The central legal point established in the judgment is the duty of the State to act fairly in insurance contracts, the violation of which can lead to the setting aside of repudiated insurance claims.

JUDGMENT

The Court

1. The petitioner-Company insured its godowns with respondent no.1, the National Insurance Company Limited (hereinafter referred to as 'the NICL'). The respondent no.2 is the Divisional Manager of petitioner no.1 and respondent no.3, the surveyor appointed by petitioner no.1-Company in respect of the petitioner's claim.

2. The petitioner has been paying premiums regularly to the respondent no.1 in accordance with the insurance agreement between the two and produced from time to time the necessary documents in respect of the stock declarations of the petitioner's godowns.

3. On February 21, 2004, a fire broke out in the petitioner's Agarpara Jute Mill at 28, B.T. Road, Kolkata-700 058 at about 1:45 a.m. The petitioner had substantial stocks of material in the said godown, which was damaged by the fire.

4. M/s. PEC Limited, the financer of the petitioner, was informed by the surveyor (respondent no.3) about the said accident.

5. The surveyor duly visited the mill premises and made the necessary inspections. According to the petitioner all documents asked for by the Surveyor from time to time were handed over by the petitioner. However, the respondent no.1-Company/ NICL rejected the claim of the petitioner on December 12, 2008 for non-submission of documents. The said decision was challenged by the petitioner in WP No.633 of 2010. A co-ordinate Bench of this Court, vide order dated August 1, 2013, disposed of the said writ petition by directing the NICL to consider the documents that had been furnished and deal with the claim in accordance with the law.

6. Subsequently, there was ample communication between the parties. However, on December 8, 2014, it was again communicated by the NICL to the petitioner that its claim had been turned down in the light of the Policy Condition in terms of Condition No.6(i)(b) under the heading 'General Conditions' of the Policy, namely 'Standard Fire and Special Perils Policy'.

7. Challenging the same, the petitioner has preferred the instant writ petition. Such repudiation of the Fire Claim No.101800/03/3400000026, made under Fire Policy No.101800/11/03/3400000516, has been specifically challenged, also claiming release of the amount assessed by the surveyor that is Rs.84,36,594/- with interest at the rate of eighteen per cent per annum from the date of assessment till the date of settlement of the claim.

8. The current chapter of the episode began with the direction of the Co- ordinate Bench on the NICL to reconsider the claim of the petitioner on merits.

9. It is contended by learned counsel for the petitioner that the writ petition is very much maintainable since the NICL is a subsidiary of the General Insurance Corporation of India and is a Government Company within the meaning of Section 2(45) of the Companies Act, 2013 and thus an authority under Article 12 of the Constitution.

10. It is contended that the State has a duty to act fairly and even in cases of contracts, the State cannot arbitrarily or unfairly repudiate the same. In respect of contracts of insurance, which has a public law element, the State has to meet the test of Article 14 of the Constitution, it is argued. In support of such submissions, learned counsel cites AIR 1995 SC 1811 [L.I.C. of India and another Vs. Consumer Education and Research Centre and others] and AIR 1998 Cal 1 [Assambrook Exports Ltd. and another Vs. Export Credit Guarantee Corpn. of India Ltd. and others].

11. Learned counsel for the petitioner submits that full-fledged inspection was held on several dates by the official surveyor appointed by the NICL itself, that is, respondent no.3. It is argued that Clause 6(i)(a) of the General Conditions has not been considered by the NICL. It is sought to be highlighted that the said provision clearly stipulates that a claim in writing for the loss or damage, containing as particular an account as may be reasonably practicable of all the several articles or items of property damaged or destroyed and all the