A two-judge bench of Justice M.R. Shah and Justice B.V. Nagarathna while observing that in many cases the insurance companies are refusing the claims on flimsy/technical grounds held that "while settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control."

In the case, the appellant owned a truck that he had insured by the respondent company. When the truck was stolen, the appellant registered an FIR, informed the insurance company on the same day, and submitted the documents along with the copy of the FIR to the insurance company but the Insurance company refused to settle the claim.

Following this, the appellant filed a consumer complaint before the District Consumer Disputes Redressal Commission wherein the Commission directed him to submit a certified copy of the certificate of registration of the truck. The RTO denied issuing the duplicate certified copy on the grounds that due to the report of theft the details regarding this certificate had been locked on the computer. The District Commission then dismissed the complaint of the appellant for not filing the relevant documents for settlement of the claim.

The order passed by the District Commission(DCDRC) was later confirmed by the State Commission(SCDRC)and thereafter by the National Consumer Dispute Redressal Commission(NCDRC).

Aggrieved, with the order of NCDRC, the appellant - complainant approached the Supreme Court.

Counsel Shri Anand Shankar Jha appearing for the Appellant claimed that the Appellant has been wrongly denied the insurance claim and prayed for the settlement while respondents opposed the appeal.

The Supreme Court was of the opinion that, "when the appellant had produced photocopy of the certificate of registration and registration particulars as provided by the RTO, solely on the ground that the original certificate of registration is not produced, non settlement of claim can be said to be deficiency in service will stop therefore, the apparent has been wrongly denied the insurance claim."

The Bench also observed that the insurance companies were refusing the claims on flimsy or technical grounds and observed that "The insurance company has become too technical while settling the claim and has acted arbitrarily. The appellant has been asked to furnish the documents which were beyond the control of the appellant to procure and furnish. Once there was a valid insurance on payment of huge sum by the way of premium and the truck was stolen the insurance company ought not to have become too technical and ought not to have refused to settle the claim on non submission of the duplicate certified copy of the certificate of registration which the appellant could not produce due to circumstances beyond his control."

The Supreme Court thus allowed the original complaint and set aside the order passed by NCDRC. It directed the insurance company to pay Rs 12 lacs insurance along with an interest of 7% from the date of submitting of claim and also the litigation cost of Rs 25,000 paid by the appellant.

Click here to read/download the Judgment