2019 (12) TMI 1664 - SC - Indian Laws

Waiver of condition relating to delay in intimation and lodging of the claim, by appointing a surveyor - absence of any mention, of aspect of delay in intimation and violation of conditions of Clause 6(i) of General Conditions of Policy, in the repudiation letter, the same could be taken as defence before the NCDRC - whether the insurer had waived the condition as to delay in intimation by appointing a surveyor? - HELD THAT - This Court in Sonell Clocks 2018 (8) TMI 1910 - SUPREME COURT has distinguished Galada Power on facts and held that the appointment of a surveyor cannot, as a matter of law, be construed as a waiver of the terms and conditions of the insurance policy. However, in Sonell Clocks, the insurer had taken a specific plea in the repudiation letter that the loss was not conveyed within the stipulated period. The law as laid down in Galada 2016 (7) TMI 1603 - SUPREME COURT on issue still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC. Admittedly in the case at hand there was no reference of delay in intimation or lodging of the claim as stipulated in Clause 6(i) of the General Conditions of Policy in the repudiation letter - The NCDRC has failed to take into consideration this aspect of the matter and, therefore, cannot be held to be justified in rejecting the claim of the Appellant, on that ground. The Respondent-insurer is directed to make payment of Rs. 63,43,679/-, as assessed by the surveyor, to the Appellant with interest @ 8% from the date of the filing of the claim of petition till date of payment - Appeal allowed.

Summary

Issues Involved:
1. Whether the Respondent-insurer had waived the condition relating to delay in intimation and lodging of the claim by appointing a surveyor.
2. Whether the absence of any mention of delay in intimation and violation of conditions in the repudiation letter could be taken as a defense before the NCDRC.

Issue-wise Detailed Analysis:

Issue 1: Waiver of Condition by Appointment of Surveyor

The Appellant contended that the Respondent-insurer waived the condition of timely intimation by appointing a surveyor, as per Clause 6(i) of the General Conditions of Policy. The Appellant relied on the precedent set in *Galada Power and Telecommunication Ltd. v. United India Insurance Company Ltd.* where the court held that by appointing a surveyor, the insurer waived the right to reject the claim based on delayed intimation.

However, the Respondent-insurer argued, supported by the judgment in *Sonell Clocks and Gifts Ltd. v. New India Assurance Company Ltd.*, that appointing a surveyor does not constitute a waiver of the condition. The court in *Sonell Clocks* distinguished *Galada*, noting that the latter was based on specific facts and did not establish a general principle. The court emphasized that the factum of waiver must be gathered from the totality of the circumstances.

The court concluded that the argument of waiver by appointing a surveyor has no legs to stand on, as per the law laid down in *Sonell Clocks*. Thus, the Respondent-insurer did not waive the condition by appointing a surveyor.

Issue 2: Absence of Mention of Delay in Repudiation Letter

The second issue was whether the insurer could raise the defense of delayed intimation for the first time before the NCDRC, given that the repudiation letter did not mention this ground. The Appellant argued that the insurer cannot travel beyond the grounds mentioned in the repudiation letter, as established in *Galada Power*.

The court noted that in *Sonell Clocks*, the insurer had explicitly mentioned the delay in the repudiation letter, which was not the case here. Therefore, the court opined that the law laid down in *Galada* still holds: an insurer cannot introduce new grounds for repudiation at the stage of hearing before the consumer forum if those grounds were not mentioned in the repudiation letter.

In this case, the repudiation letter only mentioned that the loss was not caused by fire resulting from spontaneous combustion, as required by the policy. There was no mention of delayed intimation. Thus, the court held that the NCDRC erred in rejecting the claim on the ground of delayed intimation.

Conclusion:

The Supreme Court allowed the appeal, setting aside the NCDRC's judgment. The Respondent-insurer was directed to pay Rs. 63,43,679/- as assessed by the surveyor, with interest at 8% from the date of filing the claim petition until the date of payment. The payment was to be made within eight weeks, with no order as to costs.