The Thane Additional District Consumer Redressal Commission has directed an insurance company to pay a compensation of Rs 7.29 crore to a chemical company for a fire at its plant in Navi Mumbai in 2015.
The commission’s president, Ravindra P Nagre, in the order passed on March 21, held the opposite party, Future Generali India Insurance Company, guilty of negligence, deficiency in service and unfair trade practice.
A copy of the order was made available on Wednesday.
The consumer forum asked the insurance company to make the payment to the claimant – Sangdeep Acid Chem Pvt Ltd – along with an interest at nine per cent per annum from October 29, 2017 till the realisation of the amount.
It also ordered the insurer to pay Rs 25 lakh to the complainant towards mental harassment and Rs 1 lakh for the cost of litigation.
The insurer will comply with the order within a period of 45 days from the date of order, failing which it shall be liable to pay interest at 12 per cent, the consumer panel said.
The complainant submitted to the commission that its plant in Koparkhairne area of Navi Mumbai was insured for a sum of Rs 15 crore.
A massive fire that broke out at the plant on November 8, 2015 and it was completely destroyed.
The insurer’s surveyors reported that the losses were to the tune of Rs 14 crore.
The loss towards the building, plant, machinery and lab equipment was assessed by the surveyors at Rs 4.75 crore which the insurer settled while rejecting the balance.
In its justification for rejection, the insurer said the claim towards loss of stock was being denied on the ground that the complainant was not able to substantiate their loss towards the stock and was not in compliance with certain requirements.
The commission in its order said the fact is that all the records at the complainant’s plant were totally gutted and the complainant had no recourse to most of the data.
“That the complainant conclusively proving the quantum of loss on the basis of time tested methods but the opposite party falsely repudiate the claim of the complainant which caused great financial loss and mental harassment and substantial loss to the complainant, for this negligence, deficiency in service and unfair trade practice is responsible on the part of opposite party,” it said in the order.
The opposite party failed to settle the claim within 30 days from the receipt of the final survey report as per a notification of the Insurance Regulatory and Development Authority (IRDA), it said.
In this case, the final survey report about the stocks was received by the opposite party on September 29, 2017.
As per this, the opposite party had to settle the claim on October 29, 2017, but the insurance company repudiated the claim on August 6, 2018, about 10 months from the date of receiving the final survey report, the commission said.
There is no explanation by opposite party about this delay and this shows the negligence, deficiency in service and unfair trade practice on its part, the commission said.
Therefore, the complainant is entitled for the claim amount of Rs 7,29,77,780 along with interest and also entitled for an amount of Rs 25,00,000 for mental harassment, it said.
