National Consumer Disputes Redressal Commission – Hotel Leelaventure’s Insurance Claim Dismissed
A significant consumer dispute case came before the National Consumer Disputes Redressal Commission involving Hotel Leelaventure (Leela Hotel) and New India Assurance. Leela Hotel sought compensation for losses suffered during the 2005 Mumbai floods due to the repudiation of their insurance claim under two policies issued by the insurance company. The claim amounted to Rs. 5,98,42,267 for damages caused by unprecedented flash floods, but the Commission dismissed the claim as Leela Hotel failed to prove the inclusion of Leela Galleria in the insured premises as per the policies.
Leela Hotel’s claim centered on the damages caused by excessive rains and high tides that resulted in 2.5 feet of water inundation, submerging the basement and causing losses to buildings, plant & machinery, fixtures, fittings, and furniture. The incident was promptly reported to the insurance company, but the final survey report indicated that the damaged stock within the insured premises was covered, while items at Leela Galleria and its basements were not within the scope of ‘insured premises.’
Leela Hotel alleged deficiency in service, contending that the insurer arbitrarily offered a paltry compensation of Rs. 37.57 lakhs despite the hotel paying a premium of around Rs. 22 lakhs and suffering a loss of about Rs. 6 crores. The Commission, however, ruled that Leela Galleria was not covered under the two policies as no endorsement was issued to include it. Moreover, assets/stocks/FFF of Galleria were insured under a separate policy by Oriental Insurance Co. Ltd., indicating that it was not covered under the existing policies.
The Commission emphasized that an insurance policy must be interpreted as it is without any additions or interpretations. It also considered the surveyor’s report and noted that the insurer is required to consider the report, although not bound to accept it entirely. The final surveyor’s assessment excluded the loss incurred at Leela Galleria premises, which led to the dismissal of Leela Hotel’s complaint.
In conclusion, the National Consumer Disputes Redressal Commission’s ruling in this case highlights the importance of clear policy terms and endorsements. The dismissal of the claim emphasizes the need for consumers to thoroughly understand their insurance policies and ensure that all insured properties are correctly listed to avoid potential disputes in the future.
