Pranav B Prem

The Uttarakhand State Consumer Disputes Redressal Commission, Dehradun, comprising President Ms. Kumkum Rani and Member Mr. C.M. Singh, has held IFFCO Tokio General Insurance Co. Ltd. liable for wrongfully repudiating a claim on the ground that the cause of death—rabies—was not covered under the insurance policy. The Commission allowed the appeal filed by the complainant, set aside the district commission’s order, and directed the insurer to pay the insured sum along with compensation.

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The case was filed by Smt. Meera Srivastava, wife of the deceased insured Shailesh Kumar Srivastava. Her husband had taken a loan of ₹2 lakhs from Almora Urban Co-operative Bank, which had a tie-up with IFFCO Tokio for issuance of an insurance policy. Pursuant to the bank’s requirement, the husband deposited the premium and a cover note bearing Policy No. 51158578 was issued on 15.07.2010, valid till 14.07.2011. The complainant was named as the nominee in the policy.

It was agreed at the time of the loan disbursal that in the event of the borrower's death during the term, the insurance company would repay the loan amount to the bank. Unfortunately, the complainant’s husband passed away on 15.06.2011, within the policy period. After informing both the insurer and the bank, the complainant requested them to settle the loan amount. However, instead of settling the claim, the insurance company repudiated it through a letter dated 04.01.2012, citing that the death was not due to an accident but due to rabies, which according to them was not covered under the policy.

Left with no option, the complainant paid the balance loan amount herself and then filed a complaint before the District Consumer Commission, Nainital, which was dismissed on 14.11.2014. Aggrieved, she filed an appeal before the State Commission.

In its defence, IFFCO Tokio argued that the policy was an “Individual Personal Accident Policy” that covered only accidental injuries caused by external, violent, and visible means. It was contended that the complainant had not disclosed details of the accident, cause of death, or treatment in the claim form, and that rabies is an infection—not a result of an accident—therefore, the claim was rightly repudiated. The bank also aligned with the insurer’s argument, asserting that death from infection did not fall under the policy’s coverage and that they had been unnecessarily made a party to the proceedings.

The State Commission, however, after a detailed examination of the policy terms, cover note, claim form, and repudiation letter, found that the insurer had not justified under which specific clause of the policy death due to rabies was excluded. The Commission scrutinized the definition of “Injury” under the policy, which refers to “accidental bodily injury solely and directly caused by external, violent and visible cause.” It was observed that the definition did not explicitly exclude death caused by rabies, nor was there any such exclusion under the “General Exclusions” clause.

The Commission noted that rabies is often transmitted through external violent means such as an animal bite, and the policy did not carve out an exception for such instances. Further, it found that the repudiation letter was vague and did not clarify the precise policy clause that justified denial of the claim. The Commission held that this amounted to deficiency in service on the part of the insurance company.

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The State Commission allowed the appeal, set aside the order of the District Commission, and directed IFFCO Tokio General Insurance Co. Ltd. to pay ₹2 lakhs as the insured amount to the complainant. Additionally, it awarded ₹45,000 as compensation for mental agony, physical and financial loss, and ₹5,000 towards litigation costs. The amounts are to be paid within one month from the date of the order, failing which the complainant shall be entitled to simple interest at 7% per annum until actual payment.

Appearance

For the Appellant: Sh. Deepak Ahluwalia, Advocate

For the Respondents:  Sh. Suresh Gautam, Sh. Vaibhav Jain Advocates

Cause Title: Meera Srivastava V. Branch Manager, IFFCO Tokio General Insurance

Case No: SC/5/A/15/21

Coram: Ms. Kumkum Rani [President], Mr. C.M. Singh [Member]

[Read/Download order]