Inflated claim can lead to zero compensation

The National Commission held that the insurer was justified in refusing to settle the claim as the insured had attempted to fraudulently inflate the claim

Robina Kumar was the sole proprietress of Balaji Textiles. She had a shop on the first floor, and was engaged in the wholesale business of ladies’ suits and clothes.

The firm had availed of cash credit facility of Rs 24 lakh from Canara Bank. This required an insurance policy to be taken through the bank, which obtained a Standard Fire and Special Perils Policy from New India Assurance with a coverage of Rs 65 lakh, valid from July 29, 2009 to July 28, 2010. The policy covered stock of all types — clothes, suits, dress materials, sarees, etc — lying