Re-decide on compensation under insurance policy, NCDRC gets 'supreme' guidance in this matter

The Supreme Court on Monday provided a key guideline to the National Consumer Disputes Redressal Commission (NCDRC). Through this, the bench of Justice Sanjay Kumar and Justice Augustine George Masih instructed the NCDRC to revisit the compensation amount under the insurance policy for the loss incurred by a company in 2005. This was done during the hearing of the appeal filed by the insurance company challenging the ruling provided by the NCDRC in August 2022.

The NCDRC had previously opined that the company must be compensated by the insurance firm since the company had incurred losses by the collapse of the factory shed. The bench on this stated that the company had acquired comprehensive coverage against fire as well as special perils from the insurance company. The coverage was valid from 30 June 2005 to 29 June 2006.

This case was related to the loss of a company, which was affected due to the collapse of its factory shed due to heavy rains in 2005. The company had sought compensation of Rs 91 lakh from the insurance company. After this, the insurance company appointed a surveyor, who assessed the loss to be only Rs 8.89 lakh and claimed that this loss was not due to flooding, so it was not covered under the policy.

The company then complained to the NCDRC on the argument given by the insurance company regarding compensation, in which it cited the assessment done by an independent surveyor, in which the amount of loss was stated to be Rs 46.97 lakh. Accepting this report, the NCDRC directed the insurance company to pay compensation of Rs 46.97 lakh.

After this, the insurance company challenged this decision, saying that the NCDRC did not properly consider the amount of compensation. During the hearing on this, the Supreme Court said that the NCDRC did not properly consider the surveyor's report submitted by the insurance company and increased the amount of compensation without proper assessment. Also, the Supreme Court sent this case to the NCDRC and directed it to reconsider the amount of compensation and also asked to take a quick decision on the matter on a priority basis.