LexM/S. ISNAR AQUA FARMS versus UNITED INDIA INSURANCE CO. LTD.
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76 SUPREME COURT REPORTS [2023] 11 S.C.R. [2023] 11 S.C.R. 76 : 2023 INSC 680 76 CASE DETAILS M/S. ISNAR AQUA FARMS v. UNITED INDIA INSURANCE CO. LTD. (Civil Appeal No. 1077 of 2013) AUGUST 08, 2023 [A. S. BOPANNA AND SANJAY KUMAR, JJ.] HEADNOTES Issue for consideration : Appellant, which undertook prawn cultivation, had obtained insurance coverage from respondent under a prawn insurance policy. Major outbreak of a bacterial disease called ‘White Spot Disease’ led to mass mortality of the prawns in the appellant’s farm. The insurance claim submitted by appellant was repudiated by respondent-insurance company in its entirety, which was challenged before the National Consumer Disputes Redressal Commission (NCDRC); and, in this second round of litigation before this Court, the further issue was whether the claim amount and interest quantifi ed by NCDRC was just and equitable. Insurance – Requirement of uberrima fi des: Held : Uberrima fi des, i.e., good faith, is the requirement in a contract of insurance – This obligation and duty would rest on both parties not only at the inception of the contract of insurance but throughout its existence and even thereafter – On facts, despite the second surveyors report dated 22.09.1995 quantifying the appellant’s loss at `17,64,097/-, the respondent insurance company chose to repudiate the appellant’s claim in its entirety, basing on the wholly unfounded assertion that the appellant had failed to maintain and provide proper records – This was also despite the clear fi nding of its earlier surveyors, M/s. Frank and Fair Investigators, that total loss was suff ered by the appellant – Further, having attached great importance to the death certifi cate given by the MPEDA/State Fisheries Department in its policy and its prescribed claim procedure, the insurance company baldly brushed aside the Death Certifi cate dated 01.05.1995 furnished by the offi cials of the State Fisheries Department 77 at Visakhapatnam – It is not open to an insurance company to ignore or fail to act upon a certifi cate or document that it had itself called for from independent and impartial authorities, subject to just exceptions, merely because it is averse to it or to its detriment – Having undertaken to indemnify an insured against possible loss in specifi ed situations, an insurance company is expected to make good on its promise in a bonafi de and fair manner and not just care for and cater to its own profi ts. [Paras 12 and 13] Insurance – Computation of admissible loss – Methodology: Held : On facts, the insurance policy itself provided the method of computation of the admissible loss –There were three ways of computing the admissible loss (Input Cost Method; Unit Cost Method and Fortnightly Valuation Method) – NCDRC had assessed the appellant’s total loss as `30,69,486.80 and awarded simple interest @ 10% p.a. – However, the values of loss worked out by the appellant were: `75,98,361/- (as per Input Cost Method); `75,87,750/- (as per Unit Cost Method); and `79,20,000/- (as per Fortnightly Valuation Method) – Computations made by appellant are accurate – Appellant would be entitled to lowest of the aforestated three valuations, viz., `75,87,750/- – Further, delay on part of insurance company in settling the appellant’s claim fairly and in a timely manner warrants that it pays interest on the amount due and payable to appellant – Interest rate fi xed by NCDRC, viz, 10% is just and equitable. [Paras 7, 8 and 14] LIST OF CITATIONS AND OTHER REFERENCES General Assurance Society Limited v. Chandumull Jain and another AIR 1966 SC 1644 : [1966] SCR 500 – followed. Jacob Punnen and another v. United India Insurance Company Limited (2022) 3 SCC 655; Modern Insulators Limited v. Oriental Insurance Company Limited (2000) 2 SCC 734 : [2000] 1 SCR 1076 – relied on. OTHER CASE DETAILS INCLUDING IMPUGNED ORDER AND APPEARANCES CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1077 of 2013. M/S. ISNAR AQUA FARMS v. UNITED INDIA INSURANCE CO. LTD. [SANJAY KUMAR, J.] 78 SUPREME COURT REPORTS [2023] 11 S.C.R. From the Judgment and Order dated 21.07.2011 of the National Consumer Disputes Redressal Commission, Delhi in Original Petition No. 55 of 1996. Appearances: Sridher Potaraju, K. P. Sundar Rao, Aayush, Rajat Srivastava, Sumit Panwar, C. K. Rai, Advs. for the Appellant. Pramit Saxena, A. K. De, Zahid Ali Khan, Ms. Ananya De, Advs. for the Respondent. JUDGMENT / ORDER OF THE SUPREM
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