November 25, 2023 In Uncategorized


A two-Judge Bench of the Supreme Court comprising of Justice Abhay S. Oka and Justice Rajesh Bindal passed a Judgment dated 20-11-2023 in the matter of Bajaj Allianz General Insurance Co. Ltd. Vs Mukul Aggarwal & Ors, Civil Appeal No. 1544 / 2023 held that the clauses of an insurance policy, which define the rights and liabilities of both the insured and the insurance company, should be interpreted with precision and strict adherence.


(i) That the aforesaid Appeal was filed before the Apex Court by the, Bajaj Allianz General Insurance Co.Ltd. (Appellant / Insurer) against one Mukul Aggarwal, Dassault Systems India Pvt. Ltd., BMW India Pvt. Ltd. and Bird Automotive Pvt. Ltd (Respondents), who challenged the decision of the Hon’ble National Consumer Disputes Redressal Commission (NCDRC) which dismissed the appeal and also rejected the argument asserting that the State Commission in Delhi lacked jurisdiction to address the Complaint.

(ii) The first Respondent, Mr. Mukul Aggarwal (the Owner), initiated claims due to damage to his BMW 3 Series 320D car resulting from an accident near DLF Square in Gurgaon on 29.07.2012, between 12:30 am to 2 am. The impact rendered the car irreparable. Further, the Owner of the damaged car was a Director at Dassault Systems India Pvt. Ltd., Gurgaon (Dassault), he sought a loan from Dassault to acquire a new BMW car for personal use.

(iii) Subsequently, Dassault secured a loan of Rs. 26,92,229/- from a car financing company in its name. On 17.05.2012, the Owner purchased the car from M/s Bird Automotive Pvt. Ltd. (the Dealer), an authorized BMW dealer, in the name of Dassault. The Owner obtained two protections for the car: a motor insurance policy from Bajaj General Insurance Company Ltd. (the Insurer) and the BMW Secure Advance Policy (BMW Secure) from BMW. The Owner paid premiums of Rs. 59,158/-  and Rs. 24,831/- for the first and second policies, respectively, with an Insured Declared Value (IDV) of Rs. 29,46,278/-.

(iv) Further, the Owner contended that a combined reading of the two policies stipulates that if the car sustains damage exceeding 75% of the IDV, the Insurer must provide a new car to the insured. After the accident, the Police and National Highway Authority of India (NHAI) officials visited the scene and recorded the accident in the Daily Accident Report of 29.07.2012. The damaged car was initially moved to BOSCH Car Workshop due to its location on a busy highway, and later to the Dealer’s workshop on 30.07.2012.

(v) The Owner, unable to contact the Dealer, filled out a Claim Form with Dassault on 30.07.2012 and submitted it to the Dealer, who then forwarded it to the Insurer. A discrepancy in the Engine and Chassis numbers in the insurance policy was discovered, and the Insurer corrected it on 09.08.2012. A fresh Claim Form was filed on 09.08.2012, seeking a claim under both the general motor insurance policy and BMW Secure.

(vi) Thereafter, the Insurer appointed a surveyor who, after a Preliminary Survey, estimated the loss at approximately Rs. 25,00,000/-. The Dealer’s survey estimated the loss at Rs. 38,34,730/-. The Insurer’s Final Survey Report on 07.01.2013, assessed the loss at Rs. 25,83,012/-, considering it a total loss.

(vii) Dissatisfied by the lack of response to the claim, the Owner filed a Complaint before the State Consumer Disputes Redressal Commission, Delhi (SCDRC). Following the State Commission’s Order, the Insurer, without notice to the Owner, appointed SHAPT professional services for an additional survey, and on 09.01.2013, repudiated the claim citing delays, failure to respond to letters, inconsistencies in the accident description between the Claim Form and the Police Report, and alleged suppression of material facts (blood stains in the vehicle). The Insurer did not provide reasons for these conclusions. Consequently, BMW did not honor its commitments under BMW Secure.


I) The Ld. State Commission determined that the Insurer had a duty to indemnify the Insured for Rs.29,46,278/- by replacing the car in adherence to the terms of the BMW Secure Advance. Consequently, the State Commission directed both the Insurer and BMW to indemnify the Owner for the total loss of the BMW 3 Series 320D car by replacing it with a new car of the same make and model.

II) Furthermore, the State Commission issued a directive for the Insurer and BMW to pay Rs.50,000/- as compensation and Rs.10,000/- for litigation charges.


Aggrieved by the State Commission Order, the Appellant filed a first Appeal (Civil) (FA) No. 96/2015 before the NCDRC. The Ld. NCDRC, vide Order dated 10-12-2019, dismissed the Appeal and made the following observations:

A) Challenging the Judgment of the State Commission, BMW and the Insurer separately appealed to the National Commission. The National Commission, in its impugned Judgment, dismissed the argument challenging the jurisdiction of the State Commission in Delhi.

B) Further, the National Commission further dismissed the appeals on merits, upholding the decisions made by the State Commission.


Aggrieved by the NCDRC Order dated 10-12-2019, the Appellant filed Civil Appeal No. 1544 of 2023 before the Supreme Court. The Apex Court vide Order dated 20-11-2023 held as follows:


a) Whether the repudiation of the insurance claim by the Insurer was valid, considering grounds such as delay in reporting the accident, alleged failure to respond to letters, discrepancies in accident descriptions, and the discovery of blood stains in the vehicle.

b) The nature and extent of obligations under the Motor Insurance Policy and the BMW Secure policy, especially concerning the total loss or constructive total loss of the vehicle.

c) Whether the State Commission had the territorial jurisdiction to deal with the Complaint, given that the accident occurred in Gurgaon, outside the territorial jurisdiction of the State Commission at Delhi.

d) The court needed to interpret the terms of the insurance policies, emphasizing the strict reading of policy conditions and ensuring that the insured cannot claim more than what is covered by the policy.


1) The Apex Court observed that BMW’s argument regarding the total loss condition under BMW Secure, requiring a surveyor’s report confirming the net liability of the Insurance Provider exceeding 75% of the Insured Declared Value, lacked contestation on the availability or pricing of a similar car at the time of the accident.

2) Further, the Supreme Court noted BMW’s failure to plead whether a car of exactly similar make was available on the date of the accident and the cost of such a vehicle. Thereafter, the Bench emphasized that these facts were within BMW’s special knowledge, and the Court drew an adverse inference against BMW for not bringing these facts on record.

3) The Apex Court clarified that BMW’s only defense was that it was not liable under BMW Secure due to the Insurer’s repudiation of the insurance claim. The Court highlighted that BMW did not provide any evidence to show that a surveyor’s report confirming total loss was obtained.

4) The Bench held that there was a deficiency in service by both the Insurer and BMW under the Consumer Protection Act, 1986, and as a result, the car Owner was entitled to compensation. Further, the Hon’ble Court determined the liability amounts, stating that the Insurer was liable to pay Rs. 25,83,012.45/-, and BMW was liable to pay a reasonable amount estimated at Rs. 7 lakhs only under BMW Secure.

5) The Apex Court ordered the payment of interest on the amounts payable by the Insurer and BMW from the date of filing of the Complaint, quantified at 6% per annum. The interest accrued on the amounts deposited was also considered.

6) The Hon’ble Court set aside the operative part of the State Commission’s Order, substituting it with directions to pay monetary compensation instead of replacing the car.


Based on the aforementioned facts, the Supreme Court identified deficiencies in services provided by the Insurer and BMW. The Court emphasized the importance of clear evidence and determined liabilities based on the insurance and BMW Secure policy terms. It was noted that BMW’s defense depended on the Insurer’s repudiation, as they lacked supporting evidence. The Court quantified the compensation, with a specific amount for the Insurer and a reasonable estimate for BMW. The Apex Court partially allowed the Appeal, with the operative part of the State Commission’s Order being set aside.

Further, the Court held that the Owner is permitted to withdraw Rs. 22,09,000/- deposited by the Insurer, along with accrued interest. Additionally, the Insurer is directed to pay simple interest at a rate of 6% per annum on the withdrawn amount from the date of the Complaint to 24.04.2023. A sum of Rs. 3,74,012/-, along with simple interest at the same rate, is to be paid to the Owner by the Insurer within three months. The Owner is also entitled to withdraw Rs. 7 lakhs deposited by BMW, with BMW liable to pay 6% per annum interest on this amount to the Owner from the Complaint date to 11.03.2015. The State Commission’s cost order is maintained, and no additional costs are imposed in these appeals. In essence, the judgment balances the interests of the parties involved, ensuring just compensation and adherence to legal principles.

Editor’s Comments:

Insurance companies are by and large reluctant to pay the Insured what he or she is entitled to. The above case is another example of repudiation by the Insurance Company at the smallest instance. The Apex Court has done justice by highlighting the failure of the Insurance Company and BMW Secure to provide appropriate evidence to support the repudiation.


Sakshi Raghuvanshi

Legal Associate

The Indian Lawyer

Edited by

Sushila Ram

Chief Consultant

The Indian Lawyer

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