DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM.

                                      Dated this the 31^st day of July, 2024 

Filed on: 10/03/2021     

PRESENT

Shri.D.B.Binu                                                                President

Shri. V. Ramachandran                                                   Member

Smt. Sreevidhia T.N.                                                      Member

C.C. No. 127/2021

COMPLAINANT

Khaja Mueenudeen, S/o. Muhammed Adbul Khader Mahin, TC 41/2173, Kalippanakulam House, Manacaud, Trivandrum 695009. Currently residing at Lords G.B., Skyline Imperial Garden, Near IMA house, Stadium Link Road, Kaloor, Ernakulam.

(Rep. by Adv. Jolly John, Biz & Legis, Opp. D.H. Ground, DH Road, Ernakulam 682016)

VS

OPPOSITE PARTIES

1. M/s. United India Insurance Co. Ltd., Head Office at #19, Nungambakkam High Road, IV Lane, Chennai 600034. Its Reg. Office at 24, Whites Road, Chennai 600014. Rep. by its Managing Director
2. M/s. united India Insurance Co. Ltd., Regional Office, 2^nd Floor, J.J. Arcade, Deshabhimani Junction, NH Road, Kaloor, Kochi 682017. Rep. by its Manager.

(OP No. 1 & 2 Rep. by Dr. P.V. Sasikumar, “Saphalyam”, 37/2014A2, Jawahar Nagar, Kadavanthara, Cochin 682020)

FINAL ORDER

D.B. Binu, President:

A brief statement of facts of this complaint is as follows:

The complaint was filed under Section 35 of the Consumer Protection Act, 2019. The complainant, a businessman from Trivandrum now settled in Ernakulam, seeks direction against two opposite parties for releasing an insurance claim under the Salvage Loss Basis. The complainant owns a Honda Civic (registration no KL-27-3686) insured under policy no 1002043119P112452447 from 25.12.2019 to 24.12.2020. On 25th May 2020, the car, driven by the complainant's driver, met with an accident near the Vytilla flyover. The complainant, informed by the driver, had the car moved to Peninsular Honda, a service centre in Maradu.

Upon returning to Ernakulam, the complainant was advised to claim a total loss due to severe damage. He submitted the claim on 04.06.2020. The insurance company required clarifications regarding toll receipts and the apartment gate register. The complainant explained that toll receipts were not kept as drivers take internal routes to save toll fees, and the vehicle's movements were not recorded in the apartment register due to being parked in the lawn area and lax recording during the Covid period.

The complainant alleges that the insurance company is using these clarifications as an excuse to delay and deny the rightful claim. Due to the delay, the complainant and his family are struggling to find safe transportation during the pandemic and face financial constraints in buying another car.

The complainant requests the Commission to direct the opposite parties to pay INR 6,26,889 with 18% interest from the date of the accident until settlement and INR 3,00,000 for litigation costs and mental agony due to unfair trade practices.

2.Notice:

The Commission sent the notice to the Opposite Parties. The Opposite Parties have filed their versions in response.

3.Version of the Opposite Parties:

The complaint is not maintainable either under law or on facts and appears to be an attempt to extort money. It arose from an incident where the complainant’s car met with an accident on 25/5/2020, as reported by the driver Renjith. The claim was intimated to the opposite party (OP) after a delay of 9 days and to the police after 6 days, violating policy terms that require immediate intimation of any loss or damage.

The complainant did not provide timely information or opportunities for the OP to investigate. The facts submitted do not match those collected during investigations, and no repair estimates from authorized workshops were provided. The complainant requested Rs. 6,26,889 as repair costs, while the policy’s declared IDV (Insured Declared Value) for the car was Rs. 3,65,000, with a maximum liability of Rs. 2,92,000 (80% of IDV).

The driver's statement and the complainant’s complaint contain inconsistencies regarding the accident's details. Different versions were provided about the occurrence and reporting of the accident. The OP requests the commission to dismiss the complaint as misconceived, groundless, and unsustainable, with costs.

Further clarifications by the OP deem the complainant's statements false and illogical. No proper evidence was provided about the accident. The OP is not convinced by the complainant’s version. The complainant argued about gate entries during COVID-19, but the OP states no proper recording of entries existed at the relevant time. The last recorded entry was on 25/5/2020 at 9:17 AM, contradicting the complainant’s timeline.

Allegations made by the complainant are baseless and cannot be accepted. The complainant admitted to having a package policy, but allegations of delay and deficiency in service are denied by the OP. The insurance claim can only be settled as per policy terms and conditions. The maximum claim amount is Rs. 3,65,000, making the Rs. 6,26,889 claim excessive. The complainant misrepresented facts and failed to provide necessary evidence, aiming to extract undue and unentitled advantages.

Several documents and clarifications were not provided by the complainant. The OP requests the commission to dismiss the claim as misconceived and groundless. The complainant violated policy conditions by not informing the OP immediately after the accident. The claim is based on mismatching statements and lacks proper documentation. This comprehensive response from United India Insurance Company Limited emphasizes the procedural lapses and lack of evidence from the complainant.

4.Evidence:

The complainant submitted a proof affidavit along with seven documents. The documents in the complaint are marked as Exhibits A1 to A7. The complainant was examined as PW1.

• Exhibit A1: True copy of Certificate registration no KL-27-3686.
• Exhibit A2: True copy of Certificate of insurance with policy number 1002043119P112452447.
• Exhibit A3: True copy of the bill issued by Kripa crane service dated 26.05.2020
• Exhibit A4: True copy of the Insurance Re-Estimate issued to the 2nd opposite party
• Exhibit A5: True copy of general diary extract dated 01.06.2020 of Maradu Police Station
• Exhibit A6: True copy of the motor claim form submitted before the 2nd opposite party complainant
• Exhibit A7: True copy of the letter dated 23.12.2020 issued by the 2nd opposite party rejecting the claim of the complainant.

The opposite parties submitted a proof affidavit along with 13 documents. The documents in the opposite parties are marked as Exhibits B1 to B13.

• Exhibit B1: Copy of the letter sent by the complainant dated 19/9/2020.
• Exhibit B2: Copy of the claim intimation letter dated 4/6/2020.
• Exhibit B3: Copy of the statement given by driver Renjith dated 3/9/2020.
• Exhibit B4: Copy of the letter dated 10/9/2020 sent by the OP to the complainant.
• Exhibit B5: Copy of the letter dated 23/12/2020 sent by the OP to the complainant.
• Exhibit B6: True copy of the repair estimate dated 1/6/2020 by M/s Patel Cars (Pvt. Ltd.), Maradu.
• Exhibit B7: True copy of the email letter dated 2/10/2020 sent by the Investigators (M/s Faith Investigations) to OP.
• Exhibit B8: True copy of the Gate Entry Register for the complainant’s apartments.
• Exhibit B9: True copy of the email letter sent by OP to the complainant dated 19/10/2020.
• Exhibit B10: True copy of the survey report dated 26/8/2020.
• Exhibit B11: True copy of the Consent Letter signed by the complainant dated 26/8/2020 in stamp paper for having agreed to a settlement under the Salvage Loss as per the Full and Final Assessment by the surveyor for the own damages sustained to the insured vehicle due to the accident.
• Exhibit B12: Copy of the report submitted by the investigator.
• Exhibit B13: Copy of the terms and conditions of the policy.

The complainant filed this complaint against United India Insurance Company Limited. His Honda Civic, insured under a comprehensive policy, met with an accident. Despite submitting the claim, the insurance company rejected it on technical grounds, citing inconsistencies and delay. He sought Rs. 6,26,889 with interest and Rs. 3,00,000 for litigation costs and mental agony, alleging unfair trade practices and deficiency in service.

5.Argument Note by Sri. Jolly John, Learned Counsel for the Complainant:

                        The complainant is a businessman residing in Ernakulam. The opposite parties are a public sector General Insurance Company licensed by IRDAI and one of its branch offices in Ernakulam district. The complainant's car, bearing number KL-27-3686, was covered under the comprehensive vehicle insurance policy of the opposite parties and met with an accident around the Vytilla flyover in May 2020. After submitting his claim through the authorized service centre, the complainant's claim was rejected by the opposite parties on mere technical grounds. This has resulted in significant inconvenience and financial burden on the complainant and his family, especially during the pandemic period.

The primary issue to be considered is whether an insurance claim can be repudiated merely on technical grounds. The complainant argues that the insurance claim cannot be rejected on such grounds. The opposite parties allege that the claim was not submitted based on consistent facts and details, as purportedly found in the investigation report. However, mere variation in the narrated facts is not a ground for rejection of the claim. The complainant asserts that the car accident occurred near Vytilla flyover when the car, driven by the complainant's driver, collided with the median. The terms "post" and "median" were used interchangeably in the statements given to the police and the opposite parties. Such minor variations should not invalidate the otherwise genuine insurance claim, especially since the complainant did not have first-hand information about the accident.

The opposite parties also alleged that the fact that the accident occurred near Vytilla while the vehicle was being driven from Alappuzha to Ernakulam was false. They relied on the entry and exit register of the cars at the complainant's residence and records at the Aroor Toll Plaza. However, the complainant contends that there are multiple routes available, and the reliance on the Aroor Toll Plaza route is baseless and prejudiced. The entry-exit register was not properly maintained during the pandemic due to a shortage of staff and safety reasons, and only vehicles outside of the residents were recorded. Minor factual details like these are irrelevant for processing a comprehensive insurance claim and repudiating the claim on such grounds is arbitrary.

The opposite parties also pointed out a variation in who called the service centre first, which the complainant argues is another unfair and unreasonable ground for claim repudiation. Furthermore, the opposite parties cited a delay of 9 days in intimation as a reason for rejecting the claim. However, in the case of Jaina Construction Company vs. The Oriental Insurance Company Ltd. and Anr., the Honourable Supreme Court ruled that a claim cannot be repudiated merely on the ground of delay in informing the insurance company. Similarly, in Ashok Kumar vs. New India Assurance Co Ltd., the Honourable Supreme affirmed that mere delay in informing the insurance company about the occurrence of theft cannot be a ground to deny the claim of the insured. The Insurance Regulatory Authority also advises that insurers' decisions to reject claims should be based on sound logic and valid grounds, and delays should not lead to repudiation unless the delay would have resulted in claim rejection even if reported in time.

The complainant also references The Honourable Supreme Court ruling in Gurmel Singh vs. Branch Manager, National Insurance Co. Ltd., where it was stated that insurance companies should not repudiate claims on flimsy or technical grounds and should avoid excessive technicalities in settling claims. In the present case, the opposite parties repudiated the claim on trivial grounds, such as "where the car got hit, through which route the car had travelled, and who called the service center first," which is highly unreasonable and amounts to unfair trade practices, especially when the complainant had a comprehensive insurance package.

All documents required for the insurance claim were submitted to the opposite parties, and the surveyor assessed the net loss at Rs. 2,47,000/- on a salvage loss basis, which the complainant accepted. However, the opposite parties breached their promise of approving the claim based on salvage loss by stating unreasonable grounds.

Since the complainant's policy is a premium and comprehensive package, the opposite parties are obligated to approve the claim for accidents that occurred through external means, irrespective of the minor factual issues cited by the opposite parties. The arbitrary and unreasonable actions of the opposite parties constitute unfair trade practices and deficiency in service, causing unlawful financial gain at the expense of the complainant.

The complainant seeks either the payment of Rs. 2,47,000/- on a salvage loss basis or Rs. 6,26,889/- (the estimated repair cost) with 18% interest. Due to the failure of the opposite parties to approve the claim, the complainant suffered significant monetary loss and inconvenience, as the accident occurred during the COVID-19 pandemic, leaving the complainant and his family without their primary mode of transport. Consequently, the complainant had to incur additional expenses for arranging alternate transportation. The complainant requests the Commission to address these unfair practices and approve the insurance claim along with appropriate compensation for the losses and hardships endured.

6.Summary of Argument Notes Filed by Sri. Dr. P.V. Sasikumar, Counsel for the Opposite Parties

The complainant's car, bearing registration number KL-27-3686, insured with the opposite party (OP2) under a Private Car Package Policy, reportedly hit a roadside divider near Vytilla flyover on 25/5/2020, sustaining heavy damages. The accident was intimated to OP2 on 4/6/2020, nine days after the occurrence. Upon receiving the intimation, OP2 appointed a competent surveyor who inspected the vehicle on 5/6/2020 at M/s Patel Cars Pvt. Ltd., Maradu, Cochin. The surveyor assessed the net loss on a salvage loss basis as Rs. 2,47,000/-, against an estimate of Rs. 5,64,334.84/- submitted by the workshop.

Due to inconsistencies in the documents submitted by the complainant and the delay in reporting the accident, OP2 assigned a panel investigator to investigate. The investigator reported inconsistencies about the cause of the accident and non-cooperation from both the owner and the driver during the investigation. Despite the accident allegedly occurring on 25/5/2020 at 3:30 PM, there were no damages observed on the road divider, no toll receipts produced to confirm travel, and no movements recorded in the entry/exit register of the complainant's apartment building. These factors prevented confirmation of the accident's date and location. Consequently, OP2 requested detailed clarifications from the complainant, but the responses were unsatisfactory. Given the policy condition violation of reporting the accident only after nine days, preventing a spot survey, OP2 repudiated the claim. This led the complainant to file a complaint before the Commission, seeking Rs. 6,26,889/- with 18% interest and Rs. 3 lakhs for litigation costs and mental agony.

The main issues to be addressed are whether the repudiation by OPs of the complainant's claim is justified, whether the amount claimed by the complainant is sustainable, and whether there was any intentional delay or deficiency in service from OPs.

The complainant stated the accident occurred on 25/5/2020 near the Vytilla flyover, but only reported the incident to OP2 on 4/6/2020, nine days later. The policy stipulates that any loss or damage must be reported immediately to arrange a spot survey. Reporting the accident nine days later violated this condition. Additionally, the complainant reported the accident to the Maradu Police Station on 1/6/2020, six days after the incident, contradicting the driver's statement that it was reported the next day.

Inconsistent descriptions of the accident were given: the complainant stated in various documents that the car hit a road divider, a post, and a concrete wall. These variations raise doubts about the incident's details. The complainant also gave conflicting accounts about who contacted the service center and who was present in the car.

The complainant failed to provide essential material facts and did not allow a spot survey, hindering the collection of accurate information. Despite these issues, OP2 arranged for a surveyor to assess the damages. The surveyor assessed a net loss of Rs. 2,47,000/- on a salvage loss basis, and the complainant consented to this amount. However, the claim was repudiated due to the aforementioned reasons.

The complainant did not produce the original repair estimate from M/s Patel Cars Pvt. Ltd. and instead submitted a re-estimate of Rs. 6,26,889/-. The complaint seeks this amount despite the car's IDV being Rs. 3,65,000/- and the agreed assessment being Rs. 2,47,000/-. This indicates the complainant's intention to extract more money than entitled under the policy.

There was no intentional delay or deficiency in service from OPs. The complaint was reported late, preventing a spot survey, and the investigator's findings confirmed inconsistencies in the claim. The rejection letter was sent on 23/12/2020 after detailed discussions. The pandemic's timeline in Kerala also extended until December 2020, adding context to the delay.

In conclusion, the allegations made by the complainant are unfounded. OP2 was justified in rejecting the claim due to policy condition violations, inconsistent statements, non-cooperation, and lack of evidence. The complaint appears to be an attempt to gain undue advantages. It is requested that the Commission dismiss the complaint and grant relief to OPs, including costs.

7.Points for Consideration:

The main points to be analyzed in this case are as follows:

i) Whether the complaint is maintainable or not? ii) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant? iii) If so, whether the complainant is entitled to get any relief from the side of the opposite party? iv) Costs of the proceedings if any?

8. The issues mentioned above are considered together and are answered as follows:

A. Maintainability of the Complaint:

                                           In the present case in hand, as per Section 2(7) of the Consumer Protection Act, 2019, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment. True copy of Certificate of insurance with policy by the opposite parties (Exhibit A-2). Hence, the complainant is a consumer as defined under the Consumer Protection Act, 2019.

B. Deficiency in Service and Unfair Trade Practice:

The primary issue revolves around whether the opposite parties' actions constitute a deficiency in service or unfair trade practice. The complainant's car, insured under a comprehensive policy, met with an accident on 25/5/2020. The claim was submitted on 04.06.2020. The opposite parties rejected the claim based on inconsistencies in the complainant's statements and a delay in reporting the incident.

The Honourable Supreme Court in Jaina Construction Company vs. The Oriental Insurance Company Ltd. and Anr. held that a claim cannot be repudiated merely on the ground of delay in informing the insurance company. The mere delay in informing the insurance company about the occurrence of theft cannot be a ground to deny the claim of the insured. The Insurance Regulatory Authority also advises that insurers' decisions to reject claims should be based on sound logic and valid grounds, and delays should not lead to repudiation unless the delay would have resulted in claim rejection even if reported in time.

In the case of Gurmel Singh vs. Branch Manager, National Insurance Co. Ltd., the Honourable Supreme Court stated that insurance companies should not repudiate claims on flimsy or technical grounds and should avoid excessive technicalities in settling claims. In the present case, the opposite parties repudiated the claim on trivial grounds, such as "where the car got hit, through which route the car had travelled, and who called the service center first," which is highly unreasonable and amounts to unfair trade practices, especially when the complainant had a comprehensive insurance package.

C. Liability of the Opposite Parties:

 The complainant submitted all necessary documents for the insurance claim, and the surveyor assessed the net loss at Rs. 2,47,000/- on a salvage loss basis, which the complainant accepted. However, the opposite parties breached their promise of approving the claim based on salvage loss by stating unreasonable grounds.

                              Since the complainant's policy is a premium and comprehensive package, the opposite parties are obligated to approve the claim for accidents that occurred through external means, irrespective of the minor factual issues cited by the opposite parties. The arbitrary and unreasonable actions of the opposite parties constitute unfair trade practices and deficiency in service, causing unlawful financial gain at the expense of the complainant.

                           We have meticulously considered the detailed submissions of both parties, as well as thoroughly reviewed the entire record of evidence, including the argument notes.

                      It is disheartening to see a comprehensive insurance policy, meant to provide security and support in times of need, being undermined by excessive technicalities. The complainant's frustration and financial burden due to the insurance company's actions are evident. The commission recognizes the emotional and financial strain caused by the delay and the ultimate rejection of the claim.

Insurance is a service intended to offer peace of mind and protection. However, in this case, the opposite parties failed to uphold these principles, resulting in unfair trade practices and a deficiency in service. The commission, therefore, feels compelled to address this injustice and provide the complainant with the relief he rightfully deserves.

                       We determine that issue numbers (I) to (IV) are resolved in the complainant favour due to the significant service deficiency and the unfair trade practices on the part of the opposite parties. Consequently, the complainant has endured considerable inconvenience, mental distress, hardships, and financial losses as a result of the negligence of the opposite parties.

                 In view of the above facts and circumstances of the case, we are of the opinion that the opposite parties are liable to compensate the complainant.

Hence, the prayer is partly allowed as follows:

1. The opposite parties shall pay Rs. 6,26,889/- (Rupees Six Lakhs Twenty-Six Thousand Eight Hundred Eighty-Nine Only) to the complainant as a claim amount as per the insurance policy evidenced by Exhibit A4.
2. The opposite parties shall pay ₹40,000 (Rupees Forty Thousand Only) as compensation for monetary loss, mental agony, and hardship suffered by the complainant. This amount is awarded for the deficiency in service and unfair trade practices, as well as for the mental agony and physical hardships endured by the complainant. 
3. The opposite parties shall also pay the complainant ₹15,000 (Rupees Fifteen Thousand Only) towards the cost of the proceedings.

The opposite parties are jointly and severally liable for the fulfilment of the above orders, which must be executed within 45 days from the date of receiving this order. Failure to comply with the payment orders under points I and II will result in interest at the rate of 9% per annum from the date of filing the complaint (10.03.2021) until the date of full payment realization."

Pronounced in the open Commission on this the 31^st day of July, 2024

Sd/-

                                                                             D.B.Binu, President                                                                                              Sd/-

V. Ramachandran, Member

Sd/-

 Sreevidhia.T.N, Member                                                                 

Forwarded/By Order

  Assistant Registrar  

 Appendix

Complainant’s Evidence

• Exhibit A1: True copy of Certificate registration no KL-27-3686.
• Exhibit A2: True copy of Certificate of insurance with policy number 1002043119P112452447.
• Exhibit A3: True copy of the bill issued by Kripa crane service dated 26.05.2020
• Exhibit A4: True copy of the Insurance Re-Estimate issued to the 2nd opposite party
• Exhibit A5: True copy of general diary extract dated 01.06.2020 of Maradu Police Station
• Exhibit A6: True copy of the motor claim form submitted before the 2nd opposite party complainant
• Exhibit A7: True copy of the letter dated 23.12.2020 issued by the 2nd opposite party rejecting the claim of the complainant.

Opposite party’s Exhibits

• Exhibit B1: Copy of the letter sent by the complainant dated 19/9/2020.
• Exhibit B2: Copy of the claim intimation letter dated 4/6/2020.
• Exhibit B3: Copy of the statement given by driver Renjith dated 3/9/2020.
• Exhibit B4: Copy of the letter dated 10/9/2020 sent by the OP to the complainant.
• Exhibit B5: Copy of the letter dated 23/12/2020 sent by the OP to the complainant.
• Exhibit B6: True copy of the repair estimate dated 1/6/2020 by M/s Patel Cars (Pvt. Ltd.), Maradu.
• Exhibit B7: True copy of the email letter dated 2/10/2020 sent by the Investigators (M/s Faith Investigations) to OP.
• Exhibit B8: True copy of the Gate Entry Register for the complainant’s apartments.
• Exhibit B9: True copy of the email letter sent by OP to the complainant dated 19/10/2020.
• Exhibit B10: True copy of the survey report dated 26/8/2020.
• Exhibit B11: True copy of the Consent Letter signed by the complainant dated 26/8/2020 in stamp paper for having agreed to a settlement under the Salvage Loss as per the Full and Final Assessment by the surveyor for the own damages sustained to the insured vehicle due to the accident.
• Exhibit B12: Copy of the report submitted by the investigator.
• Exhibit B13: Copy of the terms and conditions of the policy.

Despatch date:

By hand:     By post                                                  

kp/

CC No. 127/2021

Order Date: 31/07/2024