Case Title: Brahma Nand vs Muthoot Finance Ltd. and Anr.
Summary
The District Commission in Panipat, Haryana, has held Muthoot Finance Limited and Liberty General Insurance Company liable for deficiency in service after they failed to reimburse the insurance claim despite receiving necessary documents. The Complainant, a Branch Manager at Muthoot Finance, was admitted to Raj Hospital for treatment of a high-grade fever, and the insurance company purportedly denied the claim. The Complainant lodged a consumer complaint against Muthoot and the insurance company, arguing that it did not issue or manage insurance policies. The District Commission determined that the repudiation was unjustified and held Muthoot vicariously liable for its actions. The Commission instructed Muthoot and the insurance company to reimburse the Complainant for Rs. 1,13,765/-, plus interest at a rate of 9% per annum, from the date of the complaint until full payment.
About the case
The District Consumer Disputes Redressal Commission, Panipat (Haryana) bench, which is composed of Dr. R.K. Dogra (President) and Dr. Rekha Chaudhary (Member), has held Muthoot Finance Limited and Liberty General Insurance Company liable for deficiency in service after they failed to reimburse the insurance claim despite receiving the necessary documents. Additionally, Muthoot Finance, the Complainant’s employer, was held accountable for the repudiation due to its role in facilitating the policy for the Complainant on behalf of the insurance company.
The Complainant was currently employed as a Branch Manager at Muthoot Finance Ltd. (“Muthoot”) and was enrolled in a Group health insurance policy with Liberty General Insurance Co. (“Insurance Company”). The Complainant was admitted to Raj Hospital, Madlauda for treatment of a high-grade fever during his tenure. Although the insurance company and Muthoot were informed of his hospitalization, they neglected to reimburse the Rs. 1,13,765/- expenses that were incurred. The cost was personally borne by the Complainant, who subsequently submitted the necessary documentation for possible reimbursement. The insurance company, however, purportedly denied the claim. A satisfactory response was not received by the Complainant, despite the fact that she made numerous communications with the insurance company. Complaint lodged a consumer complaint against Muthoot and the insurance company with the District Consumer Disputes Redressal Commission, Panipat, Haryana (“District Commission”), feeling aggrieved.
Muthoot responded by emphasizing that it does not issue or manage insurance policies, and that the insurance company is accountable for issuing them. Apart from being the policyholder, Muthoot maintained that there was no direct relationship or liability between it and the insurance company. Subsequently, Muthoot maintained that it may not be held accountable for any purported service deficiencies associated with the insurance claim.
For the proceedings, the insurance company did not appear before the District Commission.
The District Commission determined that the Complainant was hospitalized at Raj Hospital from July 19, 2021, to July 26, 2021, based on the medical records. Despite Muthoot’s status as an agent, the District Commission maintained that liability could be attributed to Muthoot because it acted on behalf of the insurance company. The medical records also verified the Complainant’s illness’s severity and the treatment she received from qualified medical professionals. The District Commission, as a result, determined that the repudiation was unjustified and that the insurance company had a deficiency in service. In addition, it held Muthoot vicariously liable for its actions.
As a result, the District Commission instructed Muthoot and the insurance company to reimburse the Complainant for Rs. 1,13,765/-, plus interest at a rate of 9% per annum, from the date of the complaint until full payment. In addition, the District Commission ordered Muthoot and the insurance company to provide the Complainant with Rs. 5,000/- in compensation and Rs. 5,500/- in litigation expenses, in recognition of the mental anguish and harassment that the Complainant experienced.
