Insurance Claim Cannot Be Rejected Without Cogent Evidence: Kupwara Consumer Commission Directs Bajaj Allianz To Pay ₹5 Lakh
The District Consumer Disputes Redressal Commission, Kupwara, Jammu & Kashmir, has held that an insurer cannot repudiate an insurance claim merely by alleging that the supporting bills are fake unless such allegations are backed by cogent evidence. Holding Bajaj Allianz General Insurance Co. Ltd. liable for deficiency in service and unfair trade practice, the Commission partly allowed a complaint filed by a shop owner whose insurance claim arising from a fire incident had been rejected on the ground that the bills submitted by him were forged.
Facts
The complainant, Ghulam Mohammad Shah, was running a business dealing in readymade garments and cosmetics from a shop at College Road, Bohipora, Kupwara. On 22 July 2017, a fire broke out in the shop, resulting in damage to the stock kept therein. The complainant stated that the stock was worth approximately ₹25 lakh.
The complainant had obtained an insurance policy from Bajaj Allianz General Insurance Co. Ltd., covering the stock for an insured amount of ₹10 lakh. Following the fire, the complainant informed the insurance company and the concerned authorities. An IRDAI-licensed surveyor and investigator were appointed by the insurer to assess the incident and the loss.
The complainant submitted bills and other documents in support of his claim. However, the insurer repudiated the claim, alleging that the bills produced by him were fake and forged. Aggrieved by the rejection, the complainant approached the District Consumer Commission alleging deficiency in service and seeking compensation for the loss suffered.
Contentions of the Insurer
The insurer contended that the complaint was filed with the intention of extracting money and harassing the insurance company and that the complainant had failed to produce the necessary documents to establish his claim.
It submitted that an IRDAI-licensed surveyor and investigator had found the bills submitted by the complainant to be fake and forged, and the surveyor recommended closure of the claim as a “No Claim.”
Observations and Decision
The Commission observed that there was a major contradiction in the insurer's case. While the FIR and Fire and Emergency Services report established that the incident was a fire, the survey report relied upon by the insurer described it as a burglary. The Commission found the survey report unreliable, particularly as the insurer had failed to produce any cogent evidence or other credible material to establish that the bills were fake.
The Commission further noted that the insurer's verification team had verified the bills at the spot, and the issuing shopkeepers had confirmed their genuineness by affixing their seals and signatures. It held that once the insurer had verified and accepted the documents during the claim process, their subsequent rejection without strong and convincing evidence amounted to deficiency in service and unfair trade practice.
Accordingly, the Commission partly allowed the complaint and directed Bajaj Allianz General Insurance Co. Ltd. to pay ₹5 lakh towards the loss caused to the damaged stock along with interest at the rate of 6% per annum from the date of institution of the complaint until realization. The Commission further awarded ₹50,000 as compensation for mental agony and harassment and ₹20,000 towards litigation expenses. The insurer was directed to comply with the order within 30 days of receipt of the order.
Appearances:
For the complainant: - Adv. Shabir Ahmad Bhat
For the OPs: - Ad. Zubair Ahmad Wani
Case Title: Ghulam Mohammad Shah v. Bajaj Allianz General Insurance Co. Ltd. & Ors.