NCDRC upholds order for IndusInd General Insurance to pay claim despite fake licence

The National Consumer Disputes Redressal Commission (NCDRC) on 13 October 2026 dismissed an appeal by IndusInd General Insurance Co. Ltd. in a car owner's own-damage claim that the insurer had rejected. The commission upheld orders directing the insurer to pay the vehicle's declared value, which the State Commission recorded as Rs 11,29,415, with interest at 4% a year from 26 November 2019.

What Happened

According to the order, the insurer rejected the claim on 26 November 2019 because the driver at the time of the accident did not hold a valid driving licence. When hired, the driver had shown the policyholder a licence issued by the Sangli RTO and valid until 2032; it was later found to be fake. The order records that the insurer's surveyor had verified the licence as issued by the Sangli RTO.

A District Commission partly allowed the complaint on 5 January 2023, and the Maharashtra State Commission dismissed the insurer's appeal on 13 May 2026. Relying on a March 2020 Supreme Court judgment, the State Commission held that an employer who sees a licence that looks genuine is not expected to check its authenticity with transport offices, and that the insurer had not shown the policyholder was negligent in hiring the driver.

Before the NCDRC, the insurer argued that this principle applies to third-party claims and not to own-damage claims, and that its survey had assessed the loss at Rs 8,67,004. The NCDRC held that the State Commission had correctly applied the Supreme Court's ruling and found no illegality in its order.

At the insurer's request, the commission directed the policyholder to hand over the damaged vehicle and its documents, such as the registration certificate, once the payment is received. Both sides must complete this within four weeks.

What It Means

For owners who employ drivers, the commission held that an own-damage claim should not be refused only because a licence that looked genuine later turned out to be fake, where the owner was not shown to be negligent. The order also shows that when an insurer pays the full declared value (IDV), it can take possession of the damaged vehicle. The order may be appealed. Policyholders with a disputed claim can approach the National Consumer Helpline (1915) or file a complaint through e-Daakhil.

Source: Consumer commission order