Insurance claims must be assessed based on fair and contractual standards, avoiding arbitrary deductions.

JUDGMENT

AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER

1. The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act , 1986 (for short “the Act”) against the Opposite Parties seeking to direct the OPs:

A. Direct the opposite party to pay Rs. 1,21,73,017/- being the balance amount of the actual loss after part payment made by the Ops

B Ops be directed to pay the loss and other consequential losses as stated above along with 18% per annum interest from the date of loss till its realization,

C That the Ops be directed to pay Rs. 25 Lacs as compensation towards harassment and mental caused to the complainant

D The Ops be directed to pay the aforementioned sum along with cost of Rs. 3 Lacs.

E And or any other relief to the complainant and against the O.P. as this Commission deems fit and proper in the facts and circumstances of the case in the interest of Justice.”

2. Brief facts of the case, as per the Complainant, are that the Complainant is a partnership firm engaged in manufacture of transformers of various capacities since the year 2009 and registered with requisite statutory authorities. The firm has obtained an insurance policy from the opposite parties (OPs) under Standard Fire and Special Perils Policy No.35030811160100000016 valid from 17.05.2016 to 16.05.2017. During the validity of the said policy, a major fire incident occurred on 09.08.2016 at the Complainant‟s factory premises, resulting in extensive damage to the building, plant & machinery, finished and semi-finished goods, raw material and stock in process. The fire incident was promptly reported to Fire Brigade, Police and Insurer. The OP appointed a licensed Surveyor and the complainant submitted all requisite documents, including audited books of accounts, stock statements and financial records, fully substantiating the genuineness and magnitude of the loss. However, despite the loss being admittedly covered under the policy and duly supported by records, OPs adopted an arbitrary, unrealistic and unjustified methodology in assessment, delayed the settlement of the claim and released only a partial payment of Rs. 1,84,70,955 under protest, while illegally withholding the balance legitimate claim of Rs. 1,21,73,017. The complainant contended that the acts of OPs clearly constitute deficiency in service and unfair trade practice, causing severe financial hardship and business loss to the complainant, thereby entitling the complainant to the balance amount withheld by the OP along with interest, compensation, costs and other consequential reliefs as prayed.

3. Upon notice, the complaint was resisted by the OPs by filing their written version, wherein, the OPs contended that the present complaint is wholly misconceived, frivolous and not maintainable in law, as the complainant is a commercial entity and does not fall within the definition of a “consumer” under the Consumer Protection Act , 1986. Further, the dispute raised involves complex questions of fact and assessment of loss requiring detailed evidence, which can only be adjudicated by a competent civil court. The OPs denied any deficiency in service and contended that the claim was duly processed strictly in accordance with the terms and conditions of the insurance policy, based on an independent and statutory survey conducted under Section 64UM of the Insurance Act , 1938. After due assessment, the total loss was rightly determined and Rs.1,84,70,955 was paid to the complainant in full and final settlement, which was accepted without protest at the relevant time, thereby extinguishing any further liability of the respondent. The surveyor correctly applied the average