The Commission, in its recent order, has directed the New India Assurance Company to pay Rs 27 lakh towards compensation and refund for not deciding the claim of an insured because a copy of the FIR was not furnished.

Presiding over the Commission, Justice J D Kapoor observed that it was a “misconceived notion” that unless the insured files an FIR, he is not entitled to compensation.

“When a person approaches the police to report loss of goods, it is for the police to decide whether to convert the complaint into an FIR or a daily diary,” he said.

Once a complaint is registered with the police, the final report becomes the “statutory authority that should be acted upon,” Justice Kapoor said.

The observations came on a complaint filed by one Rinku Sharma, a sole proprietor. Sharma had a fire insurance policy with the New India Assurance Co. to the tune of Rs 50 lakh. During his policy term, a fire broke out destroying his complete stock, he had claimed. The police and the fire department were duly informed. However, when Sharma contacted the insurance company, his claim was rejected on the ground that “no clear cut cause of fire could be established.”

The company further rejected the report of the fire department as well as the reports submitted by the three surveyors that it had appointed. The reports, clearly stated that the fire was “accidental and was caused due to a short circuit.” Instead, the company claimed that the records and worth of the lost goods were “doubtful” and beyond Sharma’s financial means and the “fire itself, could have been manipulated” by Sharma to avail insurance benefits. Dismissing the insurance company’s claim, Justice Kapoor ruled that it was not for the company to question the dealings or Sharma’s financial condition.

“It was for Sharma’s suppliers to decide whether they should have provided such huge credit to him or not. No supplier would have taken a risk without being sure of the credibility of his buyers,” said Justice Kapoor in the order. He added that if the company suspected any “misrepresentation” on Sharma’s part, it should have reported it to the police.