Consumer complaint for fire insurance claim

Fire Insurance Claim by commercial entity – Held that a person takes insurance policy to cover the envisaged risk and not for commercial purpose – It is not intended to generate profits – A contract of insurance is and always continues to be one for indemnity of the defined loss, no more and no less -Dealer of vehicles is “consumer” within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 –

Respondent no.1 M/s. Harsolia Motors (dealer of Tata vehicles) and a commercial entity – had taken fire insurance cover for Rs.75,38,000/- for the office, showroom, garage, machinery etc; and the respondent no.2 had taken cover of Rs.90 lakhs.

On 28.2.2002, damage was caused to the goods of respondent nos.1 and 2 during Godhra riots.

The insurance claim of the respondent no.1 was denied, whereas, the claim of respondent no.2 for Rs.54,29,871/- was admitted.  The respondents filed the consumer complaint in the Gujarat State Consumer Disputes Redressal Commission.

The State Commission held that the respondent no.1 is not “consumer” under Section 2(1)(d) of CP Act.

In appeal, the National Commission held that a person takes policy for insurance and not for business and therefore, consumer complaint by a commercial company is maintainable,  vide its judgment dated 3.12.2004. 

On exhaustive analysis of the provisions of the Consumer Protection Act and the earlier decisions, the Supreme Court was held that a consumer complaint by a commercial unit for fire insurance claim is maintainable.  The civil appeal of the appellant was dismissed. 

Civil Appeal Nos.5352/5353 of 2007-  National Insurance Co. Ltd Vs. Harsolia Motors and others