United India Insurance dodges claim, made to pay up


Ambalal Patel was insured for Rs. 1 lakh under a group insurance scheme of United India Insurance. He suffered a severe head injury at his residence and was admitted to Indus Hospital, Ahmedabad. He was under the care of Dr. Ajay N. Prajapati. Ambalal died at the hospital the next day. Jyotsna, the widow, submitted the claim with all necessary papers to the company. The company repudiated the claim on grounds that neither a first information report (FIR) nor a post-mortem examination report had been submitted. It even rejected the attending doctor’s diagnosis and certificate. He had said that there had been no need for a post-mortem. The company treated the claim as rejected and closed.

Jyotsna and CERS, of which she is a member, filed a complaint with the Consumer Forum. Citing precedents, the complainants stated that when a person dies following a serious injury suffered at home, the case does not warrant an FIR, or a panchnama or a post-mortem examination report. The Forum held the insurer liable for deficiency in service and ordered the company to pay Jyotsna Rs. 1 lakh with 9% interest, Rs. 5,000 as compensation for mental agony and harassment and Rs. 1,000 towards costs. It also directed the company to pay CERS Rs. 1,000 towards costs.

SC rules out forcible seizure of defaulter’s vehicle


Maruti Finance granted a hire-purchase facility to S. Vijayalaxmi for buying a Maruti Omni car. The loan amount of Rs. 1.82 lakh was repayable along with interest in 60 equal monthly hire charges of Rs. 4,604 each. On her failure to pay the instalments regularly, the company sent her a legal notice, alleging that 26 cheques issued by her had been dishonoured. She was asked to pay Rs. 1.31 lakh within three days. Eventually, Maruti Finance took possession of the vehicle from her residence and sold it to the highest bidder for Rs. 70,000. Vijayalaxmi was asked to pay the balance of Rs. 51,920.

An indignant Vijayalaxmi filed a complaint before the Consumer Forum. The Forum directed Maruti Finance to pay Rs. 1.5 lakh along with a 9% interest and Rs. 5,000 towards harassment and costs. Maruti Finance appealed before the Delhi State Commission which affirmed the Forum’s order and directed payment of a further Rs. 50,000 on account of punitive damages. The company filed a revision petition before the National Commission, which dismissed the petition but modified the State Commission order. It set aside the part of the order on punitive damages and directed the company to pay Rs. 10,000 as costs to Vijayalaxmi.

Maruti Finance petitioned the Supreme Court. The apex court observed that the question was whether the consumer courts were right in holding that the vehicle had been illegally and/or wrongfully recovered by use of force from the loanee. “Even in case of mortgaged goods subject to hire-purchase agreements, the recovery process has to be in accordance with law and not by use of force. Till such time as the ownership is not transferred to the purchaser, the hirer normally continues to be the owner of the goods, but that does not entitle him on the strength of the agreement to take back possession of the vehicle by use of force,” the Supreme Court stated.

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