Order Name: Kuljit Kaur Vs. Cholamandlam Ms. General Insurance Co. Ltd
Case No.: R.P. No. 925/2019
The National Consumer Disputes Redressal Commission (NCDRC), led by AVM J. Rajendra, recently ruled that an insurance claim can be justified on a non-standard basis if both parties have breached their contractual obligations.
Brief Facts of the Case
The complainant’s husband had insured his vehicle through Cholamandlam Insurance, with financing from Indusind Bank. After her husband’s death, the loan was repaid, but transferring the insurance policy to the legal heirs was delayed due to the bank’s slow issuance of a No Objection Certificate (NOC). Although a court directed the bank to issue the NOC, the bank continued to delay and eventually issued an NOC with an incorrect date. Due to this delay, the policy couldn’t be transferred, and the complainant renewed it in her deceased husband’s name, following advice. When the vehicle was involved in an accident and declared a total loss, the insurer denied the claim, citing the failure to transfer the policy within the required time frame after the husband’s death. The complainant then filed a Consumer Complaint before the District Forum, which ruled in her favor and directed the insurer to pay Rs. 13,75,000 as compensation for the vehicle. Dissatisfied, the insurer appealed to the State Commission of Punjab, which modified the order and directed the insurer to pay 75% of the insured declared value, amounting to Rs. 10,31,250, on a non-standard basis, plus Rs. 25,000 for litigation costs. The complainant, unhappy with this modification, filed a revision petition before the National Commission.
Contentions of the Insurer
The insurer argued that the claim was rejected because no legal heir certificate was provided and the policy was not transferred to the complainant’s name. They contended that the complainant did not initiate the transfer process and disputed the validity of the incident claimed. The insurer requested the dismissal of the complaint along with costs.
Observations by the National Commission
The National Commission focused on whether the State Commission’s decision to pay 75% of the insured value on a non-standard basis was justified. The Commission noted that the insurance policy had been renewed after the complainant’s husband’s death and that the insurer was aware of this during the renewal process. Despite the complainant paying all dues, the lack of an NOC led to the policy being renewed in the deceased’s name. The Commission recognized that there were minor breaches of contractual obligations on both sides and affirmed that the State Commission’s decision to apply a non-standard basis was fair and lawful.
The Commission dismissed the revision petition without imposing any costs.
Takeaway
This judgment highlights that both parties must fulfill their contractual obligations. If both sides are at fault, the court may rule for a non-standard settlement, ensuring fair compensation while acknowledging the breaches.
