Chennai Consumer Forum Upholds Commercial Insurance Claims Under Consumer Act
A consumer forum in Chennai has made a significant ruling. It has ordered an insurance company to pay a substantial claim for a factory fire. The forum confirmed that commercial insurance policies still fall under the Consumer Protection Act. This decision provides clarity for businesses facing similar disputes.
Details of the Factory Fire and Claim
The case involved Mipalloy Nomura Plating Company LLP. This company operated a factory in Sriperumbudur. They had insured their plant with Liberty General Insurance Company Ltd. The total sum insured was Rs 28 crore.
A fire broke out at the factory on April 10, 2019. The company reported the fire immediately. They filed an FIR the next day. By May 7, 2019, they submitted a formal claim for Rs 19.07 crore. Investigations showed the fire started accidentally due to an electrical short circuit.
Insurance Company's Rejection and Legal Battle
Liberty General Insurance rejected the claim after 937 days. This delay went beyond the policy's specified timeline. The company argued the complainant was not a consumer because the policy covered a commercial enterprise. They also alleged gross negligence by the factory owners.
The rejection forced Mipalloy Nomura to take legal action. They filed a writ petition in the High Court to obtain necessary documents. Subsequently, they approached the consumer commission alleging deficiency in service and arbitrary repudiation.
Consumer Commission's Ruling
The Additional District Consumer Disputes Redressal Commission, Chennai (North) heard the case. The bench included President D Sathish Kumar and members P Vinodh Kumar and K Amala. Advocate Sanjay Pinto represented the complainant company.
The commission partly allowed the complaint. They ordered Liberty General Insurance to pay Rs 11.29 crore. This amount was based on a revised survey report from October 12, 2022. The payment must include 6% interest from November 7, 2024, until full realization.
Additional Compensation Ordered
Beyond the insurance payout, the commission awarded additional compensation. They directed the insurer to pay Rs 5 lakh for deficiency in service and mental agony suffered by the company. The commission also ordered Rs 10,000 towards litigation costs.
This ruling reinforces that commercial insurance claims remain protected under consumer law. It sets an important precedent for similar cases across India. Businesses can now approach consumer forums with greater confidence when insurance companies delay or deny legitimate claims.
