Insurance – Requirement of uberrima fides:
Held : Uberrima fides, i.e., good faith, is the requirement in a contract of insurance – This obligation and duty would rest on both parties not only at the inception of the contract of insurance but throughout its existence and even thereafter – On facts, despite the second surveyors report dated 22.09.1995 quantifying the appellant’s loss at `17,64,097/-, the respondent insurance company chose to repudiate the appellant’s claim in its entirety, basing on the wholly unfounded assertion that the appellant had failed to maintain and provide proper records – This was also despite the clear finding of its earlier surveyors, M/s. Frank and Fair Investigators, that total loss was suffered by the appellant – Further, having attached great importance to the death certificate given by the MPEDA/State Fisheries Department in its policy and its prescribed claim procedure, the insurance company baldly brushed aside the Death Certificate dated 01.05.1995 furnished by the officials of the State Fisheries Department UNITED INDIA INSURANCE CO. LTD. [SANJAY KUMAR, J.]
at Visakhapatnam – It is not open to an insurance company to ignore or fail to act upon a certificate or document that it had itself called for from independent and impartial authorities, subject to just exceptions, merely because it is averse to it or to its detriment – Having undertaken to indemnify an insured against possible loss in specified situations, an insurance company is expected to make good on its promise in a bonafide and fair manner and not just care for and cater to its own profits. [Paras 12 and 13] Insurance – Computation of admissible loss – Methodology: Held : On facts, the insurance policy itself provided the method of computation of the admissible loss –There were three ways of computing the admissible loss (Input Cost Method; Unit Cost Method and Fortnightly Valuation Method) – NCDRC had assessed the appellant’s total loss as `30,69,486.80 and awarded simple interest @ 10% p.a. – However, the values of loss worked out by the appellant were: `75,98,361/- (as per Input Cost Method); `75,87,750/- (as per Unit Cost Method); and `79,20,000/(as per Fortnightly Valuation Method) – Computations made by appellant are accurate – Appellant would be entitled to lowest of the aforestated three valuations, viz., `75,87,750/- – Further, delay on part of insurance company in settling the appellant’s claim fairly and in a timely manner warrants that it pays interest on the amount due and payable to appellant – Interest rate fixed by NCDRC, viz, 10% is just and equitable. [Paras 7, 8 and 14] LIST OF CITATIONS AND OTHER REFERENCES
General Assurance Society Limited v. Chandumull Jain and another AIR 1966 SC 1644 : [1966] SCR 500 – followed.
Jacob Punnen and another v. United India Insurance Company Limited (2022) 3 SCC 655; Modern Insulators Limited v. Oriental Insurance Company Limited (2000) 2 SCC 734 : [2000] 1 SCR 1076 – relied on. OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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