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SC upholds showroom owner's claim

Written by: Staff

New Delhi, Sep 17 (UNI) The Supreme Court has upheld the claim of a textile showroom owner of Coimbatore in Tamil Nadu, which was looted and set on fire by rioters during communal riots in the state in 1998.

The riots were sparked off by a series of bomb blasts in the city on Feb 14, 1998. The appellant Ms Shobika Attire had to flee from the city to Palghat in Kerala, to save the lives of her family members and her own and could return only after communal frenzy subsided.

The petitioner filed a claim of Rs 2 crore with New India Assurance Company Ltd, with which the showroom was insured against damages to the said stocks in trade.

The petitioner filed an appeal against the judgment of National Consumer Disputes Redressal Commission dated Nov 21, 2005, which had rejected the petition of the appellant challenging the state Consumer Commission.

On March 20, 1998, the company filed a claim for Rs 2.20 crore with the respondent insurance company. The Insurance company failed to settle the claim on one pretext or the other.

Meanwhile, National Insurance Company with which fittings, fixtures and furniture were insured approved a claim for Rs 20,43,605.

Finally, the respondent company on the basis of the report of surveyors gave a cheque for Rs 1,02,38,738 to the bank of the petitioner. The bank, however, responded by stating that the stock in trade of the company was never less than Rs 2 crore during the period of insurance cover in the insured premises.

The appellant filed claim for the remaining amount of Rs 97,83,327 which was rejected both by the state consumer commission as well as by the National Consumer Commission, holding that there was deficiency in service.

The apex court setting aside the order of the National Consumer Commission, held, ''In our view, the appellants had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of their claim under the Insurance policy and it was for the insurance company to disprove such a claim with evidence, if any. The insurance company despite the report of the investigator, failed to establish that the claim of the appellant was not justified and was not covered by the policy of insurance.'' A bench comprising Justices A R Lakshmanan and Altamas Kabir in their judgment dated September 15, however, refused to accept the claim of the appellant for compensation for hardships, mental agony and harassment, in addition to the actual claim.

The court directed the respondent insurance company to pay Rs 97,83,827 with interest at the rate of nine per cent per annum from the date of the claim till the date of actual payment. The payment is to be made within a month from the date of the judgment.


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