South Mumbai District Commission Holds Bajaj Allianz General Insurance Co. Liable For Wrongful Repudiation Of Genuine Claim

Brief Facts:

The Complainant purchased a Maruti Swift Dezire Car for his livelihood and obtained an insurance policy from Bajaj Allianz General Insurance (“Insurance Company”). The insurance premium paid by the Complainant was Rs. 26,233/- for a sum assured of Rs. 5,95,380/-. Later, the car was stolen while travelling at Mumbai Central. The Complainant promptly reported the theft to the Insurance Company and subsequently filed a criminal complaint against the alleged perpetrator at Nagpada Police Station in Mumbai. The Complainant then submitted a claim of Rs. 5,95,380/- along with necessary documents to the Insurance Company. However, the Insurance Company denied the claim. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, South Mumbai, Maharashtra (“District Commission”) against the Insurance Company.

In its written version, the Insurance Company contested the allegations raised by the Complainant. The main defences presented were twofold: Firstly, it argued that the Complainant failed to exercise reasonable care as stipulated under Condition No. 4 of the policy terms. This condition mandated that the insured must take all reasonable steps to safeguard the vehicle from loss or damage, including not leaving the vehicle unattended without proper precautions. The Insurance Company claimed that leaving the key in the vehicle, as reported by the driver to the police, demonstrated negligence on the part of the Complainant or his representative, which contributed directly to the theft.

Secondly, the Insurance Company argued that it issued a notice asking the Complainant to clarify the circumstances under which the driver left the ignition key in the vehicle during the incident. However, the Complainant failed to respond to this notice, which further supported the denial of the insurance claim.

Observations by the District Commission:

The District Commission noted that the driver left the vehicle momentarily to purchase food, at the alleged perpetrator's request, keeping the engine and air conditioning running for his comfort. The District Commission noted that the driver's actions were reasonable under the circumstances, as he adhered to the passenger's request to keep the car running for comfort, a common practice in such situations. It held that the perpetrator took advantage of the driver's brief absence to steal the vehicle which absolved the driver and the Complainant of negligence.

The District Commission noted that the Insurance Company's grounds for denying the claim based on alleged negligence were untenable, as the evidence demonstrated that due care was exercised to prevent theft. The District Commission also criticized the lack of diligence shown by the Mumbai police in tracing the stolen vehicle. Therefore, the District Commission held the Insurance Company liable for deficiency in services.

Consequently, the District Commission directed the Insurance Company to pay the claim amount of Rs. 5,95,380/- to the Complainant along with reasonable interest. Additionally, the District Commission directed the Insurance Company to pay a compensation of Rs. 50,000/- for mental anguish and litigation costs.

Case Title: M/s. Sumit Tours & Travels vs Bajaj Allianz General Insurance Co. Ltd.

Case Number: 216/2016

Date of Pronouncement: 14/06/2024