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Chandigarh insurance firm fined ₹30k for deficiency in service
A complaint was filed by Amartex Industries Limited, Chandigarh, against United India Insurance Company Limited, Manimajra, and its regional office in Chandigarh. Also, a case was filed against Garg Insurance Consultancy Services, Panchkula
The District Consumer Disputes Redressal Commission has penalised an insurance company for declining the claim of a clothing business house.
A complaint was filed by Amartex Industries Limited, Chandigarh, against United India Insurance Company Limited, Manimajra, and its regional office in Chandigarh. Also, a case was filed against Garg Insurance Consultancy Services, Panchkula.
The company that moved the complaint runs the business of manufacturing and sale of clothing, ready-made garments, and food chain division and is into the business of sale of general merchandise in retail. It runs several outlets in the tricity region.
It is alleged that the insurance company through its agent Garg Insurance Consultancy Services approached the company offering to insure all the stocks at its 12 different outlets by projecting that the same would be comprehensive and shall cover all incidents of losses due to fire, theft, burglary and shortage of stocks due to any reason whatsoever or loss to stocks or movable properties by fire, etc.
The clothing company bought the policy, as per which the entire stock and trade of the Mohali outlet of the complainant was insured with a total value of ₹4,50,00,000.
During the stock audit of the Mohali outlet store, two theft cases—one in May 2021 and another in August 2021—were reported and written complaints were filed.
The complainant said the insurance company was also informed about the incident and all the relevant documents were submitted.
However, after about eight months of filing the complaint, the insurance company repudiated the claim in May 2022, on the ground that the surveyor found that the claim was not covered as it was a case of theft and not burglary.
Hence, this consumer complaint was filed.
In the commission, the opposition parties did not turn up before the commission, despite proper service, hence the case was proceeded against ex-parte, the order mentioned.
The commission observed that the said act certainly amounts to a deficiency in service on their part and the present consumer complaint deserves to succeed.
It observed that since the surveyor after scrutiny of the entire record of the complainant assessed the total loss to the extent of ₹13,40,941 (after deducting 10% on account of dead stock), the insurance company is liable to pay the said amount to the complainant along with interest and compensation etc.
The forum also directed the firm to pay ₹13,40,941 to the complainant along with interest @ 9% per annum from the date of repudiation of the claim, which is May 6, 2022, onwards. Also, to pay ₹20,000 as compensation for causing mental agony and harassment, and to pay ₹10,000 as costs of litigation.
