Karnal, Haryana: In a landmark judgment reinforcing consumer protection, the Karnal District Consumer Commission has directed an insurance company to compensate a car owner after it arbitrarily rejected an accident insurance claim. The insurer had attempted to deny liability by citing the National Green Tribunal (NGT) and Supreme Court mandates that prohibit diesel vehicles older than 10 years from plying in the National Capital Region (NCR).

The Core of the Dispute

The complainant owned a 2012 diesel Hyundai Elantra, which was insured with The New India Assurance Company Limited for the period of March 2024 to March 2025. After paying a premium of ₹12,000, the owner faced a severe accident in June 2024, where the vehicle struck an electric pole to avoid hitting a motorcyclist. Following extensive repairs at an authorized workshop costing ₹2.89 lakh, the insurer repudiated the claim, arguing that the vehicle's age made it illegal to operate within the NCR jurisdiction.

Judicial Scrutiny and Findings

A bench comprising President Jaswant Singh and members Neeru Agarwal and Sarvjeet Kaur scrutinized the insurer's actions. The commission noted a glaring contradiction: the insurance company had meticulously verified the vehicle's documents and age before accepting the premium and issuing a valid policy. The bench questioned why, if the company was aware of the Supreme Court and Delhi Government guidelines regarding vehicle age, they proceeded to issue the policy in the first place.

The commission observed that it has become a troubling trend among insurance firms to issue policies under false pretenses and subsequently invent excuses to avoid fulfilling their contractual obligations during the claim process. The denial was termed "arbitrary and unjustified."

Final Verdict and Compensation

The commission ruled that the insurer's actions constituted a "deficiency in service" and an "unfair trade practice." Consequently, the company was ordered to pay:

• ₹60,888 towards the claim amount.
• ₹25,000 as compensation for mental agony.
• ₹11,000 to cover litigation costs.

This ruling serves as a stern warning to the insurance industry that they cannot use regulatory environmental norms as a shield to evade liability once a contract of insurance has been legally established and premiums collected.