Chhattisgarh Consumer Court Rules in Favor of Complainant Against Insurance Company

Chhattisgarh Consumer Court Rules in Favor of Complainant Against Insurance Company

Chhattisgarh Consumer Court Rules in Favor of Complainant Against Insurance Company

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The Chhattisgarh consumer disputes redressal commission has issued a significant ruling, directing an insurance company to pay Rs 85,71,271 along with 6% interest to M/s. Shri Shyam Food Products. The ruling comes after the insurance company repudiated a claim for damaged stock, leading to a legal battle between the two parties.

M/s. Shri Shyam Food Products filed a complaint alleging restrictive trade practices by the Oriental Insurance Company, which had repudiated an insurance claim. The insurance policy, covering a sum assured of Rs 1,20,00,000 for the period between April 2016 to April 2017, aimed to insure the stock maintained by the complainant during business operations.

The dispute originated from a fire incident in May 2016, damaging the stock and prompting a preliminary survey by a surveyor appointed by the insurance company. Subsequently, a final survey assessed the loss at Rs 85,71,271, along with a compensation claim for mental agony and harassment. Despite efforts to settle the claim, the insurance company repudiated it in July 2019.

Alleging unfair repudiation based on undisclosed grounds and failure to adhere to regulations set by the Insurance Regulatory and Development Authority of India, the complainant asserted that the company’s actions constituted deficiency in service and unfair trade practices. The court agreed, emphasizing the company’s obligation to act upon the final survey report and timely settlement of claims.

Consumer Court President Justice Gautam Chourdiya stated that the insurance company’s failure to act upon the final survey report and unnecessary delays constituted deficiency in service and unfair trade practices, violating regulations and the Insurance Act.

In its ruling, the Consumer Court directed the insurance company to pay the awarded amount to the complainant along with the cost of litigation. This decision underscores the importance of adherence to regulations and timely claim settlement in consumer disputes.

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