An insurer cannot be permitted to deny a genuine claim on hyper-technical and irrelevant grounds, the State Consumer Disputes Redressal Commission, Chandigarh, observed while dismissing an appeal filed by an insurance company.
The Consumer Commission also directed the insurer to pay a claim of Rs 15 lakh to a city resident.
Go Digit General Insurance Company Limited filed an appeal against the order dated October 1, 2025, passed by the District Consumer Disputes Redressal Commission, Chandigarh, which had directed the insurance company to pay a claim of Rs 15 lakh to the complainant, Jayvati, following the death of her son in a road accident.
The District Commission also ordered the insurer to pay Rs 15,000 as compensation for mental agony and harassment and Rs 10,000 towards litigation costs.
The complainant stated that her son, who was covered under the insurance policy, died in a motorcycle accident. She filed a claim and submitted all the requisite documents sought by the insurer.
However, the insurer rejected the claim on the grounds that the complainant had failed to produce the driving licence of the deceased insured and that there was no evidence to establish the involvement of the motorcycle in the accident. Alleging deficiency in service and unfair trade practice, she filed a complaint before the District Commission, which allowed the complaint and directed the insurer to pay the claim amount.
After hearing the matter, the State Commission upheld the order of the District Commission.
The State Commission observed that the appellant had failed to point out any specific exclusion clause in the insurance policy that would disentitle the complainant from receiving the insured amount in the present case.
The Commission further held that it is a well-settled principle of insurance jurisprudence that while the terms and conditions of an insurance policy are binding on the parties, they must be interpreted and applied in a fair, reasonable, and purposive manner consistent with the object of the contract of insurance.
“An insurer cannot be permitted to repudiate a genuine claim on hyper-technical, irrelevant, or inconsequential grounds having no direct nexus with the occurrence of the insured event," the Commission observed.
In view of these findings, the State Commission dismissed the appeal and upheld the order dated October 1, 2025, passed by the District Consumer Disputes Redressal Commission, Chandigarh.
