In Brief
A chemicals company sought insurance recovery for loss claimed to have resulted from spontaneous combustion. The insurer denied the claim on the ground that spontaneous combustion alone, without resulting in fire, is not covered under the fire insurance policy. The National Consumer Disputes Redressal Commission rejected the claim, introducing grounds not raised in the insurer's original repudiation letter, including delay in intimation. The Supreme Court held that insurers are bound by grounds stated in their repudiation letter and cannot introduce new grounds at hearing. Allowing the appeal, the Court directed payment of the amount assessed by the surveyor with 8% interest from the claim date.
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