The Supreme Court has set aside a National Consumer Disputes Redressal Commission (NCDRC) award that had directed an insurer to pay a partial fire-insurance claim despite three independent surveyor and forensic reports pointing to inflated stock figures and false declarations by the insured, holding that a consumer forum cannot simply discount detailed, mutually consistent surveyor findings without pointing to a specific, identifiable defect in them.
Hemkund Duplex and Board Pvt. Ltd., a paper manufacturing unit, had claimed Rs. 7.31 crore from New India Assurance after a fire at its factory. The insurer commissioned survey and forensic examinations, all of which converged on the same conclusion: the stock figures the insured had declared, both before the fire and in the claim itself, did not hold up, and the declarations underlying the policy and the claim were materially false. On that basis, New India Assurance repudiated the claim in full. The NCDRC, however, did not accept a full repudiation: it awarded Hemkund Duplex Rs. 2.4 crore, effectively discounting the surveyors' adverse findings without engaging with them on their own terms.
A Bench of Justices Sanjay Kumar and Sanjeev Sachdeva reversed that outcome. The Court's reasoning turned on the evidentiary weight due to a surveyor's report under the regulatory scheme governing insurance surveys: where multiple surveys and a forensic examination independently arrive at the same adverse conclusion, a consumer forum departing from that conclusion needs more than a general sense that the insured's loss was understated: it needs to identify a concrete flaw in the survey methodology, data, or reasoning that justifies discounting it. Absent such an identified flaw, the Bench held, the NCDRC's part-award to a claimant found to have made false declarations could not stand, and it restored the insurer's full repudiation of the claim.