13 June 2024 Consumer Protection Act >> Consumer Rights   |   Insurance Claim/Money Rejected >> Insurance  

A recent court case involved a fire insurance claim dispute between Sri Sai Lakshmi Poultry Feeds, a poultry feed manufacturer, and United India Insurance Company Limited. The poultry feed manufacturer, the respondent in this case, had filed a consumer complaint seeking compensation for losses suffered due to a fire at their facility.

The crux of the dispute was the respondent's claim for damages caused by a fire. They claimed that due to spontaneous combustion, they incurred losses in de-oiled bran, de-oiled soya, brans, and dry fish, amounting to Rs. 3,153,195.

The insurance company, the appellant in this case, argued against the claim. They contended that the respondent failed to provide adequate evidence to prove the purchase of de-oiled bran, a key element in their claim. Additionally, a significant discrepancy existed between the weight of the damaged stock claimed by the respondent and the weight discovered during a physical verification process. The appellant also raised suspicion about several large purchases made by the respondent just before the fire incident. Finally, the lack of cooperation from the respondent regarding the investigation, particularly not providing payment details for the purchases, further strengthened the appellant's case.

The State Commission, initially hearing the case, ruled in favor of the respondent. They directed the insurance company to pay Rs. 3,090,521 with interest and compensation. However, this decision was challenged by the insurance company in the Appellate Court.

The Appellate Court, after reviewing the evidence, overturned the State Commission's order. The court agreed with the insurance company's arguments. The respondent's inability to provide convincing proof regarding the legitimacy of the de-oiled bran purchases and the substantial difference in the weight of the damaged stock were significant factors in the court's decision. The court also acknowledged that the respondent's lack of cooperation during the investigation raised doubts about the claim's validity.

In conclusion, the Appellate Court's verdict favored the insurance company. The court determined that the respondent failed to present sufficient evidence to substantiate their claim, leading to the dismissal of their fire insurance claim.