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United India Insurance Co. Ltd. v. M/S. Park Leather Industries Ltd.

Civil Appeal · 2025 INSC 455Decided 7 Apr 2025
C.A. No.-000913 - 2023
Justice Sanjay Kumar · Justice Augustine George Masih

Background

Park Leather Industries' factory shed collapsed during heavy rainfall in August 2005, damaging plant, machinery, and stock, and it claimed Rs. 91 lakh under its fire and special-perils insurance policy with United India Insurance. The insurer's own surveyor assessed the loss at only about Rs. 8.9 lakh and the claim was repudiated on the ground the damage was not caused by an insured peril. The National Consumer Disputes Redressal Commission (NCDRC) held the insurer liable and awarded Rs. 46,97,085 based on a second, independent surveyor's report the company had produced only after the insurer's written statement.

Decision Breakdown

The Supreme Court found that the NCDRC's quantum finding was flawed because it treated the insurer's silence in its written statement as an admission of the higher figure, even though that surveyor's report was filed only later, with the rejoinder, so the insurer could not possibly have addressed it earlier. Since the insurer did not contest liability itself, only the quantum was in question, and the Court held the NCDRC never independently applied its mind to reconcile the two conflicting surveyor assessments. The appeal was allowed to the extent that the quantum issue was remitted to the NCDRC for fresh determination after both sides are given a proper opportunity to lead evidence, with the disputed deposit amount to be transferred to the NCDRC pending the outcome.

Lesson Learnt

A tribunal cannot treat a party's non-response to evidence filed after its own pleadings as an implied admission: quantum disputes need a fair, evidence-based hearing on both sides, not assumptions based on procedural timing.

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

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