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Insurance Claim Cannot Be Rejected Without : Kupwara Consumer Commission to Bajaj Allianz
A blaze that left more than stock burned
In a significant ruling reinforcing the on insurers, the , has held that cannot reject a genuine insurance claim on bare allegations of without producing . The Commission partly allowed the complaint of a shop owner whose fire insurance claim was repudiated, awarding him over ₹5.7 lakh in compensation, interest, and .
When an insurer’s investigation goes up in smoke
The complainant, Ghulam Mohammad Shah, ran a readymade garments and cosmetics shop at College Road, Bohipora, Kupwara. On , a fire broke out, destroying stock Shah valued at approximately ₹25 lakh. He held a policy from Bajaj Allianz covering the stock for ₹10 lakh. After the incident, Shah informed the insurer and the authorities. An -licensed surveyor and investigator were appointed. Shah submitted bills to support his claim, but in , the insurer repudiated the claim, alleging the bills were fake and forged. Shah then approached the Consumer Commission alleging .
The in insurance disputes
Insurer Bajaj Allianz argued that the surveyor found the bills to be forged and recommended a “” closure. It contended that Shah failed to provide any explanation despite being given an opportunity. However, the Commission noted a glaring contradiction: while the FIR and report clearly established the incident as a fire, the surveyor’s report described it as a “burglary.” The bench, comprising President Peerzada Qousar Hussian and Member Ms Nyla Yaseen, observed that the survey report was “” and could not be blindly relied upon.
Crucially, the Commission emphasized that the insurer’s own verification team had verified the bills on the spot, and the issuing shopkeepers confirmed their genuineness by affixing seals and signatures. “It is well settled that once the insurer verifies the documents and accepts them during the claim process, a subsequent rejection without amounts to ,” the Commission stated.
Key observations from the judgment
The Commission questioned why, if the bills were indeed fake, the insurer did not initiate any criminal proceedings against Shah or the shopkeepers who had verified them. The subsequent allegation of forgery appeared to be “.” The contradictory survey report—recording burglary instead of fire—was termed an “.”
Final verdict: compensation with interest
Holding Bajaj Allianz liable for and , the Commission directed the insurer to pay:
-
₹5,00,000
for the loss of damaged stock, with
6% per annum interest
from the date of institution () until realization.
-
₹50,000
as compensation for .
-
₹20,000
towards .
The insurer must comply within 30 days of receiving the order. The ruling underscores that insurers must back repudiation decisions with — or flawed investigations will not suffice in consumer forums.
