NEW DELHI: The Delhi State Consumer Disputes Redressal Commission has directed New India Assurance Company to pay Rs 52,62,708 to a restaurant owner over the settlement of an insurance claim after a fire destroyed his establishment in 2011. The commission awarded Rs 51,12,708 towards the balance claim, Rs 1 lakh for mental agony and harassment and Rs 50,000 as litigation costs. The judgment was passed on August 25, 2026.Why did the restaurant owner approach the commission?According to the commission order, the complainant was running a hotel, bar and restaurant named Tamba Indian Cuisine in Rajouri Garden, New Delhi. The establishment was insured with New India Assurance under a Standard Fire and Special Perils policy with a sum insured of Rs 1 crore.A major fire broke out at the premises on May 4, 2011, completely destroying furniture, fixtures, fittings, electrical installations, stock-in-trade and other articles. The incident was reported to the police and fire department, after which the insurer appointed surveyors to assess the loss.The complainant said the original purchase bills had been destroyed in the fire, but certified copies obtained from suppliers were submitted to the surveyor. He alleged that despite repeated assurances about settlement, the insurer made him sign blank discharge vouchers and other documents before releasing Rs 16,88,995 on March 30, 2012 and Rs 78,895 on July 27, 2012.He also alleged that the insurer relied on a survey report prepared for a co-insurer and assessed the loss on a market-value basis, applying 75 percent depreciation to damaged items instead of assessing the loss on a reinstatement basis.The insurer denied the allegations and argued that the complainant was not a consumer because the insurance policy had been obtained for commercial purposes. It also said its surveyor had assessed the loss at Rs 7,16,707 and that this amount had been paid in full and final settlement.What did the commission find?The bench of president Justice Sangita Dhingra Sehgal and member Bimla Kumari rejected the insurer’s argument that the complainant was not a consumer, observing that he was earning his livelihood from the hotel. It held that an insurance policy taken to cover an envisaged risk was not obtained for a commercial purpose.The commission also found that the survey report recorded the fire as the proximate cause of the loss and that there was no breach of the policy terms or conditions by the complainant.The commission specifically questioned the 75 percent depreciation applied to the damaged items.“On further perusal, we find that there is no specific clause in the insurance policy regarding 75 percent depreciation merely because the original invoices were not available. Similarly, no material has been placed on record to show that the Complainant had violated any condition of the policy so as to justify such substantial deductions,” the commission said.The commission also found that the insurer had not adequately explained how the amount paid represented its final liability under the policy.“Despite this, the Opposite Party settled the claim only for Rs. 16,88,995/- (Rupees Sixteen Lakh Eighty-Nine Thousand Nine-Hundred and Ninety-Five Only). Except relying upon the survey report, the Opposite Party has not produced any satisfactory explanation or calculation demonstrating how the said amount represented the final liability under the policy,” the bench further added.The commission then considered the material produced by the complainant and directed payment of the balance amount.“Keeping in view the facts of the present case and the extensive law as discussed above, we direct the Opposite Party to refund the policy cover as per the bills adduced by the Complainant after deducting the difference of the claimed amount already paid to the Complainant i.e., Rs. 51,12,708/-..,” the commission noted.The insurer was directed to pay Rs 51,12,708 with 6 percent annual interest from May 4, 2011 to August 25, 2026, provided the amount was paid by October 25, 2026. In case of default, the amount would carry 9 percent annual interest until realisation.The commission also awarded Rs 1 lakh to the complainant for mental agony and harassment and Rs 50,000 towards litigation costs, taking the total amount awarded to Rs 52,62,708, apart from the applicable interest.
