The National Consumer Disputes Redressal Commission (NCDRC), under the leadership of Dr. Inder Jit Singh, recently ruled against a company challenging New India Assurance. The company couldn’t establish any unfairness or irrationality in the insurer’s decision of not accepting the surveyor’s report.
Let’s talk about the background of the case. The company, a registered entity under the Companies Act, 1956 and a TISCO distributor, had obtained a Burglary and House Breaking Policy from New India Assurance. This policy covered their inventory, including agro buckets, tools, and other goods, worth Rs. 1,00,53,000, and it got this coverage against a premium of Rs. 12,535 for its warehouse. Subsequently, a truck loaded with stolen goods from the insured warehouse was seized, and a police complaint was lodged. The insurer was duly informed and a surveyor appointed to evaluate the loss. The company claimed a loss of goods worth Rs. 89,29,703.65, a claim which the insurer rejected. The company then approached the State Commission, whose adverse decision led them to appeal before the NCDRC.
Now let’s discuss the insurer’s viewpoint. They claimed that at the time of the burglary, the property was occupied by Western Steel & Engineering, a related entity of the company, a fact that was not disclosed, constituting misrepresentation. They pointed to a clause in the policy which states that the coverage ceases if the premises are vacant for seven or more consecutive days and nights without the insurer’s consent. They argued that the premises were unoccupied for 94 days before the loss was discovered. They also contended that the volume of stolen stock, equivalent to about 15 truckloads, implied the theft couldn’t have happened in a single day, suggesting it occurred over multiple instances. This indicated a lack of adequate care for such high-value stock, violating the policy’s condition of reasonable care. Finally, they argued that despite repeated requests, the company failed to provide necessary documents to assess and quantify the loss until the surveyor submitted his report.
The NCDRC then made its observations. They noted that as per the policy’s terms and conditions, compliance with the terms, conditions, and endorsements is a prerequisite for any liability of the insurer. This includes the insured’s duty to take reasonable steps to protect the insured property against accident, loss, or damage. The company was also required to provide the insurer with all necessary information, support, and proofs regarding any claim. The NCDRC pointed out that the company failed to meet these obligations by not taking adequate care to protect the property and offering incomplete information to the surveyor during the claim assessment process. They cited previous Supreme Court rulings emphasizing the insurer’s right to reject a surveyor’s report if it’s deemed arbitrary or perverse. In this case, the company couldn’t prove any unfairness or irrationality in the insurer’s rejection of the surveyor’s report. The absence of evidence to dispute the insurer’s claims about the scope of the burglary and non-availability of documented stock records led the State Commission to base its findings on the evidence before it.
Consequently, the NCDRC found no merit in the appeal and dismissed it.
Case Title: M/S. Shah Vadilal Jethalal Vs. New India Assurance Co. Ltd
Case Number: F.A. No. 681/2012
