NATIONAL INSURANCE COMPANY LTD. versus M/S. HARESHWAR ENTERPRISES (P) LTD. & ORS.

Citation: [2021] 8 S.C.R. 895 · Decided: 18-08-2021 · Supreme Court of India · Bench: HEMANT GUPTA · Disposal: Case Partly allowed

Cited by 1 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
895
[2021] 8 S.C.R. 895
895
NATIONAL INSURANCE COMPANY LTD.
v.
M/S. HARESHWAR ENTERPRISES (P) LTD. & ORS.
(Civil Appeal No.7033 of 2009)
AUGUST 18, 2021
[HEMANT GUPTA AND A. S. BOPANNA, JJ.]
Consumer Protection Act, 1986 – Insurance claim –
Respondent No.1-insured was engaged in the business of
manufacture of polyethylene, plastic films etc. – Plant and machinery
in respondent no.1’s factory was charged in favor of respondent
no.2 as security and stock in trade was hypothecated to respondent
no.3 for discharge of loan obtained from them – The factory, plant
and machinery were covered under the insurance policies of
appellant-insurer against risk of fire, flood and earthquake – Fire
broke out causing total destruction – Appellant was intimated –
Joint Surveyors appointed by appellant assessed the loss – Final
report submitted – Despite said report, the appellant appointed
investigators – Eventually, complaint filed by respondent no.1 –
NCDRC allowed claim in part, further apportioning the amount in
favour of respondent nos.2 and 3 – On appeal, held: Fire occurred
on 06.11.99 – Surveyors visited the site on 09.11.99 itself – Interim
and final report were submitted to the insurer on 23.03.2000 and
13.03.01 but, it did not take any steps immediately – After much
delay, it appointed the investigator on 22.06.01 but did not conclude
the said process despite repeated requests by respondent no.1 –
Further, for the first time the insurer relied on the investigator’s
report in the NCDRC proceedings – Surveyors report was submitted
as the natural process – Conclusion reached therein is more reliable
rather than the investigation report keeping in view the manner in
which the insurer proceeded in the matter – Hence, reliance placed
on the surveyor’s report by NCDRC without giving credence to the
investigation report cannot be faulted – Such conclusion does not
call for interference – However, amount ordered by NCDRC shall
be payable with interest at 9% p.a. instead of 12% p.a.
Consumer Protection Act, 1986 – s.24A – Cause of action –
Held: s.24A indicates that the complaint is required to be filed within
A
B
C
D
E
F
G
H
896
SUPREME COURT REPORTS
[2021] 8 S.C.R.
two years from the date on which the cause of action arises – Cause
of action will remain flexible and is to be gathered from the facts of
each case – In the present case, though the cause of action arose
for the first time when the fire broke out but it did not remain static
at that point – As the matter kept oscillating, fresh cause of action
arose – On facts, complaint filed was within time – Consideration
of the same on merits by NCDRC justified.
Consumer Protection Act, 1986 – Insurance Claim – Surveyors
report, reliance on – Held: Surveyors report is the basic document
which has statutory recognition – It can be relied upon if it inspires
confidence of adjudicating forum and if on facts, the forum does
not find the need to place reliance on any other material.
Partly allowing the appeal, the Court
HELD: 1.1 Section 24A of the Consumer Protection Act,
1986 indicates that the complaint is required to be filed within
two years from the date on which the ‘cause of action’ has arisen.
The cause of action will remain flexible to be gathered from the
bundle of facts arising in each case. In the instant case the fire
incident had occurred on 06.11.1999. The appellant had informed
the insurer on 07.11.1999, where after the joint surveyors were
appointed and on verification had submitted their final report on
13.03.2001. Despite said report, the insurer through their letter
dated 22.06.2001 had appointed an investigator but did not
proceed to either accept the claim or repudiate the same. Further,
in the reply filed on behalf of the insurer before the NCDRC
reference is contained that correspondence was exchanged
between the investigator appointed by the insurer and the
respondent No.1 through the letters dated 07.03.2002,
05.04.2002, 03.05.2002, 03.06.2002 and 13.07.2002. If in the
above context the fact situation herein is noticed, though the fire
incident occurred on 06.11.1999, the same merely provided the
cause of action for the first time to make the claim but the same
did not remain static at that point. On the other hand, the process
of joint survey though had concluded with its final report on
13.03.2001, the letter dated 22.06.2001 addressed by the insurer
to the respondent No.1 regarding appointment of the investigator
had created a fresh cause of a

Excerpt shown. Read the full judgment & AI analysis in Lexace.