Tech support firm seeks Rs 1,900 crore from HDFC Ergo
, TNN|
Dec 21, 2017, 11.07 AM IST
The National Consumer Disputes Redressal Commission (NCDRC) has sought response from HDFC Ergo General Insurance Company on a complaint filed by distressed tech support provider iYogi Technical Services seeking Rs 1,900 crore compensation for deficiency in services resulting in a default judgment against it by a US court.
Claiming to have taken aprofessional liability policy from HDFC Ergo in October 2014, which was valid for a year for $10 million, iYogi complained to NCDRC through advocate Manish Kumar that when it faced the lawsuit filed by the US attorney general to "stop a scam that uses deception and scare tactics to pressure consumers into buying unnecessary tech support services", the insurance firm did not fulfil its obligation to provide the requisite money promised under the insurance policy to engage competent lawyers before the Seattle court to defend the lawsuit.
Arguing for iYogi before a bench of Justice Ajit Bharihoke and member Anup Thakur, senior advocate Sukumar Pattjoshi said denial of obligated financial support from HDFC Ergo mandated under the insurance policy "forced iYogi to remain unrepresented to defend against the alleged claims brought against it in the court in US, thereby resulting in a loss of reputation and withdrawal of partners that supported its operations. As a result of withdrawal of partners, iYogi's net worth got completely eroded leading to significant erosion in market capital and shareholder value of $263 million".
"HDFC Ergo's refusal to defend a lawsuit by making unreasonable interpretations of an insurance policy, iYogi's entire market capitalisation had been completely eroded and it is under these compelling circumstances, in order to recover its claim against the various debtors and entities, it was constrained to file lawsuits as an indigent person," Pattjoshi said.
The NCDRC bench, in its order, said, "Complaint is admitted subject to just exceptions. Issue notice of the complaint to the opposite parties under Section 13(2) of the Consumer Protection Act, 1986, to make it clear that if the opposite parties wish to file written statement, they may do so within 30 days from the date of service of notice of the complaint, failing which right to file the written statement may be closed. List the matter on July 24, 2018."
Claiming to have taken aprofessional liability policy from HDFC Ergo in October 2014, which was valid for a year for $10 million, iYogi complained to NCDRC through advocate Manish Kumar that when it faced the lawsuit filed by the US attorney general to "stop a scam that uses deception and scare tactics to pressure consumers into buying unnecessary tech support services", the insurance firm did not fulfil its obligation to provide the requisite money promised under the insurance policy to engage competent lawyers before the Seattle court to defend the lawsuit.
Arguing for iYogi before a bench of Justice Ajit Bharihoke and member Anup Thakur, senior advocate Sukumar Pattjoshi said denial of obligated financial support from HDFC Ergo mandated under the insurance policy "forced iYogi to remain unrepresented to defend against the alleged claims brought against it in the court in US, thereby resulting in a loss of reputation and withdrawal of partners that supported its operations. As a result of withdrawal of partners, iYogi's net worth got completely eroded leading to significant erosion in market capital and shareholder value of $263 million".
"HDFC Ergo's refusal to defend a lawsuit by making unreasonable interpretations of an insurance policy, iYogi's entire market capitalisation had been completely eroded and it is under these compelling circumstances, in order to recover its claim against the various debtors and entities, it was constrained to file lawsuits as an indigent person," Pattjoshi said.
The NCDRC bench, in its order, said, "Complaint is admitted subject to just exceptions. Issue notice of the complaint to the opposite parties under Section 13(2) of the Consumer Protection Act, 1986, to make it clear that if the opposite parties wish to file written statement, they may do so within 30 days from the date of service of notice of the complaint, failing which right to file the written statement may be closed. List the matter on July 24, 2018."
(This article was originally published in The Times of India)
