Page 56 - The Insurance Times October 2024

Insurance Caselaws

"NCDRC Behaving Like Experts": Supreme Ammonia gas leaked out of chambers nos. 1 and 2 of the
Court Issues Aside Judgement Supporting aforementioned factory in 1997. As a result, the Appellant
notified the Respondent and thereafter made a claim
Revocation of Insurance Claim against the Respondent for 85,956 bags of potatoes. The
Appellant was notified by the Respondent-appointed
Case Title: S.S. Cold Storage India Pvt. Ltd. v.
Surveyor that the occurrence had resulted from wear and
National Insurance Company Limited, Civil Appeal
tear and decay, and as such, it was excluded under the terms
No. 2042/2012
of the Refrigeration Insurance Policy.Senior Advocate Vijay
Summary Hansaria argued at the outset on behalf of the appellant
The Supreme Court disagreed with the National Consumer that the Refrigeration Insurance Policy was only provided
Disputes Redressal Commission's (NCDRC) ruling in an appeal following a comprehensive investigation of the premises.
contesting an NCDRC ruling. The case involved a cold storage Hansaria further claimed that assessments from three
facility where ammonia gas leaked out of chambers in 1997. specialists made it abundantly evident that the cracks were
The appellant, S.S. Cold Storage India Pvt. Ltd., filed a claim caused by an accident rather than natural wear and tear.
against the respondent for 85,956 bags of potatoes. The He continued by claiming that the NCDRC had only partially
NCDRC ruled that the leak was caused by natural wear and relied on the aforementioned findings, but that because the
tear, not wear and tear. The court ruled that the ammonia information in the reports was interconnected, it was not
gas leak was an unanticipated event and the respondent's possible for it to be partially approved and partially
rejection of the insurance claim was a service failure. The denied.Conversely, Yogesh Malhotra, speaking on behalf of
Supreme Court granted the appellant's request for the the Respondent, supported the NCDRC's conclusions and
insurance claim. contended that they shouldn't be changed. Drawing from
the Surveyor's report, he argued that the ammonia leak was
About the Case
a result of natural wear and tear and was therefore not
The Supreme Court voiced its disagreement with the covered by the Refrigerator Insurance Policy.The contentious
National Consumer Disputes Redressal Commission's
question before the court was whether the NCDRC was right
(NCDRC) ruling at the hearing of an appeal contesting an to deny the appellant's complaint, concluding that the
NCDRC ruling. Judges A.S. Bopanna and Dipankar Datta
respondent had not failed to provide sufficient notice.
made up the Division Bench that heard the case. The Bench
expressed astonishment at the views made by the tribunal The Court concluded, based on the aforementioned
members in this particular issue, given their expertise in the observations, that the ammonia gas leak was the
contested matter. Running a cold storage facility is the consequence of an unanticipated event that was without
appellant's (S.S. Cold Storage India Pvt. Ltd.) line of work. the appellant's control. As a result, the Respondent's
The Respondent (National Insurance Company Ltd.) provided rejection of the insurance claim constituted a service failure.
the Appellant with a refrigerator insurance policy in addition The Court finally granted the appellant's request for the
to other insurance policies for the storage of potatoes. aforementioned insurance claim.

50 October 2024 The Insurance Times