Back
J&K State Orders United India Insurance To Complainant For Excavator Machine Damage
In a significant ruling, the , Srinagar, has held liable for the of an insurance claim. The bench, comprising President Smt. Nighat Sultana and Member Sh. Maheep Gupta, ruled that an insurer cannot rely on without providing concrete evidence to substantiate their stance.
A Machine Submerged in Dispute
The matter pertains to an excavator owned by the complainant, Abdul Rashid Sumji, which was insured under a policy issued by the respondent insurance company. In , during the currency of the policy, the heavy machinery accidentally fell into the River Jhelum and remained submerged, sustaining extensive damage. Following the incident, the owner incurred significant repair costs amounting to approximately ₹18.82 lakh and sought reimbursement from the insurer.
However, the insurance provider rejected the claim in , citing "normal wear and tear" as the cause of damage. Under the terms of the policy, such losses are considered .
Contentions of the Parties
The complainant maintained that the incident was purely accidental and that the insurance company was contractually obligated to him for the losses sustained. Conversely, the insurer argued that the loss fell outside the scope of coverage based on the report provided by an -authorized surveyor. During the proceedings, the insurance company attempted to introduce an additional ground for rejection, questioning the validity of the driver's license. The , however, dismissed this, noting that an insurer is restricted to the grounds initially cited in the formal .
Legal Reasoning and
The emphasized that the the applicability of an exclusion clause lies squarely with the insurance company. By failing to lead evidence to demonstrate that the damage was indeed caused by "normal wear and tear," the insurer failed to meet its . The noted that the insurer’s right to lead evidence had been closed due to non-compliance, leaving their defense unsubstantiated.
Key Observations
The judgment clarifies the standards required for insurers to maintain a repudiation. The made several pivotal observations:
-
"It is a settled legal position that it is not permissible for the insurance company to take any additional ground in addition to the grounds taken in the ."
-
"It is a settled legal preposition that onus to prove the operation of exclusion clause lies squarely with the Insurance Company."
-
"As the insurance company did not lead any evidence to prove its contention of loss having occurred due to normal wear and tear, the stand taken by the Company is not tenable."
-
"Justice demands that under such circumstances, the must be passed to the complainant."
Final Verdict and Implications
The upheld the assessment conducted by the surveyor regarding the , noting that the deductions for and were factually justified. Consequently, the Court directed the insurance company to pay a total sum of ₹8,53,084 to the complainant. This amount includes ₹4,84,986 for the adjusted loss, ₹3,18,098 as compensation for the prolonged delay in settlement, and ₹50,000 for mental agony and litigation expenses.
The insurer has been directed to disburse the payment within 30 days. Failure to comply will render the company liable to further interest payments at a rate of 6% per annum until the final deposition. This ruling serves as a reminder that insurers cannot deny legitimate claims based on speculative exclusions without meeting their evidentiary obligations.
