Investigation by private agency hired by insurance company does not replace police probe: NCDRC imposes costs of Rs 1 lakh on Tata AIG

The National Consumer Disputes Redressal Commission (NCDRC) imposed costs of Rs. 1 lakh on insurance company Tata AIG Life Insurance for undue harassment, loss, and injury caused to a policy holder (Kamla Devi v. Tata AIG Life Insurance Corporation Ltd). .Presiding Member Dinesh Singh held that investigation by a private agency hired by the insurance company to probe an incident cannot replace the investigation conducted by the police. The order states,“In a case of unnatural death, where a DD entry is duly made, an inquest is duly carried out, a post mortem is duly conducted, a private agency providing “medico-legal services” does not wholly substitute for and replace Investigation by the Police.”.In the present case, the husband/father of the complainants had obtained four insurance policies from the respondent through one agent. The husband passed away after being hit by a running train while crossing the tracks..On his death, benefits from three policies were directed to the wife and son. However, the company denied the claim on the fourth policy, asserting that the death was not an accident but a suicide. The company also argued that the first three policies were concealed while taking the fourth policy..While deciding the matter, the Commission stated that there was no evidence that suggested any malafide on the part of the life-insured. It relied on the Supreme Court judgment in M/s Modern Insulators Ltd v. Oriental Insurance Co Ltd, in which it was held,“The non-disclosure of the previous policies by the life assured is not fatal to the claim of the complainants.”.The NCDRC observed that the State Commission principally relied on the medico-legal opinion of a private agency while determining that the death was by suicide. However, the post-mortem report as well as the police report concluded that railway accident could not be ruled out as a cause of death. .The police report stated, “While crossing the railway line was coming from one colony to another in a hurry and due to hurry might have fallen on railway line and due to fall died by coming beneath the speedy train. Therefore, the cause of this accident due to rail accident cannot be denied. The cause of death in this case railway accident cannot be ruled out.”.In this light, the NCDRC found that a private agency engaged by the insurance company cannot substitute the police..While setting aside the State Commission order, the Presiding Member also advised the insurance company to imbibe systemic improvements in the future so as to avoid inconsistency and arbitrariness in decision making..The respondent was accordingly directed to settle the claim in question with interest at the rate of 9% per annum from the date of filing of the complaint before the State Commission till realization, within a period of four weeks from today. .Out of the costs of Rs 1 lakh, Rs 50,000 was directed to be paid to the complainants and Rs 50,000 to be deposited in the Consumer Legal Aid Account of the State Commission..Advocate Praveen Kumar Aggarwal appeared for the appellants. The respondent was represented by Advocate S Hari Haran..[Read order here]