NCDRC asks insurance firm to pay over Rs 7 cr to Levi Strauss India

The apex consumer commission has granted relief to Levi Strauss, a global jeans manufacturing brand, while directing an insurance company to pay more than Rs 7 crore to it for the losses incurred due to fire at a warehouse in Bengaluru in 2008.

The National Consumer Disputes Redressal Commission (NCDRC) directed United India Insurance to pay Rs 7.48 crore as claim to Levi Strauss India Private Limited against the damages incurred by the company in a fire that broke out in one of its warehouses in Bengaluru due to electric short circuit.

Besides this, NCDRC Presiding member V K Jain also directed the insurance company to pay compensation in the form of simple interest at nine per cent per annum on the claim amount within three months.

"The opposite party (United India Insurance) shall also pay the principal amount of Rs 7,48,44,265 to the complainant," the Commission said.

"The opposite party shall also pay compensation in the form of simple interest at 9 per cent per annum on the aforesaid amount with effect from seven months from the date of appointment of the surveyor till the date on which the payment in terms of this order is made," it added.

On July 13, 2008, a fire broke out in the Bengaluru warehouse of Levi Strauss due to electric short circuit. The company had filed an initial claim of Rs 12.20 crores with the insurance company, which was repudiated.

The insurance company had denied the claim on the ground that the loss was covered only under the "Companies Insurance Policy", which was originally taken by the parent company of Levi Strauss, based out of United States.

However, the insurance company, while repudiating Levi Strauss India's claim did not consider the other global policy taken by the company, namely "Global All Risks Property Policy", primarily taken by companies to cover global risks.

The commission, in its order, noted that the least of the amount payable to Levi Strauss was Rs 7,48,44,265, which the company was entitled to recover from the insurance company along with appropriate compensation in the form of interest.