Insurance firms can’t use rules to deny customers their rights

Consumer laws are not to be applied by strict word-to-word implementation as dictated in other laws. This order was passed by the Jammu and Kashmir State Consumer Disputes Redressal Commission in Prabhawati Raina vs Oriental Insurance Co and another.

Raina owned a two-storey house in Chak Rajwali, Anantnag district. The house and attic were insured under Oriental Insurance Co. Ltd for fire and other risks for Rs4 lakh. Due to the militancy in the region, Raina was forced to leave the house. Later, she came to know that the house was destroyed in a fire and raised a claim with the insurance company to reimburse her.

The company refused to entertain the claim as it was not accompanied by a police FIR. She got a copy of the FIR after almost a year and submitted it to the insurance company. The insurance company then rejected the claim as the plea was made after over 20 months, whereas the insurance policy had a stipulation that all claims were to be made within 30 days of the occurrence of the incident.

Raina took the matter to the state commission which looked into the defence version which stated that the complainant was bound in law to come to the company with her claim within 30 days as per clause 4 of the Policy and in any event within 12 months as laid down by the Jammu and Kashmir high court.

The commission observed that the FIR and all witnesses had confirmed that the house had indeed caught fire and was completely destroyed. The situation in the area had led to the FIR being recovered at a late date. The question of limitation had to be viewed in light of the circumstances in this case and could not be used as a ploy by the opponents to deny the consumer her rightful claim, the commission held. The company was asked to pay Rs4 lakh and was directed to pay costs of litigation, assessed at Rs5,000.