Baramulla Consumer Court Directs TATA-AIG to Compensate Over ₹36 Lakh in Fire Insurance Case

Alfaaz – The Words Desk

Baramulla: In a significant ruling, the District Consumer Disputes Redressal Commission (DCDRC) in Baramulla, has ordered TATA-AIG General Insurance Company Ltd. to pay over thirty six lakh to a local resident Fayaz Ahmad Mir, whose fire insurance claim was allegedly wrongfully denied.

The bench, led by President Peerzada Qousar Hussian and Member Nyla Yaseen, according to an order as per Alfaaz – The Words, found the insurer guilty of “deficiency in service” and “unfair trade practice” after the company failed to appear for proceedings despite repeated notices.

Fayaz Ahmad Mir, a resident of Shiepora Delina Baramulla, had insured his two-storied building for ₹31.2 lakh under Policy No. 7700027902, active from April 3, 2022, to April 2, 2024. The property and an adjacent cowshed were destroyed in a sudden fire on January 5, 2024, which also injured a firefighter during containment efforts. Mir promptly filed a claim, submitting documents including a Fire Department certificate, but the insurer rejected it in June 2024, alleging policy violations. TATA-AIG claimed Mir’s daughter ran a boutique in one room, insured separately with another company, and that a room rented to the Social Welfare Department for an Anganwadi center, according to their counsel, breached set terms.

Mir, however, dismissed these allegations as “baseless,” arguing the boutique was unrelated to the fire’s origin and emphasizing the rented space was part of his residential premises. Three witnesses, including Mir himself, testified to his financial distress and the insurer’s refusal to engage, leaving him homeless.

The commission noted TATA-AIG’s failure to substantiate its claims or conduct a proper inspection, ruling the rejection arbitrary.

The ex-parte order mandates ₹31.2 lakh for the insured loss, ₹5 lakh for mental trauma, ₹30,000 for litigation costs, and ₹20,000 towards the Consumer Welfare Fund Baramulla.

The judgment highlights that residential property rentals do not inherently void policies unless explicitly barred and found no evidence linking the boutique’s separate insurance to the particular fire incident.