A consumer commission here has directed New India Assurance Company Limited to pay Rs 50,000 compensation to a customer, saying despite having a valid insurance policy, he had to suffer because of the insurer's "irrational decision" of only partly paying the medical claim.

Noting that the company had failed to reimburse the complainant's entire claim of around Rs 4.77 lakh and only reimbursed around Rs 2.15 lakh, the commission has also ordered it to provide the remaining amount of around Rs 3.25 lakh with interest, along with the litigation cost of Rs 25,000.

The District Consumer Dispute Redressal Commission (Central District) was hearing the complaint of Nishchal Jain alleging deficiency in services by the insurer for repudiating his insurance claim that caused him "financial as well as physical trouble, inconvenience, harassment and mental agony".

Taking note of the evidence before it, the commission comprising President Inder Jeet Singh observed that the denial of the claim by the insurance company was "arbitrary, without any valid ground and contrary to the terms and conditions of the policy", besides amounting to deficiency in services.

The bench, also comprising member Rashmi Bansal, said due to the denial of the claim, the complainant had suffered financial loss, physical trauma, harassment and mental agony.

"Despite having a valid insurance policy and despite being diligent in paying the premium regularly, the complainant had to suffer due to the irrational decision of the opposite party or OP (insurance company), therefore, complainant's plea for entitlement of compensation is found justified and is quantified to Rs 50,000," the commission said.

"Since the complainant had to initiate legal action against the OP in the absence of settlement of his insurance claim, which in the opinion of this commission makes him entitled to the cost as claimed, that is, Rs 25,000," it added.

In its order dated July 10, the commission also directed the company "to reimburse the complainant an amount of Rs 3,25,643, along with 6 per cent interest per annum, from the date of rejection of the claim, which is January 9, 2015, till its realisation by the complainant".

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.