Hisar District Commission Holds Bajaj Allianz General Insurance Co. Liable For Wrongful Repudiation Of Claim

Brief Facts:

The Complainant was the registered owner of a 'Maruti Swift VDI' which was insured with Bajaj Allianz General Insurance Co. Ltd. (“Insurance Company”) through an agent. On November 25, 2018, the Complainant went to the Rally Ground parked the vehicle in a designated parking area, and properly locked it. However, when he returned to the spot after some time, he found the vehicle missing. Despite his efforts, he could not locate the vehicle. Consequently, he lodged an FIR under Section 379 of the IPC and informed the agent about the incident. Following the instructions from the agent, he submitted the necessary documents to the insurance company and also provided the untraced report of the vehicle. Despite repeated requests and visits, the insurance company did not settle the insurance claim for the stolen vehicle and kept delaying the matter. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Hisar, Haryana (“District Commission”) against the insurance company and the agent.

In response, the insurance company contended that the complaint involved the Complainant's acts and conduct, unfair trade practice, and raised questions of law and fact. It stated that the Complainant took a private car package policy for the vehicle. It highlighted that there was an 11-day delay in lodging the FIR from the date of the alleged theft and a 22-day delay in informing the insurance company about the theft. Further, the Complainant fabricated the story about the parking of the vehicle and indicated that the vehicle was stolen from the roadside, not from a designated parking area.

The agent admitted to visiting the complainant's residence, examining the vehicle, taking photographs, and collecting the insurance premium in cash, after which the insurance company issued the insurance policy. The agent sought of dismissal of the complaint.

Observations by the District Commission:

The District Commission noted that the insurance company repudiated the Complainant's claim alleging that there was misrepresentation and concealment of material facts, specifically alleging that the vehicle inspected for insurance was different from the one reported stolen. The District Commission held that the insurance company cannot introduce new grounds for repudiation beyond those stated in the rejection letter.

The District Commission held that it was the duty of the insurance company to substantiate its allegation of misrepresentation with concrete evidence. The agent admitted in her written statement that she visited the Complainant's residence, inspected the vehicle, and collected the premium in cash after taking photographs of the vehicle. The District Commission noted that this confirmed that the insurance policy was issued after a proper inspection of the vehicle. The District Commission found it surprising that the insurance company alleged the vehicle produced during the inspection was different from the stolen vehicle, especially when an untraced report was filed by the police.

The District Commission noted that the insurance company failed to present any document proving the Complainant concealed material facts when taking the policy. Moreover, the insurance company did not submit the surveyor report. The District Commission also held that the repudiation was not based on any delay in informing the police or the insurance company, nor was there any claim that the Complainant failed to cooperate in the vehicle search. This indicated that the insurance company deprived the complainant of his claim on technical grounds without valid reasons.

Therefore, the District Commission held the insurance company liable for being negligent and deficient in providing services. As a result, the District Commission directed the insurance company to pay the Insured Declared Value (IDV) of Rs. 3.50,235/- along with interest at the rate of 9% per annum to the Complainant. Additionally, the Complainant was instructed to execute any necessary paperwork under the Motor Vehicle Act and IRDA regulations. The insurance company and the agent were further ordered to compensate the Complainant with Rs. 20,000/- for mental agony and harassment and Rs. 10,000/- for litigation expenses.

Case Title: Naresh Kumar vs Bajaj Allianz General Insurance & others

Case Number: CC No.380/2019

Date of Decision: 30.5.2024