Consumer Court Orders Rs 15 Lakh Compensation for Widow After Insurer's Claim Fails

Insurer Fails to Prove Deceased Man’s Driving Licence Was Fake, Widow Awarded Rs 15 Lakh Compensation

In a significant ruling, a consumer court has directed the National Insurance Company to pay Rs 15 lakh to the widow of Trilok Nath, a vehicle owner-cum-driver who died in a road accident in January 2021. The court found that the insurer failed to prove its claim that the deceased’s driving licence was fake.

Trilok Nath had purchased a comprehensive insurance policy from the National Insurance Company for the period of November 24, 2020, to November 23, 2021. The policy included a Compulsory Personal Accident (CPA) cover of Rs 15 lakh, for which he paid a premium of Rs 275. On January 30, 2021, during the policy’s validity, Nath died in a fatal accident involving his insured vehicle. An FIR was registered the same day at Bharmour Police Station in Chamba, Himachal Pradesh.

Following the accident, Nath’s legal heirs, including his widow, submitted a claim to the insurance company along with all requisite documents, including the vehicle’s registration certificate, death certificate, FIR, and a copy of Nath’s driving licence. However, the insurer did not settle the claim for over three years, prompting the complainants to file a plea alleging a deficiency in service.

The insurance company contested the claim, arguing that Nath’s driving licence was invalid. It cited a police investigation that added a charge under Section 181 of the Motor Vehicles Act, 1988, for driving without a valid licence. The insurer also submitted a verification report from the District Transport Officer (DTO) in Nagaland, which stated that Nath’s licence was not found in their records.

However, the consumer court rejected these arguments, noting that Nath’s widow had provided a copy of his driving licence, which was issued by the DTO in Nagaland and renewed until April 26, 2022. The court observed that the DTO’s inability to trace old paper-format records did not automatically render the licence fake or fabricated. It emphasized that the burden of proving the licence’s invalidity rested on the insurer, which failed to provide conclusive evidence.

The court further pointed out that the insurer’s submitted documents lacked the statutory certification required under the Bharatiya Sakshya Adhiniyam, 2023, making them unreliable. Additionally, it noted that the Motor Accident Claims Tribunal (MACT) in Chamba had already evaluated the evidence from the same accident and concluded that the insurer failed to prove the licence was fake. This finding was binding on the insurer under the principles of issue estoppel and judicial consistency.

Consequently, the court ruled that Nath must be deemed to have held a valid and effective driving licence at the time of the accident. It held the insurer’s denial of the claim as a clear deficiency in service and directed it to pay Rs 15 lakh to the complainant within 90 days. Failure to comply would result in an interest penalty of 9% per annum from the date of the complaint until the amount is paid.

This ruling underscores that insurance companies cannot deny claims without concrete evidence, especially when claimants provide all necessary documents. Consumers facing similar grievances are encouraged to seek redress through state consumer helplines or the National Consumer Helpline at 1915.