NCDRC Upholds Ruling Against Bajaj Allianz General Insurance

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

Case No.: First Appeal No. 70 of 2014

Summary

The National Consumer Disputes Redressal Commission (NCDRC) denied an appeal by Bajaj Allianz General Insurance Company, which objected to the property’s classification as a “temporary shack” instead of a “restaurant.” The insurance company claimed that the complainant had concealed the fact that the restaurant’s premise was illegal while obtaining the policy. The NCDRC ruled that the insurance company had not proven this, and that the complaint was put up after the complainant had completed all the required paperwork.

 The NCDRC dismissed the insurance company’s argument that the insured structure was not a regular restaurant but rather a makeshift shack. The bench decided that when the building was completely destroyed by fire, complaints against the property’s description could not be made. The State Commission’s contested order was sustained, and the appeal was denied.

About the case

The National Consumer Disputes Redressal Commission (NCDRC) bench, which consists of Dr. Sadhna Shaker as a member and Mr. Subhash Chandra as the presiding member, denied an appeal brought up by Bajaj Allianz General Insurance Company contesting the Goa State Commission’s ruling. The Insurance Company objected to the property’s classification, calling it a “temporary shack” instead of a “restaurant,” but the NCDRC rejected the company’s arguments. The bench decided that since the entire building was destroyed in a fire, these concerns could not be raised later.

Bajaj Allianz General Insurance Co. Ltd. (“Insurance Company”) provided Mr. Bhupender Gahlawat with a fire insurance policy for his shack-turned-restaurant, Kneez Up (“Restaurant”), located in Velsao, Goa. When the insurance policy was in effect, on May 15, 2012, a significant fire caused damage to the restaurant. An independent surveyor determined that there had been a loss of Rs. 17,63,265/-, and the complainant filed a claim with the insurance company. On the other hand, the Insurance Company rejected the claim, citing the Complainant’s misrepresentation of some material facts and her failure to disclose them to the Insurance Company at the time of policy acquisition. 

The State Consumer Disputes Redressal Commission, Goa (the “State Commission”) received a consumer complaint from the aggrieved party. After accepting the complaint, the State Commission ordered the Insurance Company to pay the complainant Rs. 17,63,265 in addition to Rs. 50,000 in compensation and Rs. 10,000 in legal fees. Not happy with this order, the National Consumer Disputes Redressal Commission (“NCDRC”) received an appeal from the Insurance Company. The insurance company claimed that the complainant had hidden the fact that the restaurant’s premise was illegal while getting the policy. The argument it made was based on a show-cause notice that the Complainant received about unauthorized development on the land in question. It further claimed that the eatery was a “temporary shack,” and that the Complainant had concealed the fact that the local Panchayat had issued an order to demolish it.

 The Insurance Company further said that if it had known that the Tourism Department normally only allowed a “temporary shack” and not a restaurant, it would not have given the policy. The complaint, which was being operated as a restaurant, was put up after the complainant had completed all the required paperwork, according to the NCDRC. Regarding the claim that the Insurance Company provided the Complainant with a copy of the notice, the NCDRC ruled that the Insurance Company had not proven this. The notice was for the restaurant’s demolition. Following the acquisition of the insurance policy, the Complainant was the target of all accusations pertaining to illegal building. As a result, the NCDRC dismissed the Insurance Company’s argument that the Complainant had lied about important information while obtaining the fire policy. 

Additionally, the NCDRC disregarded the Insurance Company’s argument that the insured structure was not a regular restaurant but rather a makeshift shack. It was decided that when the building was completely destroyed by fire, these kinds of complaints against the property’s description could not be made. As a result, the State Commission’s contested order was sustained and the appeal was denied.