The Jammu & Kashmir State Consumer Disputes Redressal Commission, Srinagar, comprising President (O) Smt. Nighat Sultana and Member Mr. Maheep Gupta, held Oriental Insurance Company Ltd. liable to indemnify the entire insured loss despite one of the joint policyholders transferring his share in the insured property to his sister before the loss. The Commission observed that the transfer of ownership between the named insureds did not extinguish the insurer's liability, as it neither altered the insured risk nor negated the insurable interest in the absence of fraud.

Facts:

The complainants, Syed Ahsan-ul-Haq Andrabi and Syed Sabeena Noor, approached the Commission in 2016 alleging that Oriental Insurance Company Ltd. had failed even to register and process their insurance claim. Acting on the complaint, the Commission directed the insurer to appoint a surveyor and settle the claim in accordance with the policy terms.

Although the insurer challenged the direction before the High Court of Jammu & Kashmir and Ladakh, the appeal was dismissed in August 2016. Despite the High Court upholding the Commission's directions, the insurer failed to comply for several years. Although it filed a compliance report in June 2024 stating that a surveyor had been deputed to assess the loss, the survey report was ultimately placed on record only in July 2026

The surveyor assessed the insurer's net liability at Rs. 3,92,959/- but left the question of admissibility open on the ground that the insurance policy stood in the joint names of the siblings whereas, following an earlier transfer, the property had become the sole ownership of Syed Sabeena Noor.

The insurer thereafter sought scrutiny of the ownership documents and contended that, at best, it could be held liable for only 50% of the assessed loss because one of the joint insureds had relinquished his share in the property. It also argued that the delay in disposal could not be attributed solely to it since the Commission had remained non-functional for a considerable period.

Observation and Decision:

The Commission held that the transfer of ownership between two named insured siblings did not extinguish the insurer's liability, as there was no change in the insured risk or any element of fraud. The Commission also rejected the insurer's contention that it was liable only for 50% of the assessed loss, holding that since the transfer was between the named insureds and not to a third party, the insurer remained liable to indemnify the entire loss.

The Commission further observed that the Insurance Company had unjustifiably delayed settlement of the claim despite repeated directions of the Commission, which had been upheld by the High Court.

Accordingly, the Commission allowed the complaint and directed Oriental Insurance Company Ltd. to pay a total sum of Rs. 6,87,196/- to the complainants. The amount comprised the surveyor's assessed loss of Rs. 3,92,959/-, compensation for delay calculated at 6% per annum from the date of institution of the complaint till the date of the order amounting to Rs. 2,44,237/-, and Rs. 50,000/- towards mental agony and litigation expenses.

Taking note of the insurer's "scant regard" for the directions of the Commission and the High Court, it further directed the insurer to deposit Rs. 50,000/- in the Consumer Welfare Fund, while granting it liberty to recover the amount from the officials responsible for the delay. The Commission further directed that failure to comply with the award within 30 days would attract interest at the rate of 6% per annum on the entire awarded amount.

Appearances: Adv. Sajood Amin for the complainants; Adv. N.A. Dendroo for the opposite party.

Case Title: Sayed Ahsan-Ud Haq Andrabi & Anr. V. Oriental Insurance Company Ltd.

Case No.: C.C. No. 21 of 2016

Click Here To Read/Download Order