A private insurance firm has been ordered by a city district consumer forum to pay Rs five lakh as damages to its client for refusing to settle his claim worth Rs 3.10 lakh for his stolen car and subjecting him to metal agony.

Terming Cholamandalam MS General Insurance Company Ltd's decision to reject Vasant Kunj resident Satya Deo Prasad's claim for his stolen car as "arbitrary", the New Delhi district Consumer Disputes Redressal Forum also asked the insurance firm to settle Prasad's claim worth Rs 3.10 lakh.

"We are of the view that opposite party (insurance firm) has simply acted in a rash and negligent manner in dealing with the claim and has arbitrarily repudiated it for no good reason and in the process caused harassment, mental agony and expenses to the complainant (Prasad) and thus is liable for imperfection and deficiency in providing insurance services," said the forum's bench, headed by President C K Chaturvedi.

Prasad, in his complaint, said his car, which was stolen in June 2008, was insured with the firm for the period between July 2007 and July 2008 .

The car was stolen on June 2, 2008, from Saket after which he lodged a First Information Report with the police and immediately informed the bank which had finance its purchase, he said.

Prasad then informed the insurance firm about the incident on June 13, 2008, as the particulars of the company were not easily traceable as the original documents were in the stolen car, he said.