"Claim Was Rightly Settled": SC Sets Aside NCDRC Order Directing New India Assurance To Pay 13+ Crores To Tata Steel
|The Supreme Court has dismissed consumer complaints by Tata Steel Ltd. against the New India Assurance Company by holding that the claims were rightly settled.
The Court set aside the NCDRC order that awarded an amount of Rs.13,15,27,000/- with interest at 10% per annum to the complainant.
The Bench of Justice Surya Kant and Justice KV Viswanathan said that, "We hold that the claim was rightly settled by the NIACL letter dated 03.01.2003 which determined the loss amount payable at Rs.7.88 crores after applying 60% depreciation.."
Senior Counsel Sanjay Jain appeared for the appellants, while Senior Counsel Joy Basu appeared for the respondent.
In this appeal, four Civil Appeals stemmed from proceedings the National Consumer Disputes Redressal Commission (NCDRC).
New India Assurance Company Limited (NIACL) challenged the NCDRC's order partially allowing the insured's complaint and awarding Rs. 13,15,27,000/- with 10% interest per annum. The insured, in turn, appealed against the dismissal of their review application and contested the main order and a subsequent rectification order. The core issue revolved around the calculation of depreciation, with the insured arguing for a higher amount based on their assessment of Rs. 28 crores.
The insured had insured their machinery with NIACL but suffered a fire accident resulting in a loss of Rs. 35.08 crores. NIACL initially released Rs. 4,92,80,905/- based on interim survey reports. The insured installed a new 6 Hi Cold Rolling Mill spending Rs. 29.60 crores. Disputes arose over the computation of depreciation, with NIACL justifying a higher rate of 60%, which the NCDRC reduced to 32%. NIACL appealed seeking 60% depreciation, while the insured contested for a higher amount based on their reinstatement value argument.
The Court observed that, "The surveyors had offered justification in their response dated 07.12.2002 for providing depreciation at the rate of 60%. The Additional Affidavit also clarifies the established practice. It should not be forgotten that the base figure of Rs.20.09 crores was kept intact. We set aside the finding of the NCDRC that the practice adopted in the instant case was not a healthy practice by the NIACL. We uphold the percentage of depreciation at 60%. We have not disturbed the base value of Rs.20.09 crores as no arguments on that score were advanced by the NIACL."
Appearances:
Appellant: Senior Counsel Sanjay Jain
Respondent: Senior Counsel Joy Basu
Cause Title: New India Assurance Company Ltd. vs M/s Tata Steel Ltd.
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