National Insurance Company Ltd v. Hindustan Safety Glass Works Ltd. and Anr.

Case NameNational Insurance Company Ltd v. Hindustan Safety Glass Works Ltd. and Anr.
Citation                 (2017) 5 SCC 776
Appellant               National Insurance Company Ltd
Respondent            Hindustan Safety Glass Works Ltd. and Anr.
Bench                      Justice Madan B. Lokur, Justice Prafulla C. Pant


The case that is to be discussed lies wholly based on the rights and powers of the consumer. In the business world, the consumer stays as a hidden ladder for many of the achievements made by the corporate and businessmen. The well-known fact is that every individual is a businessman and every businessman is a consumer (every maker is a user). A right violated by an individual indirectly loses his right because every citizen living is one way or the other a consumer of the other.

The present world requires a special law in order to protect the rights of all, and thus the Consumer Protection Act, 1986 makes its first step into the Indian society and lists the rights of the consumer, punishment for violating the right, power of the authority to deal with such issues, etc. Under the Act, the rights of a consumer are based on the basic rights of the consumer dealt with by the International Organisation of Consumers. The consumer is entitled to the following rights:

  • Right to be protected against the marketing of dangerous goods and service
  • The consumer has a right to get detailed knowledge from the seller about the quality, quantity, purity, price, etc.
  • Right to get relief from unfair trade practices

Even applying for a policy in the Insurance Company falls under the term consumer, and such a situation is dealt with below in the case of National Insurance Company Ltd v. Hindustan Safety Glass Works Ltd. and Anr.

Facts of the Case

The facts are that the respondent took two policies with the appellant, the National Insurance Company, on 29 August 1990 for an amount of Rs. 4.9 lakhs and for Rs. 5.7 crores. The 1st policy covers risk over residential building, office, and canteen in the office premises, while the 2nd policy covers risk overbuilding, machines, goods, semi-finished goods, and other accessories in factory premises (both premises are in Calcutta). Initially, the policy was termed for one year and then it was renewed for the year 1992. Calcutta experienced heavy rain on 6 August 1992 which resulted in the accumulation of rainwater inside and around the factory and damage in goods, furniture, and raw materials according to the insured (the appellant). As the damaged materials were under the cover of the Insurance the appellant filed the claims on the 7th and 8th of August 1992, that is immediately after the incident claiming an amount of Rs. 52 lakhs.

For the purpose of inspection, the Insurance Company appointed N.T. Kothari & Co. as a surveyor on 24 September 1992. The report of the surveyor was submitted on 11th of November of the next year mentioning the amount to be claimed as Rs. 24 lakhs. As the Insurance Company felt no clarity in the report submitted, it appointed another company for the purpose of conducting the survey.

The second surveyor (Seascan Services (WB) Pvt. Ltd) submitted its report on 23 November 1994 concluding the loss suffered by the insured as Rs. 26 lakhs. After an addendum passed (list of goods and other properties that must be added in order to claim an amount and removing the other materials which should not be added for the claim) on 10 February 1995, the amount to be claimed was reduced to Rs. 24 lakhs. Even after giving reasonable time, the insurance company failed to hand over the money claimed. Thus notice was sent regarding the claim on 22 April 1996 which did not receive any reply but was rejected on 22 May 2001, (i.e) 5 years after filing the petition in the National Consumer Disputes Redressal Commission.

Respondent’s claim

The insured claimed an amount of 52.32 lakhs along with an amount of Rs. 1.81 lakhs as the expenses made for the purpose of reducing the loss, and an interest of 18% per annum with the amount from 6 December 1992.

Before the National Commission

Respondent’s contentions before the Commission

For the claim made by the insured, the appellant places condition number 6(ii) of the policy as its first contention, where it mentions the time period of a claim to be made as 12 months from the date of the incident. Along with such a clause the condition states that if the insured failed to receive the insurance amount, it must be filled in the court within the same 12 months from that incident. Thus the case entered the court only after 1996 whereas the incident took place in the year 1992.

Apart from the above, the consumer filed the case after a period of 4 years, but according to Section 24A of the Consumer Protection Act, a maximum period of 2 years is allowed, as there arises a delay. Thus, the appellant questioned the sustainability of the complaint in the National Commission.

The insurance company contended that the loss suffered by the insured was not because of the rain, but because of the dust and moisture accumulated over the stock which was left unattended since 3 May 1991 due to a lockout.

Petitioner’s contentions before the Commission

The learned counsel appearing on behalf of the petitioner contends that the delay in filing the petition was due to the steps taken by the insurance company. From the facts, it is clear that the insurance company appointed two companies one after the other for the purpose of conducting a survey, which delayed the insured to move to the court by 2 years. Then in the next consecutive year, the insurance company passed an addendum which is to be considered for the purpose of calculating the amount to be claimed. The beginning of 1996 passed by waiting for a reply from the notice made dated 22 April. Thus, the delay in filing the complaint is valid and thus the National Commission has the power to deal with such issues.

The respondent then raised the question of the purpose of the two survey reports for dealing with a single incident. In viewing the reports submitted, the 1st surveyor was not a bona fide surveyor and has no power to submit any report with regard to the damage or loss. Meanwhile, the National Commission also rejected the 1st survey report and considered the 2nd report. But there lies some possibility of changes in the report because the insurance company made a consultation with another officer regarding this situation, but the National Commission accepted the 2nd report along with the addendum.  


The National Commission considering all the contentions passed an order of payment to the National Insurance Company. It ordered to pay an amount of Rs. 21,05,803.89 along with an interest of 9% per annum from 11 May 1995. Since the insurance company took possible steps in calculating the amount to be claimed and appointed a surveyor and the 2nd report submitted by the surveyor was in 1994, and the passing of addendum was in 1995 the interest was calculated from 1995. Along with all these Rs. 20,000 was also awarded.

An appeal was referred before the Supreme Court. The petitioner contended by rejecting the amount payable. However, the Supreme Court hearing the contentions rejected the petition and upheld the judgment passed by the National Commission.


From the above judgment, it is clear that the judiciary gives the maximum protection to the customers under the Consumer Protection Act. But at the same time, it also punishes the customer if he claims any false news and contention against the maker. Though the law is for the people, of the people, by the people, it gives protection to the consumers equal to that of the makers, analyzing the truth as all customers are makers and all makers are customers. Thus, from the above-discussed judgment, the court made it clear that the insured made policy for the materials for any situation, it did not mention any particular disaster to occur for the damage of goods and other materials to claim the insurance amount.


  1. Can the insured claim amount for any damage that occurred to the goods or only for specific damages?
  2. What is the reason behind appointing a 2nd surveyor for the same issue?
  3. Does an addendum play an important role in finalizing the insurance amount to be claimed?
  4. Why was the interest calculated from 1995 and not from 1992?


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