The Commission held that the insurer was justified in repudiating the claim, observing that although the fire initially originated at the adjoining Mojo's Bistro, the combustible temporary terrace covering at 1Above facilitated its rapid spread. It also found that the complainant failed to establish compliance with relevant policy conditions and warranties.

Facts

Sigrid Ospitalita and Entertainment LLP had obtained a Business Protector Policy from Shriram General Insurance Company through insurance broker Grovalue Insurance Brokers Pvt. Ltd. The policy provided fire and special perils coverage of ₹3 crore, along with other insurance covers, for a premium of ₹1,00,295.

A fire broke out at the restaurant on December 29, 2017. The complainant claimed that the fire originated at the adjoining Mojo's Bistro and spread to its premises due to flying embers. The complainant subsequently lodged an insurance claim of ₹5,67,25,045.

The insurer repudiated the claim on March 12, 2019, citing alleged breaches of policy conditions, including the presence of a combustible temporary terrace shed, alleged unauthorised use of the terrace for liquor storage and serving, and failure to maintain operational fire-protection equipment.

Aggrieved by the repudiation, the restaurant approached the Consumer Commission seeking the insurance claim with interest, ₹50 lakh as compensation for mental agony and harassment, and ₹5.5 lakh towards litigation expenses.

Contentions of the Parties

Shriram General Insurance argued that the combustible bamboo and tarpaulin terrace covering, alleged unauthorised liquor storage and hookah activities, and the non-operational fire-fighting system increased the fire risk and breached policy conditions, including Condition 18(a). It also disputed that its risk engineer had conducted a detailed pre-insurance inspection or approved the premises in their subsequent condition.

Opposite Party No. 2, Grovalue Insurance Brokers Pvt. Ltd., did not appear despite service of notice and was proceeded against ex parte.

Observations and Decision

The Commission observed that the source of the initial ignition and the question of whether the insured premises were maintained in conformity with the policy conditions and warranties were distinct issues. It noted that the fire originated from flying embers from the adjoining Mojo's Bistro, while the combustible temporary terrace covering at 1Above facilitated its rapid spread. Relying on the Surveyor's Report, Fire Investigation material and Government-appointed Committee Report, the Commission held that the terrace covering increased the fire risk and that the initial ignition outside the complainant's premises did not, by itself, establish compliance with Condition 18(a).

It further found that the complainant had failed to establish that the fixed fire-protection system was operational or that the insurer had waived the relevant policy conditions or warranties through its inspection. The floor-description discrepancy alone was insufficient to sustain repudiation, and the criminal acquittal of the restaurant partners did not determine the insurer's contractual liability.

Finding no deficiency in service, the Commission dismissed the complaint without costs.