Consumer court asks insurance company to pay compensation after it took no action on claim for several months
Eight years after a firm whose Mercedes-Benz E220 was damaged due to waterlogging in the infamous 26/7 deluge of 2005, a consumer court on Wednesday awarded compensation of Rs 8 lakh while observing that the insurance firm sat on their claim for several months, instead of either accepting or rejecting it.
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A Kalbadevi-based firm, Hilton Builders and Textiles Pvt Ltd, had bought an insurance policy for the years 1997-98 and renewed the policy annually. But during the July 26 deluge, the vehicle was severely damaged for which a total repair bill incurred was Rs 8,58,520. The company represented through their authorised signatory, Prakash Khulchiani, then filed a claim with the insurance provider.
However, six months after the claim was filed, the insurance company had not taken any action. Eventually, Auto Hangar, the garage with which the car was kept, began pressurising the car owners to take the car back. They issued an ultimatum stating that if the vehicle was not taken back by February 17, 2006, parking charges of Rs 300 per day would be levied. Subsequently, the car was taken back.
Even so, despite reminders, Oriental Insurance, the insurance firm, refused to cooperate. The insurance firm’s lawyers argued that their liability was only Rs 2,94,000 and denied all other liabilities. The insurance firm’s survey report had been ultimately finalised in February 2006. The South Mumbai Consumer Disputes Redressal Commission eventually concluded that the manner in which the insurance company fixed their liability was unilateral and ‘arbitrary’.
The court also observed that if the insurer within a stipulated timeframe does not explicitly renounce a claim, it is deemed accepted. The court awarded Rs 8 lakh to the firm, but rejected its claim for damages for mental agony and harassment. “The complainant has claimed Rs 2 lakh being the compensation towards the mental agony, harassment, hardship, etc. In this respect the complainant is a private firm and not an individual human being. Therefore, compensation for mental agony etc is not tenable.”u00a0
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