Bajaj Allianz held liable, to pay Rs 5 lakh to policy holder

Then began Verma's tussle with Bajaj Allianz General Insurance, whom he dragged to the consumer court for deficiency in service. The National Consumer Disputes Redressal Commission has now directed the insurer to pay him over Rs.5 lakh, including compensation and litigation costs.

Over two years after the death of Verma's mother, Suman Verma, the insurance company's bid to escape liability by repudiating the claim has backfired. The commission's presiding member, K.S. Chaudhari, and member B.C. Gupta, in a recent order, directed the insurance firm to pay $10,659 (Rs.4.75 lakh at May 2011 rates) along with Rs.30,000 as compensation and Rs.15,000 as litigation costs.

The national commission upheld the findings of the district forum and State Consumer Disputes Redressal Commission, Chandigarh, on the liability of the insurance firm towards the family of the policy holder.

Suman Verma, a resident of Chandigarh, died in the US April 28, 2011. At the time, she held a travel care insurance policy valid from April 22-June 20, 2011.

The national commission dismissed Bajaj Allianz General Insurance plea that the interest awarded by the district forum appeared to be harsh and penal in nature.

"Perusal of order of district forum reveals that 12 percent per annum interest has been awarded from the date of repudiation of claim (June 2, 2011) till its actual payment, only if order of district forum for making payment is not complied with by the petitioner within a period of 30 days," the national commission said.

"In such circumstances, award of interest cannot be said to be penal interest, but it appears that interest has been awarded only for due compliance of the order within a period of 30 days. In such circumstances, grant of interest cannot be termed as penal interest," said Chaudhari.

But the national commission agreed to offer partial relief to the insurance company on its plea. It modified the district forum's decision related to the date from which interest was to be imposed on the company in the event of non-payment of compensation to Suman Verma's family.

"The date June 2, 2011, mentioned in the order of district forum is modified by the date June 27, 2012, and revision petition stands dismissed for rest of the reliefs," the national commission said.

The insurance company now has the option of challenging the national commission's decision in the Supreme Court.u00a0