NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 3893 OF 2013
KARNAVATI VENEERS PVT. LTD. ….APPELLANT(S)
VERSUS
NEW INDIA ASSURANCE 
COMPANY LIMITED AND OTHERS ….RESPONDENT(S)
J U D G M E N T
Rastogi, J.
1. The   instant   appeal  is   directed   against  the  judgment   dated  3 rd
September,   2012   passed   by   the   National   Consumer   Disputes
Redressal Commission(hereinafter being referred to as the “National
Commission”)   affirming   the   repudiation   claim   of   the   appellant   by
letter dated 11 th
 September, 2007.
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2. The   facts   from   which   the   controversy   arises   are   that   the
appellant­complainant   is   the   private   company   which   was   engaged
in the manufacture of veneers from the woods.   The appellant took
a standard fire and special perils policy(hereinafter being referred to
as   the   “policy”)   from   the   respondent­The   New   India   Assurance
Company Limited in the year 2001 which was renewed from time to
time and the cover was renewed to the extent of Rs. 1,20,00,000/­
(Rupees   One   Crore   Twenty   Lakhs)   from   7 th
  October,   2006   to   6 th
October,   2007.     It   has   come   on   record   that   with   effect   from   11 th
July, 2006, as per orders passed by Forest Department, the factory
was   sealed   and   manufacturing   process   was   stopped.   Consequent
upon that, the power was also disconnected from 18 th
 August, 2006
having   no   manufacturing   activity   thereafter.     Unfortunately,
devastating   fire   took   place   on   20 th
  October,   2006   in   the   factory
premises in which the appellant suffered huge loss.  In consequence
thereto,   the   appellant   submitted   claim   under   the   policy   but   that
came   to   be   repudiated   by   the   respondent   by   its   communication
dated  11 th
  September,  2007  on   the   premise   that   the   appellant  has
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failed   to   submit   the   required   documents   which   is   in   breach   of
condition no. 6(b) of the policy.
3. Letter   dated   11 th
  September,   2007   pursuant   to   which   the
claim   was   repudiated   by   the   respondent   Insurance   Company   is
reproduced as under:­
“THE NEW INDIA ASSURANCE COMPANY LIMITED
214­217, AMARSINHJI SHOPPING MALL
TOWER ROAD, HIMATNAGAR 383001
11 th
 September 2007
WITHOUT PREJUDICE
To
M/S. Karnavati Veneers Pvt. Ltd. BY REGISTERED A.D.
At: Village­Oran At & Po: Tajpur Kui
N.H.8 Taluka Prantij
Dist. Sabarkantha
Dear Sirs,
“Re: Policy no. 212103/11/06/11/00001152
       Claim no: 212103/11/06/11/90000017
Dt. Of loss: 20.10.2006
With reference to the above claim we have to state that your claim
for   damages   due   to   alleged   fire   occurred   in   the   factory   on
20.10.2006.   M/s. A.M. Patel Surveyors Pvt. Ltd. was appointed to
assess the loss.
M/s.  A.M.  Patel  Surveyors   Pvt.  Ltd.   had  written  several  letters  for
the   compliance   for   the   requirements/clarifications/documents
from  time  to time.    At  least  the  surveyors  released  their   report  on
01.06.2007   on   the   basis   of   available
papers/documents/information.
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We have also issued a final notice to you on 12.07.2007 to comply
with   the   requirement/documents/information   asked   by   the
surveyor   but   you   have   not   submitted   the
documents/requirements/information   as   required   by   the
surveyors.
Surveyors have specifically mentioned in their reply  dt. 9 th
  August
2007   that   they   are   not   satisfied   with   the   compliance   from   the
insured’s end.  Non­submission of required documents is a breach
of policy condition no. 6(b) of Standard Fire & Special Perils policy
which reads as under:
“The   Insured   shall  also   at   all   times   at   his   own  expenses   produce,
procure   and   give   to   the   company   all   such   further   particulars,
plans, specification books, vouchers, invoices, duplicates or copies
thereof, documents, investigation reports(internal/external), proofs
and information with respect to the claim and the origin and cause
of the loss and the circumstances under which the loss or damage
occurred,   and   any   matter   touching   the   liability   or   the   amount   of
the liability of the company as may be reasonably required by or on
behalf   of   the   company   together   with   a   declaration   on   oath   or   in
other   legal   form   of   the   truth   of   the   claim   and   of   any   matters
connected therewith.”
Looking to the above facts the competent authority has decided to
repudiate your claim which please note.
Thanking you,
Yours faithfully,
BRANCH MANAGER
CC TO; GANDHINAGAR DO
CC TO: AHMEDABAD R.O.”
 
4. It   will   be   apposite   to   refer   at   this   stage   that   Surveyor   of   the
respondent   Company,   on   instructions,   examined   the   loss/damage
which   took   place   due   to   fire   on   20 th
  October,   2006   and   after   a
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physical   site   inspection   and   detailed   survey,   submitted   its   report
dated   1 st
  June,   2007   and   arrived   at   the   conclusion   that   the   total
damage   which   the   appellant   has   suffered   for   the   fire   which   took
place on 20 th
 October, 2006 was for a total sum of Rs. 21,76,524/­.
5. The Surveyor’s report was not disputed by either of the party.
Although   the   appellant   has   got   the   damages/loss   assessed   by   its
own Surveyor who submitted his report on 16 th
 October, 2007 after
making spot verification in reference to fire which took place on 20 th
October,   2006   and   assessed   the   damages   to   the   tune   of   Rs.86
Lakhs but as there was no evidence available with the appellant on
record,   the   appellant   had   restricted   to   the   Surveyor’s   report
appointed by the respondent Company who submitted its report on
1 st
 June, 2007.
6. The   repudiation   was   challenged   by   the   appellant   by   filing   its
claim   petition   before   the   Gujarat   State   Consumer   Disputes
Redressal   Commission(hereinafter   being   referred   to   as   the   “State
Commission”)   by   filing   of   a   Consumer   Complaint   No.   39   of   2007
that   came   to   be   dismissed   by   the   State   Commission   by   an   Order
dated 16 th
 January, 2012 on the premise that the appellant failed to
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furnish   the   required   documents   as   desired   by   the   respondent
Company and accordingly the claim has been rightly repudiated in
terms of Clause 6(b) of the policy.  
7. The   State   Commission   also   took   note   of   the   fact   that   the
factory   was   at   the   edge   of   the   village   and   there   was   no   residential
area around.  The theory of Diwali fire being the cause of the factory
fire appears to be suspicious but no such suspicion in reference to
the  fire which took place on 20 th
  October, 2006 was ever  indicated
by   the   Surveyor   appointed   by   the   respondent   Company   who
submitted   its   report   dated   1 st
  June,   2007   of   which   reference   has
been made.
8. On   appeal   being   preferred   before   the   National   Commission,
without   examining   the   material   on   record,   after   reiterating   the
suspicion   observed   by   the   State   Commission,   the   National
Commission   under   its   impugned   judgment   dated   3 rd
  September,
2012 dismissed the appeal which is the subject matter of challenge
in appeal before us.
9. Learned   counsel   for   the   appellant   submits   that   M/s.   A.M.
Patel   Surveyors   Pvt.   Ltd.   was   appointed   by   the   respondent
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Company   who   had   examined   in   extenso   the   loss/damage   which
took place due to fire on 20 th
  October, 2006, and proceeded on the
basis   of   preliminary   survey   carried   out   on   21 st
  October,   2006   and
after   taking   into   consideration   the   physical   inspection   of   the   site
and   the   material   available   on   record   made   an   assessment   of   the
loss/damage   suffered   by   the   appellant   to   the   tune   of   Rs.
21,76,524/­   and   no   evidence   was   placed   even   by   the   respondent
Company   in   rebuttal   to   question   the   finding   recorded   by   the
Surveyor   in   its   report   dated   1 st
  June,   2007.     In   the   given
circumstances,   the   suspicion   which   was   recorded   by   the   State
Commission in reference to the fire which took place on the day of
Diwali on 20 th
 October, 2006 in the factory premises was completely
without any factual foundation.
10. Learned   counsel   further   submits   that   repudiation   has   taken
place   on   the   premise   that   the   insured   has   failed   to   submit   the
required   documents   which,   according   to   the   Company,   was   in
breach   of   condition   no.   6(b)   of   the   policy   as   being  indicated   in   the
order   of   letter   of   repudiation   dated   11 th
  September,   2007   but   it   is
unsustainable in law.
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11. Per   contra,   learned   counsel   for   the   respondents,   while
supporting the finding returned by the National Commission in the
impugned   judgment   submits   that   indisputedly   from   the   material
which   has   come   on   record,   on   the   directions   of   the   Court,   the
factory   was   closed   on   11 th
  July,   2006   and   consequent   upon   that,
the power was disconnected on 18 th
 August, 2006 and there was no
manufacturing   at   the   time   when   fire   took   place   on   20 th
  October,
2006 and just after 13 days of the commencement of the Insurance
policy,   with   effect   from   7 th
  October   2006,   fire   occurred   on   20 th
October, 2006.   This made a  suspicion  which was  recorded by  the
State   Commission   in   its   Order   and   affirmed   by   the   National
Commission under  the impugned judgment.   Merely because there
was a Surveyor’s report dated 1 st
 June, 2007 who was appointed by
the   respondent   Company   who   gave   a   report   that   the   loss   was
suffered, in the given circumstances, the repudiation was valid and
justified   and   after   being   affirmed   at   two   stages   needs   no
interference of this Court.
12. We  have  heard   learned   counsel   for   the   parties   and  with   their
assistance perused the material available on record.
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13. It is not disputed that the appellant took fire insurance policy,
in  the  first  instance  in 2001 and  has renewed it  from   time to time
and   the   cover   risk   of   Rs.   1,20,00,000/­   was   renewed   from   7 th
October, 2006 to 6 th
 October 2007 and after its renewal, devastating
fire   took   place   in   the   factory   on   20 th
  October,   2006   in   which   the
appellant suffered huge losses.
14. It   is   also   not   disputed   that   the   appellant   has   never   put   any
claim in the last 6 to 7 years during the above period and when the
policy   was   renewed   from   7 th
  October,   2006   to   6 th
  October,   2007,
unfortunately, the devastating fire took place on 20 th
 October, 2006
for unknown reasons.
15. It is also not disputed that M/s. A.M. Patel Surveyors Pvt. Ltd.
which was appointed as a surveyor by the respondent Company has
extensively   examined   the   site   physically   and   after   taking   into
consideration   the   relevant   record   made   available   by   the   appellant
(insured),   estimated   the   loss/damage   which   took   place   due   to   fire
on   20 th
  October,   2006   of   Rs.   21,76,524/­   and   the   respondent   has
repudiated   the   claim   of   the   appellant   not   on   the   premise   that   the
Surveyor’s   report   dated   1 st
  July,   2007   is   not   acceptable   to   the
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respondent   Company   but   on   account   of   non­submission   of   the
required   documents   ­   which   was   a   breach   of   clause   6(b)   of   the
policy   as   indicated   by   the   Company   in   its   repudiation   letter   dated
11 th
 September, 2007.
16. In   our   considered   view,   invoking   condition   no.   6(b)   of   the
policy   for   repudiation   dated   11 th
  September,   2007   was
unsustainable in law for the reason that clause 6(b) only desires to
submit necessary document for the purpose of assessment of claim
regarding   the   loss/damages   caused   due   to   the   fire   which   took
place.  Whatever the material documents available with the insured
were indisputedly made available to the Surveyor who has made its
own   physical   inspection   in   reference   to   the   loss   which   took   place
due   to   fire   on   20 th
  October,   2006   and   submitted   its   report   on   1 st
June,   2007.     Once   that   assessment   has   been   made   regarding   the
loss/damage which took place due to fire dated 20 th
  October, 2006
and that was not disputed by the respondent Company, repudiating
the claim invoking clause 6(b) of the policy, in our considered view,
was unfair and is not legally sustainable.
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17. Consequently,   the   appeal   deserves   to   succeed   and   is
accordingly allowed.  The order passed by the National Commission
dated 3 rd
 September, 2012 is set aside.  The respondent Company is
directed to make the payment of Rs, 21,76,524/­ as assessed by the
Surveyor along with interest @ 8% per annum from the date of the
Surveyor’s   report   dated   1 st
  June,   2007   to   the   appellant   until   its
actual payment.
18. The respondent Company shall make necessary compliance of
the Order of this Court within two months.  No costs.
19. Pending application(s), if any, shall stand disposed of.
……………………………J.
(AJAY RASTOGI)
……………………………J.
(C.T. RAVIKUMAR)
NEW DELHI;
FEBRUARY 09, 2023.
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