Insurer moves apex court against Bhushan Steel & Strips

Public sector insurer New India Assurance Company Ltd has approached the Supreme Court challenging a consumer court's order that asked it (insurer) to pay compensation of Rs 13.15 crore to Bhushan Steel & Strips Ltd for the damage due to fire at its Sahibabad unit.      

Bhushan Steel & Strips' (BSSL's) factory was gutted on December 12, 1998, and its cold rolling mill, insured with the insurance company, was completely damaged.      

While BSSL had claimed compensation of Rs 35.08 crore for replacing the mill in January 1999, the surveyor had assessed the amount after depreciation at around Rs 13.15 crore.      

On August 5, 2008, the National Consumer Disputes Redressal Commission, on BSSL's plea, had asked the insurance company to pay Rs 13.15 crore for the loss. It had also asked the insurer to deduct around Rs 7.75 crore that it had paid BSSL as compensation and shell out the rest with interest at 10%.      

Opposing the award, the insurer has challenged the ruling on the grounds that "despite several communication from the surveyor to the respondent (Bhushan Steel), no information in relation to the new replaced machinery was ever supplied."