Insurance firm expected to act in fair manner, not just care for own profits: SC
PTI, Aug 9, 2023, 8:55 PM IST
New Delhi: An insurance company is expected to act in a bonafide and fair manner with its client and not just care for and cater to its own profits, the Supreme Court has said.
A bench of justices A S Bopanna and Sanjay Kumar, in a verdict on a plea by an insuree company, said it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties.
The top court said it is the duty of the insured and the insurance company to disclose all material facts within their knowledge.
”Having undertaken to indemnify an insured against possible loss in specified situations, an insurance company is expected to make good on its promise in a bonafide and fair manner and not just care for and cater to its own profits,” the bench said.
The observations came while deciding a plea by Isnar Aqua Farms against an order of the National Consumer Disputes Redressal Commission (NCDRC) which directed the insurance firm United India Insurance Co. Ltd to pay Rs 30.69 lakh to the firm for loss in prawn cultivation.
The apex court directed that a sum of Rs 45.18 lakh shall be remitted by the insurance company to the firm, with a simple interest of 10 percent from the date of the complaint till the date of realisation, within six weeks.
The firm had undertaken prawn cultivation in Visakhapatnam District in an area of 100 acres after getting it insured for Rs 1.20 crore from the insurance company.
Due to a major outbreak of a bacterial disease called ‘White Spot Disease’ along the east coast of Andhra Pradesh, there was mass mortality of prawns.
When the firm claimed insurance, the insurer company repudiated the appellant’s claim in its entirety on the ground that there was a breach by the complainant of the policy conditions as records were not maintained properly and accurately.
The top court said the insurance company baldly brushed aside the death certificate furnished by the officials of the State Fisheries Department at Visakhapatnam.
”Merely because the contents thereof were not to its liking, the insurance company could not have ignored the same and swept it under the carpet.
”More so, as such certification was being made by impartial and independent bodies of significant stature and that, perhaps, was precisely the reason why the insurance company had attached such importance to it in its norms.
”In any event, it is not open to an insurance company to ignore or fail to act upon a certificate or document that it had itself called for from independent and impartial authorities, subject to just exceptions, merely because it is averse to it or to its detriment,” the bench said in its verdict.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Balasore tragedy result of composite negligence of railway officials: Orissa High Court
Three convicted for 2016 Kollam collectorate blast case
Expect Canadian government to ensure justice, uphold rule of law: PM Modi
Group clash in Indore after argument over bursting firecrackers: NSA slapped against 2 accused
Police rescue 70 cattle after gunfight with cow smugglers in Rajasthan’s Bharatpur
MUST WATCH
Latest Additions
Balasore tragedy result of composite negligence of railway officials: Orissa High Court
Actress Kasthuri stokes controversy by her remarks on Telugu-speaking people in TN
Three convicted for 2016 Kollam collectorate blast case
Expect Canadian government to ensure justice, uphold rule of law: PM Modi
Group clash in Indore after argument over bursting firecrackers: NSA slapped against 2 accused
Thanks for visiting Udayavani
You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.