Many Insurance Cases Turned Down after SC Verdict

Consumer forums reject pleas if cases don't start within 2 years of a dispute

Consumer Disputes Redressal Forums are rejecting many insurance-related cases after a recent Supreme Court Judgment on time-barred claims. "Almost 70% of insurance cases in the Maharashtra Commission have been rejected after the Supreme Court's verdict," said Sudhir Gudhal, director, Magus Corporate Advisor, a firm that assists corporates manage claims. "The judgment is being used to reject even fair cases." 
The judgment, in the Kandimalla Raghavaiah & Co, a tobacco firm in Andhra Pradesh, vs National Insurance Company case, said legal proceedings in consumer cases should start within two years of a dispute arising. 
Consumer forums, the platform preferred over civil courts for quickly settling low-ticket-size claim disputes, many related to insurance and banking, are also turning most cases away as they struggle to dispose of those that have already piled up due to increasing awareness among consumers about their rights. 
"Consumer forums (councils) are turning away aggrieved consumers emptyhanded by not entertaining their cases due to the lengthy documents involved," says Geetanjali Dutta, an independent lawyer who deals in consumer disputes. 
Generally, consumer protection forums, or consumer courts, established under the Consumer Protection Act of 1986, deal with cases more expeditiously than civil courts, where the need for trials drag cases and burden aggrieved consumers with huge legal expenses that could go up to . 4 lakh. 
There are forums at the district level (Consumer Disputes Redressal Forum), at the state level (State Consumer Protection Council, or state commission) and at the national level (Central Consumer Protection Council, or national commission). 
"It's mostly mediclaim disputes from the insurance segment that consumer forums mostly deal with," says Tapan Dutta, chairman, Bombay Suburban Consumers Association. "Many insurance 
companies 
deny things they have promised," he says. "Even in the consumer forums, many a time they ask for documents or details that are irrelevant, making the (disputeredressal) process lengthier and costly for middle-class people." 
Irda guidelines suggest cases should be settled in six months, but companies take 12-18 months to settle them. The irony is that a consumer court takes 3-6 years to settle a case, while civil courts take 10-12 years to settle a claim. There is also a glut of cases related to banking, automobile, and electricity. 
There are currently 10,062 cases pending with the National Commission, 95,800 with State Commission and 2.48 lakh with the district forums.