The Supreme Court has set aside an order of the National Consumer Disputes Redressal Commission (NCDRC) directing New India Assurance Company Ltd. to pay ₹2.40 crore to M/s Hemkund Duplex and Board Pvt. Ltd. in connection with a fire insurance claim.
A Bench comprising Justice Sanjay Kumar and Justice Sanjeev Sachdeva held that the insurer was justified in repudiating the claim after survey and investigation reports pointed to significant discrepancies in the insured's claim, stock records and declarations.
Hemkund Duplex and Board Pvt. Ltd. had filed a claim of ₹7,31,31,096.78, along with 18% interest and other damages, under two fire insurance policies issued by New India Assurance. The policies covered the company's stock, building, plant and machinery at its factory in Najibabad.
A fire broke out in the company's waste paper yard on May 7, 2009. The insurer appointed surveyors and an investigative agency to examine the circumstances surrounding the fire and the claimed loss.
The reports pointed to several discrepancies, including the absence of a clear cause of fire, a delay in informing the fire brigade and inconsistencies between the stock allegedly destroyed and the company's books and purchase records.
The final surveyor assessed the total loss at approximately ₹46.09 lakh, substantially below the amount claimed by the company. It also noted that the books appeared to have been manipulated to inflate the insurance claim.
The Supreme Court noted that the insured had given different figures for its alleged loss, ranging from ₹15 crore reportedly stated to the media, to ₹10 crore communicated to the insurer, ₹8.45 crore in the claim form and subsequently ₹7.31 crore.
The Court also considered the fact that the fire brigade was informed around 50 minutes after the fire was detected, despite the fire station being only about 6–7 kilometres away.
The survey reports further recorded concerns about the manner in which efforts were made to extinguish the fire.
The Bench examined Policy Conditions Nos. 6 and 8, which required truthful disclosure of relevant information and provided for forfeiture of benefits in case of fraudulent claims or false declarations.
The Court concluded that these conditions had been breached and observed that false factual statements had been made to support the insurance claim.
The Court further noted that statements of workers and supervisors indicated that the tin shed contained largely unusable waste material, contrary to the version given by company officials that usable raw material had been stored there.
The Supreme Court reiterated that a surveyor's report is not sacrosanct or conclusive, but it remains an important piece of evidence in assessing an insurance claim.
The Court noted that while an insurer may depart from a surveyor's report, such discretion cannot be exercised arbitrarily. In the present case, however, the NCDRC had failed to properly consider the adverse findings contained in the survey and investigation reports.
The Bench held that the NCDRC was not justified in brushing aside the surveyors' findings and granting the insurance claim.
The Supreme Court accordingly allowed New India Assurance's appeal, set aside the NCDRC's order dated November 19, 2024, and dismissed the connected appeal filed by Hemkund Duplex and Board Pvt. Ltd.
The Court also directed that the ₹50 lakh deposited by the insurer, along with accrued interest, be returned to it. The parties were directed to bear their own costs.
Case: M/s New India Assurance Company Ltd. v. M/s Hemkund Duplex and Board Pvt. Ltd.
Citation: 2026 INSC 1023
Bench: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Judgment Date: September 21, 2026
Representation:-
For Appellant(s) Mr. Salil Paul, Adv. Ms. Manjeet Chawla, AOR Mr. Sahil Paul, Adv. Mr. Jyoti, Adv. Mr. Harmeet Singh Phillip, Adv. Mr. Sandeep Dayal, Adv. Mr. Raghav Nagar, Adv. Mr. Karrtik Sharma, Adv. Mr. Sridhar Potaraju, Sr. Adv. Mr. Kumar Abhishek, Adv. Ms. Yashika Sharma, Adv. Ms. Jaslene Ahluwalia, Adv. Ms. Anamika Mishra, Adv. Ms. Meghna, Adv. Mrs. Farah Naaz, Adv. Ms. Neelima Bagoria, Adv. Ms. Reema Roy, Adv. Mr. Amod Kumar Mishra, Adv. Mr. Chandan Kumar Mandal, Adv. Mr. Shalen Bhardwaj, Adv. Mr. Nischal Kumar Neeraj, AOR
For Respondent(s) Mr. Nischal Kumar Neeraj, AOR Mr. Shakti Narayanan, Adv. Mr. Salil Paul, Adv. Ms. Manjeet Chawla, AOR Mr. Sahil Paul, Adv. Ms. Jyoti, Adv. Mr. Sandeep Dayal, Adv. Mr. Harmeet Singh Phillip, Adv. Mr. Raghav Nagar, Adv. Mr. Karrtik Sharma, Adv.
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