Bihar State Commission Holds Bajaj Allianz General Insurance Co. Liable For Wrongful Repudiation of Valid Claim

The State Consumer Disputes Redressal Commission, Bihar bench of Gita Verma (Judicial Member) and Md. Shamim Akhtar (Judicial Member) held Bajaj Allianz General Insurance Co. Ltd. liable for deficiency in service for wrongfully repudiating a valid insurance claim despite receiving all required documents. Negligence on the part of the Insurance Company's lawyer for his failure to appear for the proceedings was also attributed to the Insurance Company itself.

Brief Facts:

The Complainant purchased a pick-up van for self-employment and income generation. To finance the van, he took a loan from the Central Bank of India (“Bank”). The van was also insured with Bajaj Allianz General Insurance Co. Ltd. (“Insurance Company”), with a coverage of Rs. 5,62,000/-. During the subsistence of the policy, the van met an accident in the Saran district. An FIR was filed for the same, followed by its seizure by the local police. The van was finally released and returned to the Complainant in a severely damaged manner. Subsequently, the Complainant raised a claim with the Insurance Company.

The Insurance Company appointed a surveyor to assess the loss. The surveyor assessed the van in a garage situated in Ara. The garage provided an estimated repair cost of Rs. 6,37,850/-. The surveyor collected the necessary documents from the Complainant and assured that the claim would be processed promptly. Despite this, the Insurance Company rejected the claim. It contended that the Complainant failed to submit certain requested documents for claim settlement.

Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Ara, Bihar (“District Commission”). The Insurance Company failed to appear before the District Commission. Therefore, it was proceeded ex-parte. The District Commission allowed the complaint and directed the Insurance Company to pay Rs. 6,37,850/- as the insured amount, Rs. 10,000/- as compensation for mental agony and Rs. 5,000/- as litigation cost.

Aggrieved by the decision of the District Commission, the Complainant filed an appeal before the State Consumer Dispute Redressal Commission, Bihar (“State Commission”).

Observations of the State Commission:

The reason cited by the Insurance Company for its failure to appear before the District Commission was that its lawyer failed to appear for the proceedings despite being provided with a 'vakalatnama'. The State Commission held that it was not a valid excuse for its absence.

The Insurance Company also submitted a Xerox copy of the aforementioned 'vakalatnama' in support of its explanation. It stated that it only became aware of the District Commission's order at the execution stage, which led to the filing of the appeal. However, the State Commission found this reasoning unacceptable. It was observed that the Insurance Company had full knowledge of the case and had appointed the lawyer specifically to contest it.

The State Commission cited Order 3, Rules 1 and 2 of the Code of Civil Procedure (CPC) and held that a lawyer holding a 'vakalatnama' acts as the legal agent of the party. Therefore, any negligence by the lawyer is legally attributed to the party they represent.

The State Commission further observed that the Complainant had provided an affidavit supporting his claim and testified as a witness. His testimony remained uncontested and was therefore accepted. Additionally, he submitted multiple documents to substantiate his evidence which were reviewed by the District Commission. Based on the unchallenged oral testimony and supporting documents, the State Commission held that the Complainant had indeed submitted all necessary documents required for claim settlement as per the policy's terms. Therefore, the Insurance Company's repudiation of the claim constituted a deficiency in service. The State Commission upheld the District Commission's decision and allowed the complaint.

Case Title: Bajaj Allianz General Insurance Co. Ltd. vs Sri Ashish Ranjan Singh and Ors.

Case No.: Appeal No. 95 of 2022

Advocate for the Appellant: R.C. Narayan

Advocate for the Original Complainant/Respondent: S.K. Dubey and B.B. Sinha

Date of Pronouncement: 05.11.2024

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