The National Consumer Disputes Redressal Commission (NCDRC) ordered the payment saying the rejection of Mumbai's Rushabh Jewellers owner Champaklal Hansraj Shah's claim by the insurance firm was "not justified", especially after a surveyor had assessed the loss.
The bench presided by Justice S C Jain also pointed out to the insurance firm that if it was not satisfied with the finding of its surveyor, it should have appointed another one before deciding to reject the claim.
"The opposite party (insurance firm) was not justified in repudiating the claim especially when the surveyor had assessed the loss...
"If the insurance firm was not satisfied with the report of their surveyor, they ought to have sought clarification from the surveyor on the points of disagreement..., or they ought to have referred the matter to a second surveyor before arriving at a conclusion to whether or not to repudiate the claim," the NCDRC said.
The NCDRC order came on Shah's plea, filed in 2003 and alleging that the insurance firm had arbitrarily rejected his claim on the ground that the gold ornaments were not stored in a 'burglar-proof' safe, despite renewing his policy every year from 1995 without any problem.
The NCDRC agreed with Shah's contention and said "it is too late in the day" for the insurance firm to take the defence that the safe was not 'burglar-proof' after "having renewed the policy for a period of five years".
Shah said he had bought a Jewellers' Block Policy from the insurance firm in 1995 for Rs 35 lakhs and during the cover period from November 1999 to November 2000, 6.8 kgs of gold and Rs 45,000 cash was stolen from his shop in January 2000. (MORE)
