United India Insurance slapped with Rs 50K fine for troubling policy holder

Written by PTI | New Delhi | Updated: Feb 18 2013, 18:46pm hrs
InsuranceUnited India Insurance has been slapped with a fine for wasting time in frivolous proceedings.(Reuters)
United India Insurance Company Ltd (UIICL) has been slapped with a fine of Rs 50,000 by the apex consumer commission for wasting its time in frivolous proceedings and drawing a policy holder into an "unnecessary and uncalled for" litigation.

The National Consumer Disputes Redressal Commission (NCDRC) passed the order while dismissing the insurance firm's revision petition against orders of the Delhi State Commission and a District Forum which had awarded compensation to the policy holder for the delay in settling of her claim.

"We are constrained to view the revision petition as an attempt to draw the respondent (policy holder) into an unnecessary and uncalled for litigation. It has also resulted in wasting time of this Commission in frivolous proceedings.

"In view of the above, the revision petition is dismissed with punitive cost of Rs 50,000. Out of this Rs 25,000 shall be paid by UIICL to the respondent. The remaining Rs 25,000 shall be credited by it to the Consumer Welfare Fund," the bench presided by Justice J M Malik said.

The NCDRC also observed that as per the facts stated in the insurance firm's plea, UIICL had prematurely rejected the claim without concluding the whole verification process.

"The revision petition itself is an admission of the facts that repudiation of the claim in May 2008 was premature and unjustified...," it said.

The State Commission had upheld the District Forum's decision of allowing the complaint of Delhi resident Rani Sharma, whose claim, on theft of her vehicle which was insured with UIICL, was rejected by the insurance firm in 2008 on the ground that she was not the registered owner of the car.

The insurance firm, however, had settled the claim in 2010 after she had filed the complaint, the commission had observed.