The National Consumer Disputes Redressal Commission (NCDRC) has ruled in favor of the Andhra Cricket Association, holding United India Insurance Co. Ltd. liable for a deficiency in service. The insurance company had wrongfully repudiated a claim related to the cancellation of a One Day International cricket match between India and West Indies, scheduled for October 14, 2014, in Vishakhapatnam. The match was cancelled due to cyclone Hudhud, which hit the city on October 12, 2014.
The Andhra Cricket Association had taken an insurance policy from United India Insurance Co. Ltd. to cover any losses in case the match was cancelled. The policy insured the match day, October 14, 2014. However, the insurance company argued that the policy was only valid for 24 hours, starting from midnight on October 14 to midnight on October 15. They claimed that the cyclone occurred before the policy period, and therefore, the claim was not valid.
The NCDRC bench, presided by Justice A.P. Sahi, rejected the insurer’s claim, stating that the cyclone was a covered peril under the insurance policy. The commission applied the rule of “Contra Proferentem,” which means that the language of a contract is to be taken most strongly against the party using it. In this case, the commission held that the repudiation of the insurance claim was unjustified, and United India Insurance Co. Ltd. was guilty of deficiency in services.
As a result, the commission directed the insurance company to pay Rs. 2,35,81,470 to the Andhra Cricket Association, along with an interest of 6% from the date of filing the complaint. The commission’s decision emphasizes the importance of interpreting insurance contracts in a way that indemnifies losses caused by covered perils, rather than giving a narrow interpretation that defeats the purpose of the contract.
The case highlights the need for insurance companies to honor their commitments and provide fair compensation to policyholders in the event of a claim. The NCDRC’s decision sets a precedent for similar cases, where insurance companies may try to repudiate claims on technical grounds. The ruling ensures that policyholders are protected and that insurance companies are held accountable for their actions.