2026 Supreme(Online)(NCDRC) 315

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
A.P. Sahi, President, Bharatkumar Pandya, Member
Beri & Beri Cold Storage and General Mills Pvt. Ltd. – Appellant
Versus
Syndicate Bank – Respondent
ORIGINAL PETITION NO. 54 OF 2004

An insurance claim for indemnity is maintainable under consumer law. A service provider acts with deficiency if it fails to fulfill promised insurance coverage and if the insurer repudiates a claim without conducting a mandatory assessment survey, rendering such repudiation legally invalid.

Headnote:(A) Consumer Protection Act, 1986 - Sections 2(1)(d) and 2(1)(g) - Insurance Act, 1938 - Section 64-UM - Deficiency in service - Repudiation of insurance claim - Requirement of mandatory survey - Complainant being a corporate entity is a 'person' and 'consumer' - Claim of indemnification is not for commercial profit but for restoring status quo - Bank's obligation to ensure comprehensive insurance coverage as promised - Insurance company's failure to conduct mandatory survey under Section 64-UM renders repudiation invalid. (Paras 14, 16, 23, 55, 60)

(B) Evidence and Proof - Admissibility of affidavits and correspondence - Evidentiary value of letters admitting insurance coverage and liability - Inconsistent pleas in affidavits filed by service providers rejected as contradictory to contemporaneous correspondence - Unilateral reversal of stand by bank through belated affidavits carries no credibility. (Paras 46, 47, 51, 55)

Facts of the case:
The complainant, a business entity running a cold storage, obtained insurance policies for its plant, machinery, and stock. Upon an incident involving the collapse of the cooling system and machinery, the complainant filed for indemnification. The bank, which had facilitated the purchase of the insurance, initially pursued the claim with the insurance company, admitting the insurance covered all risks. The insurance company subsequently repudiated the claim on the grounds that the incident arose from machinery breakdown and not fire, despite the bank's initial insistence on comprehensive coverage. The bank later attempted to retract its admissions regarding its role in insuring the property.

Findings of Court:
The court held that the insurance company acted in violation of statutory regulations by failing to conduct a survey before repudiating the claim. The bank was found deficient for failing to secure the comprehensive coverage it had promised. The court ordered both parties to share the liability for the loss, as the bank's and insurance company's inconsistent conduct and lack of professional diligence prejudiced the complainant.

Issues: Whether the complainant is a 'consumer' entitled to file a complaint; whether the claim is for a 'commercial purpose' excluded from the Act; and whether the repudiation of the claim without a proper survey, coupled with the bank's failure to ensure promised coverage, constitutes a deficiency in service.

Ratio Decidendi: Insurance claims for indemnification of loss do not amount to commercial profit generation acts and are thus maintainable under consumer law. A service provider cannot repudiate a claim without conducting a statutory survey of the loss, and once clear evidence of admitted coverage obligations exists, subsequent attempts to withdraw these through affidavits are untenable.

Result: Complaint allowed with directions for compensation.