The national consumer dispute redressal commission (NCDRC) has dismissed a claim filed by Kanan Knitwear, a Lower Parel-based textile firm, for compensation for machinery theft. The commission also found the firm guilty of concealing material facts from TATA AIG General Insurance.
Kanan Knitwear had rented two galas measuring 31,000 sq ft in Kurla (West) from Manilal Sunerji Doshi in December 2005, installing machinery worth Rs1.9 crore along with furniture and fixtures. In June 2009, the firm alleged that Darshana Doshi, a relative of the landlord, forcibly took possession of the property and installed a separate lock. The firm filed a police complaint and lodged an FIR.
In July 2010, Kanan Knitwear purchased two fire, building, and burglary insurance policies from TATA AIG, paying premiums of Rs23,683 and Rs63,903, valid until mid-2011. Despite the landlord’s relative taking over the premises, the firm claimed it had assigned a watchman to guard the property and maintained that the machinery remained in their possession.
In May 2011, a court-appointed commissioner inspected the premises during a civil suit and revealed that the machinery had been stolen. The firm subsequently filed a claim with TATA AIG, but the insurance company repudiated the claim in August 2011, stating that the premises were not under the effective control of Kanan Knitwear.
The state consumer dispute redressal commission (SCDRC) rejected the firm’s claim, noting that Kanan Knitwear failed to disclose the dispossession when renewing the insurance policy, making it voidable due to non-disclosure of material facts.
Later, NCDRC upheld the SCDRC’s decision, stating the firm had renewed the policy without disclosing that the premises were under the landlord’s control since June 2009. The commission noted that the theft was only discovered after a government valuer broke open the locks under a court order during civil proceedings.
The NCDRC stated, “The renewal of the policy on May 24, 2010 indicates it was obtained without full disclosure of material facts. The respondent (insurance firm) cannot be found at fault for holding that the premises were not in effective control of the appellant.”
