Insurance Claim Denied: Consumer Complaint Dismissed Over Timing of Construction.


22 October 2024 Civil Revision >> Civil & Consumer Law   |   Consumer Protection Act >> Consumer Rights   |   Insurance Claim/Money Rejected >> Insurance  

A recent ruling by the National Consumer Disputes Redressal Commission (NCDRC) has upheld the dismissal of a complaint filed by M/s Jai Bharat Breeding Farm and Mr. Kartar Singh against Oriental Insurance Company Limited and Canara Bank. The dispute centered on a repudiated insurance claim related to damage sustained at a poultry farm.

The petitioners had sought redressal after their insurance claim, filed under a Standard and Special Perils Policy, was denied by Oriental Insurance. The policy, effective from March 15, 2010, covered the poultry farm for a sum of Rs. 2,97,00,000. Following a reported loss, a surveyor appointed by the insurance company assessed the damage at Rs. 11,56,367. However, the claim was subsequently repudiated.


 

 

The core issue revolved around the timing of the construction of the damaged shed and machinery. The surveyor's report indicated that the shed and machinery were completed in June 2010, several months after the insurance policy was issued. This discrepancy was further supported by the petitioners' own balance sheet, which showed "machinery under installation" and "building under construction" as of March 31, 2010.

Both the District Consumer Disputes Redressal Forum, Jind, and the State Consumer Disputes Redressal Commission, Panchkula, Haryana, dismissed the petitioners' complaint and subsequent appeal, respectively. The NCDRC, in its recent ruling, concurred with these findings.

The NCDRC emphasized its limited jurisdiction in interfering with concurrent findings of lower consumer forums, citing established Supreme Court precedents. These precedents highlight that the NCDRC's revisional powers are restricted to cases involving jurisdictional errors, material irregularities, or patent illegalities.

In this case, the NCDRC found no such irregularities in the orders of the State Commission and the District Forum. The court noted that the petitioners had essentially reiterated arguments already presented before the lower forums, without introducing any substantial new evidence.

Furthermore, the NCDRC highlighted the petitioner Kartar Singh’s own written statement, dated July 6, 2010, admitting that shed no. 6 was completed in May-June 2010. This admission directly contradicted the claim that the shed was covered by the policy, which was issued in March 2010.

The NCDRC concluded that the damaged shed and machinery were not in existence at the time the insurance policy was issued, thereby validating the insurance company's decision to repudiate the claim. Consequently, the revision petition was dismissed, and the orders of the State Commission and the District Forum were upheld.

This ruling underscores the importance of accurate information and timely disclosure in insurance policies. It serves as a reminder that insurance coverage typically applies to existing structures and assets, and that discrepancies in construction timelines can significantly impact the validity of claims.


Section 21, Consumer Protection Act - 1986  

Consumer Protection Act, 1986