State Consumer Disputes Redressal Commission
M/S.Emco Ltd.Through Its Chief ... vs The New India Assurance Co.Ltd.Through ... on 12 March, 2026
1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
MAHARASHTRA, MUMBAI
CONSUMER COMPLAINT NO.SC/27/CC/601/2018
M/s EMCO Ltd.
Through its Chief Financial Officer and
Company Secretary, Mr. Ganesh Tawari
Registered Office
N -104, MIDC Area, Mehrun,
Jalgaon, Maharashtra - 425003.
And
Head Office
Plot No.f-5, Road No.28,
Wagle Industrial Estate,
Thane - 400 604. ....Complainant.
Versus
New India Assurance Company Ltd.
Through its Regional Manager
Unit 222100, J.K. Amin Chambers,
Station Road, Bharuch,
Gujrat - 392001.
AND
Having its registered and Head Office at
New India Assurance Building,
87, M.G. Road, Fort,
Mumbai - 400 001. ....Opposite Party.
BEFORE:
Ms. Poonam V. Maharshi, Hon'ble Presiding Member.
Dr. Nisha Amol Chavhan, Hon'ble Member
APPEARANCE :
For Complainant: Adv. Priyanka Pandey i/b Chandhiok & Mahajan
For Opponents: Adv. Sanjit Shenoy a/w Adv.Anand Gawand
O R D E R
(Delivered on 12/03/2026) Per Mrs. Dr. Nisha Amol Chavhan, Member.
1. The present Consumer Complaint No. CC/601/2018 in is filed under Sec.17 of the Consumer Protection Act-1986. (The 'C.P. Act' for short) by the complainant against Opponent.
22. The brief facts of the case of Complainant that the present complaint aroused out of an insurance claim made by him upon the Opponent. The Complainant had availed "ERCETION ALL RISKS/STORAGE CUM ERRECTION INSURANCE POLICY" bearing no. 22210044130400000001 (Insurance Policy) from Opponent on 22.04.2013 for a period of 22.04.2013 to 21.04.2014.
3. Complainant stated that, on 28.05.2013, due to high velocity storm three towers bearing no. 24/0, 23/5 and 23/4 collapsed, and this led to huge material losses to the Complainant. The claim for losses was raised upon the Opponent under Insurance Policy. However, it was declined by the Opponent through email dated 24.01.2018. Therefore, said consumer complaint is filed to claim an amount of INR 79,63,742/-.
4. Complainant stated that through letter of award dated 03.03.2009, the Complainant was awarded a contract for inland transportation & insurance, delivery of equipment/material survey, foundation, erection, stringing, testing and commissioning of tower package on the Site. In order to protect the towers on Site, the Complainant availed Insurance Policy from the Opponent on 22.04.2013, after paying a premium of INR 89.49.87/- said Policy provided a cover period from 22.04.2013 to 21.04.2014, A high velocity storm hit the Site on 28.05.2013 and damaged towers bearing no. 24/0, 23/5, 23/4. Following this, the Complainant through email dated 30.05.2013 intimated the Opponent regarding the loss suffered by it due to damage to above mentioned towers.
5. Complainant stated that, through email dated 31.05.2013, the Opponent informed him regarding appointment of Mr. Raman Roy as a Surveyor for assessment and investigation of subject claim. The Surveyor vide emails dated 03.06.2013, 16.10.2014; 21.01.2015 raised certain requirements for scrutinizing the efficacy of Subject claim. The Complainant diligently offered all the assistance sought by the Surveyor and provided for all the documents as demanded by the Surveyor through its email dated 22.07.2013, 22.06.2014, 05.11.2014 and 21.01.2015. Accordingly, the Surveyor released his final report 3 on 24.01.2015.
6. Thereafter, the Opponent, through its email dated 20.11.2015 requisitioned the Meteorological Department's report for 28.05.2013, from the Complainant to substantiate the Subject claim. Pertinently, it is the case of Opponent that the said report was also sought from the Complainant through its earlier email dated 05.03.2015. However, the Complainant denies receiving the email dated 05.03.2015. Nonetheless, the Complainant submitted the said report to the Opponent on 06.02.2016.
7. Thereafter, through numerous emails the Complainant urged the Opponent to settle the Subject claim. The Opponent never responded to the emails of the Complainant until on 24.01.2018, where the Opponent stated to have rejected Complainant's Subject claim through its earlier letter dated 26.06.2015. The Complainant denies the receipt of Opponent rejection letter dated 26.06.2015.
8. Therefore, in view of the arbitrary process adopted by the Opponent to deny the bona fide claims of the Complainant, the Complaint filed the instant complaint before this commission to recover the Subject claim of INR 79,63,742/-.
9. It is the case of Opponent that instant complaint is barred by the limitation period of two years, as stipulated in Section 24A of the Act. The Opponent in his defence on the assertion that rejected the Subject claim through its letter dated 26.06.2015. However, the rejection of the said claim was formally communicated to the Complaint for the first time by the Opponent on 24.01.2018. Through the said email dated 24.01.2018, the Opposite Party for the first time formally served its pre-dated letter dated 26.06.2015 upon the Complainant.
10. Complainant relied on the judgment of the Hon'ble National Consumer Disputes Redressal Commission in Freight System (India) Private limited vs. 4 Omkar Realtors and Developers Private Limited and Anr., wherein it held that: "A company is included in the definition of person contained in Section 2(31).it is not per se precluded from being 'consumer', provided, if, for a particular purpose, it meets the requirements of 'consumer as defined in Section 2(7) of the Act 2019." In the light of abovementioned submissions, is submitted that Opponent is liable for deficiency of service due to rejection of Subject claim. Therefore, it is prayed before this Commission, that the instant complaint be allowed in favour of the Complainant.
11. Upon admission of the complaint, notice was issued to the Opponent. He appeared through counsel and opponent no.1 filed his Written Version with documents; the pleadings of both sides have been taken on record.
12. In defence, the Opponents submitted that the Complaint filed against them is false, frivolous, vexatious and not maintainable and as such the same is liable to be dismissed in limine as against this Opponent with costs under the provisions of Section 26 of the Consumer Protection Act.
13. The Opponent submitted that the policy issuing office is Bharuch Divisional Office No. 2 as indicated in the insurance policy and admitted by the Complainant. Moreover, the cause of action i.e. the damage to the Tower occurred at Ranchi, Jharkhand. Hence, neither the Opponent nor the cause of action is within the territorial jurisdiction of this commission. The Complainant should be directed by this commission to withdraw the present Complaint and file it before the appropriate State Commission having the territorial jurisdiction to entertain and adjudicate the claim of the Complainant. The address mentioned in the cause title of the Complaint is that of the Opponent's Head Office. The Head Office never issued the insurance policy nor processed the claim. This is contrary to the ratio decidendi of the Apex Court in the 2009 case of M/s. Sony Surgical V/s. National Insurance Co. Ltd., wherein it was held as follows "it will mean that even if a cause of action has arisen in Ambola, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where a branch office of the insurance company is situated.
5We cannot agree with this contention. It will lead to absurd consequences and lead to bench hunting. In our opinion, the expression branch office' would mean the branch office where the cause of action has arisen."
14. The Opponent further submitted that the present Complaint is barred by limitation as envisaged under S. 24A of the Consumer Protection Act. since as per admission of the Complainant, the damage occurred on 30/05/2013 Hence the Complaint ought to have been filed within 2 years from the date of incident on or before 29/05/2015 whereas the present Complaint was filed on 13/07/2018 i.e. after 5 years 2 months from the date of cause of action. The question of limitation is a question of law and has to be dealt with before proceeding with the Complaint on merits. Hence, the Complaint deserved to be dismissed in limine on the ground of limitation.
15. Opponent submitted that, the present Complaint is not maintainable under Section 2 (1) (d) (ii) of the Consumer Protection Act as the services of the Opponent have been engaged for commercial purpose as the Complainant is doing business on a large scale. Insurance policy issued by the Insurance Company is for giving insured amount to the person who has taken insurance policy in case anything adverse happens during policy period. If commercial organisation obtains insurance policy for its building. Machinery, then by that policy commercial organisation is protecting its assets and hence, taking policy for protecting assets of commercial organization is certainly a commercial activity. Thus, a commercial organization is reducing the losses or wiping out the entire loss with the help of amount which the organization will get on the basis of insurance policy. If that is so, then it is very clear that taking of insurance policy for the building, machinery and other assets, stocks of the commercial organization is certainly a commercial activity. Taking insurance policy for such purpose is for protecting the property or interest of commercial organisation. Thus the purpose of insurance policy is to protect the interest of a commercial organisation. Hence, services of insurance in such cases are part of commercial activity. In, Laxmi Engineering Works V/s. P.S.G. Industrial 6 Institute, 1995 AIR 1428, It was observed by the Apex Court that- indeed the entire act revolves around the consumer and is designed to protect his interest. The act provides for "business to consumer" disputes and not for "business to business" disputes. The act provides for "business to consumer" disputes. It means on one side business organisation running business such as Insurance Company or other Companies providing services and on other side an individual person and that is why words are used "business to consumer"
disputes. It was specifically mentioned that the act provides not for "business to business" disputes. It means that it is not expected under the provisions of the act that both parties are running a business. If that is so then dispute between "businesses to business" is not expected to be covered under the act as observed by Hon'ble Apex Court. Here in the present case, the complainant is a commercial organisation running commercial activity. To protect machinery for running business, the policy was taken from the opponent and hence, purpose of availing services of the opponent is certainly for commercial purpose. Complainant No.2 cannot take advantage of explanation to Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 as that is not its case as commercial organisation cannot raise a plea of earning livelihood by means of self- employment. Thus, complainant No.2 is not a consumer as contemplated under the Consumer Protection Act, 1986. In view of basic scheme and object of the Consumer Protection Act, 1986, it is the individual person who is a consumer for whose protection the Act is passed. No doubt in view of definition of "consumer" and "person", firm, co-op, society, association of persons can be a consumer, however, services availed should not be commercial. It is also noteworthy that more than 90% consumer complaints against the Insurance Companies are by the commercial organisation and they are depriving rights of the common man who is a real consumer of the Insurance Companies by occupying most of the field. Thus, the common man is deprived of getting quick relief and the time of the commission is whiled away in a long ordained civil trial to decide complicated questions of facts and law as well as examine voluminous documents which is contrary to the objective and purpose of the 7 Act i.e. to provide a quick and efficacious remedy to the common man. Hence, the complainant is not a consumer as envisaged under the Consumer Protection Act, 1986.
16. The Opponent therefore pray that the present Complaint filed against them be dismissed with costs in their favour for wrongly invoking the provisions of the C.P. Act;
17. Heard the learned advocates for the parties at length; perused the complaint with annexures, the Written Version of Opponent, the affidavits of evidence of the both parties and the documents placed on record as well as citation of record filed by the both parties, upon a comprehensive appraisal of the pleadings, materials and submissions available, the following points arise for our determination and are answered as set out hereinafter.
Sr.
Points Findings
No.
1 Whether the Complainant falls under the definition of Affirmative a 'Consumer' under Section 2(1)(d) of the Act, 1986?
2 Whether the complaint is barred by limitation under Negative Section 24A?
3 Whether the repudiation of the claim by the Opposite Party amounts to a deficiency in service?
4 What order? As per final Order Point No.1
18. In this present case, the opponent contended that since the insurance was taken for machinery used in a business to generate profit, the Complainant is excluded from the definition of a 'Consumer'. However, this Commission places reliance on the landmark judgment of the Hon'ble Supreme Court in National Insurance Co. Ltd. vs. Harsolia Motors (2023). The Apex Court clarified that:
"taking an insurance policy by a commercial enterprise cannot be said to have a close nexus to profit-generating activity. The dominant intention of the insurance transaction is to indemnify the risk of loss, not to generate profit."8
19. Furthermore, as per the explanation to Section 2(1)(d)(ii), since the Complainant is using the machinery for their livelihood, the commercial exclusion does not apply. Thus, the Complainant is held to be a 'Consumer'. Therefore the preliminary objection regarding the commercial nature of the insurance policy is, therefore, dismissed." In view of our finding given as to have point No.1 in affirmative.
Point No.2
20. The Opponent argued that the complaint was filed beyond the two-year period prescribed under Section 24A of the Act., The damage occurred on 30/05/2013 Hence the Complaint ought to have been filed within 2 years from the date of incident on or before 29/05/2015 whereas the present Complaint was filed on 13/07/2018 i.e. after 5 years 2 months from the date of cause of action.
21. It is a settled position of law that the 'cause of action' in insurance matters does not necessarily arise on the date of the incident alone, but also on the date of repudiation of the claim. In National Insurance Co. Ltd. vs. Hindustan Safety Glass Works Ltd. (2017), the Hon'ble Supreme Court held that an insurance company cannot rely on technicalities of limitation to escape its liability when the claim was pending or was recently repudiated. After the perusal of record we observed that claim was rejected through its letter dated 26.06.2015. However, the rejection of the said claim was formally communicated to the Complaint for the first time by the Opponent on 24.01.2018. Through the said email dated 24.01.2018, the Opposite Party for the first time formally served its pre-dated letter dated 26.06.2015 upon the Complainant. Therefore, as present complaint has filed within two years of the formal letter of repudiation, it is within the limitation period. In view of our finding given as to have point No.1 in Negative.
Point No.3
22. In this present case, the Surveyor's report confirms the occurrence of the fire and the damage to the machinery. The Opposite Party failed to provide 9 substantial evidence of any policy violation. Arbitrary repudiation of a valid claim after accepting premiums for years constitutes a clear deficiency in service as defined under Section 2(g) of the Act. In view of our finding given as to have point No.3 in affirmative.
Point No.4
23. In light of the facts and legal precedents discussed, the Commission finds that the repudiation of the claim by the Insurance Company is unjustified. Regarding the Preliminary Objection that the Complainant is not a "consumer" under the Consumer Protection Act, 1986, it is well-settled that an insurance policy is a contract of indemnity taken to protect against unforeseen risks and is not, in itself, an investment for generating profit. Even if the machinery was used for commercial production, the purchase of a service (insurance) to safeguard that asset does not strip the Complainant of their status as a "consumer." Furthermore, the defence of limitation cannot stand, as the cause of action in insurance claims is a continuing one until there is a final, formal communication of repudiation. The delay in filing, if any, is overshadowed by the insurer's failure to settle the claim within a reasonable timeframe. Consequently, the complaint is allowed. The opponent is directed to indemnify the Complainant by paying amount of Rs 79, 63,742/- along with interest at the rate of 9% per annum from the date of the 24.01.2018 repudiate the claim till realization. This commission acknowledging the deficiency in service and the mental agony caused to the insured In addition, therefore, it is directed to the Opponent to pay to sum of Rs. 1,00,000/- towards the compensation for the stress, inconvenience, harassment, mental torture & agony suffered by the Complainants; As well as pay to the Complainants a sum of Rs. 25,000/- towards the Legal and incidental expenses incurred by the Complainant. Hence, in an answer to point no. 4 we pass the following order.
ORDER
1. Complaint is hereby allowed.
102. The opponent is directed to indemnify the Complainant by paying amount of Rs 79, 63,742/- along with interest at the rate of 9% per annum from the date of the 24.01.2018 repudiate the claim till realization.
3. In addition, it is directed to the Opponent to pay to sum of Rs. 1,00,000/- towards the compensation for the stress, inconvenience, harassment, mental torture & agony suffered by the Complainants; As well as pay the sum of Rs. 25,000/- towards the Legal and incidental expenses incurred by the Complainant.
4. The copy of the judgment be furnished to the both side free of cost.
[Poonam V. Maharshi] Presiding Member [Dr. Nisha Amol Chavhan] Member NAC/aj