Case Title: S.S. Cold Storage India Pvt. Ltd. v. National Insurance Company Limited, Civil Appeal No. 2042/2012
Citation : (SC) 619
Summary
The Supreme Court disagreed with the National Consumer Disputes Redressal Commission’s (NCDRC) ruling in an appeal contesting an NCDRC ruling. The case involved a cold storage facility where ammonia gas leaked out of chambers in 1997. The appellant, S.S. Cold Storage India Pvt. Ltd., filed a claim against the respondent for 85,956 bags of potatoes. The NCDRC ruled that the leak was caused by natural wear and tear, not wear and tear. The court ruled that the ammonia gas leak was an unanticipated event and the respondent’s rejection of the insurance claim was a service failure. The Supreme Court granted the appellant’s request for the insurance claim.
About the Case
The Supreme Court voiced its disagreement with the National Consumer Disputes Redressal Commission’s (NCDRC) ruling at the hearing of an appeal contesting an NCDRC ruling. Judges A.S. Bopanna and Dipankar Datta made up the Division Bench that heard the case. The Bench expressed astonishment at the views made by the tribunal members in this particular issue, given their expertise in the contested matter. Running a cold storage facility is the appellant’s (S.S. Cold Storage India Pvt. Ltd.) line of work. The Respondent (National Insurance Company Ltd.) provided the Appellant with a refrigerator insurance policy in addition to other insurance policies for the storage of potatoes.
Ammonia gas leaked out of chambers nos. 1 and 2 of the aforementioned factory in 1997. As a result, the Appellant notified the Respondent and thereafter made a claim against the Respondent for 85,956 bags of potatoes. The Appellant was notified by the Respondent-appointed Surveyor that the occurrence had resulted from wear and tear and decay, and as such, it was excluded under the terms of the Refrigeration Insurance Policy. Senior Advocate Vijay Hansaria argued at the outset on behalf of the appellant that the Refrigeration Insurance Policy was only provided following a comprehensive investigation of the premises. Hansaria further claimed that assessments from three specialists made it abundantly evident that the cracks were caused by an accident rather than natural wear and tear. He continued by claiming that the NCDRC had only partially relied on the aforementioned findings, but that because the information in the reports was interconnected, it was not possible for it to be partially approved and partially denied. Conversely, Yogesh Malhotra, speaking on behalf of the Respondent, supported the NCDRC’s conclusions and contended that they shouldn’t be changed. Drawing from the Surveyor’s report, he argued that the ammonia leak was a result of natural wear and tear and was therefore not covered by the Refrigerator Insurance Policy. The contentious question before the court was whether the NCDRC was right to deny the appellant’s complaint, concluding that the respondent had not failed to provide sufficient notice.
The Court concluded, based on the aforementioned observations, that the ammonia gas leak was the consequence of an unanticipated event that was without the appellant’s control. As a result, the Respondent’s rejection of the insurance claim constituted a service failure. The Court finally granted the appellant’s request for the aforementioned insurance claim.
