Full Judgment Text
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 3893 OF 2013
KARNAVATI VENEERS PVT. LTD. ….APPELLANT(S)
VERSUS
NEW INDIA ASSURANCE
COMPANY LIMITED AND OTHERS ….RESPONDENT(S)
J U D G M E N T
Rastogi, J.
rd
1. The instant appeal is directed against the judgment dated 3
September, 2012 passed by the National Consumer Disputes
Redressal Commission(hereinafter being referred to as the “National
Commission”) affirming the repudiation claim of the appellant by
Signature Not Verified
th
letter dated 11 September, 2007.
Digitally signed by
Ashwani Kumar
Date: 2023.02.09
12:48:09 IST
Reason:
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2. The facts from which the controversy arises are that the
appellantcomplainant is the private company which was engaged
in the manufacture of veneers from the woods. The appellant took
a standard fire and special perils policy(hereinafter being referred to
as the “policy”) from the respondentThe New India Assurance
Company Limited in the year 2001 which was renewed from time to
time and the cover was renewed to the extent of Rs. 1,20,00,000/
th th
(Rupees One Crore Twenty Lakhs) from 7 October, 2006 to 6
th
October, 2007. It has come on record that with effect from 11
July, 2006, as per orders passed by Forest Department, the factory
was sealed and manufacturing process was stopped. Consequent
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upon that, the power was also disconnected from 18 August, 2006
having no manufacturing activity thereafter. Unfortunately,
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devastating fire took place on 20 October, 2006 in the factory
premises in which the appellant suffered huge loss. In consequence
thereto, the appellant submitted claim under the policy but that
came to be repudiated by the respondent by its communication
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dated 11 September, 2007 on the premise that the appellant has
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failed to submit the required documents which is in breach of
condition no. 6(b) of the policy.
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3. Letter dated 11 September, 2007 pursuant to which the
claim was repudiated by the respondent Insurance Company is
reproduced as under:
“THE NEW INDIA ASSURANCE COMPANY LIMITED
214217, AMARSINHJI SHOPPING MALL
TOWER ROAD, HIMATNAGAR 383001
th
11 September 2007
WITHOUT PREJUDICE
To
M/S. Karnavati Veneers Pvt. Ltd. BY REGISTERED A.D.
At: VillageOran At & Po: Tajpur Kui
N.H.8 Taluka Prantij
Dist. Sabarkantha
Dear Sirs,
“Re: Policy no. 212103/11/06/11/00001152
Claim no: 212103/11/06/11/90000017
Dt. Of loss: 20.10.2006
With reference to the above claim we have to state that your claim
for damages due to alleged fire occurred in the factory on
20.10.2006. M/s. A.M. Patel Surveyors Pvt. Ltd. was appointed to
assess the loss.
M/s. A.M. Patel Surveyors Pvt. Ltd. had written several letters for
the compliance for the requirements/clarifications/documents
from time to time. At least the surveyors released their report on
01.06.2007 on the basis of available
papers/documents/information.
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We have also issued a final notice to you on 12.07.2007 to comply
with the requirement/documents/information asked by the
surveyor but you have not submitted the
documents/requirements/information as required by the
surveyors.
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Surveyors have specifically mentioned in their reply dt. 9 August
2007 that they are not satisfied with the compliance from the
insured’s end. Nonsubmission of required documents is a breach
of policy condition no. 6(b) of Standard Fire & Special Perils policy
which reads as under:
“The Insured shall also at all times at his own expenses produce,
procure and give to the company all such further particulars,
plans, specification books, vouchers, invoices, duplicates or copies
thereof, documents, investigation reports(internal/external), proofs
and information with respect to the claim and the origin and cause
of the loss and the circumstances under which the loss or damage
occurred, and any matter touching the liability or the amount of
the liability of the company as may be reasonably required by or on
behalf of the company together with a declaration on oath or in
other legal form of the truth of the claim and of any matters
connected therewith.”
Looking to the above facts the competent authority has decided to
repudiate your claim which please note.
Thanking you,
Yours faithfully,
BRANCH MANAGER
CC TO; GANDHINAGAR DO
CC TO: AHMEDABAD R.O.”
4. It will be apposite to refer at this stage that Surveyor of the
respondent Company, on instructions, examined the loss/damage
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which took place due to fire on 20 October, 2006 and after a
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physical site inspection and detailed survey, submitted its report
st
dated 1 June, 2007 and arrived at the conclusion that the total
damage which the appellant has suffered for the fire which took
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place on 20 October, 2006 was for a total sum of Rs. 21,76,524/.
5. The Surveyor’s report was not disputed by either of the party.
Although the appellant has got the damages/loss assessed by its
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own Surveyor who submitted his report on 16 October, 2007 after
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making spot verification in reference to fire which took place on 20
October, 2006 and assessed the damages to the tune of Rs.86
Lakhs but as there was no evidence available with the appellant on
record, the appellant had restricted to the Surveyor’s report
appointed by the respondent Company who submitted its report on
st
1 June, 2007.
6. The repudiation was challenged by the appellant by filing its
claim petition before the Gujarat State Consumer Disputes
Redressal Commission(hereinafter being referred to as the “State
Commission”) by filing of a Consumer Complaint No. 39 of 2007
that came to be dismissed by the State Commission by an Order
th
dated 16 January, 2012 on the premise that the appellant failed to
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furnish the required documents as desired by the respondent
Company and accordingly the claim has been rightly repudiated in
terms of Clause 6(b) of the policy.
7. The State Commission also took note of the fact that the
factory was at the edge of the village and there was no residential
area around. The theory of Diwali fire being the cause of the factory
fire appears to be suspicious but no such suspicion in reference to
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the fire which took place on 20 October, 2006 was ever indicated
by the Surveyor appointed by the respondent Company who
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submitted its report dated 1 June, 2007 of which reference has
been made.
8. On appeal being preferred before the National Commission,
without examining the material on record, after reiterating the
suspicion observed by the State Commission, the National
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Commission under its impugned judgment dated 3 September,
2012 dismissed the appeal which is the subject matter of challenge
in appeal before us.
9. Learned counsel for the appellant submits that M/s. A.M.
Patel Surveyors Pvt. Ltd. was appointed by the respondent
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Company who had examined in extenso the loss/damage which
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took place due to fire on 20 October, 2006, and proceeded on the
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basis of preliminary survey carried out on 21 October, 2006 and
after taking into consideration the physical inspection of the site
and the material available on record made an assessment of the
loss/damage suffered by the appellant to the tune of Rs.
21,76,524/ and no evidence was placed even by the respondent
Company in rebuttal to question the finding recorded by the
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Surveyor in its report dated 1 June, 2007. In the given
circumstances, the suspicion which was recorded by the State
Commission in reference to the fire which took place on the day of
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Diwali on 20 October, 2006 in the factory premises was completely
without any factual foundation.
10. Learned counsel further submits that repudiation has taken
place on the premise that the insured has failed to submit the
required documents which, according to the Company, was in
breach of condition no. 6(b) of the policy as being indicated in the
th
order of letter of repudiation dated 11 September, 2007 but it is
unsustainable in law.
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11. Per contra, learned counsel for the respondents, while
supporting the finding returned by the National Commission in the
impugned judgment submits that indisputedly from the material
which has come on record, on the directions of the Court, the
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factory was closed on 11 July, 2006 and consequent upon that,
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the power was disconnected on 18 August, 2006 and there was no
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manufacturing at the time when fire took place on 20 October,
2006 and just after 13 days of the commencement of the Insurance
th th
policy, with effect from 7 October 2006, fire occurred on 20
October, 2006. This made a suspicion which was recorded by the
State Commission in its Order and affirmed by the National
Commission under the impugned judgment. Merely because there
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was a Surveyor’s report dated 1 June, 2007 who was appointed by
the respondent Company who gave a report that the loss was
suffered, in the given circumstances, the repudiation was valid and
justified and after being affirmed at two stages needs no
interference of this Court.
12. We have heard learned counsel for the parties and with their
assistance perused the material available on record.
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13. It is not disputed that the appellant took fire insurance policy,
in the first instance in 2001 and has renewed it from time to time
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and the cover risk of Rs. 1,20,00,000/ was renewed from 7
th
October, 2006 to 6 October 2007 and after its renewal, devastating
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fire took place in the factory on 20 October, 2006 in which the
appellant suffered huge losses.
14. It is also not disputed that the appellant has never put any
claim in the last 6 to 7 years during the above period and when the
th th
policy was renewed from 7 October, 2006 to 6 October, 2007,
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unfortunately, the devastating fire took place on 20 October, 2006
for unknown reasons.
15. It is also not disputed that M/s. A.M. Patel Surveyors Pvt. Ltd.
which was appointed as a surveyor by the respondent Company has
extensively examined the site physically and after taking into
consideration the relevant record made available by the appellant
(insured), estimated the loss/damage which took place due to fire
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on 20 October, 2006 of Rs. 21,76,524/ and the respondent has
repudiated the claim of the appellant not on the premise that the
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Surveyor’s report dated 1 July, 2007 is not acceptable to the
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respondent Company but on account of nonsubmission of the
required documents which was a breach of clause 6(b) of the
policy as indicated by the Company in its repudiation letter dated
th
11 September, 2007.
16. In our considered view, invoking condition no. 6(b) of the
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policy for repudiation dated 11 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. Whatever the material documents available with the insured
were indisputedly made available to the Surveyor who has made its
own physical inspection in reference to the loss which took place
th st
due to fire on 20 October, 2006 and submitted its report on 1
June, 2007. Once that assessment has been made regarding the
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loss/damage which took place due to fire dated 20 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.
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17. Consequently, the appeal deserves to succeed and is
accordingly allowed. The order passed by the National Commission
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dated 3 September, 2012 is set aside. The respondent Company is
directed to make the payment of Rs, 21,76,524/ as assessed by the
Surveyor along with interest @ 8% per annum from the date of the
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Surveyor’s report dated 1 June, 2007 to the appellant until its
actual payment.
18. The respondent Company shall make necessary compliance of
the Order of this Court within two months. No costs.
19. Pending application(s), if any, shall stand disposed of.
……………………………J.
(AJAY RASTOGI)
……………………………J.
(C.T. RAVIKUMAR)
NEW DELHI;
FEBRUARY 09, 2023.
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