Chandigarh District Commission Holds HDFC ERGO General Insurance Co Liable For Deficiency In Service, Orders To Disburse Insurance Amount, Pay Compensation

The District Consumer Disputes Redressal Commission-I, U.T. Chandigarh bench comprising Shri Pawanjit Singh (President), Mrs Surjeet Kaur (Member) and Shri Suresh Kumar Sardana (Member) held HDFC ERGO General Insurance Company liable for deficiency in service for wrongfully repudiating the claim made by the wife, as the nominee, of her deceased husband, who died in a road accident. The bench rejected the Insurance Company’s contention regarding the influence of alcohol on the husband during the accident while terming it ‘irrelevant’ to the factual scenario. Brief Facts: Late Shri Pramod Kumar (“Deceased”) obtained a Personal Accidental Death Policy from HDFC ERGO General Insurance Company (“Insurance Company”). After some time, he was knocked down on a motorcycle while sitting at the back, resulting in an 8-day hospitalization and his subsequent death. Miss Rubi Rani (“Complainant”), the deceased’s widow and nominee filed a claim with the Insurance Company. She provided all necessary documents including an FIR regarding the accident. However, the Insurance Company repudiated the claim on the basis that her deceased husband was found to be under the influence of alcohol at the time of the accident. Feeling aggrieved, the Complainant, along with her minor children, filed a consumer complaint in the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”). She contended that there was no substantial evidence to prove that her deceased husband had consumed alcohol at the time of the accident. The Insurance Company based its contentions on the medical record of the deceased husband, claiming that immediately after the accident, the patient smelled of alcohol. It further raised preliminary objections of maintainability, concealment of facts and jurisdiction. Observations by the Commission: The District Commission noted that the accident in question occurred not due to any negligence or alcohol consumption by the deceased husband but due to the rash and negligent driving of an unknown vehicle that had fled the scene after the accident. Further, the Insurance Company didn’t present any evidence to prove the alleged alcohol consumption. The District Commission observed that the insurance policy excluded coverage of an insured person who sustained injuries or sickness while under the influence of alcohol or drugs. The District Commission held that the accident had no connection to the deceased, even if he had consumed alcohol at the time. The exclusion clause was, therefore, not applicable to the circumstances of this accident. Consequently, the District Commission concluded that the Insurance Company’s refusal to honour the Complainants' claim, based on alleged alcohol consumption, was unjust and constituted a deficiency in service. It ordered the Insurance Company to pay the complainants the insurance coverage amount of ₹27,75,000, along with interest at a rate of 9% per annum from the date of the initial claim’s repudiation. Additionally, the District Commission awarded ₹30,000 as compensation for the mental agony and harassment suffered by the complainants and ₹10,000 as the costs of litigation. The District Commission clarified that out of the compensation, ₹5,00,000 each should be paid to the three minor children, and the remaining amount should be paid to the Complainant widow. Case Title: Rubi Rani and others and HDFC ERGO General Insurance Company Ltd and Anr. Case No.: CC/200/2021 Advocate for the Complainant: Nitin Gupta Advocate for the Respondent: Nitesh Singhi Click Here To Read/Download The Order

Chandigarh District Commission Holds HDFC ERGO General Insurance Co Liable For Deficiency In Service, Orders To Disburse Insurance Amount, Pay Compensation

Smita Singh

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