Non-Settlement Of Genuine Insurance Claims Is Unfair Trade Practice: Kupwara District Commission Holds Baja Allianz Liable

Brief facts:

The complainant is the owner of a TATA Sumo vehicle bearing Registration No. JK09-5701 which was insured with Bajaj Allianz General Insurance ('Insurer'). The policy was valid from 18.04.2015 till 17.04.2016. As per the complainant, the vehicle met with an accident at Sirajpora on 19.03.2016 while plying from Vilgam to Handwara. An FIR was also lodged by the complainant. The vehicle suffered heavy loss due to the accident. Accordingly, the complainant approached the insurer to register his claim and a surveyor was appointed to assess the loss. Moreover, the complainant was asked by the insurer to submit a translated copy of the FIR, mechanical inspection report, other bills and documents. The complainant submitted all the documents as requested by the insurer. As per the complainant, despite submission of the requisite documents, he was made to run from pillar to post but was not compensated for his loss.

It was stated that the vehicle was the only source of income of the complainant and his family was solely dependent on that income. Further, the complainant is also not in a position to repay the loan of the vehicle availed from the bank. It was his contention that the non-settlement o the insurance claim has caused him mental agony. Hence, a complaint was filed b y the complainant against the insurer and its authorized officer.

Submissions of the insurer:

The insurer submitted that the permit for the vehicle was issued in the name of the ex-owner of the vehicle- Mansoor Ahmed Khan and Altaf Ahmed Khan. It was submitted that the complainant has not obtained any permit to ply the vehicle about which he was duly informed. As per the insurer, it was in violation of the terms and conditions of the policy and the complainant was asked to provide a valid permit. On failure of the complainant to produce any permit, the insurance claim was righly repudiated as per the insurer.

Observations of the commission:

The bench took note of the facts and observed that the insurer was duty bound to settle the claim of the complainant after registering it but nothing has been done despite receipt of all documents. It was further observed that no evidence has been submitted by the insurer to prove any breach of terms and conditions of the policy. Thus, it was held that failure to settle genuine insurance claim within the stipulated period amounts to unfair trade practice under the Consumer Protection Act, 2019.

Hence, the complaint was allowed with the following directions:

1. 1.The insurer was directed to pay the sum assured.
2. 2.Rs. 1,00,000 as costs for mental agony and indulging in unfair trade practice.
3. 3.Rs. 20,000 as litigation charges.

Case Title: Irfan Ahmad vs Bajaj Allianz General Insurance Company

Case Number: Consumer Complaint No. 14/2017

Date of Decision: 31.07.2025

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