Delay in settling insurance claims 'deficiency in service'

By Our Legal Correspondent

NEW DELHI, JAN. 4. The National Consumer Disputes Redressal Commission has upheld the findings of a consumer court that a delay in settling claims by insurance companies will come within the ambit of Consumer Protection (CP) Act. The Commission also upheld that by not paying the amount due to the complainant, the insurance company had committed `deficiency in service'.

This finding comes close on the heels of a recent Supreme Court ruling, bringing the services of the offices of the Regional Provident Fund Commissioners within the purview of the CP Act.

According to the facts of the case, a transport company in Maharashtra had insured its vehicle with an insurance company and the vehicle met with an accident. When the complainant made a claim for Rs. 82,020, for repairs, it was rejected on the ground that at the relevant period, the vehicle had been given on hire, which was a breach of the terms of the contract.

The Consumer Disputes Redressal Forum, Amravati held that the complainant had not committed any breach nor had there been any negligence on the part of the driver of the complainant. The complainant was entitled to get compensation on account of the damages caused to the vehicle. The forum directed the settlement of the claims with 18 per cent interest till the amount was paid.

On appeal by the insurance company, the Maharashtra State Consumer Disputes Redressal Commission held that the `deficiency in service' of the company was proved and the order of the Forum needed no interference. Against this, the company moved the National Commission through a revision petition.

The counsel for the complainant, Mr. S.K. Sharma, argued that a re-appreciation of facts and findings of the lower courts could not be raised in a revision petition, which should only confine to the question of law.

The National Commission headed by its President, Mr. Justice Suhas C. Sen, Mr. S.P. Bagla and Mr. Justice C.L. Chaudhry, members, agreed with Mr. Sharma and held that it was basically a decision on facts, as the District Forum had already examined the evidence. The State Commission had not disagreed with the conclusions of the Forum.

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Section  : National
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