Consumer Rights » Complaint

Insurance company cannot modify clauses in the insurance policy on their own, rules Consumer Redressal Forum

ashish — Sat, 15 May 2010 15:31:28 +0000

When you take an insurance company and have it for a number of years, I wonder how many of you actually go through the correspondence you have with the insurance company (especially when they modify some of the conditions of the insurance policy and expect that you will have to abide by these conditions). Well, now a Consumer Redressal Forum has refused to accept the changes in condition made by the insurance policy and awarded compensation to an individual after he was denied the compensation by the insurance company. This was a case where a house was insured with an inclusive clause that included terrorist action (since the house was in terrorist prone Srinagar) and the insurance company had accepted the clause. Later, when the house was damaged, the insurance company claimed that the clause had been deleted and refused to settle the claim, and the person went to the Consumer Redressal Forum for help (link to article):

A Nepean Sea Road resident has some reason to cheer five years after his ancestral home in Srinagar was damaged in a terrorist attack. The South Mumbai District Consumer Disputes Redressal Forum has awarded him Rs 5 lakh as compensation after an insurance firm left him in the lurch by rejecting his claim . The forum also took the firm to task for unilaterally deleting the “terrorism clause” from 66-year-old Sudhir Anant’s policy that covered the complainant’s Srinagar bungalow.
Anant, who originally hails from Kashmir, bought a policy from The New India Assurance Company, in 2000. The policy included the “terrorism clause”. According to Anant, owing to the volatile situation in J&K, he had taken such a policy and in 2003-04 paid an additional premium to get the special clause included. On May 11, 2005, while Anant was in Mumbai, there was a blast on the street adjacent to the bungalow which damaged the structure considerably.

The insurance company used the claim from an earlier Supreme Court judgment that had ruled that a renewed policy is the same as the original policy, and conditions cannot be changed by the insurance company unilaterally.

Bad service from Indian Railways with poor cleanliness, bad condition of coaches

ashish — Wed, 31 Mar 2010 17:50:12 +0000

This is actually not about the pleasures that we saw on the journey, more about the the condition that the India Railways seems to be in. The spouse and me have traveled to some extent on the Indian railways, criss-crossing the country through the railways (although we have a preference to the AC coaches, and not the sleeper coaches). We normally do the journey between Dehra Doon and Delhi frequently since there is family in both locations.
We normally take the Shatabdi (and have been doing so for many years), and have started seeing the condition of the trains going down over the past few years. It would seem like the same coaches that were in use for the past many years are being used, which is fine, but it also seems that the maintenance of the coaches has come down drastically (and maybe this is how Laloo Prasad Yadav earned money on the railways, by cutting down the cleaning and maintenance). So, now when we go, there is a smell in the train, the loos are normally never as clean as they used to be, and of course water eventually ends midway during the trip.
But what happened on the course of a journey just a few weeks back took the cake. We were not able to do the normal Shatabdi, and had to book the Jan Shatabdi that leaves in the afternoon. We thought that this is a train that also has non-AC coaches, but everything else would be the same (the ticket price was around the same). First surprise, the train was 1 hour late. And when the train came, passengers started coming out from the train (which means that the train had just arrived and they had decided to move the same train to departure). The reaction of people when they entered the AC chair car was incredible, one could not believe how dirty the train was. There were cups on the floor, there was coffee and tea on the floor and some of the seats, and also other rubbish (this was done by the departing passengers, but it was the responsibility of the railways to ensure that incoming passengers paying fare are entitled to clean coaches and clean loos (one look at the loos, and it was an attempt to hold things till we reached our destination)).
We tried talking to the TT for getting hold of the complaint book (there were other problems, in some cases, the meal tray would not hold in place and kept on falling on the person in the seat), but the TT declined to offer any such book, and politely told us that such things happen once in a while, what is the point of raising such a complaint. This also told us the likely treatment of any complaint that we raised.

Man gets Rs. 11 lakh as compensation from hospital for negligence (which led to him getting crippled for life)

ashish — Sat, 27 Mar 2010 17:53:56 +0000

When a man gets admitted to hospital, the expectation is that he will get better, and that the hospital will take the best possible care to ensure that the person gets the best possible service. This includes getting proper medical attention, being attended to by nursing staff, and also to ensure that the person does not suffer any intensification of medical problems due to any kind of negligence. What do you consider to be the responsibility of a hospital when a person falls from a hospital bed, and his relative detects him missing from the hospital bed and then they find him with multiple fractures, lying on the floor, and consequently crippled for life. It is only the courts who award the proper compensation to the person and find the hospital responsible for negligence and order the payment of compensation (link to article):

NEW DELHI: The Delhi High Court has awarded Rs 11 lakh as compensation to a man who was crippled for life while admitted at Batra Hospital in the city more than two decades ago.
The very night his sister who was at the hopital to take care of him noticed he was missing from his bed. She raised an alarm and the security guard, after a brief search, found Majumdar lying on the ground floor. The patient suffered multiple fractures and was reduced to a paraplegic. In his suit, Majumdar alleged the hospital had failed to take reasonable care of him and it was the hospital’s negligence that led to him getting such severe injuries.

Delhi Government held responsible for money for bringing up a child after mother’s failed sterilization procedure

ashish — Mon, 01 Mar 2010 14:05:42 +0000

When a woman undergoes a sterilization procedure, it is with the expectation that any more sexual relationship will not result in more babies, and in today’s world where family planning is required, going in for a sterilization procedure is an act of great responsibility. When the family feels that they have had enough children, then sterilization is way of stopping any further children from coming. To make it easier for poorer families to adopt such a procedure, the various Governments provide camps where sterilization is carried out under the supervision for doctors. When a family adopts such a procedure, they do with the thought that such a camp being sponsored by the Government means a measure of reliability. So what happens when a lady finds out that she has got pregnant even after such a procedure being carried out, who bears the responsibility ? In a recent judgment, the Delhi Court has held that the State Government is responsible for the expenses for rearing the baby, especially when the household is very poor and cannot bear the expenses for rearing the baby. The expenses are to be charged from the Government, but not recovered from the doctors who carried out the operation (link to article):

A Delhi court has held the government responsible for the birth of an unwanted child in a poor household because the mother became pregnant despite undergoing sterilisation under a government-sponsored scheme at a hospital. Asking the government to bear the expenses of rearing the boy, additional district judge Kamini Lau awarded the 40-year-old mother, Nirmala, a compensation of Rs 1 lakh on Tuesday.
While awarding the compensation, ADJ Lau said “The serious problem of population explosion warrants and demands that adequate measures be taken by the government while adopting and implementing the family planning scheme successfully.”

SEBI told to work towards compensating fraud-hit investors

ashish — Mon, 23 Nov 2009 16:13:49 +0000

SEBI (the Securities and Exchange Board of India) has the mandate to protect investors, especially the retail and small investors who can get defrauded on various stock market deviancies, fraud, and management frauds. And SEBI has taken a number of actions in the past to act against people who have sought to defraud investors, such as banning people from the market, or preventing access to the market for such white collar criminals.
However, there have been a number of cases where investors, especially the smaller investors have got defrauded in the past, and when calls have been made for SEBI to either act on behalf of getting compensation to these hapless investors or being more proactive, the actions of SEBI leave some room for improvement. Some of these cases are related to vanishing companies, or to frauds, or to price manipulation (link to article):

Undoubtedly, SEBI has done a lot to protect the interest of investors. There are, however, some areas where action needs to be initiated to ensure that investors, particularly small gullible ones, are protected from unscrupulous promoters, conniving auditors and mercenary manipulators.
The limited punitive actions taken by the department of corporate affairs and SEBI against the companies and their directors do not answer the basic question of compensating the investors who for no rhyme or reason are the losers. The argument that investment in equities is a matter of risk and reward cannot be extended to the frauds committed by these companies. Small investors, at least up to Rs 25,000, need to be compensated.

Car dealers to pay a compensation of 25,000

ashish — Sat, 21 Nov 2009 09:33:54 +0000

The second hand car market in India is increasing, to the extent that the business of re-sale and purchase of second hand cars now has a greater volume than that of first car purchase (direct purchase of vehicles from the dealers). However, a lot of people who decide to buy or sell their vehicles do not follow proper procedures, and can land in a lot of trouble while doing so. While indulging in second hand transactions, it is absolutely essential that purchasers or sellers ensure that they are going through reliable people, and that the transactions also mean a settlement of all the documentation required (RC, Insurance, any outstanding traffic fines, pollution control certificates), etc.
Here is a case whereby a person gets into trouble by not following through on the documentation needed in the case of a second hand transfer of a vehicle. He gets cheated when the car dealers actually do not transfer the car to him, but instead transfer the car to a third person. It helps that there is a consumer forum which can help in ensuring that the car dealers follow through on the required steps (link to article):

Holding two car dealers guilty of unfair trade practice, the district consumer forum has directed them to pay a compensation of Rs 25,000 along with litigation cost of Rs 5,000 to sector-38 resident Manjit Singh. The forum headed by Jagroop Singh Mahal directed Prithi Pal Singh and Sukhwinder Singh, dealers of second-hand vehicles in Car Bazaar, to return Rs 1,20,000 with interest to Manjit for not providing him necessary documents of a car purchased from them.
Despite repeated requests, nothing was done in this regard which forced Manjit to report the matter to the police. Later, the complainant approached the Registering and Licensing Authority, Haryana, and was shocked to learn that the vehicle was under the process of transfer in the name of one Mahesh Kumar of sector 40-D, Chandigarh. Following this, Manjit filed a complaint before the forum alleging cheating, fraud, deficiency in service and unfair trade practice.

Insurance regulator gets strict on orphan policies

ashish — Wed, 09 Sep 2009 19:45:40 +0000

What are orphan insurance policies ? These are policies where the agent who sold these policies has shifter to another company, and the person who bought these policies no longer has an agent or an intermediary to help service them. This is a common problem in the life insurance business, since:
- An agent will do anything to sell a policy, including using charm, threatening about the problems that could occur later in life if you don’t have an insurance policy, using contacts, etc. The agent gets a good commission when the insurance policy is sold, but the amount of commission is drastically reduced in subsequent years, which leaves little incentive for the agent to remain and service the needs of the insurance buyer. If another company offers a better deal, the agent will move.
How can there be a solution that also helps the insurance buyer ? Well, the IRDA (insurance regulator) is making it more difficult for agents to shift so very easily, adding a set of conditions and rules (link to article):

In A bid to ensure that fewer policies get lapsed, the Insurance Regulatory and Development Authority of India (Irda) has made it tougher for agents to shift loyalties . The new agency guidelines ensure that all agents—individuals , corporate as well as banks—continue to sell policies of the same insurance company for at least three years. Historically, lapse ratio has been higher among orphan policies when compared with policies that are serviced by an agent. To ensure that an agent shifting loyalties does not leave behind orphan policies, the insurance regulator has put in a number of preconditions that the agent has to fulfil before he can obtain a no-objection certificate from his principal.
To take care of the policies orphaned by agents, Irda said, life insurers should ensure alternate arrangement, and these measures should go beyond a call centre facility, which is also an essential requirement . Insurance companies have been asked to intimate each policyholder that their agent has quit and there are alternate arrangements being made to service them.

Bank charged penalty for charging older customer more than newer customers

ashish — Sun, 09 Aug 2009 16:50:56 +0000

It is an established business fact that when banks give loans to their customers, they normally treat newer customers more attractively than they treat older customers. The terms and conditions of the loan specify for floating rate loan that banks can charge customers more (either by increasing the EMI amount, or the loan duration) if the interest rate regime changes. Similarly, even in the case of fixed rate loans, the bank retains the right (if you read the complete legalese of the loan terms, you can confirm) to change the fixed rate loans if the rate of interest changes by a certain amount. This changing of fixed interest rate has not been challenged, however, somebody challenged the fact that they were being charged more than new customers, treating that as a unlawful practice. This was accepted by the consumer forum which fined the bank (link to article):

Imposing a penalty of Rs one lakh, which the bank will pay to Goyal, the forum said, ‘The bank is directed to overhaul accounts of all its loanees and bring the rate of interest at par with those at which the loan (home) is advanced to new customers from time to time, so that all its customers, whether old or new, who have opted for adjustable rate of interest pay the same rate of interest during any particular period.’
Arguing before the forum, Goyal’s counsel stated that the finance company and bank adopted unfair trade practice by increasing rate of interest for old customers at a higher rate, whereas the prevailing rate of interest was much lower, which was depicted through their announcements and advertisements in the newspaper to attract new customers. After hearing the pleas, the forum held that the interest rate of any old loanee would be lowered to bring it at par with the interest rate at which the loan is advanced by the bank to its new customers.

One is not sure whether this practice is still ongoing, but one suspects that banks do continue doing this. Not too many people are aware that this has been ruled unfair by a consumer forum, and that they can challenge this practice. Most people continue to accept that whatever a bank does is acceptable.

Safety feature – Online Credit card usage

ashish — Thu, 30 Jul 2009 20:13:22 +0000

If you have ever stopped to look at the online credit usage you would have done (including reviewed the information you were asked to provide), it would seem extremely easy to use somebody’s card and use it for buying stuff. What is it that you need to provide in terms of information when using your credit card online ? You go to a site, decide to buy something (maybe jewellery, maybe some electronics goods, or something that can be delivered instantaneously such as software) and are asked whether you need to pay through a credit card, using the much hyped secure card payment gateways (that use ’128 bit encryption security’, and are from well known banks).
Think for a minute about the information you provide online; you typically provide the following information:
- Name
- Date of birth (sometimes)
- Card Number
- 3 / 4 Digit security code at the back of the card
- Validity period of the card
Now, if you had gone to a restaurant, and paid by card, the person taking the billing (waiter, cashier) would already have all these details (except for Date of Birth), and for that, if they ask you to fill a card containing personal details such as DOB and anniversary, most of us would fill that already. That is enough for them to use that card details online, and in many cases, this goes undetected, or detected only at the end of the month. So why is nothing being done about this ?
Well, something is finally being done (link to article):

If you’re an online shopaholic, make sure you have a personal identification number (PIN)/password for your credit or debit cards. Otherwise, forget about using them for internet shopping from August 1. A recent directive by the Reserve Bank of India makes it mandatory to have an additional authentication passcode verified by Visa or MSC (Mastercard Secure Code). This is in addition to the other information already on the card like name, card number, expiry date and CVV (card verification value) number
So how do you get this new password? Credit/debit card users have to register online with their banks, giving personal and card details. They will then be given a PIN or password to be be used as an additional layer of security at the checkout point before completion of the transaction.

So, if you did not know about this directive, and wonder as to why your card does not seem to work online anymore, now you know the reasons for the same. So, go ahead, and contact your bank for getting the confirmation. As to whether this is fool-proof, only time will tell.

Man gets succour from Delhi High Court after hand gets crushed

ashish — Tue, 16 Jun 2009 12:08:14 +0000

One reads in the newspaper all the time about some accident whereby a person gets injured due to rash or negligent driving by the driver of a vehicle (in numerous cases, this rash driving would be done by the driver of a bus or truck, and because of the size and weight of this large vehicle, the injuries would be serious, or even death could occur). In such cases, a person (or his dependents) can claim compensation from either the driver / owner of the vehicle, or from the insurance company that had provided insurance to the vehicle. Such claims need to be filed under the Motor Accident Claim Tribunal, which assesses the loss of employment income along with extent of injury and accordingly provides compensation (some compensation is also provided in the cases where the fault of the driver cannot be proved). These cases can also be taken to higher courts if either party is unsatisfied with the award of the Tribunal (link to article):

NEW DELHI: The Delhi High Court has awarded over Rs five lakh as compensation to a man whose right hand was crushed after it came under the rear wheel of a bus in an accident five years ago. Justice J R Midha enhanced the compensation from Rs 2.43 to Rs 5.76 lakh considering the medical reports which suggested that the self-employed victim had suffered 50% disability.
The Motor Accident Claim Tribunal after assesing the claim had awarded Rs 2.43 lakh to Tahir, who was earlier doing screen printing job, to compensate for loss of income. The High Court allowed Tahir’s appeal for enhancement of compensation after taking into account medical certificates which claimed that he suffered permanent disability rendering him unemployed. HC in its order, also directed that the amount be deposited in a bank as fixed deposit.

Not too many people are aware of some of the processes and procedures dealing with applying for compensation under the Motor Accident Claim Tribunal, so here are some sites that provide more information on this area:

What is Motor Accident Claim Tribunal (link to article):

Who can report to MACT in case of accident ?
Victim himself or through Advocate,in the case of personal injury. Through advocate in case of minor applicant below the age of 18 years. Legal heirs themselves or through advocate in the case of death.The owner of the vehicle in the case of property damage.

Some queries related to the MACT (link to article, including the documents to be submitted):

Q. I had lodged a case for insurance on account of motor accident, which took place. The Tribunal held that the liability of the Insurance Company is limited to Rs. 20000/- only. Whether Tribunal is right in saying so and what is my remedy against said order?
A. If there is no evidence on the record to show that the liability of the Insurance Company was limited to Rs. 20,000/-, the finding of the Tribunal is liable to be set aside. The liability of an Insurance company, unless there is a prohibition to same in a contract or otherwise, is unlimited You can challenge the said order before the High Court in appeal.

More details on applying to MACT (link to article):

Chapter 10 with Sections 140 to 144 provides for interim compensation on ‘No Fault’ Basis. According to this provision Rs. 50,000/- is to be given to the kith and kin of the deceased and Rs. 25,000/- to the grievously injured victim. The compensation under Section 140 is made payable if prima facie evidence of following is available;
(1) Accident by the offending vehicle;
(2) Offending vehicle being insured;
(3) Death or grievous injuries have been caused.