Once Assessment Of Damage Is Done & Is Not Disputed By Insurer, Then Claim Cannot Be Repudiated- Supreme Court

The Supreme Court had aside the impugned order of the National Consumer Disputes Redressal Commission (NCDRC) and directed the respondent-Insurance company to pay Rs, 21,76,524/­- to the insured as assessed by the Surveyor.

The Bench of Justice Ajay Rastogi and Justice C.T. Ravikumar observed that “Once that assessment has been made regarding the loss/damage which took place due to fire dated 20th October, 2006 and that was not disputed by the respondent Company, repudiating the claim invoking clause 6(b) of the policy, in our considered view, was unfair and is not legally sustainable.”

Senior Advocate Sanjay Hegde appeared for the appellant and Advocate Awantika Manohar appeared for the respondent.

In this case, Civil Appeal was filed against the order of NCDRC whereby appeal against the order of the State Commission was allowed without the material on record was examined and further reiterated that theory of Diwali fire being the cause of the factory fire appears to be suspicious as the factory was at the edge of the village and there was no residential area around.

The appellant-complainant, a private company was engaged in the manufacture of veneers from the woods. The appellant took standard fire and special perils policy from the respondent-The New India Assurance Company Limited in the year 2001 which was renewed from time to time to the extent of Rs. 1,20,00,000/-.

After its renewal, in October 2006, a devastating fire took place in the premises and the appellant suffered a huge loss. M/s. A.M. Patel Surveyors Pvt. Ltd. was appointed by the respondent, who had examined in extenso the loss/damage suffered by the appellant.

The Apex Court noted that the surveyor had extensively examined the site physically and after taking into consideration the relevant record made available by the appellant (insured), estimated the loss/damage of Rs. 21,76,524/-.

Further, it was noted by the Apex Court that the claim of the appellant was repudiated not on the premise that the Surveyor’s report was not acceptable to the respondent but on account of non-­submission of the required documents ­ which was a breach of clause 6(b) of the policy.

The Court observed that whatever the material documents available with the insured were undisputedly made available to the Surveyor who made its own physical inspection in reference to the loss which took place due to fire and then the report was submitted.

“In our considered view, invoking condition no. 6(b) of the policy for repudiation dated 11th September, 2007 was unsustainable in law for the reason that clause 6(b) only desires to submit necessary document for the purpose of assessment of claim regarding the loss/damages caused due to the fire which took place.” observed by the court.

Consequently, the Appeal was allowed.

Cause Title- Karnavati Veneers Pvt. Ltd. V. New India Assurance Company Limited & Ors.

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