District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Shri Amrinder Singh Sidhu (President) and Shri B.M. Sharma (Member), has held that mere suspicion regarding the cause of loss, without cogent evidence, cannot justify repudiation of a motor insurance claim, and found Shriram General Insurance Company Limited guilty of deficiency in service and unfair trade practice. The complaint was filed by Harminder Pal, the owner of a car insured with the opposite party for the period from 3 September 2020 to 2 September 2021 with an Insured Declared Value of ₹4,00,000.
On 15 December 2020 at about 4:30 a.m., the insured vehicle met with an accident while travelling from Nanauta to Chandigarh via Nakur Road. The car, driven by Ravinder Singh, lost control and struck a tree, causing severe damage. Since there was no third-party injury, no FIR was lodged. However, the accident was immediately reported to the insurer through its toll-free number, following which a claim was registered and a surveyor was appointed.
After the spot survey, the vehicle was taken to an authorised repairer, who prepared an estimate dated 19 December 2020 for ₹7,30,504.85. The complainant also submitted an affidavit regarding the accident and responded to the clarifications sought by the insurer. Despite this, the insurer repudiated the claim on 5 April 2021 on the ground that the “cause of loss and damages are not matching with the reply as well as photos.” Aggrieved by the repudiation, the complainant approached the Consumer Commission alleging deficiency in service and unfair trade practice.
In its written version, the insurance company admitted that the vehicle was insured during the relevant period and that the claim was lodged for the accident. However, it alleged that the driver was driving rashly, possibly under the influence of alcohol, and pointed out that no FIR or MLC had been submitted. It maintained that the claim was rightly repudiated due to a mismatch between the cause of loss and the damages reflected in the photographs, and stated that the surveyor had assessed the loss at ₹3,75,513.84.
The Commission observed that it was an admitted position that the accident occurred during the currency of the policy and that the claim had been repudiated on the ground that the cause of loss did not match the damages. It found no merit in the insurer’s defence regarding rash driving and the absence of an FIR. The Commission noted that the repudiation letter itself showed that the insurer was questioning the authenticity of the accident, which was unrelated to the allegation of rash driving.
The Commission also observed that although the insurer claimed to have repeatedly asked for documents such as the FIR, it failed to produce any documentary evidence in support of that assertion, except for a letter issued more than a month after the accident. Relying on the principle that the burden of proof lies on the party making the allegation, the Commission held that the insurer had failed to establish any discrepancy or lack of authenticity in the claim. It observed that “mere bald averments… sans any cogent documentary evidence… cannot be believed,” and concluded that the repudiation amounted to deficiency in service and unfair trade practice.
Accordingly, the Commission partly allowed the complaint and directed the insurer to pay ₹3,75,514, being the amount assessed by the surveyor, along with interest at 9% per annum from 5 April 2021 until realisation. It also directed the insurer to pay ₹20,000 towards compensation for harassment and litigation expenses.
Case Title: Harminder Pal v. Shriram General Insurance Company Limited
