Back
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Presiding Member and Subhash Chandra, Member
M/s. Detco Textiles Pvt. Ltd. – Complainant
versus
M/s. New India Assrance
Company Ltd. and Anr. – Opp. Parties
Consumer Case No.449 of 2014
Decided on 3.3.2023
Consumer Protection Act, 1986 – S. 21(a)(i) – [Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services -Insurance – Fire Accident – Repudiation of Claim – No proof of assessment was wrong - Admitted amount – directed to be paid - The accident of fire and the Policy coverage are not disputed. It is also not disputed that the Complainant had been renewing the Policy with Opposite Party No.1 for almost 5 years - The exact cause of trigger of fire could not be arrived at by the Truth Lab or the Surveyor and the Opposite Parties. The Surveyor had completely ruled out any malafide or deliberate conduct on the part of the Complainant. There was also no free entry of any person in the factory premises other than the authorised personnel. There was also no suggestion of any sabotage and no basis for coming to the conclusion that fire was brought in the premises with the Complainant’s knowledge. The Policy itself records that HSD and LSD are used by the Complainant as a part of manufacturing and even form part of the items insured. This has also been recorded in the Final Survey Report – Thus various petroleum products/solvents were, in one way or the other, may be small in quantities, used in the process of manufacturing and trade, Commission cannot rule out the possibility of any mischief on the part of the Complainant of bringing fire accelerant from outside - The Complainant on the other hand had not placed any evidence to establish that the assessment made by the Surveyor was incorrect - The Complainant, therefore, cannot be allowed the amount beyond the assessment of the Surveyor – Complaint party allowed. [Paras 14 to 17].
Result: Complaint parlty allowed.
ORDER
The Complainant is a Company engaged in the business of processing and dyeing all types of shirting and blended fabrics including 100% Cotton, Polyester/Viscose, Polyester/Cotton/Viscose and Yarn Dyed. Opposite Party No.1 is engaged in the business of providing general insurance services. Opposite Party No.2 is engaged in the business of carrying out insurance surveys.
2. Case of the Complainant is that they purchased Standard Fire and Special Perils Policy No.131000/11/13/01/00000221 dated 08.05.2013 from Opposite Party No.1 by paying a premium of Rs.2,48,934/-. The Policy was valid from 12.05.2013 to 11.05.2014 and covered the risk to stocks at Tarapur Plant due to fire, lightening, explosion/implosion, aircraft damage etc. The Policy was issued with the knowledge of risks involved in the business of the Complainant.
On 25.05.2013, at about 00.15 hrs. fire broke out in the Tarapur Plant, which was used to store the finished stocks. The fire occurred due to short circuit in the tube-light on the first floor of the main building. The fire spread rapidly because of huge stocks kept in the main building and engulfed 320 KVA Generator Set as well as 750 KVA transformer installed just outside the main building. Due to fire accident, various machines, raw materials and finished products, as also the building of the plant were damaged. The Complainant immediately informed the Police, Fire Department as well as the Electrical Inspector about the incident of fire and sought assistance from them to mitigate the damage. The Complainant also informed the incident of fire to Opposite Party No.1, vide email dated 25.05.2013. The Fire Brigade personnel had taken charge of the premises and got the entire premises vacated to extinguish the fire. The Police and Electrical Department Engineers also conducted detailed verification and investigation and prepared panchnama. Police Panchnama Report dated 25.05.2013 and Electrical Inspector’s Report dated 27.06.2013 confirmed that the probable cause of fire was electrical short circuit. The Fire Brigade Report dated 30.08.2013 stated that the cause of fire was unknown. Opposite Party No.1 deputed Opposite Party No.2 to conduct Survey and assess the loss. The Surveyor visited the site on 26.05.2013. According to the Complainant, the estimate of loss was Rs.41.95 crores. The Complainant after discussion with Opposite Party No.2 reduced the claim to Rs.35.68 crores, vide letter dated 28.05.2013. The Complainant further reduced the claim to Rs.22.08 crores, vide letter dated 14.01.2014. Ultimately, the Complainant submitted final bill of Rs.21.98 crores with Opposite Party No.2, vide email dated 18.01.2014. The Opposite Parties sought various information/clarifications/documents from the Complainant, which were provided to them. The Opposite Parties, jointly alongwith the Complainant, disposed of the salvage through open tender. The Complainant received letter dated 03.03.2014 from Opposite Party No.1, which included the final Surveyor Report dated 11.02.2014, stating that the Surveyor had assessed the loss at Rs.10,65,12,194/-. The Survey Report was provided to the Complainant without supporting documents, more importantly the Truth Labs Forensic Report, based on which the Opposite Parties recorded their findings/conclusions. The Complainant sent letter dated 14.03.2014 to Opposite Party No.1 stating that several information/documents provided by the Complainant were not considered by the Surveyor while assessing the loss. The Complainant further sent letter dated 24.03.2014 to Opposite Party No.1 pointing out several anomalies in the findings of the Surveyor and requested them to convene a meeting with the Surveyor and the technical team of Opposite Party No.1. No such meeting was convened by Opposite Party No.1. Surveyor, however, vide letter dated 02.04.2014, sought some more information from the Complainant regarding the incident of fire, which was provided by the Complainant, vide letter dat
Assessment - The Complainant, therefore, cannot be allowed the amount beyond the assessment of the Surveyor.
(1) Liability of Insurance Company – Whether the fire took place by a short circuit or any other reason, as long as the insured is not the person who caused the fire, the Insurance Company cannot esc....
The court established that a consumer can claim under the Consumer Protection Act for insurance disputes, even with commercial intent, emphasizing assessment fairness by the appointed Surveyor.
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
1. Insurance claim cannot be inordinately delayed.2. Delay will result in payment of interest to ensured.3. Random inspections and obsequious objections cannot be grounds to hold up claims
(1) Fire - On merits, once it is established that there was fire, it is settled law that it is upon the Insurer to prove that the fire was intentionally caused by the Insured.(2) Burden of Proof - wh....
Assessment - In absence of details relating to stage of production of items, the Surveyor was justified in considering the semi-finished cost rate at 50% of finished cost rate on an average of 50% co....
(1) Constructive approach - A constructive approach, not one that is based on assumptions and surmises with an intention to negate the claim by categorizing it fraudulent is desirable.(2) Industry Ap....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
