NCDRC Rules in Favor of Widow, Orders Insurance Company to Pay Rs. 20 Lakhs
Introduction:
The National Consumer Disputes Redressal Commission (NCDRC) recently issued a significant ruling in First Appeal No. 1820 of 2019, overturning the State Commission's decision and favoring Geeta Devi, the widow of the deceased life assured, Shri Narsi Lal Gupta. The case involved a life insurance policy with Bajaj Allianz Life Insurance Company Ltd., and the NCDRC found in favor of the complainant, ordering the insurance company to pay a total sum of Rs. 20 lakhs.
Detailed Facts of the Case:
Shri Narsi Lal Gupta had obtained a life insurance policy with a sum assured of Rs. 10 lakhs and an additional Accident Death benefit of Rs. 10 lakhs. Unfortunately, he met with a fatal accident on 11.07.2010 and passed away on 25.07.2010. The complainant, Geeta Devi, promptly informed the insurance company about the death, but despite completing all necessary procedures, the policy benefit was not disbursed. Alleging delay and failure on the part of the insurance company, Geeta Devi filed a consumer complaint before the State Commission.
The insurance company, in response, denied the claim, contending that Shri Narsi Lal Gupta had provided false information about his income and occupation, leading to the repudiation of the claim. The State Commission, after considering the facts, ruled in favor of Geeta Devi, ordering the insurance company to pay Rs. 20 lakhs, including interest and compensation.
Observations by NCDRC:
The NCDRC observed that the insurance company failed to provide substantial and legally sustainable evidence to support the repudiation of the claim. The commission expressed concern over the casual and mischievous manner in which the claim was repudiated, leaving the poor survivors of the family with no choice but to navigate the judicial process.
The commission criticized the insurance company for conducting unscrupulous investigations, creating non-existing contradictions, and repudiating claims based on vague reasons. Referring to a judgment by the Punjab & Haryana High Court, the NCDRC emphasized the need for insurance companies to simplify policy conditions and ensure that all clauses are brought to the notice of the insured.
Summary and Conclusion:
In a significant ruling, the NCDRC set aside the State Commission's decision and directed the insurance company to pay Geeta Devi a sum assured of Rs. 20 lakhs, including interest and compensation. The commission expressed its deep concern over the unethical practices of insurance companies, urging a change in the system to prevent harassment of claimants. The NCDRC emphasized the importance of compensating the family for the gross misdemeanor and awarded Rs. 5 lakhs as compensation.
This ruling serves as a precedent against dubious practices in claim settlements and highlights the need for insurance companies to act with transparency and sensitivity, especially when dealing with claims from vulnerable and financially distressed families.
First Appeal No. 1820 of 2019
(Against the Order dated 01/02/2019 in Complaint No. 61/2011 of the State Commission Rajasthan)
Bajaj Allianz Life Insurance Company Ltd. & Anr. Vs. Geeta Devi, Wife of Late Shri Narsi Lal Gupta,
Date of Order: 25 October 2023
Click here to download the judgement.
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