company argued that the Complainant left the vehicle unattended in a deserted area in a non-operational state during the night, thus abandoning it in a dilapidated condition. The Insurance Company emphasized that the Complainant reported the theft some days later, alleging a breach of insurance terms and rendering the claim ineligible for compensation. Consequently, the Insurance Company asserted that it was not liable to honour the claim due to the violation of insurance conditions.

Observations by the Commission:

The District Commission noted that due to the challenging circumstances of the lockdown and due to unavoidable circumstances, the Complainant was compelled to leave the vehicle under the supervision of someone. Therefore, the District Commission rejected the contention raised by the Insurance Company. Reliance was placed on National Insurance Company vs Nitin Khandelwal [C.P.J. 2006 (2) 1], wherein the Supreme Court held that under extraordinary circumstances, non-standard claims can be given to the insured, even when the extraordinary circumstances led to the violation of the policy terms.

In light of the legal principles set forth by the Supreme Court, the District Commission held it appropriate and just to award the Complainant 75% of the Insured Declared Value (IDV) as non-standard compensation for the vehicle claim. Additionally, the District Commission directed the Insurance Company to pay Rs. 5,000 to the Complainant for physical and mental anguish and litigation costs incurred by the Complainant.

Case Title: Ramdas vs United India Insurance Company Ltd.

Case No.: CC/71/2022

Advocate for the Complainant: Mahipal Chaudhary

Advocate for the Respondent: Sunil Vyas

Click Here To Read/Download Order