15 years after restaurant fire, insurer told to pay owner Rs 52.6 lakh
A consumer commission ordered New India Assurance to pay over Rs 52 lakh to a restaurant owner. The restaurant owner had approached the commission after a fire destroyed his establishment in 2011. The insurer had initially settled the claim for a much lower amount, which was disputed. The commission found the insurer's depreciation calculation unjustified and the settlement inadequate.
Fifteen years after a restaurant fire, the Delhi State Consumer Disputes Redressal Commission has ordered New India Assurance Company to pay Rs 52,62,708 to the restaurant owner for an insurance claim. The commission decided on August 25, 2026.
The restaurant owner operated a hotel, bar, and restaurant called Tamba Indian Cuisine in Rajouri Garden, New Delhi. The establishment was insured under a Standard Fire and Special Perils policy with a sum insured of Rs 1 crore. A significant fire occurred at the premises on May 4, 2011, completely destroying various assets.
The owner reported the fire to the police and fire department and subsequently approached the insurer. He alleged that despite assurances about settlement, the insurer made him sign discharge vouchers before releasing funds. The owner claimed the insurer used a market-value assessment for the damage instead of reinstatement value, applying 75% depreciation to damaged items.
The insurer disputed these claims, stating that the complainant was not a consumer because the policy was for commercial purposes. They also argued that their surveyor had assessed the loss at Rs 7,16,707, which had been paid in full.
The commission disagreed with the insurer's arguments, ruling that the owner was indeed a consumer as he earned his livelihood from the hotel. They found the survey report accurate and accepted that there was no breach of policy terms.
The commission specifically challenged the 75% depreciation applied to damaged items, noting the lack of specific clause in the policy for such a deduction. They rejected the insurer's explanation for the final payment and directed payment of the remaining Rs 51,12,708, including 6% annual interest. Additionally, the commission awarded Rs 1 lakh for mental anguish and Rs 50,000 for litigation costs, totaling Rs 52,62,708.
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