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Mahavir Road and Infrastructure Pvt. Ltd. v. IFFCO Tokio General Insurance Co. Ltd.

Civil Appeal · 2019 INSC 394Decided 25 Mar 2019
Civil Appeal No. 7315 of 2016
Dr. Justice D.Y. Chandrachud · Justice Hemant Gupta

Background

A road-construction company had taken out an insurance policy covering "material damage" to roads it was resurfacing in Nashik, with flood/inundation listed as a covered peril but normal wear and tear from atmospheric conditions excluded. After monsoon damage to the roads, the company claimed abnormal rainfall and water-logging had caused the loss, but the insurer's surveyor found only surface peeling from traffic movement on wet roads, not flood damage, and rejected the claim. The National Consumer Disputes Redressal Commission (NCDRC) dismissed the company's complaint, and the company appealed to the Supreme Court.

Decision Breakdown

The Supreme Court examined official meteorological data cited by the NCDRC, which showed little to no rainfall on the specific dates the company claimed the damage occurred, undermining its "abnormal rainfall" theory. The Court noted the company had also been inconsistent about the exact dates of damage and had failed to produce any expert evidence to show that the rainfall which did occur was severe enough to cause the damage (as opposed to ordinary wear and tear from vehicles using wet roads, which the policy excluded). Finding no error in the NCDRC's fact-based conclusion that the damage fell within the wear-and-tear exclusion rather than a covered peril, the Supreme Court dismissed the appeal and upheld the rejection of the insurance claim.

Lesson Learnt

An insurance claimant seeking to bring damage within a covered peril (like flood) and outside an exclusion (like wear and tear) must back the claim with consistent facts and, where the cause is technical, expert evidence: bare assertions about weather conditions will not overturn a surveyor's factual findings.

Official source (sci.gov.in)View Judgment (PDF)

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