Can’t Raise Objections Regarding Nature Of Insured Property At Later Stage, NCDRC Dismisses Bajaj Allianz General Insurance Co.’s Appeal

Brief Facts:

Mr Bhupender Gahlawat obtained a fire insurance policy from Bajaj Allianz General Insurance Co. Ltd. (“Insurance Company”) for his shack-cum-restaurant named Kneez Up (“Restaurant”), situated in Velsao, Goa. On 15.05.2012, when the insurance policy was in force, a major fire damaged the restaurant. A loss of Rs. 17,63,265/- was assessed by an independent surveyor, and a claim was submitted by the Complainant to the Insurance Company. However, the Insurance Company repudiated the claim on the ground that the Complainant misrepresented some material facts and failed to disclose them to the Insurance Company while obtaining the policy. Feeling aggrieved, the Complainant filed a consumer complaint with the State Consumer Disputes Redressal Commission, Goa (“State Commission”). The State Commission allowed the complaint and directed the Insurance Company to disburse Rs. 17,63,265/- to the Complainant along with Rs. 50,000/- in compensation and Rs. 10,000/- legal costs. Dissatisfied with this order, the Insurance Company filed an appeal with the National Consumer Disputes Redressal Commission (“NCDRC”).

The Insurance Company argued that while obtaining the policy, the Complainant concealed the information that the restaurant’s property was illegal. It based its contention on a show cause notice that was issued to the Complainant regarding illegal construction on the concerned property. It further argued that the Complainant also concealed the fact that the local Panchayat issued an order to demolish the restaurant, which was in the form of a ‘temporary shack’. The Insurance Company further submitted that it would not have issued the policy if it had known that the Tourism Department permitted a ‘temporary shack’ and not a restaurant, typically.

Observations by the Commission:

The NCDRC observed that the Complainant had fulfilled all the formalities before erecting the temporary shack, which was being run as a restaurant. With regards to the contention of the show cause notice for demolition of the restaurant, the NCDRC held that the Insurance Company failed to prove that a copy of the notice was presented to the Complainant. All the complaints against the Complainant regarding illegal construction were made after the insurance policy was obtained. Thus, the NCDRC rejected the contention of the Insurance Company that the Complainant had misrepresented material facts at the time of obtaining the fire policy. The NCDRC also rejected the Insurance Company’s contention that the insured structure was just a temporary shack and not a typical restaurant. It held that such objections regarding the description of the property could not be raised at a later stage when the entire structure was burned down in a fire.

Consequently, the appeal was dismissed, and the impugned order of the State Commission was upheld.

Case Title: Bajaj Allianz General Insurance Co. Ltd. vs Bhupender Gahlawat

Case No.: First Appeal No. 70 of 2014

Advocate for the Appellant: Ms. Suman Bagga

Advocate for the Complainant/Respondent: Ms. Tanishq Mehta

Click Here To Read/Download The Order