It’s not Fair to Create Pseudo Conditions Which Are Not Clearly Laid Down in the Policy: NCDRC

The National Consumer Disputes Redressal Commission at New Delhi heard an appeal in a case of Oriental Insurance Company. The issue stems from an insurance policy taken against a car in 2010.


The complainant, Pankaj Sood, was the owner of a Toyota Corolla, against which he had taken insurance from the petitioner for the period from 2010-2011. The complainant owns a travel business, and the car was a part of it. It was attached to a hotel, thus providing taxi service to customers as and when needed. A driver was also kept for the same. 

In May 2010, the car was called to the hotel by a customer, Kamlesh. They went to Nagpur for some work. From there, Kamlesh sent the driver to Mumbai by flight to collect some important drafts. However, no one came to deliver the said draft. The driver thus called Kamlesh but his phone was switched off. He then called the complainant and narrated the entire incident.

The complainant then went to the police to lodge an FIR for the car being stolen, but was informed that since the car was stolen/taken away at Nagpur, the FIR should be filed there. Thus, the FIR was lodged in Nagpur. An intimation was also given to the Insurer and the claim form along with relevant documents were presented. The Insurance company repudiated the claim on grounds of delayed intimation and violation of terms of the Insurance Policy stating negligence of the driver. 

A complaint was thus filed in the District Forum praying for Rs. 7,07,000 along with 18% interest; compensation amount Rs. 1,00,000 along with any other reliefs deemed fit by the court. The Insurance company resisted the complaint by stating that the complainant did not fall under the category of Consumer and also that the district forum did not have the jurisdiction. It also stated that the terms of the policy were violated. The intimation was also stated to be given late.

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The district forum opined that delay in intimation cannot be a ground for repudiation of claim. It observed that the offender ran away with the vehicle fraudulently which amounted to theft, duly covered under the Policy. Thus, the insurance company had committed deficiency in service by not settling the claim and ordered to pay the complainant the claim amount along with compensation and litigation fees. 

Aggrieved by this, an appeal was filed in the State Commission by Oriental Insurance; but was dismissed as the State forum agreed with the district forum.

Proceedings & Decision:

Hon’ble Presiding Member C. Vishwanath reviewed the facts, contentions and decisions of the lower forums. It was observed that the Petitioner filed this petition on two grounds:

(i) violation of terms and condition of Policy and

(ii) delayed intimation regarding the incident.

It was observed that the Petitioner failed to satisfy the Commission as to which clause, term or condition of Policy was violated by the Respondent. Insurance is a contract and nothing shall be presumed which is written down in the contract i.e., Policy. It is not just and fair to create pseudo conditions which are not clearly laid down in the Policy by the Insurance Company. Further, the NCDRC also found that there was no delay as alleged by the Petitioner. 

The Commission found no reason to interfere with the decision of the forums below and thus dismissed the petition.

Case Details- REVISION PETITION NO. 67 OF 2020

Story by Sai Kulkarni – Intern

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