Delhi State Commission Holds Tata AIG Liable For Wrongful Denial Of Theft Claim

The Delhi State Consumer Disputes Redressal Commission, comprising Bimla Kumari ( Presiding Member), has held M/s Tata AIG General Insurance Co. Ltd. liable for wrongful denial of a theft claim. The Commission observed that the complete repudiation of the claim was not justified and directed that the claim be settled on a non-standard basis. Brief Facts The complainant, Vijay Gupta, had insured his Toyota Fortuner under Policy No. 015504955700 issued by M/s Tata AIG General Insurance Co. Ltd., for an Insured Declared Value (IDV) of ₹22,09,275, upon payment of a premium of ₹54,120. The policy was valid from 13.11.2014 to 12.11.2015. On 01.02.2015, the vehicle was stolen while it was parked outside the complainant's residence at Rajdhani Enclave, Pitampura. An FIR (No. 141/2015) was promptly registered at Saraswati Vihar Police Station, and a non-traceable report was subsequently obtained. The complainant also informed the insurer and submitted all necessary documents for claim settlement. However, the insurer repudiated the claim, alleging violation of Condition No. 4 of the policy. Tata AIG contended that the complainant had acted with gross negligence by leaving the original ignition key inside the dashboard. Challenging the repudiation, the complainant approached the Delhi State Consumer Commission, asserting that the vehicle had been properly locked using the second key and that the spare key kept inside the dashboard was not accessible without forcibly breaking into the car. He alleged that the repudiation amounted to deficiency in service and violated IRDA norms. He sought the insured amount of Rs. 22,09,275/- with interest, along with compensation of Rs.5,00,000/- for mental agony and Rs.55,000/-litigation costs. Arguments of the Opposite Party M/s Tata AIG General Insurance Co. argued that the complaint is liable to be dismissed, as the repudiation of the theft claim was fully justified. They submitted that the claim was denied on the basis of a clear breach of policy terms, particularly Condition No. 4, which requires the insured to take reasonable care and precautions to safeguard the vehicle. The counsel contended that the complainant acted with gross negligence by leaving the original ignition key inside the dashboard of the vehicle while it was parked unattended, which amounts to a fundamental violation of the terms of the policy. Such conduct is contrary to the duty of prudence expected from any reasonable person and directly resulted in the theft. The insurer further argued that an insurance policy is a contractual arrangement, and mere payment of premium does not entitle the insured to claim benefits without complying with policy conditions. Therefore, the repudiation was justified, and there was no deficiency in service on its part. Observations of the Commission The Commission held that Tata AIG General Insurance Co. Ltd. was not justified in repudiating the theft claim in toto merely because the complainant had left a key inside the dashboard. The Commission noted that while there was some negligence on the part of the complainant, it was not serious enough to amount to a fundamental breach of the insurance policy. The commission observed that the complainant had locked the car properly using the second key and had only left the spare key inside the vehicle. The Commission held that this did not show gross negligence or a deliberate violation of the policy terms. The Commission observed that a minor violation of policy terms does not allow the insurer to reject a claim completely. The Commission relied on the decisions of the Supreme Court and the State Commission, including Ashok Kumar v. New India Assurance Co. Ltd. (2023) and HDFC Ergo General Insurance Co. Ltd. v. Callisto Building Solutions Pvt. Ltd., where claims involving similar facts were directed to be settled on a non-standard basis (75%) rather than repudiated entirely. Allowing the complaint, the Commission held that there was a deficiency in service on the part of the insurer. It directed Tata AIG to pay ₹16,56,956.25 (75% of the IDV) to the complainant by 30.12.2025, failing which interest at 6% per annum would apply from the date of filing of the complaint. The Commission also awarded ₹1,00,000 as compensation for mental agony and ₹50,000 towards litigation costs. Case Title: Vijay Gupta vs M/s Tata AIG General Insurance Co. Ltd CC No. 243/2016 Click Here To Read/Download The Order

Delhi State Commission Holds Tata AIG Liable For Wrongful Denial Of Theft Claim

Muhammed Razik

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