In Brief
A factory owner's fire insurance claim involving machinery loss raised the question of whether compensation should be based on reinstatement value or depreciated value. The insurance company repudiated the claim despite a surveyor's assessment. The State Commission awarded Rs. 29.17 lakh (reinstatement value); the National Commission reduced it to Rs. 12.60 lakh (depreciated value). The Supreme Court held that under the insurance policy's Clause 9, when the company cannot reinstate, it must pay the reinstatement value. The Court restored the State Commission's order, entitling the claimant to Rs. 29.17 lakh with 7% interest.
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