Page 45 - Insurance Times April 2019

LEGAL

Vehicle Insurance

Penalty on LIC for negligence day to Vadgaon Police Station in Yavatmal. The insurer was
also intimated and it appointed a surveyor. Three years
LIC has been found guilty of deficiency in service by keep-
ing the money of a consumer for five years without issu- later, the claim was repudiated on December 12,2011.
ing a policy. In this case, Madhav Hari vs LIC, a person sub- Meanwhile, the company's name had changed to Shreem
mitted a proposal to LIC under the Jeevan Aastha plan and Electric. So the complaint was filed before the Maharashtra
paid Rs. 1.75 lakh. But he did not get either the policy or State Commission by the company under its new name. The
refund for five years. He moved the district consumer fo- insurer contested the case on the ground that the insured
rum. It ordered LIC to refund the full amount along with a under the policy was Shreem Capacitors but the claimant
compensation of Rs. 4.25 lakh. Shreem Electric. The insurer also stated that the company
had not produced the documents required by the surveyor.
The Maharashtra State Consumer Commission upheld the
order. On appeal, the National Consumer Commission de- It alleged that a false and fabricated claim had been lodged,
and justified the repudiation.
leted the order on compensation. The consumer appealed
to the Supreme Court, arguing that the plan was equity- The State Commission observed that the policy was issued
linked and not mere insurance. So he lost the benefit of in the name of Shreem Capacitors, which was also the
escalation of investment value. claimant. Meanwhile, on February 26, 2010, the name of
the company was changed to Shreem Electric. So the Com-
LIC submitted that the plan which the consumer opted had
mission concluded that the company was entitled to file the
closed and he was given a choice to join another plan,
which he did not. So he did not deserve compensation. The complaint for claiming the amount under its new name
court agreed with the consumer and added Rs. 2 lakh more even though the policy stood in its former name.
to the previous compensation, observing that "mere inter- The Commission observed that even though initially the
est will not provide sufficient redress". Retaining the money company had not furnished adequate proof, it had later
with no effort to refund it for five years clearly established furnished all the documents as sought by the surveyor.
a deficiency in service, the judgment said. These had been verified and found to be in order and it
was only then that the surveyor had assessed the loss at
Name change can't lead to claim rejection Rs. 29.48 lakh. So the Commission concluded that it was

Shreem Capacitors was in the business of manufacturing unfair on the part of the insurer to recklessly make wild
capacitors and supplying these to various state electricity allegations that false and fabricated documents had been
boards, government undertakings, and railways. The com- furnished by the company.
pany obtained a 220 KVA sub-station from Maharashtra The Commission noted that even the company was a will-
State Electricity Transmission Company (MSETCL) to erect ing to accept the amount assessed by the surveyor. Accord-
its factory at Yavatmal. ingly by its order of January 4, 2019, delivered by D R
The property, including the transformer and other equip- Shirasao for the bench along with S K Kakade, the
ment and accessories which were kept in the open com- Maharashtra State Commission ordered United India to pay
pound, was insured with United India Insurer (insurer). A Rs. 29.48 lakh, along with 9 per cent interest computed c
fire occurred on the afternoon of December 8, 2008, in from the date of the claim. In addition, the insurance com-
which the transformer and other equipment worth Rs 52.74 pany was ordered to pay Rs. 1 lakh towards compensation
lakh were burnt. The incident was reported the following and Rs. 10,000 as litigation costs.

The Insurance Times, April 2019 45