JSK INDUSTRIES PVT. LTD versus ORIENTAL INSURANCE COMPANY LIMITED

Citation: [2022] 15 S.C.R. 581 · Decided: 18-10-2022 · Supreme Court of India · Bench: DINESH MAHESHWARI · Disposal: Appeal(s) allowed

Judgment (excerpt)

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JSK INDUSTRIES PVT. LTD.
v.
ORIENTAL INSURANCE COMPANY LIMITED
(Civil Appeal No. 7630 of 2022)
OCTOBER 18, 2022
[DINESH MAHESHWARI AND ANIRUDDHA BOSE, JJ.]
Insurance: Insurance Claim – Repudiation of – Appellants
took insurance coverage – However, insurance company repudiated
their claim on the ground that there was no sufficient balance to
cover the declaration and/or loss – State Commission as also
National Commission rejected the claim – Held: Insurance company
took a defense which did not form the basis of repudiation of the
claim – National Commission ought not to have gone beyond the
grounds of repudiation and into the nature of coverage, which
according to the National Commission had effectively changed from
“anywhere in India to anywhere in India” to a sales turnover policy,
limiting the policy coverage of the subject- goods from the points of
departure at the two locations – Matter remanded to State
Commission for taking decision afresh on the claim of the appellants
on the ground which formed the basis of repudiation.
Allowing the appeal, the Court
HELD: 1.1 The National Commission rejected the appeal
of the appellant on the ground that they had converted “from
anywhere in India to anywhere in India” policy into the sales
turnover policy covering transportation of goods only from two
locations specified in the endorsement. The repudiation of the
appellants’ claim was on the ground of exhaustion of insurance
coverage and the State Commission also determined the issue
primarily on that ground. Both the National Commission and the
State Commission had referred to the nature of the policy but the
State Commission did not come to a specific finding as to whether
the goods otherwise remained insured from the port to the
appellants’ factory. It was the finding of the National Commission
on the other hand that the policy was only applicable on supplies
made from the two locations. As regards financial limit of the
[2022] 15 S.C.R. 581
581
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SUPREME COURT REPORTS
[2022] 15 S.C.R.
policy, the appellants’ stand before the National Commission was
that there was available coverage to accommodate their claim.
On this count, the observation of the National Commission was
that if exhaustion of the coverage limit was the sole reason for
repudiation of the claim, the matter could have been remanded
to the State Commission for the decision of the complaint on
merits. That was the course which ought to have been directed
by the National Commission because the only ground on which
repudiation of the claim was made was lack of financial coverage.
The National Commission ought not to have gone beyond the
grounds of repudiation and into the nature of coverage. Thus,
the order of the National Commission as also State Commission
are set aside and the matter is remanded to the State Commission
for taking a decision afresh on the claim of the appellants on the
grounds which formed the basis of repudiation and determine as
to whether at the material point of time there was sufficient
balance to cover the claim on account of declaration made as
regards loss suffered by the appellants. [Paras 14, 15][589-C-G;
590-B-C]
Saurashtra Chemicals Ltd. v. National Insurance Co.
Ltd. (2019) 19 SCC 70 – referred to.
Case Law Reference
(2019) 19 SCC 70
referred to
Para 14
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7630
of 2022.
From the Judgment and Order dated 15.01.2018 of the National
Consumer Disputes Redressal Commission at New Delhi in First Appeal
No. 700 of 2012.
Gopal Shankarnarayan, Sr. Adv., D. Bharat Kumar, Tadimall
Bhaskar Gowtham, Aman Shukla, Ms. Tanya Srivastava,
M. Chandrakanth Reddy, Gopal Jha, Advs. for the Appellant.
S. M. Suri, Ms. Manjeet Chawla, Yashvardhan S. Soam, Advs.
for the Respondent.
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The Judgment of the Court was delivered by
ANIRUDDHA BOSE, J.
Leave granted.
2. The repudiation of a claim in respect of a “Marine Cargo-Open
Policy” gives rise to this appeal and the appellants are the claimants
before us. The policy, initially covered a sum of rupees two hundred
crores. Under the heading “Risk Details”, against Sl.No.1 of the policy
document, next to the column “Voyage”, it was indicated “from anywhere
in India to anywhere in India”. Period of Insurance was from 29th October
2009 to Midnight on 28th October 2010. There was subsequent addition
of terms and raising of insurance coverage as well. Fresh endorsement
schedules were issued incorporating the changes. 

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