Unrebutted Evidence Must Be Accepted; Insurer's Failure To File Reply Leads to Ex-Parte Award: Rajasthan State Consumer Commission - 2025-08-29

Insurer's Failure to Contest Claim Leads to ₹19.77 Lakh Award for Jodhpur Firm

Jodhpur, Rajasthan: The State Consumer Disputes Redressal Commission has ordered National Insurance Co Ltd to pay ₹19.77 lakh with interest to a Jodhpur-based firm, ruling that an insurer's failure to file a reply or rebut evidence amounts to an admission of the claim. The Commission held that the insurance company's prolonged inaction and absence from proceedings constituted a clear deficiency in service.

The bench, comprising President Justice Devendra Kachhawaha and Member Mr. Sanjay Tak , emphasized that unrebutted sworn statements and documentary evidence must be accepted by the court, leading to a decision in favour of the complainant.

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Background of the Dispute

The complaint was filed by Dinesh Tobeko Company, a Jodhpur-based partnership firm, against National Insurance Co Ltd. The firm had purchased 1,000 kg of Patchouli Oil from Indonesia, valued at US$45,000, in January 2010. To safeguard the consignment during its transit from Indonesia to Jodhpur, the company obtained a marine insurance policy from National Insurance Co Ltd.

After arriving in India, the goods were stored at a warehouse in Navi Mumbai operated by the Punjab Container & Warehousing Corporation. However, on January 31, 2010, a major fire erupted at the facility, completely destroying Dinesh Tobeko's consignment.

Following the incident, the firm promptly informed the insurer and filed a claim for compensation. The insurance company appointed a surveyor, who assessed the loss at ₹19,77,140 in a report dated April 12, 2010. Despite this assessment and repeated follow-ups by the firm, the insurance company failed to settle the claim, leading to the filing of a consumer complaint in 2015.

Arguments Before the Commission

Complainant's Position: Dinesh Tobeko Company argued that it had fulfilled all its obligations. It had a valid insurance policy, the loss occurred due to a covered peril (fire), and all necessary documents were submitted to the insurer. The counsel for the complainant presented extensive evidence, including the bill of lading, invoice, insurance policy, and the surveyor's report, to substantiate its claim. They argued that the insurer's non-payment, despite its own surveyor quantifying the loss, was an arbitrary and unjustifiable act of deficiency in service.

Opposite Party's Position: National Insurance Co Ltd and its officials (Opposite Parties 1 to 4) failed to participate meaningfully in the proceedings. Despite being represented by counsel initially, they did not file a reply to the complaint, nor did they present any evidence or arguments to challenge the complainant's claims. Their right to file a reply was closed by the Commission in 2017, and they remained absent during the final hearings, compelling the Commission to proceed ex-parte.

Legal Principles and Court's Reasoning

The Commission heavily relied on the legal principle that assertions made in a sworn affidavit, if not specifically denied or rebutted by the opposing party through a counter-affidavit, are deemed to be admitted. The judgment cited several precedents from the Supreme Court and various High Courts to support this stance.

The Commission noted:

"If a sworn statement is not rebutted, the court has no basis for not accepting it. When sworn statements are not refuted, it should be considered that the statements are correct, and the party submitting the affidavit has proven its case."

The bench observed that the complainant had successfully proven the facts of the case through an unrebutted affidavit and 36 supporting documents (Exhibits 1 to 36). The evidence confirmed the purchase of goods, the existence of the insurance policy, the fire incident, the complete destruction of the insured goods, and the surveyor's assessment of the loss.

The Commission also addressed minor discrepancies noted by the surveyor regarding the product's value and description. It accepted the complainant's detailed clarification, which was also unrebutted by the insurer, concluding that the surveyor's remarks were based on an incomplete review of documents, such as the laboratory report.

The Final Verdict

Finding a clear deficiency in service on the part of National Insurance Co Ltd, the State Consumer Commission allowed the complaint and directed the insurer to:

1. Pay the claim amount of ₹19,77,140 along with interest at 9% per annum from the date of filing the complaint (April 3, 2015) until payment.
2. Pay ₹1,00,000 as compensation for the mental and physical distress caused to the complainant.
3. Pay ₹10,000 towards the cost of litigation.

The Commission stipulated that if the total amount is not paid within 45 days, the interest on the principal claim amount will increase to 12% per annum , and the compensation and costs will attract an interest of 9% per annum from the date of the order until realization. The complaint against the insurer's officials was dismissed as the primary liability lay with the company.