Cholamandalam ordered to pay Rs 7.3 lakh to policyholder for service deficiency
Later, the insurer sent a letter to the complainant asking him to submit the accident-related documents. Afnan responded that he could not furnish the documents as the vehicle was still in police custody.
He contended that the insurance company had already obtained the relevant documents during the survey and claim form submission.
On February 1, 2024, as per court orders, the vehicle was released and taken to a garage in Shivamogga for repairs, which were estimated at Rs 6,01,482.
Afnan requested the insurer to treat the claim as a total loss, as the repair cost exceeded 75 percent of the IDV. However, the insurer declined, stating the claim had been closed due to delayed submission of documents.
Afnan also stated that the second respondent, IndusInd Bank Ltd, had repossessed the vehicle as he failed to pay EMIs following the accident.
He approached the consumer commission, alleging that the insurer had failed to process the claim despite having all necessary documents and had thereby caused a deficiency in service.
After reviewing the evidence and arguments from all parties, the Commission observed that the second and third respondents -- IndusInd Bank's Chennai and Shivamogga branches -- had only provided the vehicle loan and bore no responsibility in processing the insurance claim.
The Commission ruled that the insurance company had wrongfully denied the claim despite proper documentation and deemed it a service deficiency.
The bench comprising commission president T Shivanna and member B D Yogananda Bhandya issued the final order recently. The commission directed that within 45 days from the date of the order, the second and third respondents must hand over the vehicle to the insurer, and the insurer must pay Rs 7,30,550 to the complainant at 9 percent annual interest from May 8, 2024, until the full amount is paid.
If delayed, the interest rate will increase to 10 per cent until settlement.
The commission further instructed the complainant to cooperate with the insurer in transferring the vehicle records at the relevant authority as and when required.
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