Uttar Pradesh State Commission Holds Oriental Insurance Co. Liable For Wrongful Repudiation Of Genuine Claim

Brief Facts:

The Complainant's father was insured under a life insurance policy by Oriental Insurance Company Limited (“Insurance Company”) under a scheme provided for farmers (between the age of 12-70) by the Uttar Pradesh Government. During the subsistence of the policy, he met an accident due to which he succumbed to injuries. Subsequently, the Complainant's mother raised a claim with the Insurance Company. Despite her efforts, the Insurance Company failed to process the claim. With time, even she passed away.

Dissatisfied by the delay caused by the Insurance Company, the Complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission-II, Lucknow (“District Commission”). In response, the Insurance Company contended that the insurance benefit was only available for the farmers between the age of 12-70, whose names were registered in the computerized form. Furthermore, the Complainant was not the beneficiary of his deceased father.

The District Commission allowed the complaint and directed the Insurance Company to disburse Rs. 1 Lakh with 9% interest in favour of the Complainant. It was also directed to pay Rs. 15,000/- for mental agony and Rs. 5,000/- for legal costs. Aggrieved by the decision, the Insurance Company filed an appeal before the State Consumer Disputes Redressal Commission, Uttar Pradesh (“State Commission”).

Observations of the State Commission:

The State Commission perused the claim form filled by the Complainant after the demise of his father. As per the form, the Complainant's father was 74 years old at the time of the death. However, it was noted that the Complainant was illiterate and took the help of a third party to fill out the form. The fact that the Complainant used his thumb impression to attest the claim form instead of signing it proved that he was unable to write or read English, Hindi or Urdu. The third-party mistakenly wrote his father's age as 74, which led the Insurance Company to repudiate the claim.

The Complainant was neither informed of the aforementioned oversight, nor was able to understand the content of the claim form. Therefore, the State Commission upheld the order of the District Commission to the extent that the Complainant was entitled to the insurance amount, which was Rs. 1 Lakh. However, the State Commission reduced the penalty imposed on the Insurance Company. The compensation for mental agony was reduced from Rs. 15,000/- to Rs. 7,500/- and the legal costs were reduced from Rs. 5,000/- to Rs. 2,500/-.

Case Title: The Oriental Insurance Company Limited vs Imamuddin

Case No.: First Appeal No. A/1089/2019

Advocate for the Appellant (Insurance Company): Shri Vakar Hamish

Advocate for the Original Complainant/Respondent: Shri Rajan Rawat

Date of Pronouncement: 22nd October 2024

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