LexM/S OSWAL PLASTIC INDUSTRIES versus MANAGER, LEGAL DEPTT. N.A.I.C.O. LTD
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A B C D E F G H 985 985 M/S OSWAL PLASTIC INDUSTRIES v. MANAGER, LEGAL DEPTT. N.A.I.C.O. LTD. (Civil Appeal No. 83 of 2023) JANUARY 13, 2023 [M. R. SHAH AND C. T. RAVIKUMAR, JJ.] Insurance – In case of damage of the plant and machinery due to fire, whether the complainant entitled to reinstatement value or depreciated value under insurance policy – Appellant subscribed to a Fire & Perils policy – A fire broke out and the surveyor assessed the loss at Rs.29,17,500/- on reinstatement value and Rs.12,60,000/ - on depreciated value – Insurance company despite the reports of the surveyor, repudiated the claim – State Commission relying on the surveyor report, awarded Rs.29,17,500/- with 9% interest from the date of repudiation observing entitlement on reinstatement value – NCDRC set aside the order of State Commission and awarded Rs.12,60,000/- along with 7% interest observing entitlement to depreciated value – On appeal, held: As per clause 9 of the insurance policy, the complainant shall be entitled to reinstatement value and not depreciated value – The report of the surveyor would be relevant to consider the sum required to reinstate or repair – NCDRC has mis-interpreted and mis-read the clause 9 – NCDRC erred in holding that insurance company is liable to pay depreciated value only – Order of the NCDRC set side – The order passed by the State Commission restored. Allowing the appeal, the Court HELD: 1. Considering second part of Clause 9 of the insurance policy, in case company is unable to reinstate or repair the property insured, the insurance company shall be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition. For the aforesaid purpose, the report of surveyor wound be relevant evidence to consider the sum required to reinstate or repair. Therefore, as per second part of Clause 9 of Section 2 of the policy, the complainant shall be entitled to the reinstatement value and not the depreciated value. The NCDRC has mis- interpreted and mis-read the Clause 9. The NCDRC has seriously erred in observing and holding that the insurance company shall [2023] 1 S.C.R. 985 A B C D E F G H 986 SUPREME COURT REPORTS [2023] 1 S.C.R. be liable to pay the depreciated value only and not the reinstatement value. The State Commission was absolutely justified in awarding the reinstatement value. The impugned judgment and order passed by the NCDRC awarding the depreciated value and not the reinstatement value is unsustainable. The impugned judgment and order passed by the NCDRC is hereby quashed and set aside. The order passed by the State Commission is hereby restored. The complainant shall be entitled to Rs. 29,17,500/- being the reinstatement value with interest @ 7% from the date of order of the State Commission. [Paras 5.2 and 6][990-C-G] Canara Bank vs. United India Insurance Company Limited and Ors., 2020 (3) SCC 455 : [2020] 7 SCR 498 – referred to. Case Law Reference [2020] 7 SCR 498 referred to Para 3.4 CIVIL APPELLATE JURISDICTION : Civil Appeal No.83 of 2023. From the Judgment and Order dated 20.02.2019 of the National Consumer Dispute Redressal Commission, New Delhi in First Appeal No.207 of 2015. Jay Savla, Sr. Adv., Dhananjay Garg, Abhishek Garg, D. K. Garg, Akhil Dehlan, Sanjay Chhabra, Advs. for the Appellant. Amit Kumar Singh, Mrs. K Enatoli Sema, Ms. Chubalemla Chang, Prang Newmai, Advs. for the Respondent. The Judgment of the Court was delivered by M. R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 20.02.2019, passed by the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as the NCDRC) in First Appeal No. 207/2015, by which the NCDRC has set aside the order passed by the State Consumer Disputes Redressal Commission, Punjab (hereinafter referred to as the State Commission) and has modified the same to the extent that the insurance company shall be liable to pay only Rs. 12,60,000/- instead of Rs. 29,17,500/-, the original complainant has preferred the present appeal. 2. That the appellant herein obtained Standard Fire and Special Perils Policy with effect from 02.07.2009. The sum insured was Rs. 2.50 crores. According to the appellant, the policy was on reinstatement value. The policy was enhanced to Rs. 4.50 crores. That during the A B C D E F G H 987 validity period of policy i.e., on 17.10.2009 fire broke out in the factory premises resultin
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