Mumbai, Sep 13 (PTI) Seven years after a blaze destroyed the customs bonded warehouse of Victorinox India Pvt Ltd, a subsidiary of a Switzerland-based firm, a consumer commission here has directed an insurance company to pay over Rs 8.06 crore for unfairly repudiating its fire insurance claim.

The company's legitimate claim was rejected "solely on technical ground in a mechanical manner," the District Consumer Disputes Redressal Commission (South Mumbai) held in its order passed on September 2.

The complainant firm is a wholly owned subsidiary of Switzerland-based Victorinox AG. It deals with export, import and distribution of travel bags, knives, luxury watches, cutlery and other consumer products manufactured by its parent company in India.

The firm had taken a Standard Fire & Special Perils Policy from the New India Assurance Company.

"The insurance company's repudiation based solely on procedural non-compliance, in the absence of any substantive disagreement or fraudulent intent, was legally unsustainable," the consumer panel remarked.

The insurer thus adopted an unfair trade practice and committed a deficiency in providing service to the complainant, Victorinox India, the commission said.

As per the complaint, a huge fire broke out on February 16, 2019, at the firm's custom bonded warehouse -- a secure, government-regulated storage facility where imported goods can be held.

The complainant said that all immediate and prompt measures were taken by the staff present at the warehouse to douse the fire.

However, as the fire raged on, services of the Jawaharlal Nehru Port Trust (JNPT) Fire Services were sought.

Despite all efforts, the prominence of the fire caused large-scale destruction to the goods stored therein, the complaint said. It submitted that the insurer's appointed surveyor assessed the net loss at Rs 8,06,49,573.

The insurance firm repudiated the claim in January 2021, citing a breach of Clause 6(i) regarding the non-submission of specific internal agreements and invoices.

The commission's examination of email records showed that Victorinox repeatedly supplied the requested documents and participated in virtual conferences to satisfy the surveyor's queries.

The panel noted that the surveyor calculated and assessed loss on the basis of inspection at site and various documents submitted by the insured.

"Once that assessment has been made regarding the loss/damage which took place due to fire and that was not disputed by either party, repudiating the claim invoking clause 6(b) of the policy, in our considered view, was unfair and is not legally sustainable," it said.

The commission concluded that the insurance company rejected the claim "solely on technical grounds, without any valid or justifiable reason".

Hence, the complainant was entitled to receive the insurance claim of Rs 8,06,49,573. New India Assurance has been ordered to pay 9 per cent interest from the date the complaint was filed, it said.

Furthermore, the insurance firm was asked to pay Rs 50,000 for mental distress and Rs 50,000 toward litigation costs within 45 days. PTI AVI GK