ET OnlineDriver lost control and crashed the car; service center tells Rs 7 lakh repair cost; Insurer denies claim alleging no FIR and drunk driver; Consumer Commission orders Rs 3.75 lakh payment with 9% interest from 2021 (AI generated representative image)
On December 15, 2020, at around 4.30 AM, Mr Pal was traveling from Nanauta to Chandigarh via Nakur Road in his car, driven by his driver Mr Singh, when they met with an accident. The driver lost control, causing the car to crash into a tree, resulting in significant damage. However, Mr Pal did not inform the police as there was no third party injury. Instead, he promptly contacted the insurance company that had insured his vehicle to report the accident. He had a valid car insurance policy with an Insured Declared Value (IDV) of Rs 4 lakh.
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The insurance company at once generated a claim number and assigned a surveyor to verify the details. After a spot survey, the damaged car was taken to an authorised service centre. On December 19, 2020, the service center gave Mr Pal an estimate of Rs 7.3 lakh to repair the car.
On December 21, 2020, the insurance company’s surveyor asked him to file a detailed affidavit of this incident. Following this, nearly a month later, on January 21, 2021, the insurance company posed additional questions and sought clarifications. On February 3, 2021, Mr Pal replied to these questions in writing and sent the answers via speed post. On February 23, 2021, the insurance company replied to him. However, on April 5, 2021, the insurance company rejected his claim.
The insurance surveyor assessed the liability for payment at Rs 3.75 lakh, which would have been paid if the insurance company had accepted the claim, but it wasn’t. Aggrieved, Mr Pal filed a consumer complaint with the Chandigarh district consumer commission to pursue the Rs 3.75 lakh claim.
The insurance company informed the consumer commission in writing that Mr Pal’s car was insured with them but they had doubts regarding the driver. The insurer alleged that Mr Singh (the driver) was driving the car in a rash and negligent manner and possibly under the influence of alcohol. The insurer also said that no FIR was registered and copies of FIR and MLC are important documents while processing such accident claims. The insurer said that they have asked Mr Pal for FIR documents , but he had failed to supply them.
The insurer also alleged that they rejected the claim after scrutinising the claim form and documents, because the reasons for loss and damages did not match his reply and the photos.
Also read: ‘She was drunk’: Insurer denies Rs 3 lakh claim, consumer court directs payout with compensation
Chandigarh district consumer commission order
The Chandigarh district consumer commission’s president Amrinder Sidhu and member B.M. Sharma gave their judgement (DC/AB1/44/CC/278/2021) on January 28, 2026.
The consumer commission observed that the insurer’s main defence for not giving this claim is that the driver Mr Singh was driving the car in a rash and negligent manne, with possibility of drinking and driving and further that no FIR was registered in the case.
“However, there does not seem to any merit in the defence of the OP (insurer) firstly because it is evident from the contents of the claim repudiation/rejection letter that the OP (insurer) is doubting the very authenticity of the accident, which has no connection with its alleged plea of driver, Mr Singh driving the car in rash and negligent manner with possibility of drinking and driving.”
Secondly, the consumer commission said that when the OP (insurer) had received intimation about the accident of the insured car on the day of accident itself, that is on December 15, 2020 and even a surveyor was appointed by it, the matter was between OP and/or its surveyor to ask for FIR/MLC etc there and then and not at a later stage.
The consumer commission said that though the insurance company has pleaded that it repeatedly asked Mr Pal to supply the necessary documents/details but it has not supported the said plea with any documentary evidence, except for one letter dated January 21, 2021, that too after more than one month after the accident.
The consumer commission said that it is a settled law that one who asserts must prove and since in the present case it is the OP (insurer), which has asserted regarding the authenticity of the claim/accident, therefore, the burden to prove lies on its shoulders only.
Supreme Case law cited: Mahakali Sujatha Vs Branch Manager, Future Generali India Life Insurance Co Ltd & Anr, II (2024 CPJ 66 (SC)
Chandigarh consumer commission judgement
The consumer commission said that by applying this ratio of law laid down in the above cited Supreme Court judgement, mere bald claims of the OP (insurer) in its defence, without any cogent documentary evidence in its support, cannot be believed.
Thus, the consumer commission said that it is safe to hold that the act of OP (insurer) in repudiating the claim of the complainant (Mr Pal) amounts to deficiency in service and unfair trade practice on its part and the present consumer complaint deserves to succeed and the OP is held liable to pay the amount assessed by the surveyor as per the surveyor report i.e. Rs 3,75,513.84 to the complainant alongwith interest and compensation, etc.
Order:
- (i) to pay the amount of Rs 3,75,514 to the complainant alongwith interest @ 9% per annum w.e.f. 5.4.2021 till the date of its actual realisation.
- (ii) to also pay Rs 20,000 to the complainant as compensation for the harassment caused as well as litigation expenses
Approximate interest calculation
If we calculate interest from 5 April 2021 to the decision date (28 Jan 2026):
- Time period: about 4 years 9 months (1,759 days)
- Interest at 9% on Rs 3,75,514= Rs1,62,870
Total (approx. till January 2026) - Principal: Rs 3,75,514
- Interest: Rs 1,62,870
- Compensation: Rs 20,000
Total = Rs 5,58,384
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