New Delhi — The Supreme Court has upheld New India Assurance Company’s repudiation of a fire claim, finding that the insured used false statements and unreliable stock records to support an inflated demand.
Hemkund Duplex and Board Pvt. Ltd. claimed ₹8.45 crore after a 2009 fire at its paper factory. The National Consumer Disputes Redressal Commission awarded ₹2.40 crore, compensation and costs. The insurer argued that surveyors had found inconsistencies over the fire’s origin, the condition of the shed, unusable waste stored at the site and manipulation of accounts.
Justices Sanjay Kumar and Sanjeev Sachdeva said a surveyor’s report is not conclusive, but a consumer forum cannot discard detailed statutory survey reports without a sound basis. Statements from workers and accountants showed that the burnt material was long-stored unusable waste, contradicting management’s claim that usable raw material was destroyed.
The Bench held that policy conditions requiring full disclosure and prohibiting fraudulent claims were breached. It set aside the NCDRC order, dismissed Hemkund’s cross-appeal and directed return of the insurer’s court deposits with accrued interest.
