A bench of Justices Dinesh Maheshwari and Anirudha Bose hearing an appeal in a claim petition held that "The insured preferred an appeal which was heard and decided by a Coordinate Bench. Before the Bench, the main point on which the case turned was that the insurance company was taking a defense which did not form the basis of repudiation of the claim. It is in that context this Court held this was impermissible."

Following the judgment and ratio of the decision of the Coordinate Bench of the Supreme Court in the case of  Saurashtra  Chemicals  Ltd.  v.  National   Insurance  Co.  Ltd. [(2019) 19 SCC 70], held that the National Commission ought not to have gone beyond the grounds of repudiation and into the nature of coverage,   which according to the   National   Commission had effectively changed from “anywhere in India to anywhere in India” to a sales turnover policy, limiting the policy coverage of the   subject­goods   from the points of departure at the two locations at Silvassa.

The Bench noted the facts and came to the conclusion that the Insurance company had taken a defence which was not the ground while repudiating the claim of the petitioner. The bench observed that "National   Commission mainly rejected the appeal of the appellant on the ground that they had converted   “from anywhere in India to anywhere in India” policy into the sales turnover policy covering transportation of goods only from two locations specified in the endorsement made on 25th November 2009.   The   repudiation   of   the   appellants’   claim   was   on   the ground   of   exhaustion   of   insurance   coverage   and   the   State Commission   also   determined   the   issue   primarily   on   that ground."

The Court then noted the fact that "the observation of the National Commission was that if exhaustion of the coverage limit was the sole reason for repudiation of the claim, the matter could have been remanded to the State Commission for the decision of the complaint on merits. In our opinion, that was the course which ought to have been directed by the National Commission because the only ground on which repudiation of the claim was made was lack of "financial coverage."

Case Details:-

CIVIL APPEAL NO.  7630  OF 2022
JSK INDUSTRIES PVT. LTD.          …APPELLANT(S)
VERSUS 
ORIENTAL INSURANCE COMPANY  LIMITED   ...RESPONDENT(S)

Read the complete judgment on the following link:-

https://main.sci.gov.in/supremecourt/2018/25284/25284_2018_11_1501_39165_Judgement_18-Oct-2022.pdf