Owner Wins Rs 5 7 Lakh Payout Burglary Diagnostic Centre

A Srinagar consumer commission has directed Bajaj Allianz General Insurance to pay Rs 5.7 lakh, finding the company liable for wrongly repudiating a burglary claim filed by a woman running a polyclinic and diagnostic laboratory.

President Dr Farah Deeba and Shabnam Munshi (member) further held that an insurer cannot be allowed to take advantage of its own negligence to defeat a legitimate claim.

“It is a settled principle of law that ambiguity in insurance contracts and defects in drafting are to be construed against the insurer. The conduct of OP1 in failing to rectify the admitted discrepancy despite repeated reminders and thereafter repudiating the claim on technical grounds clearly amounts to deficiency in service and unfair trade practice,” the May 30 order read.

The commission was hearing the complaint filed by Treatwell Poly Clinic alleging deficiency in service and unfair trade practice on the part of Bajaj Allianz General Insurance Co Ltd.

It was claimed by the complainant that she had established a polyclinic under the name and style of Treatwell Polyclinic and Clinical Lab for earning a livelihood by means of self-employment. She added that for the establishment and smooth functioning of the unit, the complainant availed financial assistance from the said company.

It was contended that the insurance company issued “shopkeepers packing policy” valid from June 2016 to June 2107 and another “standard fire and perils policy” valid for the period of December 2016 to December 2017.

She claimed that to her ill luck, during the intervening night of July 6, 2017, some unknown persons broke open the locks and committed burglary as a result of which medical equipment, machinery, auto analyser, CС machine, laptop and cash were stolen.

After the complainant came to know about the incident the next morning, she lodged an FIR with the police station and also intimated the insurance company.

Later, the insurance company appointed a surveyor, namely Mehraj-ud-din Shah, for survey and assessment of loss. The complainant submitted all requisite documents to the surveyor as were demanded by him.

However, despite submission of documents and completion of all formalities, she added that the claim was repudiated on the ground that the loss claimed is not covered under the policy.

The complainant contended that she protested and pleaded that the policies were arranged by the bank and the premium was deducted from her account. The complainant alleged that the insurance company was fully aware that the complainant was running a polyclinic and clinical laboratory and the policies were meant to cover the hypothecated stocks, machinery and medical equipment.

Aggrieved by the conduct of the insurance company, the complainant filed a complaint seeking payment of the insurance amount besides compensation and litigation charges. She was represented by advocate Sajood Amin.

The counsel for the insurance company, advocate Imtiyaz A Kungroo, while admitting the insurance policies and also the incident of burglary, resisted the claim on the ground that the policies covered only stocks of medicine and did not cover medical equipment and machinery.

It was contended that the stolen articles were outside the scope of coverage under the policy and therefore the insurance company repudiated the claim. It was contended that the repudiation of the claim is based on policy conditions and the survey report and thus cannot amount to deficiency in service.

The Jammu and Kashmir Bank, on the other hand, maintained that it had merely facilitated the insurance by debiting the premium amounts. The bank pointed out that a health policy had erroneously been issued in the name of one “Nayeem Ahmad” instead of providing coverage for the complainant’s machinery and medical equipment.

The bank further stated that it had taken up the issue with the insurer through emails in January 2017 and that, despite repeated reminders, the insurer acknowledged the discrepancy and assured that the issue would be resolved.

This ruling of the consumer commission highlights that an insurer cannot take advantage of its own negligence to repudiate a valid claim on technical grounds after failing to rectify known discrepancies in policy coverage.

Consumer helpline number of respective state and national consumer commission: For consumer-related grievances, individuals may contact the consumer helpline in their respective states (Jammu and Kashmir Consumer Commission Helpline: 1800 180 7114) or call the National Consumer Helpline at 1915 for assistance.

Richa Sahay is a Legal Correspondent for The Indian Express, where she focuses on simplifying the complexities of the Indian judicial system. A law postgraduate, she leverages her advanced legal education to bridge the gap between technical court rulings and public understanding, ensuring that readers stay informed about the rapidly evolving legal landscape. Expertise Advanced Legal Education: As a law postgraduate, Richa possesses the academic depth required to interpret intricate statutes and constitutional nuances. Her background allows her to provide more than just summaries; she offers context-driven analysis of how legal changes impact the average citizen. Specialized Beat: She operates at the intersection of law and public policy, focusing on: Judicial Updates: Providing timely reports on orders from the Supreme Court of India and various High Courts. Legal Simplification: Translating dense "legalese" into accessible, engaging narratives without sacrificing factual accuracy. Legislative Changes: Monitoring new bills, amendments, and regulatory shifts that shape Indian society. ... Read More