Insurer’s rejection quashed

The Supreme Court has dismissed two appeals of the National Insurance Company, which had rejected claims by Hindustan Safety Glass Works Ltd and Kanoria Chemicals & Industries Ltd for damage caused to its works by floodwater and fire. The insurance company repudiated the claims on grounds of delay, but the court found the delay was caused by the insurer itself. In the first case of Hindustan Safety Glass Works, rain caused damages which the first surveyor determined at ~24 lakh against a claim of ~53 lakh. The insurer felt the surveyor’s report was not bona fide and appointed another, who also reached the same figure. Then the insurer raised new issues such as limitation for a filing suit in the National Consumer Disputes Redressal Commission. The commission rejected it and in the appeal, the Supreme Court described how the government insurer caused the delay. The claim was filed in 1992, the day after the damage, but the surveyors took more than two years to assess the loss. “The entire delay is attributable to National Insurance and cannot prejudice the claim of the insured,” the judgment said, adding: “To make matters worse, National Insurance actually repudiated the claim of the insured only in 2001, well after the complaint was filed with the National Commission.” The court further underlined that “in a dispute concerning a consumer, it is necessary for the courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-à-vis the supplier of services or goods”. Similarly, in the Kanoria case, the report of a fire was made in 1993 but the repudiation came in 1999.