NCDRC directs insurance firm to pay Rs 2.57 cr plus compensation to HAL for damaged consignment

Consumer commission NCDRC has directed an insurance company to pay Rs 2.57 crore claim plus compensation to Hindustan Aeronautics Ltd for its consignment that was damaged in transit, instead of only Rs 14.18 lakh offered by the company.

The National Consumer Disputes Redressal Commission (NCDRC) directed New India Assurance Company to pay compensation to HAL at the rate of 9 percent to HAL.

"I hold that the Opposite Party (New India Assurance Company) was not justified in reducing the assessed amount from Rs 2.57 crore to Rs 14.18 lakh. The complainant therefore is entitled to recover the assessed amount from the OP along with appropriate interest," said NCDRC Presiding member V K Jain.

HAL, which is a PSU under the Ministry of Defence had in June, 2007 dispatched a consignment, consisting 23 units to its Nasik facility, out of which one got damaged in transit.

According to the complaint by HAL, the final assessed amount of the damaged unit, which was sent to Russia for repair, was Rs 2.71 crore but the insurance company, after taking over three years, approved the claim only for Rs 14.18 lakh.

It also alleged that due to delayed clearance in inspecting the damaged unit, the aircraft in which it was supposed to be fitted in, could not be delivered on time and therefore the PSU incurred a loss of Rs 100 crore.

The insurance company opposed the complaint saying that the damage had occurred due to negligence of HAL and because it did not adhere to the prescribed instructions for packing of the consignment.