Mumbai, May 12: The Maharashtra State Consumer Disputes Redressal Commission has upheld a compensation award of over Rs 22.59 crore in favour of a Dhule-based cold storage firm, while modifying the order to direct the insurer to pay 9 per cent annual interest from the date of the fire incident in September 2019 till full realisation of the amount.
Commission partly allows cold storage firm's appeal
The commission, comprising Justice S.P. Tavade and member Vijay C. Premchandani, partly allowed the appeal filed by K.S. Warehousing Corporation and dismissed the appeal filed by The New India Assurance Company Ltd. against the September 2022 order of the District Consumer Commission, Nandurbar.
“No doubt the Surveyor calculated the loss on reduced valuation of the property to the extent of 80% on account of depreciation. On this point the complainant has claimed that the policy issued with reinstatement value clause. Therefore, the calculation of the Surveyor was not proper but the said issue is properly dealt with by the District Consumer Commission. We have also perused the policy issued in favour of the complainant. It appears that since 2014-15 there was renewal of the policy without reinstatement value clause. Therefore, the assessment carried out by the District Consumer Commission in the order is proper and accordingly, of the impugned order, the District Consumer Commission has given calculation in tabular form, which is proper, correct, and reasonable. There is no need to interfere with the said finding. In view of the above discussion, we come to the conclusion that the District Consumer Commission has correctly assessed the amount of compensation to the extent of Rs 22.59 crore. The District Consumer Commission has also come to the correct conclusion regarding compensation towards mental and physical harassment and cost. Hence, there is no need to interfere with the same,” the commission maintained.
Fire destroyed cold storage facility in 2019
The case arose from a massive fire that broke out on September 2, 2019, at the cold storage facility in Dondaicha, Dhule district, destroying stored goods and severely damaging the building. The warehousing firm had insurance coverage of Rs 31 crore under a Fire Declaration Policy and Rs 6 crore under a Standard Fire and Special Perils Policy.
Commission finds flaws in forensic report
The insurance company repudiated the claim in December 2020, relying on a forensic report by Truth Labs, which alleged that the fire was caused by “human intervention” using incandescent materials and not by electrical failure.
However, the commission found significant flaws in the forensic report, observing that the alleged “incandescent materials” were never properly identified or seized from the site.
The commission instead relied on reports by government agencies, including the Electrical Inspector, Fire Services, police, and Regional Forensic Science Laboratory, all of which pointed to an accidental electrical short circuit as the probable cause of the blaze.
Insurer’s objections over policy conditions rejected
The insurer had also argued that the complainant had breached policy conditions by constructing an additional chamber and installing solar panels without intimation. The commission rejected this contention, noting that the additional chamber had existed since 2009 and the policies had been repeatedly renewed after inspections by the insurer.
The commission further held that there was “deficiency in service” on the part of the insurer, observing that both the surveyor and forensic investigators took over a year to submit reports in violation of IRDAI timelines.
Interest awarded from date of fire incident
The complainant had contended that it reimbursed farmers and traders for destroyed goods by taking loans from financial institutions, causing severe financial distress. Accepting this argument, the commission ruled that interest on the compensation amount should run from the date of the fire incident itself.
Also Watch:
Apart from the insurance claim amount of Rs 22.59 crore, the commission also upheld Rs 2 lakh compensation for mental and physical harassment and Rs 1 lakh towards litigation costs.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
