Delay Cannot Be Raised As A Ground For Repudiation For The First Time Before Consumer Forum

The Supreme Court of India in its decision in Saurashtra Chemicals Ltd. v. National Insurance Co. Ltd., [Civil Appeal No. 2059 of 2015] held that if the insurer has not taken delay in intimation on the part of the insured as a specific ground for refusal of claim in its letter of repudiation, then it cannot take the said ground in the proceedings before Consumer Forum.

FACTS:

The Appellant – Insured had availed a standard fire and special perils policy from the Respondent insurance company insuring the stock of coal and lignite stored in its factory compound against the risk of loss/ damage to the same. An additional premium was also paid by the Appellant in order to cover the risk of loss to the aforesaid stock on account of spontaneous combustion. The Appellant was declared a Sick unit under Sick Industrial Companies Act and the factory remained closed from 17th February 2006 to 9th August 2006.