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Supreme Court upholds insurance consumer's claim

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March 19, 2020, 3:25 p.m.

 SUPREME COURT , in Civil Appeal No 1867  of 2020, Prabha Tyagi  versus National Insurance Co allowed the appeal of insurance consumer.  On 12 June 2005, the spouse of the appellant obtained an insurance cover for a motor vehicle, which he owned, which was valid up to 11 June 2006.     The   limits   of   liability   which   were   specified   in   the   policy   were   Death of or bodily injury. Such   amount   as   is   necessary   to   meet   there   requirements   of the   Motor   Vehicle   Act,   1988.    damage   to   third   party   property   is   Rs   7.5   lakhs   P.A. Cover Owner-Driver is Rs. 2.0 lakhs.  The   spouse   of   the   appellant   met   with   an   accident   on   15   July   2005 and died as a consequence of the accident.   Since   the   insurance   claim   was   not   entertained   by   the   respondent,   the appellant filed a consumer dispute before  the District Consumer Disputes Redressal   Forum,   Haridwar. The   District   Forum   allowed   the   complaint   by   an   order   dated   20 September   2010   and   directed   the   respondent   to   pay   an   amount   of   Rs 1,00,000   towards   the   personal   accident   cover   and   Rs   1,47,050   towards the cover in respect of the vehicle.  The  appellant  addressed   a   query  under   the  Right   to   Information  Act 2005      In   response   to   the   query,   the   respondent   informed   the appellant on 2 November 2010 that a compulsory personal accident cover would be in the value of Rs 2,00,000, if premium had been charged.  The   appellant   filed   another   complaint   before   the   District   Forum claiming   the   additional   amount   of   Rs   1,00,000   apart   from   other   claims. The District Forum, by its order dated 8 July 2013, held that the appellant shall   be   entitled   to   an   additional   amount   of   Rs   1,00,000   towards   the personal accident cover, in addition to an amount of Rs 1,17,000 towards the estimated salvage value, as assessed by the surveyor and Rs 83,000
towards   interest   and   compensation.    A  total   amount   of   Rs   3,00,000   was awarded.    Aggrieved   by   the   order   of   the   District   Forum,   the   respondent preferred   an   appeal   before   the   State   Consumer   Disputes   Redressal Commission    The State Commission reversed  the judgment of the District Forum on the ground that the second complaint was not maintainable . The   appellant   preferred   a   revision. before the National Commission (NCDRC).    The NCDRC, by its order dated 18 September 2018, dismissed the appeal. 
Hon’ble Supreme Court has observed that the insurance company  in   its   written   statement   before   the   District   forum,   expressly represented   that   the   personal   accident   cover   was   in   the   amount   of   Rs 1,00,000.  This was admittedly incorrect.  The personal accident cover was in  the  amount  of  Rs   2,00,000.     In   awarding   the   claim   to   the   extent  of  Rs. 1,00,000   for   personal   accident   cover,   the   District   Forum   would   have proceeded   on   the   basis   of   a   solemn   statement   which   was   made   by   the insurer on affidavit.   It is now not in dispute that the statement which was made   before   the   District   Forum   was   incorrect.     The   insurance   policy,   a copy   of   which   has   been   placed   on   record,   clearly   indicates   that   the personal accident cover was in the amount of Rs 2,00,000 in respect of the owner-driver.     The apex court is   of   the   view   that   the   commissions adopted an unduly technical view of the matter by holding the complaint to be barred by Order II Rule 2 CPC. One course of action which was open to the appellant was to apply before the District Forum for recall of the earlier order   and   for   reconsideration   of   the   entire   claim   afresh.     The   Consumer Protection  Act   1986   is   a   social   welfare   legislation.     Hence,   we   are   of   the view   that   injustice   was   correctly   rectified   by   the   District   Forum   in   the second round.  This is particularly in view of the fact that it was an error on the part of the insurer which led to the award of a lesser amount in the first round.     We   are,   however,   of   the   view   that   there   is   no   justification   for   the award  of any claim in  excess  of Rs  1,00,000  which  is  the  balance  due  in respect of the personal accident cover.  
Supreme Court  accordingly allowed the appeal and direct that the appellant shall be paid an additional sum of Rs 1,00,000 over and above what has been paid
by the respondent, together with interest at the rate of 9% per annum with effect   from   the   date   of   the   filing   of   the   first   claim,   namely,   25   February 2010.   The appellant shall be paid costs which are quantified at Rs 25,000.