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National Insurance Co.Ltd vs Hindustan Safety Glass Works

The respondent Hindustan Safety Glass Works Ltd. had taken out two policies with the appellant National Insurance Company.  On 6th August, 1992, there was heavy incessancy rain in Calcutta resulting in heavy accumulation of rain water inside and around the factory/works of the respondent. According to the respondent, there was considerable damage to raw materials, stocks and goods, furniture etc. As a result of the damage suffered by the insured and in terms of the two policies taken out with National Insurance, claims were filed by the insured on 7th and 8th August, 1992, claiming a total amount of Rs.  52.32 lakhs along with an amount of about Rs.1.81 lakhs being the expenses incurred for the purpose of loss minimization. Interest at 18% per annum was also claimed by the insured with effect from 6th December, 1992 that is four months after the occurrence of the flood or inundation.

Among the various issues alleged by National Insurance Company, one main issue was that the Complaint before the National Commission was barred by limitation as it was filed on 13.08.1996 while the loss/damage to the respondent properties had taken place in August 1992.

The National Commission rejected all the contentions urged by National Insurance and by the impugned judgment and order the insured was awarded an amount of Rs. 21,05,803.89 with interest at 9% per annum from 11th May, 1995 that is three months after the addendum issued by Seascan Services (WB) Pvt. Ltd. (the second surveyor). Costs of Rs. 20,000/- were also awarded to the insured. Hence, the present appeal.

After observing the facts of the case, the Supreme Court held that on the date of the incident the respondents goods were insured. On the very next day, the respondent lodged a claim with National Insurance. In response, National Insurance first appointed a surveyor to assess the loss suffered by the respondent and a report was given by the surveyor after more than a year. Thereafter, for reasons that are not at all clear, National Insurance appointed a second surveyor which also took about one year to submit its report and eventually gave an addendum to that report thereby crossing one year in completing of its report along with the addendum. In other words, National Insurance itself took more than two years in surveying or causing a survey of the loss or damage suffered by the insured. Surely, this entire delay is attributable to National Insurance and cannot prejudice the claim of the respondent, more particularly when the respondent had lodged a claim well within time.

The Supreme Court while resolving the issue raised before it held that in a dispute concerning a consumer, it is necessary for the Courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-à-vis the supplier of services or goods. It is to overcome this disadvantage that a beneficent legislation in the form of the Consumer Protection Act, 1996, was enacted by Parliament. The provision of limitation in the Act cannot be strictly construed to disadvantage a consumer in a case where a supplier of goods or services itself is instrumental in causing a delay in the settlement of the consumer claim.

The Supreme Court held that the National Commission was quite right in rejecting the contention of the National Insurance in this regard hence, dismissed the appeal.

Case Facts

National Insurance Co.Ltd vs Hindustan Safety Glass Works Ltd on 7 April, 2017 (2009) 5 SCC 121
Bench: Madan B. Lokur, Prafulla C. Pant
Civil Appellate Jurisdiction Civil Appeal No. 3883 Of 2007

Divya Patwal


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