Pranav B Prem

The District Consumer Disputes Redressal Commission, Baramulla/Bandipora, has allowed a consumer complaint against Bajaj Allianz General Insurance Company and held it liable for deficiency in service and unfair trade practice. The Commission directed the insurer to compensate the complainant to the tune of ₹3,00,000 along with interest, in addition to compensation for mental agony and litigation costs. The matter pertained to the rejection of an insurance claim related to flood damage that occurred during the devastating 2014 Kashmir floods.

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The complaint was filed by Syed Ibrahim Rizvi, a shop owner from Malmoh, Baramulla, who had obtained a loan from J&K Grameen Bank to expand his business. The stock in his shop was insured through a policy obtained via the bank, which was valid from 14-11-2013 to 13-11-2014. In September 2014, the Kashmir valley witnessed massive floods, and Rizvi’s shop remained submerged in floodwaters for nearly 15 days, resulting in severe damage to the insured stock.

Following the damage, Rizvi approached the J&K Grameen Bank with a request to initiate the claim process. Subsequently, the bank issued a formal communication to Bajaj Allianz General Insurance Company dated 19-11-2014, seeking registration of the claim. Despite this intimation, the insurance company did not process the claim or initiate any survey, which led the complainant to file a case before the Consumer Commission.

In its defense, Bajaj Allianz General Insurance contended that the complainant had failed to directly intimate the company regarding the loss, which was a violation of the policy conditions. The insurer claimed that it had not received any formal notice of the loss from the complainant and that had they been informed in time, they would have appointed an IRDA-approved surveyor to assess the damage. They further submitted that the claim was not registered and hence, no action could be taken.

The Commission, however, found that the complainant’s shop was hypothecated to the J&K Grameen Bank and that the insurance policy had been arranged through the bank. The Commission relied upon the communication dated 19-11-2014 from the bank to the insurance company, which was annexed with the complaint. It held that this letter served as valid intimation of the loss. It further observed that in cases where insurance is facilitated through a bank, the bank acts as an agent of the insurer, and hence, notice to the bank is deemed as notice to the insurance company.

The Commission referred to the National Consumer Disputes Redressal Commission's decision in New India Assurance Co. Ltd. v. Smt. Poonam Sharma & Ors (2024), where it was held that a bank’s forwarding of a claim constitutes valid intimation, even if the insurer denies receiving the communication. The bench, comprising President Peerzada Qousar Hussain and Member Ms. Nyla Yaseen, concluded that Bajaj Allianz’s failure to act on the intimation given by the bank amounted to deficiency in service and unfair trade practice. The Commission observed: “Denial of registering the claim of the insured complainant’s shop despite having been informed by the concerned Bank regarding the loss of the stocks due to floods amounts to unfair trade practice as well as deficiency in service on the part of the opposite parties.”

Accordingly, the Commission issued the following directions:

• Bajaj Allianz was directed to register the claim and pay ₹3,00,000, the sum assured, along with 7% interest from the date of order until realisation.

• The insurer was also directed to pay ₹1,00,000 for causing mental agony and harassment.

• An additional ₹20,000 was awarded as litigation costs.

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The order is to be complied with within four weeks from the date of the decision, i.e., 15th July 2025.

Appearance

Adv. Javid Ahmad Parry for the complainant, Adv. F.D Bhat for the OP 1 and 2, Nemo for OP 3.

Cause Title: Syed Ibrahim Rizwi V. The Chairman, Bajaj Allianz General Insurance Company & Ors.

Case no: Consumer Complaint No. 15/2016

Coram: Peerzada Qousar Hussain [Preisdent], Ms Nyla Yasecen [Member]