Oriental Insurance to pay Rs 11.63L to Liberty Cinema owner

Dec 10 2012, 15:04 IST
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The state consumer commission observed that the insurance company had 'deliberately and knowingly' refused to pay the balance amount and was The state consumer commission observed that the insurance company had 'deliberately and knowingly' refused to pay the balance amount and was "enjoying the benefit of the use of the fund. (Reuters)
SummaryThe state consumer commission observed that the insurance company had 'deliberately and knowingly' refused to pay the balance amount and was "enjoying the benefit of the use of the fund.

Oriental Insurance Company Ltd has been asked by the Delhi State Consumer Commission to pay Rs 11.63 lakh to the owner of Liberty Cinema hall here as balance of reimbursement of expenses on repairs of the theatre after a bomb blast on May 22, 2005.

The state consumer commission observed that the insurance company had "deliberately and knowingly" refused to pay the balance amount and was "enjoying the benefit of the use of the fund.

The commission gave the order dismissing the insurance company's appeal against a district forum's order to it to pay the remaining amount of repair charges claimed by the cinema hall owner.

"Out of the loss assessed by the surveyor, which is Rs 26,20,925.75, the salvage amount was also deducted and the amount came to Rs 23,40,833. Out of this amount, Rs 11,85,000 had been paid by the insurance company but it deliberately and knowingly refused to pay the balance amount of Rs 11,55,833 and by not paying such a huge amount enjoyed the benefit of the use of the fund.

"We do not find any illegality or irregularity (in the district forum's order), therefore, there is no justification to interfere in the impugned order. The appeal is dismissed," the bench comprising its presiding member Salma Noor and judicial member V K Gupta said.

The Central district consumer forum had directed the insurance company to pay Rs 11,55,833 together with Rs 5,000 as compensation and Rs 3,000 as cost of litigation.

The forum's order had come on the plea of the cinema hall owner who had alleged that the insurance company had paid only half of the repair charges incurred by him.

The insurance company in its defence had contended that the amount paid was as per the assessment of its surveyor, who had deducted 50 percent from the repair costs as depreciation.

The state commission rejected the contention saying no rules were filed showing how 50 percent depreciation was applicable and added the surveyor had made the deduction to please the insurance company.

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