Dharwad Consumer Commission Slaps Reliance Insurance with Compensation Order
In a significant ruling that underscores the obligations of insurance providers under consumer law, the Dharwad District Consumer Disputes Redressal Commission has mandated Reliance General Insurance Company to pay substantial compensation for failing to transfer a motor insurance policy. The commission has directed the insurer to disburse Rs 25,000 as compensation and an additional Rs 5,000 to cover litigation costs to senior advocate Preetam Rege of Dharwad.
Background of the Consumer Complaint
The case originated when Preetam Rege purchased a pre-owned car in June 2025. At the time of this transaction, the vehicle's registration certificate and its existing insurance policy were still registered under the name of the previous owner. The insurance policy in question had been issued by Reliance General Insurance and remained valid until March 2026.
Following the purchase, Rege took the necessary legal steps to transfer the registration certificate into his own name. He then formally applied for the transfer of the insurance policy as per the provisions outlined in Section 157 of the Motor Vehicles Act. This application was accompanied by the prescribed fee and all requisite documentation, fulfilling the statutory requirements.
Alleged Deficiency in Service by the Insurer
Despite these efforts and compliance with legal mandates, Reliance General Insurance failed to process the transfer of the insurance policy to Rege's name. The complainant made repeated requests and even escalated the matter by issuing a legal notice to the company, but to no avail. Frustrated by this persistent inaction, Rege approached the Dharwad District Consumer Commission on October 3, 2025, filing a formal complaint under the Consumer Protection Act. He alleged clear deficiency in service on the part of the insurance provider.
Commission's Observations and Ruling
The Consumer Commission, presided over by President Eshappa Bhute and Member Vishalakshi C Bolashetty, thoroughly examined the records and heard arguments from both parties. In its ruling, the commission emphasized that once a vehicle is legally purchased and its registration is duly transferred, the insurance company holds a statutory duty to transfer the insurance policy upon receipt of a proper application and the required fee.
The commission noted that Reliance General Insurance's failure to execute this transfer, despite receiving reminders and a legal notice, constituted a definitive deficiency in service. This negligence, the panel observed, could have subjected the complainant to severe hardship and financial risk in the event of an accident, as the policy would not have been in his name.
It was further highlighted that although the insurance company eventually transferred the policy after the complaint was lodged, the undue delay had caused significant mental agony and inconvenience to Rege. The commission deemed this delay unacceptable and warranting compensation.
Compensation and Legal Costs Awarded
In light of these findings, the Dharwad District Consumer Disputes Redressal Commission ruled in favor of the complainant. The commission ordered Reliance General Insurance to pay Rs 25,000 as compensation for the deficiency in service and the resultant mental distress. Additionally, the insurer was directed to cover Rs 5,000 in litigation expenses incurred by Rege.
This decision serves as a robust reminder to insurance companies about their responsibilities under consumer protection laws and the Motor Vehicles Act. It reinforces the principle that timely and efficient service is not just a courtesy but a legal obligation, with failures attracting financial penalties and legal repercussions.
