Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCDRC) 405

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J. Rajendra, Presiding Member, Anoop Kumar Mendiratta, Member
Vineet Vidge – Appellant
Versus
United India Insurance Co. Ltd. – Respondent
CONSUMER COMPLAINT NO. 413 OF 2018

Advocates:
For the Appellants/Petitioners: Amarjeet Singh Sahni
For the Respondents: Suman Bagga

An insurance company cannot repudiate a fire insurance claim based solely on allegations of negligence in a criminal charge-sheet; they must establish 'wilful misconduct' with cogent evidence to prove the fire was not accidental.

Headnote:(A) Insurance Act, 1938 - Standard Fire & Special Perils Policy - Claim repudiation - Fire incident - Burden of proof regarding wilful negligence - The insurance company repudiated the claim citing violation of condition no. 8, alleging that the insured was negligent in failing to repair an electric press that caused the fire incident. The Commission held that a surveyor report is not sacrosanct and the insurer must prove wilful misconduct beyond mere allegations in an FIR or charge-sheet to forfeit policy benefits. (Paras 10, 11, 13)

(B) Insurance Law - Fire insurance - Principle of accidental loss - The court observed that for a claim to be denied under fire insurance, it must be proved that the loss was caused by the wilful act of the insured. Negligence alone does not equate to the wilful misconduct required to forfeit insurance claims, and the burden remains on the insurer to provide cogent evidence of such intent. (Paras 11, 13)

Facts of the case:
The complainant, engaged in manufacturing ladies garments, obtained a fire insurance policy. During the policy period, a fire broke out in the premises causing stock loss. The insurance company appointed a surveyor who assessed the loss. Subsequently, the company repudiated the entire claim based on a worker's statement in a police charge-sheet that the fire resulted from the owner's failure to repair an electric press, violating the policy's condition against fraudulent claims or wilful acts.

Findings of Court:
The Commission found that the insurance company failed to lead independent evidence or prove that the fire resulted from the insured's wilful misconduct. As the surveyor's assessment of loss was not challenged for inaccuracies, the Commission relied on the surveyor's figure for settlement.

Issues: Whether the insurance company was justified in repudiating the fire insurance claim on the ground of the insured's alleged wilful negligence in maintaining electrical equipment.

Ratio Decidendi: A fire loss is considered accidental unless the insurer proves with cogent evidence that the fire was caused by the insured's wilful act or privity. An FIR or charge-sheet alone, without specific proof of intent, is insufficient to meet the high threshold required to establish 'wilful misconduct' for claim repudiation under fire insurance policies.

Result: Complaint allowed; insurance company directed to pay Rs.39,31,100/- with interest.

Table of Content
1. summary of claim, repudiation based on alleged negligence, and arguments of parties. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8)
2. court evaluates burden of proving wilful misconduct vs accidental fire in insurance. (Para 9 , 10 , 11 , 12 , 13)
3. court directs settlement based on surveyor's report due to lack of contrary evidence. (Para 14)

JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER

ORDER

1. Present complaint has been preferred by the complainant aggrieved against repudiation of claim by OP, vide letter dated 29.06.2017 in respect of loss of stocks sustained by the complainant in a fire incident on 19.01.2014.

2. In brief, complainant is engaged in business of manufacturing ladies suits, sarees etc. and had obtained a fire policy for the period 31.10.2013 to 30.10.2014 in respect of stocks worth Rs.3,05,00,000/-. Unfortunately, in a fire incident on 19.01.2014 in the premises, complainant suffered loss of stock valued by him at Rs.85-90 lakhs. The incident was duly reported to the police and FIR No.42 of 2014 under Section 287 IPC was registered. On intimation of incident, opposite party appointed a Surveyor to inspect the site. Complainant requested OP vide a letter dated 17.10.2015 to supply the copy of survey report but failed to elicit any response. The claim stands repudiated by OP vide letter dated 29.06.2017 on the basis of statement of a worker of the complainant, namely Jogender, who alleged negligence of complainant/owner of premises in failing to repair electric press, which caused the incident of fire. As per the complainant, a false and frivolous statement had been made by the said worker against the interests of the complainant. Complainant accordingly seeks sum of Rs.90,00,000/- towards claim for loss along with interest and litigation expenses.

3. In the written version, Insurance Company/OP claimed that M/s Ravi Singhal & Associates was appointed as Surveyor on receipt of claim who submitted his report assessing the loss to the tune of Rs.39,31,100/-. The complainant also gave his consent for settlement of the claim for the said amount as assessed by the Surveyor but during scrutiny of the claim papers, it was learnt that one of the factory worker, namely Jogender, had given a statement that incident of fire took place due to negligence of owner of the factory as he failed to repair the electric press despite being asked by Jogender. Further, fire could have been avoided in case the press had been repaired. OP further relied on the fact that as per final report submitted by the police under Section 173 Cr.P.C., charge-sheet was filed against the complainant under Section 287/338 IPC. In the afore-said circumstances, OP averred that since the owner of the factory/complainant was negligent in not getting the electric press repaired, he violated condition No.8 of the Standard Fire & Special Perils Policy. Consequently, the claim was treated as ‘No Claim’ and was communicated to the complainant vide letter dated 29.06.2017.

4. In the rejoinder filed on behalf of the complainant any negligence in repair of the electric press as alleged by the worker was refuted. Also, the loss of claim to tune of Rs.90,00,000/- was reiterated.

5. In support of his case, complainant led evidence by way of affidavit and exhibited copy of the insurance policy as Ex.CW-1/1; copy of letter dated 02.09.2015 as Ex.CW-1/2; copy of the reply dated 29.06.2017 as Ex.CW-1/3; copy of the letter dated 20.01.2014 as Ex.CW-1/4; copy of the letter dated 17.10.2015 as Ex.CW-1/5; copy of the fire report dated 27.01.2014 as Ex.CW-1/6; copy of FIR No.0042/2014 dated 19.01.2014 as EX.CW-1/7; copy of the grievance letter dated 16.11.2017 as Ex.CW-1/8; copy of newspaper as Ex.CW-1/9; copy of the report of Fire Surveyor as Ex.CW-1/10; copy of the letter dated 15.05.2015 as Ex.CW-1/11 and copy of the reply under RTI Act as Ex.CW-1/12.

6. On the other hand OP led evidence of Ms. Gitanjali Chauhan, Assistant Manager Legal by way of

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2026 Supreme(Online)(NCDRC) 405

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONJ. Rajendra, Presiding Member, Anoop Kumar Mendiratta, MemberVineet Vidge – AppellantVersusUnited India Insurance Co. Ltd. – RespondentCONSUMER COMPLAINT NO. 413 OF 2018

An insurance company cannot repudiate a fire insurance claim based solely on allegations of negligence in a criminal charge-sheet; they must establish 'wilful misconduct' with cogent evidence to prove the fire was not accidental.

Cases Referred (1)

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J. Rajendra, Presiding Member, Anoop Kumar Mendiratta, Member
Vineet Vidge – Appellant
Versus
United India Insurance Co. Ltd. – Respondent
CONSUMER COMPLAINT NO. 413 OF 2018