Mumbai: The National Consumer Dispute Redressal Commission (NCDRC) has dismissed a claim filed by Kanan Knitwear, a Lower Parel-based textile manufacturing and trading firm, seeking compensation for machinery theft from its premises. The commission not only rejected the claim but also held the firm guilty of concealing material facts from the insurance company, TATA AIG General Insurance, when seeking compensation.

Kanan Knitwear had hired two galas, total admeasuring 31,000 square feet in Kurla (West), Mumbai, from Manilal Sunerji Doshi in December 2005. The firm installed machinery worth ₹1.9 crore, along with furniture and fixtures, in the premises. However, in June 2009, the firm alleged that Darshana Doshi, a relative of the landlord, allegedly forcibly took possession of the property and installed a separate lock on the premises. The firm filed a police complaint and lodged an FIR in response.

In July 2010, Kanan Knitwear purchased two fire, building, and burglary insurance policies from TATA AIG, paying premiums of ₹23,683 and ₹63,903, valid until mid-2011. The firm claimed that despite the landlord’s relative taking over the premises, they had assigned a watchman to guard the property, maintaining that the machinery remained in their possession.

In May 2011, a court-appointed commissioner inspected the premises during a civil suit, revealing that the machinery had been stolen. The firm subsequently filed a claim with TATA AIG, but the insurance company repudiated the claim in August 2011, stating that the premises were not under the effective control of Kanan Knitwear.

The State Consumer Dispute Redressal Commission (SCDRC) rejected the firm’s claim, noting that Kanan Knitwear failed to disclose the dispossession of the premises when renewing the insurance policy. The SCDRC ruled that the policy had become voidable due to non-disclosure of material facts.

Kanan Knitwear then approached the NCDRC, seeking relief. However, the NCDRC upheld the SCDRC’s decision, stating that the firm had renewed the policy without disclosing the fact that the premises were under the control of the landlord since June 2009. The commission highlighted that the theft came to light only after a government valuer broke open the locks under a court order during civil proceedings.

“The renewal of the policy on 24.05.2010 indicates it was obtained without full disclosure of material facts. The respondent (insurance firm) cannot be found at fault for holding that the premises were not in effective control of the appellant,” the NCDRC stated in its order.