An insurance company must process and decide on a claim within a reasonable time as mandated by law. An insurer cannot defer the settlement indefinitely pending external investigations, and the claimant has a mandatory duty to disclose all material developments such as judicial outcomes relevant to the claim.

ORDER

A. P. SAHI, J (PRESIDENT)

1. The present Complaint raises the grievance of deficiency in service and unfair trade practice on the part of the Insurance Company by not settling an insurance claim in respect of an incident of fire, which the Complainant claims to be covered as a risk under Standard Fire and Special Peril Policy that was valid for the period 14.06.2008 to 13.06.2009. The Complainant is in the business of yarn processing and manufacturing socks for export. It had secured its goods under the said policy and had paid the premium for it.

2. According to the Complainant and his allegations, 2 of its employees, namely, Prashant Naik and Vipul Rane committed theft in the intervening night of 25.08.2008 / 26.08.2008, as a result whereof 17 cartons of socks were stolen by them and the Complainant further suspected that in order to remove and erase any evidence of the said act, they also set the premises on fire. Thus, the loss was due to the theft as also due to fire.

3. The Insurance Company is stated to have been intimated about the said loss and claim was lodged on 27.08.2008. It is also stated that fire tenders had been called to douse the fire, for which reliance has been placed on Fire Report No. 102 of 2008 that has been filed on record. A report with the Police Station was lodged on 06.09.2008 and according to the investigations, the accused were chargesheeted for the offences of theft as well as arson. A Forensic Laboratory Report was also sought by the police for which samples were sent on 31.12.2008.

4. A preliminary Survey was conducted and report was submitted on 03.09.2008 by M/s A.P.Phadge and Company. Subsequently, a Final Report was tendered by the Surveyor on 06.01.2009.

5. The Insurance Company did not settle the claim or pass any order and instead made certain queries, to which replies were given by the Complainant as the Insurance Company was awaiting the outcome of the police investigation.

6. After the submission of the Surveyor Report, a Forensic Laboratory Report dated 16.04.2009 was received by the police indicating that the test for any extraneous material having been used for fire like kerosene was negative. The Fire Report dated 13.07.2009 stated that the supposed cause of fire was still under investigation and was, therefore, unknown.

7. The Insurance Company as indicated above, neither repudiated the claim nor settled it as a result whereof the Complainant made a request to the Insurance Company to do the needful and to settle the claim, keeping in view the Surveyor's Report so as to indemnify the loss.

8. Since the claim was not settled, the Complainant filed Consumer Complaint No. 144 of 2010 on 25.08.2010 before the Maharashtra State Consumer Disputes Redressal Commission, claiming an amount of Rs.84,99,951/-.

9. The pleadings were exchanged before the State Commission and the affidavits of evidence were filed and when the matter proceeded for hearing, State Commission came to the conclusion that it had no pecuniary jurisdiction in the matter and accordingly passed an order, returning the Complaint on 01.12.2014. The order dated 01.12.2024 is extracted hereinunder:

BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, MUMBAI

Complaint Case No. CC/10/144

SPENTA INTERNATIONAL LTD.

Reg. Office

Plot No. 13, 14, 15 and 16, Dewan Indl Estate,

Village Navali, Dist. Thane, Palghar 401 404,

Godown at C/o Shubh Tubes Pvt Ltd.