A complainant was awarded Rs 25.04 lakh as insurance money along with nine per cent interest since 2011 that additionally came to be over Rs 24.78 lakh as of date by the State Consumer Disputes Redressal Commission, Maharashtra after the firm rejected the claims to reward the money to the complainant. Besides, the Commission also directed The New India Assurance Co. Ltd, the insurance firm to pay Rs 25,000 for mental and physical harassment and Rs 10,000 towards litigation costs.
The order dated August 12, 2022, was passed by Justice S. P. Tavade, president and A. Z. Khwaja, judicial member of the Commission. The order was given on a complaint by Mrs Savika Vibhuti, sole proprietor of M/s Komal Polypast.
Into the business of manufacturing plastic, product designing, mould making and moulding, insurance claimer Vibhuti has her office in Mumbai's Malad and has a factory in Kashimira, Thane. She had mortgaged her stocks and machinery with the Union Bank of India and taken two insurance through The New India Assurance Co. Ltd. and had taken the insurance for the loss due to fire or any other natural risk like flood etc. from The New India Assurance through Union Bank of India. Two insurance policies that were taken were Rs 25.04 lakh and Rs 15 lakhs respectively, covering the complainant’s stock, machinery, building, and superstructure including, the compound wall and building plinth and foundation.
At the time of the first policy, the factory was in Goregaon and later shifted to Kashimira, Thane. Vibhuti had intimated about the change of address to the Bank on April 5, 2011. The bank, in turn, informed the Insurance company on April 7, 2011. Due to heavy rains on July 14, 2011, there was flooding and that led to the machinery and stock lying heavily damaged, following which the insurance claim was made by Vibhuti.
When Vibhuti informed about the damages to both the company and the bank, a surveyor was sent by the insurance firm for inspection. After the surveyor submitted the report, the firm rejected the claim stating that the location was not covered under the policy and that the change of address was never informed. However, the complainant contended that the change of address was informed during the subsistence of policy.
The insurance firm further claimed that it had not committed deficiency in service and instead, the complaint should be dismissed with costs as the complainant was not even a 'consumer'.
While the claim was repudiated by the insurance firm saying the change of address was not informed, it settled the claim regarding damage to machinery. While doing so, it also alleged that the complainant and the bank were hand-in gloves with each other and prepared false records.
Rejecting the submission, the Commission observed that the complainant had mortgaged its stock and machinery for a loan with the bank and the latter had obtained insurance for stock.
The Commissioner further observed that the bank being a public body cannot be hand in glove with the complainant and create false records.