Mumbai, June 25: The National Consumer Disputes Redressal Commission (NCDRC) has partly allowed an appeal filed by insurance major New India Assurance Company Limited and reduced the compensation payable to a Mumbai-based businessman whose industrial printing machine was damaged during the devastating 2005 Mumbai floods.
The Commission directed the insurer to pay Rs 21.37 lakh, along with 6 per cent annual interest from February 28, 2006, to Anand Shyamsundar Jaisingh, proprietor of Channel Digital, Andheri.
The amount is substantially lower than the compensation awarded earlier by the Maharashtra State Consumer Disputes Redressal Commission (SCDRC), which had directed payment equivalent to USD 55,000.
Insurance Claim Dispute
Jaisingh, who operates a computerised industrial printing business, had obtained a Standard Fire and Special Perils Insurance Policy covering machinery and allied equipment for the period between July 2005 and July 2006. His printing machine suffered extensive damage when unprecedented flooding inundated Mumbai during the heavy rains of July 26-27, 2005.
Claiming that the machine was beyond repair and amounted to a total loss of nearly Rs 95 lakh, Jaisingh lodged an insurance claim with New India Assurance. The insurer appointed surveyors, M/s Ashok Chopra & Co., to assess the loss.
According to the complaint, the insured provided all the required documents and technical reports, including opinions from experts who concluded that repairing the machine would cost more than replacing it.
Despite these reports, the insurer repudiated the claim in January 2006 and reaffirmed its stand later the same year, relying largely on the surveyor’s findings and its interpretation of the policy conditions. Aggrieved by the rejection, Jaisingh approached the State Consumer Commission, which ruled in his favour and awarded compensation.
NCDRC Modifies Compensation
However, while deciding cross-appeals filed by both parties, the NCDRC found that the State Commission had failed to adequately consider significant findings contained in the surveyor’s report and certain policy conditions.
The National Commission observed that the insured had not fully cooperated in assessing the actual extent of the damage and repair costs and had violated some policy requirements.
At the same time, the Commission held that the insurance company could not completely escape liability since the surveyor had confirmed substantial flood damage to the insured machine. The surveyor had assessed the maximum indemnifiable loss at Rs 21.37 lakh, which the Commission accepted as the payable amount.
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A Bench of the NCDRC accordingly directed New India Assurance to pay Rs 21.37 lakh with interest at 6 per cent per annum from February 28, 2006, until realisation. The insurer was also ordered to pay Rs 50,000 towards litigation costs.
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