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DB directs Insurance Companies to entertain delayed flood claims

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srinagar map STATE TIMES NEWS
SRINAGAR: Division Bench (DB) of State High Court comprising Chief Justice N Paul Vasanthakumar and Justice Ali Mohammad Magrey directed Insurance Companies to consider belated flood claims.
The direction came in response to two appeals filed by the National Insurance Company Limited against the judgment of J and K State Consumer Disputes Redressal Commission, Srinagar, dated 2nd January, 2015, wherein the Commission has directed the appellant to entertain/register the claims made by the respondents in these appeals for settlement of their insurance claims on merits.
The DB after hearing Advocate J.A Kawoosa for the Insurance Company and Advocate S.M Ayoub for the complainant dismissed the appeal of Insurance Company with the direction to register the claims and process the claims on merits without reference to the delay in submission of the claims.
The complainants/respondents being aggrieved over the rejection of their insurance claims on the ground that claims were not submitted within 15 days, filed complaints before the J and K State Consumer Disputes Redressal Commission, Srinagar. The case of the claimants before the Commission was that they have insured their buildings / goods with the appellant under policy Nos. 421008/48/14/3600000131 and 421001/11/13/3100000936 and due to the unprecedented floods faced in Srinagar in 2014 their buildings/goods, which were having insurance coverage, were damaged and the respondents lodged insurance claims on 20th November 2014 and 27th November 2015 respectively i.e. after 81 and 83 days of loss.
The Commission, relying on the Circular issued by the Insurance Regulatory and Development Authority dated 20th September 2011, set aside the rejection order as the claimants were presumptively prevented by the situation due to Jhelum flood of September, 2014 which reduced Srinagar City to a ghost city for weeks together when the offices of Insurance Company were also totally disarrayed and directed the appellant to register the claims and settle the same on merits according to law.
Counsel appearing for the Insurance Company submitted that that the Commission has passed the order without appreciating the conditions contained in the Insurance policy, wherein it is stated that on the happening of any loss or damage, the insured shall forthwith give notice thereof to the Company within 15 days of the loss or damage or such further time as the Company may in writing allow in that behalf, and in these cases the devastating floods having pondered the Srinagar City, if the respondents have sustained any loss due to the said floods they should have submitted their claims within 15 days and taking note of the ground situation the Company itself has extended the period up to 1st October 2014, there cannot be any further delay and in these cases there is delay of more than two months in submitting the claims, as such the Commission is not justified in giving directions to entertain the claims and decide them on merits.
The Division Bench after hearing both the sides observed that in these cases the policy itself contemplates extension of time therefore the submission of claim within 15 days of the loss is directory and not mandatory. The Division Bench further observed that it is a well settled law that while interpreting the provisions/clauses, the ground realities should be borne in mind and whether the claims made are bonafide or purposely delayed, has to be determined on the facts of each case. JNF

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