Insurance claims for losses must reflect correct assessments based on factual evidence, prioritizing relevant evidence over generic averages.

ORDER

PER A.P. SAHI, J„ PRESIDENT

These two appeals have been preferred against the order dated 08.07.2014 passed in Consumer Complaint No. 4 of 2012 by the SCDRC Maharashtra (hereinafter referred to as the State Commission).

The complaint was a dispute regarding the indemnification of a loss to a stock of cotton that was stacked in heaps in the premises of the complainant factory (respondent in First Appeal No. 580 of 2014 and appellant in First Appeal No. 1111 of 2014) when a fire broke out due to friction in the conveyor belt while the factory was in operation. The fire spread over to the cotton heaps and a damage was caused that was attempted to be contained with the intervention of the Fire Brigade that doused the fire. The incident occurred on 28.03.2011.

The policy undisputedly is a Standard Fire and Special Perils Policy covering the risk of damage to Stocks to the tune of Rs. 13.66 Crores. Neither the details of the policy nor is the date of incident in dispute which fell within the period of the duration of the policy.

The incident was reported to the Police, the Municipal Authorities as well as the Fire Brigade and the Insurance Company appointed a surveyor Mr. J.C. Bhansali, who visited the factory and conducted his survey on 31.03.2011. The report was tendered on 05.07.2011, and, after having analysed the report, the Insurance Company offered to settle the matter in the light of the report of the surveyor. The complainant factory however refused to accept the amount computed in the surveyor's report and also made a request to the Insurance Company for a reassessment.

The complainant factory however on its own got the loss reassessed through a Chartered Accountant Mr. P.H. Nahar who tendered his report dated 06.12.2011.

The complainant factory attempted for a settlement of the claim and demanded a release of the amount as per the assessment of Mr. Nahar but having failed to get any response, a further notice was issued, where-after on being unsuccessful to get the claim indemnified, Consumer Complaint No. 4 of 2012 was filed before the State Commission on 21.03.2012.

Notices were issued and the Insurance Company came up with its reply and resisted the complaint.

The complainant factory also moved an application seeking a direction to the Insurance Company to release the amount of Rs.29,33,430/- as assessed by the surveyor subject to his rights in the complaint.

Pending the complaint, as per the order dated 14.06.2012 the Insurance Company on 06.08.2012 deposited a sum of Rs.29.00 Lakhs with the State Commission. The said amount was admittedly released to the complainant factory during the pendency of the complaint and the State Commission after having assessed the evidence arrived at the conclusion that the complaint deserved to be allowed for a total amount of Rs.40,37,932/-. A direction was therefore issued that since the complainant factory has already received an amount of Rs.29.00 Lakhs, the balance of Rs. 11,37,932/- with interest @ 12% would be payable from the date of the filing of the complaint till its realization. In addition thereto, interest at the same rate would be payable on the amount of Rs.29.00 Lakhs from the date of the complaint till the date of receipt of the amount of Rs.29.00 Lakhs i.e. from 21.03.2012 to 06.08.2012. A further amount of Rs. 10,000/- was awarded as litigation costs.

The order dated 08.07.2014 passed by the State Commission has been challenged by the Insurance Company in First Appeal No. 580 of 2014 praying for setting aside the order dated 08.07.2014. This appeal reportedly was filed with a delay of 19 days. IA No. 6096 of 2014 has been filed praying for condoning the delay and it seems that the appeal was entertained and notices were issued on 08.10.2014 on the delay condonation application as well as the stay application. A further order was passed to deposit 50% of the awarded amount along with up-to date interest with the State Commission to be invested in a Fixed Deposit Account.