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2025 Supreme(Online)(NCDRC) 3195
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
A. P. Sahi, PRESIDENT, Bharatkumar Pandya, MEMBER
M/S AUTO PROFILES LTD. – Appellant
Versus
UNITED INDIA ASSURANCE COMPANY LIMITED – Respondent
CONSUMER COMPLAINT NO. 63 OF 2010
For the Appellants/Petitioners: Mr. Bhaskar Tiwari, Mr. Ramakant Shukla
For the Respondents: Mr. A.K. De, Ms. Ananya De
Non-disclosure of material facts in an insurance proposal voids the contract, justifying claim repudiation.
Headnote:The present case involves a consumer complaint alleging deficiency against an insurance company for unjustified repudiation of an insurance claim due to misrepresentation and non-disclosure of material facts regarding risk assessment, specifically related to prior flood-related claims. The court found that the non-disclosure of the refusal to renew successive insurance policies was crucial and deemed the contract voidable under the principles of utmost good faith and material misrepresentation. Consequently, the court upheld the repudiation of the claim as justifiable.
Result: The Complaint is accordingly rejected.
| Table of Content |
|---|
| 1. company filed a complaint alleging denial of insurance claim. (Para 1 , 2 , 3 , 4 , 5) |
| 2. arguments made regarding wrongful repudiation by the insurer. (Para 6 , 7 , 8) |
| 3. contentions failed to prove disclosure of previous claims. (Para 9 , 10 , 11 , 12) |
| 4. arguments asserting insured's non-disclosure as justification. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 5. court’s analysis of evidence presented by both sides. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 6. conclusions regarding compliance with good faith requirements. (Para 27 , 28 , 29) |
| 7. court affirms repudiation based on non-disclosure. (Para 30 , 31 , 32 , 33 , 34) |
| 8. final ruling rejecting the complaint. (Para 35 , 36 , 37 , 38) |
ORDER
A. P. SAHI, J (PRESIDENT)
1. This is a complaint alleging deficiency against the Insurance Co. for having unjustifiably repudiated an insurance claim of the Complainant regarding a loss suffered on account of inundation and floods in the premises of the Complainant.
2. The Complainant is a Company involved in the manufacturing and production of all sorts of Metallic and Non-metallic Auto-Mobile components as well as manufacturers for General spares in other fields as well. The factory of the Complainant is situate at Adityapur Industrial Area of Jamshedpur, now in Jharkhand. The plant of the Complainant is situate at a vantage point which is at the confluence of two rivers and the area is affected by serious floods and inundation during the rainy season.
3. A heavy unprecedented rainfall occurred on 16/17/18.06.2008 and the downpour was unprecedented. Both the rivers Kharkai and Subarnarekha overflowed and crossed the danger marks of water level that spread over entering into the area of TATA-Kandra Main Road which is located at a lower level, and since the plant of the Complainant is located in that area only, the same was flooded and not only the Complainant’s but the neighbouring units were also affected. The accumulated water reached considerable heights of eight to ten feet and played havoc with the stocks and equipment of the complainant.
4. It is the loss suffered due to the said incident that became subject matter of a claim under a Standard Fire And Special Perils policy acquired by the Complainants from the Opposite Party that was valid for the duration 28.11.2007 to 27.11.2008. The Complainant in terms of the risk of inundation and floods covered under the policy, dispatched its claim on 24.06.2008 and a surveyor was appointed by the Insurance Co. A preliminary assessment of a loss of Rs.1.53 crores was made but the final survey report was submitted on 01.03.2009 assessing the loss at Rs.1,17,48,402/-. The Complainant under protest made a request for the settlement of the claim but the claim was rejected on 16.12.2009. The letter of repudiation is extracted hereinunder:
“Date:16.12.2009
To,
Oracle Auto Pvt Ltd M-7 &11,Phase-7, Adityapur Industrial
Dear Sir,
Re:Loss due to Flood/inundation on 17/18.6.2008 under policy no: 210801/11/07/11/00000152 our claim no:210801/11/08/01/90000004
We refer to the claim lodged by you for flood loss on 17/18.06.2008 under the above Policy. We have carefully examined the relevant materials and wish to inform you as follows:
The Policy was taken from us afresh, after the risk was under insurance with M/S Bajaj Allianz General Insurance Co. Ltd. earlier.
The Policy was issued relying upon information provided by you in the Proposal dated 28/11/2007 wherein it was declared that the information had been fully disclosed and shall be the basis of the contract of insurance. The declaration in the Proposal is extracted below
"I / We hereby declare that the statements made by me / us in this Proposal Form are true to the best of my / our knowledge and belief and I / We hereby agree that this declaration shall form the basis of the contract between me / us and United India Insurance Co. Ltd."
In the Proposal it was specifically enquired as to whether there had been refusal by, earlier insurer to renew a Policy
