A district consumer commission has directed an insurance firm to pay claim for a vehicle that was stolen, used for drug trafficking, later found by police and returned to the owner with it continuing to be lying in his garage. The commission directed the insured declared value (IDV) of Rs 7 lakh be given with 12 per cent interest despite the vehicle not having any more cover at the time of the order.
The commission reasoned that the vehicle could not be sold or transferred because a court had directed against it and could not be used because there was no insurance cover as its colour was changed from the one in the registration certificate. Without an insurance cover, the car continued to lay in the garage unused.
Insurance firm's rejection of the claim
The insurance firm had rejected the claim stating there was no insurance cover. Calling the repudiation "imaginary and illegal", the commission said that there was deficiency in service and unfair trade practice by the insurance firm. The commission further gave Rs 1.30 lakh towards mental agony and litigation cost suffered by the complainant. The order dated August 25, was passed by Ravindra P Nagre, president and S V Kalal, member The District Consumer Disputes Redressal Commission, Mumbai Additional Suburban. It was passed on a complaint by Thane resident Navin Kankre against Powai based Royal Sundaram General Insurance Company Limited.
Kankre had purchased a Mahindra Scorpio in December 2014 for Rs 14.41 lakh. He took an insurance cover from Royal under 'Private Car Package Policy'. The insurance cover was from March 13, 2018 to March 12, 2019. The vehicle was stolen on March 17, 2018 from Dindoshi. Kankre immediately filed a consumer complaint with the police and informed the insurance firm about the theft on March 24, 2018 and submitted all documents to the insurance firm. The insurance firm informed Kankre in December 13, 2018 that the claim was rejected for the reason that "on the date of loss there was no valid insurance cover to the said vehicle".
Consumer complaint and legal proceedings
After contacting the insurance firm and sending legal notice when there was no response, Kankre approached the consumer commission. An ex-parte order was passed after the firm did not reply to the notice of the commission. As the case was pending, the complainant was informed that his vehicle was found in Rajasthan in December 2019 and returned to him. His vehicle was used for drug trafficking and its colour was changed from black to white. When the car was returned, being evidence in the drug trafficking case, the conditions imposed as per the order made it impossible for the Complainant to use the said vehicle or enjoy any kind of benefit.
The conditions clearly mentioned "that the complainant shall not change, sell, transfer etc, the condition of the said vehicle till the disposal of the case." The commission said that the vehicle was parked in the garage but could not be used for these conditions.
Rejecting the contention of the insurance firm, the commission stated that there was deficiency in service and unfair trade practice on its part. It then directed the insurance firm to pay the compensation with interest from the date of rejection of the claim to the date of giving the money with the order to be complied in 60 day from the date of the order.
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