Delhi Consumer Body Orders Rs 17.75 Lakh Payout for Lost Jewellery, Rejects Insurer's Assumptions
In a significant ruling, the Delhi State Consumer Disputes Redressal Commission has upheld an order directing Oriental Insurance Company Limited to pay Rs 17.75 lakh as compensation for lost jewellery, emphasizing that denial of an insurance claim cannot be based on assumptions and presumptions without cogent evidence. The commission dismissed the insurer's appeal, affirming a deficiency in service under the Consumer Protection Act.
Key Findings of the Commission
The commission, comprising Justice Sangita Dhingra Sehgal (president) and Bimla Kumari (member), delivered the order on January 15, 2026, stating that the district forum had rightly held the insurer liable. The key findings include:
- The insurance company rejected the claim based on subjective perceptions, such as questioning the ownership and value of the jewellery after the loss occurred, despite having accepted the valuation report at the time of policy issuance.
- It was undisputed that the policyholder, Praveen Kumar Sharma, had complied with all formalities when the policy was issued, including submitting a valuation report from a certified valuer.
- The surveyor appointed by the insurer did not dispute the valuation, existence of the policy, or occurrence of the loss, but merely expressed opinions based on presumptions about the reasonability of carrying the jewellery.
- The insurer failed to provide any documentary evidence to substantiate grounds for rejection, such as alleged lack of reasonable care or improbability of travel.
- Denial of a claim based on conjectures is unjustified, especially when the policy specifically covers loss caused by accident or misfortune under Section III for jewellery and valuables.
Background of the Case
Praveen Kumar Sharma had taken a Householder Insurance Policy from Oriental Insurance Company Limited for the period between December 24, 2009, and December 23, 2010. The policy covered household items, including gold jewellery valued at Rs 18.37 lakh, based on an approved valuer's report accepted by the insurer.
On January 7, 2010, while travelling on his scooter, Sharma lost a pouch containing his wife's jewellery. He promptly lodged a non-cognisable report with the police on the same day and informed the insurer on January 8, 2010. The insurer appointed a surveyor who assessed the loss at Rs 17.75 lakh but expressed doubts about the circumstances. Relying on these doubts, the insurer rejected the claim on April 15, 2010, citing reasons like absence of purchase bills and alleged lack of reasonable care.
Legal Proceedings and Arguments
Aggrieved by the rejection, Sharma approached the district consumer forum, which on September 12, 2014, allowed his complaint, holding the insurer guilty of deficiency in service. The forum directed payment of Rs 17.75 lakh with 9% interest from the date of rejection, along with Rs 50,000 as compensation and litigation costs.
The insurer challenged this order before the state commission, arguing that Sharma failed to exercise reasonable care by carrying valuable jewellery alone and that the circumstances were suspicious. However, the commission found these arguments baseless, noting that the insurer had not raised doubts about ownership or bills at the time of policy issuance and failed to provide evidence to support its claims.
Decision and Implications
The commission concluded that the rejection was arbitrary and based purely on assumptions without documentary proof, constituting a deficiency in service. It upheld the district forum's order, dismissing the appeal with no order as to costs. This ruling reinforces consumer rights in insurance matters, highlighting that insurers must rely on evidence rather than subjective perceptions when assessing claims.
This case serves as a reminder for policyholders to ensure proper documentation and for insurers to adhere to fair practices under the Consumer Protection Act.
