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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member and
AVM J. Rajendra, AVSM VSM (Retd.), Member
Leather Line Tanneries Pvt. Ltd. Complainant
versus
Oriental Insurance Co. Ltd. and Anr. – Opp. Parties
Consumer Complaint No.99 of 2011
Decided on 23.5.2025
Consumer Protection Act, 1986 – Section 21[Consumer Protection Act, 2019 – Section 58] – Services – Insurance – Repudiation of Claim – Delay in processing claim – Award of simple interest – It is evident from the final Survey Report that there has been a delay in filing the surveyor report. Ascertaining the same reveals that there was protracted correspondence between the Complainant and the surveyors and there were meetings that were held at the premises of the Complainant where commitments were made by the Complainant to provide for specific information that was required for surveyor to determine the loss with due regard to the terms and conditions of the policy – Also, the assessment made by a surveyor holds significant importance – Undisputedly, the policies provide for Reinstatement. Substantial insurance cover was available and the loss claimed was well below the insurance cover. The damage occasioned by fire was such that the functioning of the Complainant was halted and it is not in dispute that there were pending orders for production – The outcome of the approach of OP-1 was the operations of the Complainant ceased, OP-2 Bank commenced adverse proceedings and the Complainant went into restructuring and there was no further extension of policies. With due regard to the known magnitude of loss sustained, the impact on the sustenance of the firm and its financial condition, OP-1 ought to have considered interim payment under the claim to certain extent. Notwithstanding the delay in this regard, expecting the insured firm to reinstate on its own within 12 months and reducing the compensation payable to Market Value Basis limiting to only Rs.1,56,63,495, verges to deficiency on service as well as unfair trade practice – Opposite Party No.1 – Insurer is directed to pay the Complainant Rs.3,59,00,000, along with simple interest @ 9% per annum from 22.11.2008 (six months from the date of incident on 22.05.2009) till the final payment, within a period of two months from the date of this order. In the event of delay, the simple interest applicable shall be @ 12% per annum. [Paras 10 to 25]
Result: Compliant disposed off.
JUDGMENT
AVM J. Rajendra, AVSM VSM (Retd.), Member—The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) against the Opposite Parties and sought the following reliefs:
a. That Complainant be graciously allowed and the opposite party No. 1 be directed to settle and pay the claim of the Complainant to the extent of Rs.11.93 Crores i.e. Rs.13.50 Crores (Rs. Eleven Crores and Ninety-Three lacs, being amount in claim, reduced by Rs.1.57 Crores on account of the amount, already paid as interim amount by the OP-1 on account of the Complainant to OP-2).
b. That the Complainant be graciously allowed additional damages to the extent of Rs.6.00 Crores (Rs. six Crores) on account of loss of profits (future profits) suffered by the complaint on account of facts and circumstances stated hereinabove against opposite party No.1.
c. That the Complainant be graciously allowed with additional relief in the form of compensation and damages to the extent of Rs.5.00 Crores (Rs. five Crores) on account of loss suffered by the complaint on account of willful and arbitrary non settlement of the claim by the opposite party No. 1 and resultant losses as well as delay in rehabilitation of the unit.
d. The Commission may graciously grant compensation on account damages on the ground of actual loss and sufferings, hardship and mental agony, inter-alia, for the acts and omission and commission on the part of opposite party no.2 to the extent of Rs.5.00 Crores.
e. That the Complainant be further allowed interest at the commercial rate of 12.50% per annum with monthly rests on the claim amount of Rs.11.93 Crores in accordance with settled law.
f. That the cost of the present complaint be allowed in favour of the complainant.
g. This Commission may graciously allow the Complainant to liberty and right to claim such other additional amount on account of loss of profit policy which though have already arise, but may be assessed in the course of time on the basis of relevant records and also actual loss of profits, which the Complainant may suffer due to delay in settlement of claims by the opposite parties.
h. Any other relief deemed fit and proper be allowed in favour of the complainant.”
2. Brief facts, as per the complaint, are that the complainant, M/s Leather Line Tanneries Pvt. Ltd. is engaged in manufacture, processing, and export of buffalo leather since the year 2001. The Complainant had obtained insurance policies from OP-1 Insurer vide Insurance Policy Cover Note No. 132160 dated 05.11.2007 and policy No.2008/299 Standard Fire and Specials Perils Policy from 08.11.2007 to 07.11.2008 for a total sum assured of Rs.5.35 Crores covering risks for Building, Furniture Fittings, Stocks and Raw Materials etc; Policy Cover Note No.132161 dated 06.11.2007 vide Policy No.2008/300 Standard Fire and Special Perils Policy from 08.11.2007 to 07.11.2008 for a total sum assured of Rs.6.05 Crores covering Stocks of all kinds, Raw Materials etc; Policy Cover Note No.132168 dated 21.05.2008 Vide Policy No.233108/11/2009/46 Standard Fire and Special Perils Policy for the period from 22.05.2008 to 21.05.2009 for a total sum of assured Rs.6.50 Crores covering the Plant and Machinery etc; Policy Cover Note No.13264 dated 15.11.2007 vide Policy No.2008/304 Standard Fire and Special Perils Policy from 15.11.2007 to 14.11.2008 insuring Plant, Machinery, Accessories etc. for sum assured of Rs.24 Crores; and Cover note No.334078 dated 23.01.2008 vide Policy No.233108/11/2008/382 for Loss of Profit (LOP) valid from 24.01.2008 to 23.01.2009 for sum assured of Rs.6 Crores. The Complainant had availed credit facilities by mortgaging and hypothecating its assets to OP-2 bank. The Bank conducted regular inspections and audits, retaining all related reports. The Complainant consistently submitted inventory and financial records in compliance with banking and statutory requirements, maintained a reputatio
Surveyor – The assessment made by a surveyor holds significant importance.
(1) Adverse Claim – The law mandates that a party confronted with an adverse claim must voice its opposition; failure to do so results in a deemed acceptance of the allegations or facts asserted agai....
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.
Second Surveyor – In the present case, there no valid reasons are stated for the appointment of the second surveyor. There is nothing to suggest that the first surveyor’s report to be arbitrary or th....
Insurance claims must be assessed based on fair and contractual standards, avoiding arbitrary deductions.
(1) Specific Law - It is settled law that the remedy under the Consumer Protection Act is an additional remedy and is not curtailed due to any specific law.(2) Arbitration clause - Arbitration clause....
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
Approved Surveyor’s assessment is necessary for a claim – There is no reason to reject Report of Surveyor Target Surveyor which inspire confidence of Bench.
Insurance claims must be assessed justly, with surveyor reports not being conclusive and subject to scrutiny.
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