Uttarakhand State Commission Holds Iffco Tokio General Insurance Liable For Wrongful Repudiation Of Claims

Brief facts:

Complainant's husband availed a loan of Rs. 2 lacs from Almora Urban Co-operative bank ('bank'). The bank also insisted on getting an insurance policy from IFFCO Tokio General Insurance Co. Ltd ('insurance company') pursuant to which the complainant's husband deposited a premium and a cover note of the policy was issued to the husband on 15.07.2010. The policy was valid till 14.07.2011 and the complainant was the nominee of her husband.

It was agreed at the time of sanctioning the loan amount that in case of death of the husband, the insurance company will repay the loan amount to the bank. However, on the death of the complainant's husband on 15.06.2011, the claim of the complainant was repudiated by the insurance company. The complainant then paid the balance loan amount with the bank and asked for reimbursement from the insurance company but the same was not paid.

Therefore, a complaint was filed by the complainant in the District commission, Nainital. The complaint was dismissed by the district commission. Hence, an appeal was filed by the complainant before the state commission.

Submissions of the insurance company:

The insurance company argued that an 'Individual Personal Accident Policy' was issued to the husband and the details of the accident, cause of death as well as details of medical treatment were not disclosed by the complainant at the time of submitting the claim. It was further argued that the husband died because of rabies and not on account of any accident and therefore the claim was rightly repudiated.

Submissions of the bank:

The bank also submitted that since the husband of the complainant did not die on account of bodily injuries or accident, the complainant cannot avail the benefit of the policy. It was argued that death due to infection does not come under the purview of the policy.

Observations of the commission:

The bench examined the Individual Personal Accident Policy and the repudiation letter issued by the company. It was observed that the said repudiation letter does not mention anywhere that under which condition of the insurance policy, death due to rabies is not covered. The bench then proceeded to examine the definition of 'Injury' mentioned in the policy and held that it does not exclude death due to rabies. It was also observed that 'death due to rabies' is not covered under the 'General exclusions' clause which lays down the conditions in which the company is not required to pay any compensation. Thus, it was held that there was deficiency in service on the part of the insurance company in repudiating the claim of the complainant.

Hence, the appeal was allowed with following reliefs:

1. Insured amount of Rs. 2 lakhs to be paid by the insurance company
2. Rs. 45000/- as compensation for mental agony, physical and financial loss
3. Costs of Rs. 5000/- towards litigation expenses

Case Title: Meera Srivastava vs Branch Manager, IFFCO Tokio General Insurance

Case Number: SC/5/A/15/21

Advocate for appellant: Deepak Ahluwalia

Advocate for Respondent No. 1: Suresh Gautam

Advocate for Respondent No.2 : Vaibhav Jain

Date of Judgment: 09.05.2025