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Insurance company made to pay dues by consumer court for ignoring court order

An insurance company's delay in meeting the just dues of a medical insurance policy holder resulted in it being forced to pay him nearly double the sum. The District Consumer Disputes Redressal Forum, Kolkata, Unit - II, even issued a warrant of arrest against a divisional manager of the United India Insurance Company Ltd after which the company paid the entire sum due along with costs and damages.

Had the company heeded the decision of the insurance ombudsman, it would have got away by paying the policy holder only Rs 18,855. By forcing him to approach the consumer court, the company ended up paying an additional Rs 18,250 in costs and punitive damages.

Sugata Shankar Roy, an advocate, who was the complainant in this case held a medical insurance policy of Rs 50,000. After hospitalization, the insurance company reimbursed only Rs 17,884. Not satisfied with this he approached the insurance ombudsman who ordered on November 16, 2012, that an additional Rs 18,855 was due to Roy. The company refused to comply with this order and the complainant moved the consumer court. On September 17, 2013, the bench of the consumer court headed by B Mukhopadhyay held that the company would have to pay Rs 18,855, a composite compensation of Rs 3,000 and litigation cost of Rs 2,000 to Roy.

The consumer court also made clear that in case the company doesn't pay at that time, it would have to pay additional punitive of Rs 250 per day. The insurance company didn't comply with the order or prefer an appeal. On November 18, the consumer court took up the matter again. The court directed the Kolkata Police commissioner to order the Hare Street police station to arrest the divisional manager of the insurance company's divisional office - IV by the next day of hearing (December 11, 2013) as its order hadn't been complied with.

On December 11, 2013, the insurance company handed over a cheque of Rs 23,855 (Rs 18,855+Rs 3,000+Rs 2,000) to Roy but didn't pay the punitive damages. The court refused to withdraw the warrant of arrest against the divisional manager. On December 24, 2013, the company moved an appeal before the State Consumer Disputes Redressal Commission but it wasn't entertained. Finally, on Monday, the company handed over a cheque of Rs 13,250 (@ Rs 250 for 53 days from October 17, 2013) to the court and the matter was disposed of.

Article referred: http://articles.timesofindia.indiatimes.com/2014-01-17/kolkata/46300749_1_consumer-court-insurance-ombudsman-additional-rs

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