State Consumer Commission Holds Insurer Liable Despite Discrepancy in Accident Dates

RAIPUR, CHHATTISGARH - The Chhattisgarh State Consumer Disputes Redressal Commission, in a significant ruling, has held an insurance company liable for settling a motor vehicle claim, even when the owner reported two different dates for the accident. The Commission, comprising Justice Gautam Chourdiya (President) and Member Pramod Kumar Verma , found that the contradictory reports were filed in good faith upon the advice of the dealer and insurance company's representatives, and this could not be a ground to repudiate a genuine claim.

The Commission modified an order from the Ambikapur District Commission, directing Reliance General Insurance Company Ltd to pay the complainant, Dr. Pritam Ram, a sum of ₹2,84,892 with 6% annual interest from the date of filing the complaint.

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Background of the Case

The case originates from a complaint filed by Dr. Pritam Ram, the owner of a Hyundai i20. He had purchased a comprehensive insurance policy with a "cashless add-on" facility from Reliance General Insurance through the car dealer, Krishna Auto Riders Pvt Ltd.

His vehicle met with an accident on October 16, 2019, and was immediately taken to the dealer's workshop for repairs under the cashless scheme. However, what followed was a series of delays and complications. The claim approval was stalled, and according to the complainant, the dealer and the insurance company's claim in-charge advised him to file a new police report with a revised accident date of November 3, 2019, to expedite the process. Dr. Ram complied.

This act of reporting two different dates became the crux of the dispute, leading the insurance company to repudiate the claim, citing a violation of policy terms and fraudulent misrepresentation. Dr. Ram was compelled to pay the full repair bill of ₹2,95,000 out of his own pocket to retrieve his vehicle after a prolonged delay.

Arguments from the Parties

Dr. Pritam Ram (Complainant): Argued that he was a victim of deficiency in service by both the dealer and the insurer. He contended that the cashless facility was denied, he was wrongly advised to change the accident date, and was forced to pay for repairs that should have been covered by his policy.

Krishna Auto Riders Pvt Ltd (Dealer/Appellant): The dealer denied liability, stating their role was limited to facilitating the insurance policy and conducting repairs. They argued that claim settlement is the sole prerogative of the insurance company and any delay or rejection was due to the complainant's own actions of providing conflicting information and delaying the submission of documents.

Reliance General Insurance Co. Ltd (Insurer/Respondent): The insurer justified the claim rejection by pointing to the two conflicting police reports for the accident dates (October 16 and November 3, 2019). They argued this was a material misrepresentation and a breach of the insurance contract's condition of utmost good faith, which rendered the claim invalid. They had appointed a surveyor who assessed the loss at ₹2,23,110 on a repair basis but did not pay out due to the policy violation.

Commission's Findings and Rationale

The State Commission meticulously examined the evidence and found both the dealer and the insurer deficient in their services.

The Commission noted that the dealer, Krishna Auto Riders, had charged a fee for a "Road Side Assistance (RSA)" certificate but failed to provide this service when the vehicle was accident-stricken. For this specific failure, the Commission ordered the dealer to refund the fee of ₹1,205 to the complainant.

The primary focus of the judgment, however, was on the insurer's liability. The Commission observed:

"The information about the two separate dates was given in good faith based on the advice of the employees/claims in-charge of the opposite parties. The fact that the vehicle was in an accident cannot be denied merely on the ground of reporting two separate dates, especially when the vehicle was towed to the workshop for repairs after the accident and the opposite parties were immediately informed."

The Commission concluded that since the accident was genuine and the vehicle was physically present at the workshop for assessment, the technical ground of conflicting dates—which were reported on the advice of the insurer's own ecosystem—could not be used to deny the claim. It found the insurer's repudiation of the claim to be an act of service deficiency.

Final Order and Implications

The State Commission modified the District Commission's order, which had erroneously split the liability between the dealer and the insurer. The appellate body clarified the liabilities as follows:

1. Krishna Auto Riders Pvt Ltd is to refund ₹1,205 to Dr. Pritam Ram for the failure to provide RSA service.

2. Reliance General Insurance Co. Ltd is to pay Dr. Pritam Ram ₹2,84,892 . This amount was calculated by taking the total repair bill of ₹2,95,000 and subtracting the mandatory deductible (₹1,000) and the salvage value (₹9,108) as assessed by the surveyor.

3. The insurer must also pay 6% simple annual interest on this amount from the date the complaint was filed (February 11, 2021) until the date of actual payment. 4. If the payment is not made within 45 days, the interest rate will increase to 8% per annum .

This judgment underscores a pro-consumer approach, emphasizing that insurance companies cannot hide behind technicalities created by their own agents or associates to deny legitimate claims, especially when the fundamental facts of the loss are undisputed.