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SUPREME COURT OF INDIA
SURYA KANT, K.V. VISWANATHAN, JJ.
New India Assurance Company Ltd. through its Manager – Appellant
Versus
M/s Tata Steel Ltd. – Respondent
Civil Appeal No. 2759 of 2009, Civil Appeal No.of 2024, SLP (C) No. 10001 of 2009, C.A. Nos. 5242-5243 of 2009
Decided On : 30-04-2024
(A) Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Insurance Act, 1938 – Section 64 UM (2) – Insurance – Damage to machinery and equipment of Mill in fire accident – Calculation of depreciation – Appeal by NIACL seeks depreciation to be fixed at 60% – Insured also in its appeals has focused only on issue of depreciation with argument being that base figure on which 32% depreciation was calculated should have been Rs. 28 Crores and not Rs. 20.09 Crores – Changed basis under Memorandum of Reinstatement Value Clause was that amount payable was to be calculated based on cost of replacing or reinstating the same, i.e. property of same kind or type but not superior or more extensive than insured property when new – It was Insured who was either unable to or unwilling thereafter to reinstate property – No concrete information was forthcoming from Insured and while claiming that invoices were not available certain indirect evidence in form of certificates for part supply were attempted to be furnished – These certificates were of dates which were after fire – Reinstatement Value Clause was part of policy and Insured had agreed to reinstate in accordance with said clause – Under main terms of policy company was to pay Insured value of property at the time of happening of destruction (except where NIACL opts to reinstate). (Paras 37, 39, 47, 48 and 57)
(B) IRDA (Protection of Policyholders’ Interests) Regulations, 2002 – Regulation 9(3) – Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Insurance Act, 1938 – Section 64 UM (2) – Insurance – Damage to machinery and equipment of Mill in fire accident – Loss Assessment on Depreciation Basis – Surveyor had assessed loss on reinstatement basis – NCDRC had awarded compensation on depreciated basis – Payment ought to have been on reinstatement basis and money is to be paid on reinstatement basis – When NIACL wrote letter for assessing on depreciation basis, it is not a case of a clarification being sought in an incomplete report – On facts of present case, there was no violation of Regulation 9(3) – In absence of any ambiguity no scope for applying doctrine of contra proferentem – Insurer was fully justified in writing letter to Surveyor requesting them to re-assess settlement amount – All findings to the contrary recorded by NCDRC held to be erroneous and herewith set aside. (Paras 73, 74, 77, 80 and 81)
Facts of the case:
Grievance pleaded by Insured/Complainant in its connected appeals is that compensation awarded ought to have been greater because, according to it, base figure on which the depreciation of 32% was computed should have been Rs. 28 Crores and not Rs. 20,09,95,000/-. Claim was that, so computing, amount payable by NIACL should have been Rs. 18.91 Crores.
Findings of Court:
Claim was rightly settled by NIACL letter dated 03.01.2003 which determined the loss amount payable at Rs. 7.88 Crores after applying 60% depreciation.
Result : Civil Appeals partly allowed.
JUDGMENT :
K.V. VISWANATHAN, J.
1. Leave granted in SLP (Civil) No. 10001 of 2009.
2. I.A. No. 48152 of 2022 in Civil Appeal No. 2759 of 2009 is filed by the Respondent [earlier known as M/s Bhushan Steel and Strips Ltd. hereinafter referred to as the “Complainant” or the “Insured”] seeking change of its name in the proceedings to ‘Tata Steel Ltd’. The Complainant/Insured has filed similar IAs in the connected appeals filed by it. It is stated that the name of the Complainant/Insured was changed to ‘Bhushan Steel Ltd.’ in the year 2007. Thereafter while these appeals were pending, the company underwent a Corporate Insolvency Resolution Process and was successfully taken over by ‘Tata Steel Ltd’ on 27.11.2018 and was renamed as ‘Tata Steel BSL Ltd’. Thereafter, it is seen that the Complainant/Insured further underwent a merger/amalgamation and was finally merged/amalgamated with ‘Tata Steel Ltd’ w.e.f. 11.11.2021. In view of the said facts, all the applications for change of name are allowed.
3. These are four Civil Appeals arising out of the proceedings in Original Petition No. 233 of 2000 before the National Consumer Disputes Redressal Commission, New Delhi [“NCDRC”].
4. Civil Appeal No. 2759 of 2009 has been filed by the New India Assurance Company Limited [hereinafter referred to as “NIACL” or the “Insurer” or the “Insurance Company”] challenging the order dated 05.08.2008 of the NCDRC. By the said order, the NCDRC partly allowed the complaint of the Insured. The NCDRC awarded an amount of Rs. 13,15,27,000/- with interest at 10% per annum from the expiry of two months since the submission of survey report dated 11.12.2001, payable to the Insured. The amount already paid by the Insurance Company was ordered to be adjusted and a cost of Rs. 50,000/- was also awarded to the Insured. NIACL, in this Appeal, is aggrieved with the finding that the Complainant’s claim must be settled, based on calculating depreciation at the rate of 32% - and not 60%.
5. The Civil Appeal arising out of SLP (Civil) No. 10001 of 2009 has been filed by the Insured/Complainant. The grievance here is against the dismissal of Misc. Application No. 298 of 2008 in Original Petition No. 233 of 2000 seeking review of the order dated 05.08.2008.
6. Civil Appeal Nos. 5242-5243 of 2009 have been filed by the Insured/Complainant against the main order dated 05.08.2008 (passed in O.P. No. 233 of 2000) and order dated 29.08.2008 (allowing the application for rectification and correcting the figure awarded to Rs. 13,51,27,000/- instead of Rs. 13,15,27,000/-) respectively.
7. The grievance pleaded by the Insured/Complainant in its connected appeals is that the compensation awarded ought to have been greater because, according to it, the base figure on which the depreciation of 32% was computed should have been Rs. 28 Crores and not Rs. 20,09,95,000/-. The claim was that, so computing, the amount payable by NIACL should have been Rs. 18.91 Crores.
Brief Summary of Facts:
8. The Insured had taken an insurance policy from NIACL for the entire machinery and equipment of its mill by paying a premium of Rs. 62,09,655/-. The policy was for the period 29.09.1998 to 28.09.1999. According to the Insured, due to a fire accident on 12.12.1998, the ‘20 Hi Cold Rolling Mill’ fitted with imported equipment was fully destroyed resulting in a loss of Rs. 35.08 crores. The incident of fire was intimated to NIACL on 12.12.1998 itself. Surveyors ‘M/s R.K. Singhal and Company Pvt. Ltd.’ and subsequently ‘M/s A.K. Govil and Associates’ and ‘M/s P.C. Gandhi’ were appointed by NIACL. A claim for Rs. 35.08 crores was filed on 29.01.1999. According to the Insured, this was based upon the quotations received from various manufacturers of the said machinery and the complete details of cost for replacing and/or repairing the machines.
9. The Insured also pleaded that since the running of the company was important, it got a 6 Hi Cold Rolling Mill installed in its unit and commenced production by spending
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