Page 52 - The Insurance Times September 2024

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NCDRC Holds United Insurance Liable For not be the cause of the damage. The insurer claimed there
was no deficiency in their service and that the claim denial
Deficiency in Service Due To Wrongful was correct.
Repudiation Of Insurance Claim The National Commission observed that the surveyor disre-
The National Consumer Disputes Redressal Commission, garded the complainant company's evidence regarding the
presided by Dr. Sadhna Shanker in an appeal filed by damage to the goods. Although it was clear that the cold
Ramdev Masala held United India Insurance liable for defi- storage building was extensively damaged by lightning and
ciency in service due to wrongful repudiation of the insur- there was also rain, the surveyor's rejection of this evidence
ance claim. and his finding that the damage was due to morning rain
The complainant company, Ramdev Masala had an insur- rather than lightning lacked solid evidence. As a result, the
ance policy for Rs. 20,00,000 from United Insurance/ Insurer National Commission overruled the State Commission's or-
through a bank. During the policy period, the stock suffered der and allowed the appeal. The Commission directed the
heavy damage due to atmospheric lightning and flooding. insurer was directed to pay Rs. 17,57,930 with interest at
The complainant informed the insurer, initially attributing 9% per annum.
the damage to a flood but later learnt from the cold stor-
age owner that atmospheric lightning was the cause The Supreme Court Eases Pollution Certifi-
insurer repudiated the claim, stating that the policy did not cate Mandate for Vehicle Insurance Re-
cover flood damage. At the complainant's request, the in- newal
surer appointed a surveyor who assessed the loss at Rs.
17,57,930 but doubted the lightning damage claim. Ag- In a significant move, the Supreme Court has revised its own
grieved by this, the complainant filed a complaint before directive from 2017 that mandated a valid Pollution Under
the State Commission of Gujrat, which dismissed the com- Control (PUC) certificate for the renewal of third-party ve-
plaint. Consequently, the complainant appealed before the hicle insurance policies. This change comes after the Gen-
National Commission. eral Insurance Council (GIC) highlighted several issues re-
sulting from the 2017 order.
The insurer argued that, according to exclusion clause h(ii)
of the policy, losses caused by atmospheric disturbances like In 2017, the Supreme Court had enforced a regulation based
storms, floods, and inundations are not covered. Therefore, on recommendations from the Environment Pollution (Pre-
the complainant's damage was excluded from coverage. It vention and Control) Authority. The directive was aimed at
was further contended that there was no proof of atmo- reducing pollution levels, particularly in Delhi, by ensuring
spheric lightning causing the damage and that the com- that vehicles without a valid PUC certificate could not be
plainant had admitted in correspondence that the loss was insured.
due to flooding. It was also argued that the surveyor's re- The GIC, represented by Solicitor General Tushar Mehta,
port could not be relied upon, as the surveyor had admit- presented multiple concerns regarding the implementation
ted that the policy covered flood risks. Additionally, since of this directive. One major issue was that around 55 per-
the flooding occurred before the reported lightning, it could cent of vehicles in India are uninsured, primarily because

The Insurance Times September 2024 47