SHARDA ASSOCIATES versus UNITED INDIA INSURANCE COMPANY LTD

Citation: [2022] 7 S.C.R. 548 · Decided: 25-07-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 7 S.C.R.
SHARDA ASSOCIATES
v.
UNITED INDIA INSURANCE COMPANY LTD.
(Civil Appeal No. 4910 of 2022)
JULY 25, 2022
[DR. DHANANJAYA Y CHANDRACHUD AND
A. S. BOPANNA, JJ.]
Consumer Protection – Insurance claim – Deficiency in service
– Insurance Policy – Interpretation of – Appellant insured JCB
Excavator with respondent for Insured Declared Value of Rs 13.50
lakhs – While the excavator was being used for road making, a
portion of the road gave way due to which the excavator fell into a
deep ditch resulting in death of two people and total loss of the
excavator – Appellant filed for insurance claim – Respondent
repudiated the claim on ground that overturning of the excavator
was not covered in terms of the policy condition Indian Motor Tariff
47 (IMT 47) as the JCB excavator was being used as tool of trade
and no additional premium was paid – Appellant filed complaint
before District Consumer Forum alleging deficiency in service  –
District Forum directed the insurer to pay an amount of Rs 13.50
lakhs together with interest @ 9% – Judgment of District Forum
upheld in appeal by State Consumer Forum (SCDRC) – Respondent
filed revision petition – National Consumer Forum (NCDRC)
reversed the decision of SCDRC on the ground that earth moving
equipment such as a JCB excavator could be used either as a tool
or as a vehicle and in the present case since it was being used for
road making, it was being used as a tool and not as a vehicle –
NCDRC held that the insurance claim could not have been allowed
under IMT 47 unless additional premium was paid – On appeal,
held : Clause 1 of the insurance policy covers loss or damage which
arises as a consequence of a landslide – IMT 47 applies to a situation
when the loss or damage was caused due to ‘overturning’ and the
‘overturning’ should arise out of the operation as a tool of such
vehicle – The accident herein however was caused as a result of a
portion of the road having given way and was in the nature of a
landslide – The damage or loss was not a result of the overturning
[2022] 7 S.C.R. 548
548
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of the vehicle, but was plainly due to collapsing of the road which
resulted in the vehicle falling into a deep ditch – NCDRC erred in
reversing the concurrent findings of fact recorded by District
Consumer Forum and SCDRC – Judgment of SCDRC accordingly
restored.
Consumer Protection Act, 1986 – s.21(b) – Revisional
jurisdiction of National Consumer Forum (NCDRC) – Limited ambit
of.
Lourdes Society Snehanjali Girls Hostel v. H&R
Johnson (India) Ltd. (2016) 8 SCC 286; Sunil Kumar
Maity v. State Bank of India 2022 (2) SCALE 88 –
relied on.
Case Law Reference
(2016) 8 SCC 286
relied on
Para 12
2022 (2) SCALE 88
relied on
Para 12
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4910
of 2022.
From the Judgment and Order dated 12.07.2019 of the National
Consumer Dispute Redressal Commission, New Delhi in Revision Petition
No. 3306 of 2014.
Jaideep Singh, Gp. Capt. Karan Singh Bhati, Advs. for the
Appellant.
Abhishek Gola, Akshat Agarwal, Viresh B. Saharya, Advs. for
the Respondent.
The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J.
1. Leave granted.
2. This appeal arises from a judgment dated 12 July 2019 of the
National Consumer Disputes Redressal Commission.1 While exercising
its revisional jurisdiction, the NCDRC, by its judgment, reversed
concurrent findings of fact which were recorded by the District Consumer
1 “NCDRC”
SHARDA ASSOCIATES v. UNITED INDIA INSURANCE
COMPANY LTD.
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SUPREME COURT REPORTS
[2022] 7 S.C.R.
Disputes Redressal Forum2 and by the State Consumer Disputes
Redressal Commission.3
3. The appellant purchased a JCB Excavator Model 3DX on 25
April 2007. The excavator was insured with the respondent for the period
between 5 March 2009 and 4 March 2010 at an Insured Declared Value4
of Rs 13.50 lakhs. On 25 May 2009, the excavator was being used on
the Shivpuri-Timli Road near Rishikesh in the State of Uttarakhand. A
portion of the road gave way, as a result of which the excavator fell into
a deep ditch resulting in the death of the operator and helper and the
total loss of the excavator. A First Information Report was filed on 26
May 2009. The FIR states that the accident had occurred due to a sudden
caving of the road. The surveyor appointed by the insurer conducted a
spot survey on 28 May 2009 and reported that the accident had taken
place due to the edge of the road side col
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