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Insurance company told to pay Rs 15.87L compensation

The Pune district consumer disputes redressal forum has directed a private insurance company to pay Rs 15.87 lakh to a customer for deficient service by wrongly repudiating his insurance claim for damage caused by fire to his new car and for causing mental and physical agony. The forum dismissed the complaint against the car manufacturer and the dealer.

The complainant, Kishor L Nimhan, had purchased a new Skoda car for Rs 16.44 lakh from Acumen Motors Private Limited, Aundh, in 2006. He got the car insured for Rs 15.62 lakh with the Royal Sundaram Alliance Insurance Company Limited for a period between November 21, 2006, and November 30, 2007, and paid a premium of Rs 61,535 for the same.

On June 6, 2007, the car caught fire while it was in a stationary, switched-off mode in the parking place at Nimhan's residence. He had then reported the matter to the police and the car manufacturer as the vehicle was badly damaged. In the ensuing developments, Nimhan sent notices to both Skoda and Royal Sundaram Alliance, but a dispute prevailed between the car manufacturer and the insurance firm over who should pay for the damage.

The insurance firm insisted that it was not liable to pay for damages because the fire was the result of manufacturing defect.

The car manufacturer, on the other hand, insisted that there was no manufacturing defect as Nimhan had used the vehicle without any problem for six months from the date of purchase and for over 7,500 km.

The two-member consumer court bench, comprising president V P Utpat and member Geeta Ghatge, had to hire expert services of the Automotive Research Association of India (ARAI) to establish whether the fire in the car had resulted out of any manufacturing defect. Relying on the ARAI's report, which concluded that there was no manufacturing defect, the forum gave its considered opinion that there was no cause of action against the car manufacturer, but the complainant was entitled to the sum insured, besides the claim of compensation from the insurance firm.

Nimhan's lawyer Bhalchandra Nikte said, "The forum has directed payment of the insured sum and the compensation within six months from the date of receipt of its order, passed on April 23. In case of a default, the amount shall carry interest at the rate of 9% per annum from the date of filing of the complaint, i.e. December 7, 2007." Counsel Rhishikesh Ganu appeared for Skoda in the case.

Article referred: http://timesofindia.indiatimes.com/city/pune/Insurance-company-told-to-pay-Rs-15-87L-compensation/articleshow/34444321.cms

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