Bajaj Allianz General Insurance’s Appeal Dismissed by NCDRC Over Property Classification Dispute

National Consumer Disputes Redressal Commission NCDRC Law Insider

LI Network

Published on: November 26, 2023 at 12:18 IST

The National Consumer Disputes Redressal Commission (NCDRC) has rejected an appeal by Bajaj Allianz General Insurance Company challenging a decision by the Goa State Commission. The dispute arose over the classification of a property insured by the company, referred to as a ‘temporary shack’ by the insurer but deemed a ‘restaurant’ by the insured party.

The NCDRC emphasized that objections regarding property classification cannot be raised at a later stage, especially when the entire structure has been destroyed, dismissing Bajaj Allianz’s appeal.

In this case, Mr. Bhupender Gahlawat held a fire insurance policy for his shack-cum-restaurant, Kneez Up, in Velsao, Goa. A major fire damaged the property during the policy period, leading to a claim of Rs. 17,63,265. Bajaj Allianz denied the claim, alleging misrepresentation and non-disclosure of material facts by Gahlawat when obtaining the policy. The State Commission ruled in favor of the complainant, directing the insurer to pay the claimed amount along with compensation and legal costs. Dissatisfied, Bajaj Allianz appealed to the NCDRC.

The insurer contended that Gahlawat concealed the illegal nature of the restaurant’s property and failed to disclose a show-cause notice for illegal construction and a demolition order issued by the local Panchayat. Bajaj Allianz argued that it wouldn’t have issued the policy if aware of the temporary nature of the structure.

However, the NCDRC observed that Gahlawat had completed all formalities before erecting the shack, which functioned as a restaurant. It rejected the insurer’s claims, noting that complaints against Gahlawat surfaced after obtaining the insurance policy.

The NCDRC also dismissed the contention that the property was a temporary shack, stating that such objections on property description are invalid after the structure is destroyed in a fire.

As a result, the NCDRC upheld the State Commission’s order, dismissing Bajaj Allianz General Insurance’s appeal in the case titled “Bajaj Allianz General Insurance Co. Ltd. vs Bhupender Gahlawat.

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