2 days ago
Delhi Consumer Commission Orders Insurer to Pay Power Company
A power company had insurance for materials used in a large electricity project.
Some of the materials, including conductor wire, were stolen.
The company told the police and later told its insurance company about the loss.
The insurer rejected the claim, saying the company reported part of the theft too late.
A consumer commission agreed that one part was reported after the policy deadline.
However, it said the project was spread over 215 kilometres, so checking the full loss quickly was difficult.
It also decided that a five-day delay in reporting another part to police was not enough to reject the claim.
The commission ordered the insurer to pay Rs 25.61 lakh.
The Delhi State Consumer Commission ordered National Insurance Company Ltd to pay Rs 25.61 lakh to a power transmission company.
The dispute involved theft from a 215-km, 400 KV double-circuit transmission project insured for Rs 580 crore.
The company reported the March 25, 2017 theft to police on March 30 and notified the insurer on April 1.
The commission found a 25-day delay for losses on stretch B breached the policy’s 14-day notification condition.
It said the five-day police-reporting delay for stretch A alone did not justify rejecting the claim and called the insurer’s repudiation unfair and deficient service.
- Who
- A power transmission company and National Insurance Company Ltd; the case was heard by the Delhi State Consumer Commission.
- What
- The commission ordered the insurer to pay Rs 25.61 lakh after rejecting its refusal of a theft-related insurance claim.
- Where
- The theft occurred at a 215-km power-transmission project, and the case was decided in Delhi.
- When
- The theft was detected on March 25, 2017; the commission issued its decision on September 7, with the year not specified in the article.
- Why
- The commission found that the insurer could not rely solely on reporting delays to repudiate the claim, particularly regarding stretch A, while acknowledging a policy breach for stretch B.
Power Company’s Position
Insurer’s Position
Validity of the claim
Power Company’s Position
The power company sought payment, compensation and litigation costs, arguing that the insurer delayed settlement and wrongly rejected the claim.
Insurer’s Position
National Insurance argued that the company was not a consumer under the Consumer Protection Act, 2019 and that the commission lacked territorial jurisdiction.
Reporting delays
Power Company’s Position
The company reported the theft to police and notified the insurer, while maintaining that the circumstances of the widespread loss explained the timing.
Insurer’s Position
The insurer argued that the company failed to promptly report the theft and violated the policy conditions.
Effect of the delays
Power Company’s Position
The commission held that the five-day delay in reporting stretch A to police did not justify repudiation and described the insurer’s rejection as unfair trade practice and deficiency in service.
Insurer’s Position
The commission found that the 25-day delay in notifying the insurer about stretch B was a clear violation of the policy’s 14-day condition.
Key facts
- Award
- Rs 25.61 lakh
- Insurer
- National Insurance Company Ltd
- Policy
- All Risk Insurance Policy issued on March 31, 2016
- Project
- 400 KV double-circuit power transmission project covering 215 km
- Sum insured
- Rs 580 crore
- Premium
- Rs 1.31 crore
- Claim raised
- Rs 54.40 lakh
- Policy deadline
- Notice was required within 14 days of detecting the loss
Quotes
Delhi State Consumer Commission
Consumer disputes tribunal comprising President Justice Sangita Dhingra Sehgal and member Bimla Kumari
“Rejection of the claim of the Complainant (power transmission company) on the ground of a violation of policy terms and conditions in the form of delay in intimation is a bald averment and amounts to unfair trade practice and deficiency in service on the part of the Opposite Party (insurer)”
indianexpress.com
Sources
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