Repudiation of insurance claim for goods destroyed in a fire, upheld

National Consumer Disputes Redressal Commission (NCDRC): NCDRC has upheld the repudiation of insurance claim for goods destroyed in a fire on the ground that complainant was under obligation to intimate insurance company about change of place of business and to get necessary endorsement on the policy but he failed to do so. The complainant, who was doing business at Kangra district in Himachal Pradesh, had taken cash credit limit of Rs. 3 lakh from State Bank of India, but when he shifted his business from Kangra to Mandi district, he failed to inform the Insurance Company. In May 30, 2008, complainant’s shop was damaged in a fire but his claim was repudiated. When the complainant filed a complaint before the forum alleging deficiency on the part of bank and the insurance firm, the firm submitted that neither complainant nor the bank informed it about shifting of business which amounted to violation of the terms and conditions of policy. The bank, in the meanwhile, submitted that the complainant had filed an affidavit for changing the place of business but there was no question of permission as it had already been shifted. The forum directed the bank to pay Rs. 1.63 lakh and also allowed Rs. 8,000 towards compensation and cost of litigation. An appeal challenging the order before the State Commission was also dismissed. After perusal of records, NCDRC observed that District Forum committed error in allowing complaint against the petitioner and State Commission further committed error in dismissing the appeal as the Complainant was under obligation to intimate insurance company about change of place of business and to get necessary endorsement on policy but he failed to do so, hence, SBI cannot be held guilty of any deficiency. (State Bank of India v. Anil Kumar, 2014 SCC OnLine NCDRC 345, decided on November 17, 2014)