Kupwara Consumer Commission: Bajaj Allianz Guilty Of Deficiency In Service For Underpaying Fire Insurance Claim; Directed To Pay ₹4.76 Lakh With Interest And Compensation
Pranav B Prem
The District Consumer Disputes Redressal Commission, Kupwara, comprising Peerzada Qousar Hussain (President) and Ms. Nyla Yaseen (Member), held Bajaj Allianz General Insurance Company Ltd. liable for deficiency in service and unfair trade practice for underpaying the fire insurance claim of a shop owner. The Commission directed the insurer to pay ₹4,76,190/- with 6% interest from the date of the claim till realization, along with ₹50,000/- as compensation for mental agony and inconvenience.
Background
The complainant, Madina Electricals, through its proprietor Mohammad Shafi Malik, insured his electrical goods shop located at Bypass Road, Kupwara, under Policy No. 0G-15-1205-4092-00008043, valid from June 11, 2014, to June 11, 2015, by paying a premium of ₹4,961/-. On June 20, 2014, the shop was completely gutted in a devastating fire. The Fire and Emergency Department and local police visited the site and issued a certificate confirming the incident. Despite repeated follow-ups, the insurance company did not settle the claim adequately, compelling the complainant to file a case before the Kupwara District Consumer Commission in 2017.
Complainant’s Contentions
The complainant contended that he had submitted all relevant documents and purchase bills showing a stock value of ₹21,51,689/-, but the insurer’s surveyor arbitrarily assessed the loss at only ₹4,50,000/-. He alleged that this constituted a clear case of under-assessment and deficiency in service, as the insurer ignored the evidence and refused to compensate him for the actual loss suffered. He sought full payment of the insured amount, compensation for mental agony and financial distress, and interest for the delay in claim settlement.
Insurance Company’s Stand
The insurance company denied all allegations and maintained that the complaint was false and frivolous. It contended that the claim had been settled as per the surveyor’s report and the policy terms, and the amount of ₹4,48,000/- had been duly paid to the complainant after necessary deductions. The insurer argued that the complaint was filed only to exert pressure and that no further amount was payable under the policy.
Findings of the Commission
After examining the evidence, including witness testimonies, surveyor’s report, and documentary records, the Commission noted that the complainant had indeed furnished purchase bills and records reflecting stock worth over ₹21.51 lakh at the time of the incident. The Commission pointed out that even the insurer’s own surveyor, Syed Nazir Ahmad Indrabi, admitted that the complainant’s shop was completely gutted by fire and that he had been provided with all relevant documents. Despite this, the surveyor restricted the loss assessment to only ₹4.5 lakh, without offering a valid justification. The Commission observed: “The surveyor despite accepting the stock position of the complainant’s shop assessed the loss as ₹4,50,000/-, which seems not to be tenable. The insurer ought to have assessed the loss in accordance with the bills submitted at the time of survey. The loss assessed by the surveyor is deemed to be undervalued.” It held that the under-assessment and underpayment of the claim constituted unfair trade practice and deficiency in service on the part of the insurance company.
Allowing the complaint, the Commission directed Bajaj Allianz General Insurance Company Ltd. to:
Pay ₹4,76,190/- to the complainant, worked out as per the average clause, along with interest at 6% from the date of claim till realization.
Pay ₹50,000/- as compensation for the mental agony and inconvenience caused due to delay and underpayment.
The Commission further directed the insurer to comply with the order within four weeks from the date of receipt.
Cause Title: Madina Electricals vs. Bajaj Allianz General Insurance Company Ltd.
Case No: CC 08/2017
Coram: Peerzada Qousar Hussain (President), Ms. Nyla Yaseen (Member)
