Case Study 18 - NCDRC absolves insurance Co

The National Consumer Commission has absolved the Oriental Insurance Company Ltd of charge of deficiency in service in a vehicle damage claim case, holding that it had issued the necessary form but that was not submitted by the policy-holder in time. The Commission said unless the claim form is deposited with the insurance company, it would be difficult for it to settle the claim of the policy-holder.
"Unless the exact amount of claim was known to them, which was possible only after the policy-holder had submitted the claim form, it could not be expected of the insurance company to undertake any consideration," the Commission, comprising President Justice Ashok Bhan and Member S K Naik, said.
The Commission passed the order on a petition filed by the insurance company challenging the Karnataka State Consumer Commission's order directing it to consider the vehicle claim of policy holder Pragathi Constructions.
The vehicle got damaged in an accident in 1996 which was repaired allegedly on the advice of the insurance company. When a claim was lodged in 1999 with the company, it was repudiated for want of the claim form.
The company informed the complainant in 1999 that its claim file stood closed as the form had not been submitted by the policy-holder in time following which it approached the District Forum which did not find any deficiency in service.
However, the State Commission had set aside the Forum's order on the ground that the company had not taken any step to consider the complainant's case for payment of compensation in respect of the damage suffered by the vehicle in the accident.
"The observations of the State Commission runs contrary to the factual position... while the company had issued the claim form, it erroneously holds that the company had not taken any steps to consider its case," the Commission said. "The State Commission erred in holding that the company had not passed any order since it had closed the claim file as the complainant had failed to submit the claim form with relevant documents. It was only after its repudiation that the complaint was filed," the NCDRC said.