NEW INDIA ASSURANCE CO. LTD. & ORS versus M/S. MUDIT ROADWAYS
[2023] 13 S.C.R. 1027, Supreme Court of India, 2023
Outcome: Dismissed (Dismissed)
Segment: Issues
[2023] 13 S.C.R. 1027 : 2023 INSC 1022
1027
CASE DETAILS
NEW INDIA ASSURANCE CO. LTD. & ORS. 
v.
M/S. MUDIT ROADWAYS 
(Civil Appeal No. 339 of 2023)
NOVEMBER 24, 2023
[HRISHIKESH ROY AND SANJAY KAROL, JJ.]
HEADNOTES
Issue for consideration: Whether the National Commission was 
justiﬁ ed in allowing the ﬁ re insurance claim of the insured against the 
insurance company.
Consumer Protection Act, 1986 – Fire insurance claim – Repudiation 
of – Fire broke out at a insured warehouse – Insured having paid for 
coverage against ﬁ re and safeguarding the custom bonded goods – Survey 
and investigations reports – Majority suggesting electric short circuit as 
the cause and two reports suggesting sparks from rooftop welding work – 
Repudiation of claim by the Insurance Company – Consumer complaint 
by the insured – Allowed by the National Commission holding that the 
insurance policy covered the complainant’s warehouse and the rooﬁ ng work 
did not signiﬁ cantly increase the risk and directed payment of speciﬁ ed 
amount with interest – Correctness:
Held: Insurance company’s obligation to the insured is of much 
greater import – Precise cause of a ﬁ re, whether attributed to a short-circuit 
or any alternative factor, remains immaterial, provided the claimant is not 
the instigator of the ﬁ re – Claim of the insured against the insurer is upheld 
– Insurer cannot introduce additional reasoning beyond those detailed in 
their letter, to justify the repudiation – Area where the ﬁ re
occurred was 
covered by the said insurance policy – Looking at the various documents, 
it is reasonable to conclude that the insured premises was the one that was 
identiﬁ ed and insured by the insurance company – Repair work undertaken 
on the rooftop to prevent water leakage to the warehouse would not fall in 
the category of an alteration which would increase the risk insured for the
1028 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
warehouse premises – Signiﬁ cant time gap that exists between the welding 
work and the ﬁ re has no logical explanation – Basis of the repudiation 
accordingly appears to be unreasonable and is not acceptable – Surveyor’s 
report, although comprehensive otherwise, is inconclusive on the aspect 
identifying the actual cause of ﬁ re – Given that the surveyor’s report only 
relies on the Forensic Examiner ﬁ ndings, it would be unsafe to rely on 
the said report – Furthermore, the claimant neither assumes the role of 
importer nor owner; instead, they function solely as a custodian entrusted 
with the goods on behalf of their clients – Customs duty component of the 
claim should, in the given event, be discharged directly to the Customs 
Department – Thus, it is a case of wrongful repudiation by the insurer – No 
legal inﬁ rmity in the impugned decision allowing the insured’s insurance 
claim. [Paras 33, 35, 37, 41, 47, 50, 55, 56, 58]
Insurance – Insurance contracts – Doctrine of uberrimae ﬁ dei: 
Held: Trust serves as the cornerstone, forming the essence of the 
insurer-insured relationship – Fundamental principle is that insurance is 
governed by the doctrine of uberrimae ﬁ dei-there must be complete good 
faith on the part of the insured – Heart and soul of an insurance contract 
lies in the protection it accords to those who wish to be insured by it – This 
understanding encapsulates the foundational belief that insurance
accords 
protection and indemniﬁ cation, preserving the sanctity of trust within its 
clauses – Eﬀ ectively, the insurer assumes a ﬁ duciary duty to act in good faith 
and honour their commitment – This responsibility becomes particularly 
pronounced when the insured, in their actions, have not been negligent – In 
light of the vital role that trust plays in insurance contracts, it is important 
to ensure that the insurer adequately fulﬁ ls the duty that has been cast on 
it, by virtue of such a covenant. [Para 57] 
Insurance Act, 1938 – s. 64 (UM) (4) – Value of a surveyor’s report:
Held: An approved surveyor’s assessment is necessary for a 
claim – s. 64(UM)(4) mandates that claims above Rs. 20,000 must be 
initially assessed by an approved surveyor – Insurer has the discretion 
to settle the claim for a diﬀ erent amount, than what is assessed by the 
surveyor – Surveyor’s report cannot be considered a sacred document 
and contrary evidence, including an investigation report, is subject to 
rebuttal. [Para 42, 43, 45]
1029
LIST OF CITATIONS AND OTHER REFERENCES
New India Assurance Co. Ltd. vs. Pradeep Kumar (2009) 7 SCC 787: 
[2009] 16 SCR 508; Galada Power & Telecommunication Ltd. vs. United 
India Insurance Co. Ltd. (2016) 15 SCC 161; Canara Bank vs. United 
India Insurance Company; (2020) 3 SCC 455: [2020] 7 SCR 498; Khatema 
Fibres Ltd. vs. New India Assurance Co. Ltd. & Anr 2021 SCC OnLine SC 
818; Saurashtra Chemicals Ltd. vs. National Insurance Co. Ltd (2019) 19 
SCC 70; JSK Industries Pvt. Ltd. vs. Oriental Insurance Co. Ltd. 2022 SCC 
OnLine 1451 – referred to. 
MacGillivray on Insurance Law – 12th Ed., John Birds, Sweet and 
Maxwell (2012) – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION : Civil Appeal No.339 of 2023.
From the Judgment and Order dated 10.08.2022 of the National 
Consumer Disputes Redressal Commission, New Delhi in CC No.765 of 
2020.
Appearances:
Aditya Kumar, C. George Thomas, Ms. Prachi Pandey, Advs. for the 
Appellants.
Parthiv K. Goswami, Mrinal Kumar Choudhary, Sr. Advs., Devesh 
Tripathi, Ms. Anasuya Choudhary, Faraz Anees, Mukeshwar Nath Dubey, 
Abhishek Yadav, Ms. Richa Pandey, Alok Tripathi, Ravi Kumar, Rajatdeep 
Sharma, Praveen Swarup, Advs. for the Respondent.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
HRISHIKESH ROY, J. 
1. Heard Mr. Aditya Kumar, learned counsel appearing for the appellants. 
Also heard Mr. Parthiv K. Goswami and Mr. Mrinal Kumar Choudhury, learned 
Senior Counsel for the
respondent. 
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS
1030 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
2. This appeal challenges the 10.8.2022 order of the National Consumer 
Disputes Redressal Commission (hereinafter referred to as, ‘the NCDRC’ 
for short), which partially allowed the consumer complaint directing the 
Insurance Company to pay Rs.6,57,55,155/- for a ﬁ re insurance claim with 
9% interest from claim denial date within 8 weeks, or face 12% interest 
beyond the stipulated 8 weeks.
INSURANCE POLICIES & CLAIM PROCESS 
3. The respondent purchased the following insurance policies: 
Sr. 
No. 
Description
Date Pr emium 
Paid 
Duration of 
Policy
Sum Insured
1
Standard Fire and Special 
Perils Policy
17080011170100000734
19.06.2017
19.06.2017 to
18.06.2018 
Rs. 6 Crores
2
Customs Duty Package Policy 
11140046172480000017
30.09.2017
30.09.2017 to 
29.09.2018
Rs. 20 Crores
3
Standard Fire and Special 
Perils Policy    
11140011170100001014
30.11.2017
30.11.2017 to 
29.11.2018
Rs. 150 Crores
4
Additional Endorsement 
to Customs Duty Package 
Policy
29.12.2020
 -
Rs. 75 Crores
4. These insurance policies covered premises of 106750 sq. ft. (covered 
area) and 15000 sq. ft. (open area) at Survey No. 09, Hissa No. 03, at Village 
– Veshvi, Taluka – Uran, District – Raigad, Maharashtra. The claimant 
leased the premises from M/s. Platinum Logistics for warehousing purpose. 
Claimant paid Rs.44,02,562/- to New India Assurance for safeguarding the 
custom bonded goods and for covering the risk against ﬁ re, etc.
5. During the
pendency of the insurance policies, on 14.03.2018, a ﬁ re 
broke out at the insured warehouse. The respondent then informed the Insurance 
Company and the Custom authorities about the same.  The Insurance Company 
appointed M/s. J.C. Bhansali and Co. as Surveyors to assess the loss. On 
03.10.2018, the insured raised a claim for a sum of Rs. 6,57,55,155/-. Of the 
total claim, Rs. 5,54,17,891/- was against Policy No. 17080011170100000734; 
Rs.18,73,984/- under Policy No.11140011170100001014 and Rs. 2,15,18,802/- 
under Policy No.11140046172480000017 respectively.
1031
REPORTS ON THE FIRE ON 14.03.2018
6. On the day of the ﬁ re incident, the matter was also reported to the 
police, resulting in the FIR No. 03/2018 on 15.03.2018. Police investigation 
prima facie concluded an electrical short circuit as the cause, which was 
relayed to the Insurance Surveyor.
7. Another report (dated 23.04.2018), addressed by the Inspection 
Division of Department of Industry Energy and Labour of the Maharashtra 
Government, recorded that the ﬁ re accident in a portion of the warehouse 
was on account of electrical sparks since the area had an electrical setup 
and stored combustible materials like boxes, papers and chemicals. 
8. The Jawaharlal Nehru Port Trust’s investigation, conducted by on-
site ﬁ reﬁ ghters revealed in their report (09.05.2018) that the probable cause 
was an electrical short circuit.
9. Two additional reports (07.08.2018 & 31.08.2018) prepared by 
independent surveyors appointed by the claimant’s clients were submitted. 
Both reports indicated that a short circuit was the likely cause of the ﬁ re. 
10. M/s. Screen Facts Services Pvt. Ltd., the Forensic Examiner 
hired by the Insurance Company, inspected the portion of the ﬁ re-aﬀ ected 
warehouse and in their report (10.12.2018) stated that combustible materials 
were stored where the ﬁ re occurred but ruled out short circuit as the cause, 
due to the absence of electrical wiring. The Forensic Examiner highlighted 
that welding work on the roof, carried out until 16:04 hrs. on
the incident day, 
was a possible cause. It recorded that negligence during welding work in the 
secure warehouse caused the ﬁ re due to sparks and inﬂ ammable materials.
11. The Investigator, M/s. J. Basheer & Associates, appointed by the 
appellants, concluded in their 11.04.2019 report that ﬁ re was due to an 
electrical short circuit, contradicting the Forensic Examiner’s ﬁ ndings. They 
also noted that the insurance policy did not cover the warehouse at Survey 
No. 9/3 because it was not aﬀ ected by the ﬁ re.
12. M/s. J.C. Bhansali & Co., the Insurance Company’s Surveyor, in 
their report (15.04.2019) concluded the following:-
“1. Cause of Fire is due to the negligence on the part of the management 
in not taking adequate precautions when the construction work was 
going on;
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1032 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
2. Almost 18000 to 20000 sq. ft. area of the roof of bonded Warehouse 
which is custom bonded Warehouse was uncovered, i.e., there were 
no roof sheets at the time of loss, due to which circumstances aﬀ ected 
the building insured or containing the insured property were changed, 
in such a way which increased the risk of loss or damage by insured 
perils and;
3.The Survey Numbers of the ﬁ re aﬀ ected Warehouse have not been 
declared/covered under the Policy.
4. Policy covers location at survey No. 9/3, but the oﬃ  ce of the insured 
and a Warehouse located at the Surveyor No. 9/3 were not ﬁ re aﬀ ected 
and they were safe;
5. Hence, claim under reference is out of the scope of relevant policy 
& liability under the claim does not arise.”
13. After receiving the Survey and Investigation Reports, the Insurance 
Company, with their 15.07.2019 communication, rejected the respondent’s 
claim. In their subsequent communication (14.12.2019), the following 
two reasons were stated: 1) The insured premises at Survey No. 9/3 was 
unaﬀ ected by the ﬁ re, and 2) The ﬁ re resulted from the insured’s negligence 
during roof construction in a secure customs-bonded warehouse with 
hazardous chemicals. Construction work in the warehouse increased the 
risk, causing insurance coverage to cease under Clause 3 of the policy’s 
terms and conditions. Following are the details of the repudiation letters 
issued by the Insurance Company:
Sr No
Date
Letter of Repudiation
1.
28.06.19
Insurance Company’s letter repudiating the claim with 
respect to policy no. 1114046172480000017 (Customs 
duty package policy) 
2.
15.07.19
Insurance Company’s letter repudiating the claim with 
respect insurance policy no. 17080011170100000734 
(Standard Fire and Special Perils Policy- Goods Held 
in Trust)
3.
14.12.19
Insurance Company’s letter repudiating the claim with 
respect insurance policy no. 17080011170100000734 
(Standard Fire and Special Perils Policy)
1033
CONSUMER COMPLAINT
14. The respondent, dissatisﬁ ed with the aforesaid repudiation of 
claim, ﬁ led Complaint No. 765 of 2020 under the Consumer Protection Act, 
1986, citing service deﬁ ciencies and unfair trade practices by New India 
Assurance Co. Ltd. In their response, the Insurance Company referred to the 
Investigation Report (11.04.2019) from M/s. J. Basheer & Associates and 
the Final Survey Report (15.04.2019) from M/s. J.C. Bhansali & Co. They 
contended that the ﬁ re occurred during roof welding work undertaken by 
the insured without adequate precautions. It was also stated that the insured 
warehouse at Survey No. 9/3 was not aﬀ ected by the ﬁ re. Furthermore, the 
roof work in the warehouse increased the risk, violating general condition 
3 of the Insurance Policy, justifying the repudiation.
15. In the impugned order, the NCDRC considered two vital issues 
to arrive at its decision: 
(i)  Whether the Complainant’s Warehouse located at Survey No. 
9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, District - Raigad was 
insured by the Opposite Party;
(ii)  What was the cause of ﬁ re incident that occurred on 14.03.2018? 
16. The NCDRC ruled in favour of the complainant concluding that 
the insurance policy covered the complainant’s warehouse. On the second 
issue, NCDRC noted the time lag between the welding work and the ﬁ re 
incident and observed that the Forensic report is inconclusive. The other 
reports suggesting an electrical short circuit as the cause of
the ﬁ re was 
found to be more acceptable.
17. Adverting to the rooﬁ ng work done by the insured, NCDRC held 
that it did not signiﬁ cantly increase the risk, and therefore Clause no. 3 
was inapplicable. Referring to the ratio in New India Assurance Co. Ltd. 
vs. Pradeep Kumar1; NCDRC highlighted that the approved Surveyor’s 
report, though important, is not absolute and not binding on the parties. The 
NCDRC accordingly ruled in favour of the insured ﬁ nding deﬁ ciency in 
service of the insurance company. Thus, direction was issued for payment 
of the speciﬁ ed sum, with interest. 
1 
(2009) 7 SCC 787.
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1034 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
ARGUMENTS
18. Mr. Aditya Kumar, the learned counsel for the appellants, 
contended that the cause of the ﬁ re was negligence on the part of the 
insured. Reports of the forensic investigator (M/s Screen Facts Services 
Pvt. Ltd.) dated 10.12.2018 (Annexure A-10) were relied upon, which 
found that electrical short-circuit was not the cause of the ﬁ re incident. 
Instead, the ﬁ re could have occurred due to sparks that may have fallen 
on ﬂ ammable chemicals stored in the adjoining area, during welding. 
Surveyor’s Report (M/s Bhansali & Co.) dated 15.04.2019 (Annexure 
A-12) was relied upon to further suggest that the ﬁ re occurred due to 
negligence on the part of the insured in not taking adequate precautions 
during the roof repair work. By undertaking such repair work without 
precautions, the insured property was altered in a way that increased the 
risk of loss or damage. Additionally, storing hazardous chemicals during 
construction or repair work was itself a negligent act and amounted to 
violation of policy conditions.
19. The learned counsel points out that the forensic inspector and the 
surveyors were speciﬁ cally tasked to investigate the ﬁ re incident. Since 
short-circuit as the cause of ﬁ re was ruled out, Mr. Kumar argues that the 
negligence theory on the part of the insured (in undertaking roof construction 
work in the vicinity of stored combustible materials), ought to be accepted. 
20. For the appellants,
Mr. Kumar also reads the Surveyor’s Report 
(M/s Basheer & Associates) dated 11.04.2019 (Annexure A-11) which 
concluded that the insurance policy did not cover the premises of the ﬁ re-
aﬀ ected warehouse. And as such, repudiation is justiﬁ ed since the insurance 
coverage was limited to the oﬃ  ce of the insured and the warehouse which 
suﬀ ered no burning incident.
21. Since Rs. 2,15,18,802.45/- was claimed towards custom duty 
liability, the appellants argue that compensating the insured warehouse is 
erroneous as custom duty liability rests only upon the importer under Sections 
12 and 46 of the Customs Act, 1962. The counsel relies on Section 23 of the 
Customs Act, 1962 to argue that granting of compensation for destroyed 
imported goods stored in the warehouse, is unjustiﬁ ed. Additionally, it 
is also contended that the Customs Department’s demand letter lacked 
a statutory basis. It is therefore submitted that the insured cannot seek
1035
indemniﬁ cation for the ﬁ re loss as any such compensation would amount 
to unjust enrichment.
22. The learned counsel submits that the doctrine of waiver as applied 
in Galada Power & Telecommunication Ltd. vs. United India Insurance 
Co. Ltd.2, had been overruled. Moreover, a legal submission can be urged 
at any stage of proceedings. Therefore, grounds of unjust enrichment and 
customs duty could still be argued before the court although they were not 
argued earlier.
23. Per contra, Mr. Parthiv K. Goswami, the learned senior counsel 
appearing for the claimant contends that the insurance company cannot be 
permitted to urge additional grounds beyond those mentioned in the letter 
of repudiation. The appellants must therefore limit their submissions to the 
grounds mentioned in the repudiation letter.
24. The learned counsel then submits that it is clear from the Leave 
& License Agreement dated 04.07.2015 that M/s Platinum Logistics had 
leased out land situated on Survey No.9/3 in Village – Veshvi, Taluka – 
Uran, Raigad to the claimant. Further, approval was sought & obtained 
from the Customs Department for a bonded warehouse on the same land. 
The insurance policy mentions the location of the insured premises as 
Mudit Roadways, Survey No.9/3 CPP Forbes CFS, Chirner Road, Village - 
Veshvi, Uran, MH1369, Maharashtra-400702. For justifying the claim, Mr. 
Goswami reads the two communications from the Tehsildar, Uran, Raigad 
dated 25.03.2018 (Annexure R-18) and
23.03.2018 (Annexure R-20) and 
also relies upon the telephone connection (Annexure R-16), electricity 
connection (Annexure R-17) and other communications from the Executive 
Magistrate (Annexure R-10) to point out that the ﬁ re incident occurred in 
the same address of the insured ware-house. Besides, the customers who 
appointed their own independent surveyors (M/s Kannan & M/s Proclaim) 
noted that the warehouse where the stock got burnt, was located at Survey 
No. 9/3 (Annexure R-8). Accordingly, it is argued that there was no basis for 
the insurance company to contend that the ﬁ re in the warehouse was outside 
the purview of the premises, covered by the insurance policy.
2 
(2016) 15 SCC 161.
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1036 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
25. Speciﬁ cally on the aspect of cause of ﬁ re, Mr. Goswami contends 
that the welding machine & cylinders were taken away from the ﬁ eld of 
view at 11.56.16 hours and the roof welding work did not continue in any 
case, beyond 16.04 hours on 14.03.2018. Therefore, if the sparks from the 
welding work were the cause of the ﬁ re, it would not go un-noticed for 26 
minutes since combustible chemicals, papers, etc. would have instaneously 
caught ﬁ re. Because of the conspicuous gap of around 26 minutes between 
the end of the welding work and the occurrence of ﬁ re, it would be illogical 
according to Mr. Goswami to attribute the welding work to be the cause 
for the ﬁ re. With this projection, the claimants contend that there was no 
negligence on the part of the insured and the cause of ﬁ re was rightly 
attributed to an electrical short-circuit.
26. It was further argued that multiple reports from diﬀ erent govt. 
departments as well as independent surveyors supported the conclusion that 
the ﬁ re had occurred on account of a short-circuit. In addition, it was also 
pointed out that no welding took place during the GI sheet rooﬁ ng work as 
those would melt during welding. Instead, nuts & bolts were used in the 
GI rooﬁ ng work.
27. On the aspect of the violation of insurance policy conditions, it 
was argued that roof repair work was being carried out to address the water 
leakage issue from the warehouse roof. Thus, there
was no alteration of 
the insured premises which would have increased the ﬁ re risk. The insured 
therefore never violated the general condition.
28. On the issue of remission of customs duty, it is argued that the 
beneﬁ t of Sections 22 & 23 of the Customs Act 1962 was only available to 
importers and not those who hold such goods in trust for their clients. In 
addition, undertaking obtained from the claimant stating that they would 
not claim a remission or abatement on the customs duty payable (Annexure 
R-4) was also placed on record. It is accordingly submitted that the remission 
and abatement of duty available does not beneﬁ t the claimants and the said 
amount (Rs. 2,13,00,061/-) may directly be paid to the Customs Department.
29. The learned counsel for the claimants relied on Canara Bank vs. 
United India Insurance Company3 to contend that the insurance company 
3 
(2020) 3 SCC 455.
1037
cannot escape its liability if there is nothing to prove that the ﬁ re was caused 
by the insured itself, irrespective of what the cause of ﬁ re was. Reliance 
was also placed on Khatema Fibres Ltd. vs. New India Assurance Co. Ltd. 
& Anr.4 to argue that the surveyor’s report was not sacrosanct and therefore, 
could be departed from, if needed.
DISCUSSION AND CONCLUSION 
30. We have reviewed both parties’ arguments and carefully examined 
the multiple reports from various agencies, civic authorities, the insurance 
company, and surveyors.
CONTENTIONS BEYOND THE LETTER OF REPUDIATION
31. The relevant portion of the letter of repudiation is reproduced 
below:
“... ... ... ... the insured premises not aﬀ ected due to alleged ﬁ re. The 
above mention premises where the loss occurred due to alleged ﬁ re is 
not insured under the Policy. Thus the alleged loss dogs (sic) not fall 
within the purview of the policy... ... ... ...
The root cause of the ﬁ re incident was due to the negligence on the 
part of the Management in not taking adequate precautions when the 
construction work was going on that too in a secured customs bonded 
warehouse where many hazardous chemicals were stored: The alleged 
cause of ﬁ re is hot (sic) covered under the policy... ... ... ...”
The insurance company in their letter mentioned two speciﬁ c grounds 
to repudiate the claim: (i) that the location of ﬁ re was part of the premises 
not covered under the insurance policy, and (ii) that there was
negligence on 
the part of the insured in carrying out repairs at the roof of the warehouse 
which caused the ﬁ re.
32. Notably, in earlier cases like Galada Power and Telecommunication 
Ltd. vs. United India Insurance Co. Ltd. & Anr.5 and Saurashtra Chemicals 
Ltd. vs. National Insurance Co. Ltd.6, it was declared that new grounds 
4 
2021 SCC OnLine SC 818.
5 
(2016) 14 SCC 161.
6 
(2019) 19 SCC 70
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1038 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
for repudiation cannot be introduced during the hearing if they were not 
included in the repudiation letter. This legal principle was reiterated in JSK 
Industries Pvt. Ltd. vs. Oriental Insurance Co. Ltd.7:
“10. Mr. Gopal Shankarnarayan, learned senior counsel for the 
appellants has argued both on substantive and procedural points to 
assail the aforesaid orders. His ﬁ rst submission is that the insurance 
company cannot resist a claim petition on grounds beyond those 
cited by them while repudiating a claim. In support of this argument, 
a decision of this Court in the case Saurashtra Chemicals Ltd. v. 
National Insurance Co. Ltd. [(2019) 19 SCC 70] has been cited. In 
this judgment, it has been held: —
“23. Hence, we are of the considered opinion that the law, as laid down 
in Galada [Galada Power & Telecommunication Ltd. v. United 
India Insurance Co. Ltd., (2016) 14 SCC 161: (2017) 2 SCC 
(Civ) 765] on Issue (2), still holds the ﬁ eld. It is a settled 
position that an insurance company cannot travel beyond the 
grounds mentioned in the letter of repudiation. If the insurer 
has not taken delay in intimation as a speciﬁ c ground in letter 
of repudiation, they cannot do so at the stage of hearing of the 
consumer complaint before NCDRC.”
33. Canvassing supplementary arguments during the hearing, 
(beyond those in the insurer’s repudiation letter), is explicitly prohibited. 
Consequently, it is held that the insurer cannot
introduce additional reasoning 
beyond those detailed in their letter, to justify the repudiation.
LOCATION OF FIRE IF COVERED UNDER THE POLICY
34. Let us now analyse whether the burnt site was covered under 
the insurance policy. The Leave & License Agreement dated 04.07.2015 
identiﬁ es all three warehouses functioning within the compound operated 
by M/s Platinum Logistics, with the same Survey No. i.e., 9/3. In fact, the 
policy documents as well as the License issued under Section 57 of Customs 
Act 1962 refers to the warehouse situated at Survey No. 9/3, Village – Veshvi, 
Gavan Phata, Chirner Road, Opp. Forces CFS, Taluka – Uran, Raigad. The 
policy document speciﬁ ed the address of the insured as ‘Mudit Roadways, 
7 
2022 SCC OnLine 1451
1039
Survey No. 9/3, Opp. Forbes CSF, Chirner Road, Village - Veshvi, Uran, 
MH1369, MH-4000702.’ In addition, the impugned order rightly points out 
that the warehouse was physically veriﬁ ed by the Customs Authorities after 
which telephone and electricity connections were provided to the insured at 
the same address. All communication addressed to the claimants, including 
letters of repudiation from the insurance company, admit to having insured 
the premises located at the given address.
35. Therefore, looking at the policy documents, the Leave & License 
Agreement and various communications received from the customs, police, 
ﬁ re & electricity departments, it is reasonable to conclude that the insured 
premises was the one that was identiﬁ ed and insured at Survey No. 9/3, by 
the insurance company. Needless to say, there is nothing to conclude that 
the area where the ﬁ re occurred on 14.03.2018 was not covered by the said 
insurance policy.
ALTERATION TO INSURED PREMISES & RISK INCREASE
36. To consider this aspect, Clause 3 in the insurance policy is relevant 
which reads as below:
“3. Under any of the following circumstances the insurance ceases 
to attach as regards the property aﬀ ected unless the insured, before 
the occurrence of any loss or damage, obtains the sanction of the 
Company signiﬁ ed by endorsement upon the policy by or on behalf 
of the Company:-
(a) If the trade or manufacture carried on be altered, or if the 
nature of the occupation of or other
circumstances aﬀ ecting 
the building insured or containing the insured property be 
changed in such a way as to increase the risk of loss or 
damage by Insured Perils.
(b) If the building insured or containing the insured property 
becomes unoccupied and so remains for a period of more 
than 30 days.
(c) 
If the interest in the property passes from the insured 
otherwise than by will or operation of law.” 
37. Clause 3(a) indicates that the insurance policy would cease to 
be applicable or cover the insured premises in certain cases where there 
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1040 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
is an increased risk of loss or damage to the insured premises or goods 
within it. In this case, the insured had undertaken repairs on the rooftop 
to prevent water leakage to the warehouse. Such essential repair work on 
the rooftop by itself, cannot be reasonably construed to be an alteration 
that would increase the risk of loss or damage, as has been urged by the 
insurance company. In our assessment, the said repair work would not fall 
in the category of an alteration which would increase the risk insured for 
the warehouse premises. Therefore, no inﬁ rmity is seen with the view taken 
by the NCDRC on the same.
CAUSE OF THE FIRE & NEGLIGENCE – MULTIPLE REPORTS
38. While dealing with the 14.03.2018 ﬁ re incident, several agencies, 
authorities and organisations have reported on the warehouse ﬁ re accident. 
Those are summarized as follows:
S.
NO.
REPORT 
DATE
FINDINGS
APPOINTED BY
1. 
Electrical 
Inspector 
23.04.2018
Sparks created from 
the Short Circuit of 
the Electrical setup 
at the corner of the 
Go-down.
Under Section 161(2)
(a), The Electricity Act, 
2003 by the Appropriate 
Government.
2. 
Asst. 
Manager, 
Jawaharlal 
Nehru Port 
Trust’s 
09.05.2018
Probable cause of 
incident reported 
as Electrical Short 
Circuit.
Claimant 
3. 
Independent 
Sy. – M/s H 
Kannan
07.08.2018
S p a r k s  f r o m 
Electrical Short 
Circuit ignited 
i n f l a m m a b l e 
chemicals stored.
Bajaj Allianz Gen. 
Insurance Co. – Insurers
to M/s. Global Exim 
(M/s Mudit Roadway’s 
Clients)
4. 
Independent 
Sy. – M/s 
Proclaim 
31.08.2018
Probable Cause of 
incident determined 
as Short Circuit 
based on the police 
report & ﬁ re brigade.
TATA AIG Gen. 
Insurance Co. – Insurers 
to Expanded Polymer 
System (M/s Mudit 
Roadway’s Clients)

1041
5. 
Police 
Investigation
(Not 
annexed)
03.11.2018
Electrical short 
circuit could be the 
cause of ﬁ re
6. 
Order of the 
Executive 
Magistrate 
03.11.2018
IO concluded that 
the accidental fire 
was caused pursuant 
to Short Circuit
Section 21 CrPC, Rule 
105 of Bombay Police 
Manual, 1959.
7. 
M/s. J 
Basher & 
Associates 
11.04.2019
Relied on Police 
Report (3.11.18) to 
conclude cause of 
ﬁ re as Short Circuit. 
Observed that fire 
aﬀ ected warehouse 
survey nos. are not 
the risk location as 
per insurance policy. 
Insurance Co.
8. 
M/s Screen 
Facts 
Services Pvt. 
Ltd.
Forensic 
Investigation 
Report
10.12.2018
Sparks from the 
ongoing welding 
work ignited the 
ﬂ ammable chemicals 
b/w A & D. Cause 
not electrical in 
nature as there was 
no electrical wiring 
equipment near the 
area of incident. 
Insurance Co.
9. 
M/s. J.C. 
Bhansali & 
Co
Investigation 
Report 
15.04.2019
Negligence by 
management in 
not taking adequate 
precautions while 
construction work was 
underway leading to 
sparks falling during 
wielding. (Based 
on M/s Screen & J 
Basheer). 
Insurance Co.
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1042 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
38.1 The above tabulated summary of reports reveals multiple and 
conﬂ icting ﬁ ndings. Seven of the reports suggest short-circuit as the cause 
for ﬁ re. The 23.04.2018 report of the Electrical Inspector highlighted that 
a short-circuit around 4:30 pm on 14.03.2018, led to sparks in M/s. Mudit 
Roadways’ warehouse. Consequently, the falling electrical sparks ignited 
the boxes, papers, and chemicals. The Assistant Manager of the Jawaharlal 
Nehru Trust also aﬃ  rmed that the ﬁ re was triggered by an electrical short-
circuit, as observed by the ﬁ re-ﬁ ghting teams at site.
38.2 Likewise, M/s. J. Basheer & Associates’ 11.04.2019 report suggest 
that the ﬁ re’s exact cause is inconclusive but a short-circuit could be the 
spark for the incident. The Special Executive Magistrate-cum-Assistant 
Police Commissioner in the Navi Mumbai Port Division accepted the police 
investigation report and concluded (on 03.11.2018) that the accidental ﬁ re 
resulted from a short-circuit.
38.3 The forensic investigation report dated 10.12.2018 analysed 
various aspects, including the chemical analysis of debris and CCTV footage 
from the 17 cameras installed in the insured premises. It determined that a 
short-circuit was not the cause but rather sparks from rooftop welding work 
may have triggered the ﬁ re. The surveyor’s report from M/s. Bhansali & 
Co. dated 15.04.2019 also aligned with such conclusion. Investigators found 
that substantial
welding work was conducted that day and pointed towards 
sparks igniting the stored ﬂ ammable chemicals in the warehouse. According 
to them, the insured’s negligence during construction work in a warehouse 
with numerous hazardous chemicals, was the root cause for the ﬁ re.
38.4 Although the footage from Camera No. 3 and video from Camera 
No.9 were not available, the forensic team analysed the available CCTV 
footage. They observed that welding equipment with cylinders were being 
brought to the rooftop at 11:51:17 hrs and the welding work being carried 
out from 11:51:17 hrs to 11:56:16 hrs, after which the equipments were 
removed from the vicinity. At 12:10:17 hrs., a worker was observed removing 
the welding red boxes. This is noteworthy as it indicates that the welding 
equipments were taken away by the workers around four hours before the 
ﬁ re occurred. Subsequently, the workers were seen transporting GI rooﬁ ng 
sheets as head loads to the rooﬁ ng work site, which continued until 16:04 
hrs. The CCTV footage showed workers also using a crane to move GI
1043
rooﬁ ng sheets and MS Rooﬁ ng Trusses to the roof repair area post-welding. 
A substantial time gap of 4 hours, 19 minutes, and 43 seconds separated the 
end of welding work from the ﬁ re itself. Even if rooftop repair continued until 
16:04 hrs., a signiﬁ cant 26-minute time lag existed before the ﬁ re started.
38.5 The Forensic Investigator’s conclusion that sparks from rooftop 
welding caused the ﬁ re appear to be illogical, as they overlooked other 
potential causes like short-circuit. Negligence despite workers not being 
involved in welding-related tasks near the time of the ﬁ re, was wrongly 
attributed to the insured. Moreover, evidence was not available that sparks 
fell on ﬂ ammable chemicals attributable to activities, undertaken by workers.
39. Of the nine reports, seven suggest short-circuit as the likely ﬁ re 
cause, while two infer negligence on the insured’s part, for in-adequate 
precautions, during warehouse construction.
40. Logically if it were the welding sparks which caused the ﬁ re, it 
should have occurred shortly after 11:54:27 during the welding works or 
around 16:04 hours during rooftop repair. The 4 hours 19 minutes 43 seconds 
time gap is startlingly signiﬁ cant. The 26-minute time lag after rooﬁ ng 
work ended and the ﬁ re does not have any rational explanation. There is no 
evidence of welding during the rooﬁ ng work at 16:04 or closer to the ﬁ re 
time, which explains the inconclusive forensic report stating sparks “could 
have” caused
the ﬁ re at 16:30.
41. The repudiation as noted is based on two reports (i) the forensic 
report of Screen Facts Service Pvt. Ltd. and of (ii) M/s Bhansali & Co. The 
ﬁ rst one notably was inconclusive. The other reports suggest short-circuit 
as the likely cause, not negligence. The signiﬁ cant time gap that exists 
between the welding work and the ﬁ re at 16:30 has no logical explanation. 
The basis of the repudiation accordingly appears to be un-reasonable and 
is not acceptable.
VALUE OF A SURVEYOR’S REPORT
42. According to the Insurance Act 1938, an approved surveyor’s 
assessment is necessary for a claim. The claimant however contends that the 
surveyor’s report is not deﬁ nitive. The key question is the extent to which 
the report is binding and under what conditions can it be overridden in. To 
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1044 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
address this, Section 64(UM)(4) of the Insurance Act, 1938 can be usefully 
read which concerns surveyors and loss assessors:
64-UM. (4) No claim in respect of a loss which has occurred in India 
and requiring to be paid or settled in India equal to or exceeding 
twenty thousand rupees in value on any policy of insurance, arising 
or intimated to an insurer at any time after the expiry of a period of 
one year from the commencement of the Insurance (Amendment) Act, 
1968, shall, unless otherwise directed by the Authority, be admitted for 
payment or settled by the insurer unless he has obtained a report, on 
the loss that has occurred, from a person who holds a licence issued 
under this section to act as a surveyor or loss assessor (hereafter 
referred to as “approved surveyor or loss assessor”):
Provided that nothing in this sub-section shall be deemed to take away 
or abridge the right of the insurer to pay or settle any claim at any 
amount diﬀ erent from the amount assessed by the approved surveyor 
or loss assessors”.”
43. The above provision mandates that claims above Rs. 20,000 must 
be initially assessed by an approved surveyor. It is noteworthy that the 
insurer has the discretion to settle the claim for a diﬀ erent amount, than 
what is assessed by the surveyor.
44. In New India Assurance Co. Ltd. v. Pradeep Kumar (supra), the 
court addressed whether one had to accept payment based on the surveyors’ 
assessment or
could provide independent evidence to support higher costs 
for replacement and repairs. The court’s pertinent conclusion is as follows:
“22. In other words 1although assessment of loss by approved surveyor 
is a prerequisite for payment or settlement of claim of twenty thousand 
rupees or more by insurer, yet surveyor’s report is not the last and 
ﬁ nal word. It is not that sacrosanct that it cannot be departed from; 
it is not conclusive. The approved surveyor’s report may be basis or 
foundation for settlement of a claim by the insurer in respect of loss 
suﬀ ered by insured but such report is neither binding upon the insurer 
nor insured.”
45. Guided by the above ratio, the situation in the present case is 
found to be similar. The surveyor’s report cannot be considered a sacred
1045
document and contrary evidence, including an investigation report, is 
subject to rebuttal. The key question is whether the investigation report is 
indispensable, or if the survey report alone is suﬃ  cient, to determine the 
cause of the ﬁ re.
46. The analysis of the forensic examiner is reproduced below for 
ready reference: -
“19.01. Insured has claimed for loss due to ﬁ re. Cause of ﬁ re as 
claimed-ﬁ re due to short circuit.
19.02. Cause of ﬁ re was investigated by M/s Screenfacts Services Pvt 
Ltd.
19.03. M/s Screenfacts Services Pvt. Ltd. have concluded cause of 
ﬁ re as under:-
19.04. Taking into consideration the construction of rooﬁ ng in the 
gap between E & F segments of the warehouse on that day. which 
involved considerable welding working it is opined that during welding 
at the rooﬂ evel sparks could have fallen on the adjoining ﬂ ammable 
chemicals stored between A & D indicating the ﬁ re. 
19.05. The root cause of the ﬁ re incident was due to the negligence on 
the part of the management in not taking adequate precautions when 
the construction work was going on, that too in a secured customs 
bonded warehouse where many hazardous chemicals were stared.” 
47. The surveyor’s abovementioned report, although comprehensive 
otherwise, is inconclusive on the aspect identifying the actual cause of ﬁ re. 
Given that the surveyor’s report only relies on the Forensic Examiner, i.e., 
M/s Screen Facts Services Pvt. Ltd.’s ﬁ ndings, it would be unsafe in this
Court’s opinion to rely on the said report.
EXTENT OF LIABILITY WHEN CAUSE OF FIRE 
INDETERMINABLE
48. Multiple survey reports suggesting diﬀ erent causes of ﬁ re present 
a perplexing conundrum on the insurance claim. The reports provided by 
the insurer, though submitted with intent, were found to be inconclusive 
and also contradictory. The reports furnished by the claimant, which include 
assessments by government departments and two independent surveyors, 
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1046 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
have however consistently identiﬁ ed the cause of the ﬁ re as a short-circuit. 
While it is diﬃ  cult to go by the reports relied upon by the insurance company, 
the reports furnished by the claimants being consistent and logical are more 
acceptable in ascertaining the true cause of the ﬁ re.
49. On the above aspect, the NCDRC has rightly placed reliance on 
Canara Bank v. United India Insurance Co. Ltd.8, wherein the Court decided 
to not place reliance on the surveyor’s report conducted by M/s Truth Labs, 
for lack of suﬃ  cient analysis & held that:
“In any event, neither in the report of M/s Truth Labs nor in the other 
reports by the Insurance Company is there anything to show that 
the insured had set the cold store on ﬁ re. Whether the ﬁ re took place 
by a short circuit or any other reason, as long as insured is not the 
person who caused the ﬁ re, the Insurance Company cannot escape its 
liability in terms of the insurance policy. We reject the contention of 
the Insurance Company that the ﬁ re was ignited by the use of kerosene 
and hence it is not liable.”
50. Therefore, it was unequivocally declared that the precise cause of 
a ﬁ re, whether attributed to a short-circuit or any alternative factor, remains 
immaterial, provided the claimant is not the instigator of the ﬁ re. This 
case underscored the fundamental principle that an insurance company’s 
obligation to the insured is of much greater import. The NCDRC’s
judicious 
application of this binding precedent appears to be well-merited.
APPLICABILITY OF CUSTOMS DUTY & UNJUST 
ENRICHMENT
51. In order to better appre ciate and understand the argument pertaining 
to unjust enrichment, the claim statement (11.02.2019) needs to be perused. 
The claimant as can be noticed, deducted Rs. 2,39,00,664.20 for covered 
losses and Rs. 19,75,388 for burnt cargo salvage. Notably, the ﬁ nal custom 
duty amount under the policy was determined as Rs. 2,13,00,061.01. 
Customs authorities communicated their intent to recover this precise sum, 
Rs. 2,13,00,061, from the insured through the letters dated 06.02.2019 and 
26.10.2020. In response to these communications, the insured submitted 
an undertaking on 11.08.2015 (Annexure R-4), explicitly stating that they 
8 
(2020) 3 SCC 455.
1047
would not seek any remissions related to customs duty under Sections 22 
and 23 of the Customs Act 1962. This action rules out unjust enrichment 
for the claimants on account of the customs duty.
52. Additionally, the Public Warehouse Licensing Regulations, 2016 
mandate that public warehouse licensees must agree to pay all duties, 
interest, ﬁ nes, and penalties related to stored goods. It was for this reason that 
the customs duty package policy was also obtained by the insured from the 
insurance company, so as to indemnify themselves for the goods destroyed 
or damaged in the warehouse. Needless to say, the said Regulations make 
the insured duty-bound to pay all such necessary duties, ﬁ nes or penalties. 
It is in that context that the insured had speciﬁ cally stated that the insurance 
company may directly remit the said component of duty to the authorities, 
instead of remitting it to the insured. This would circumvent any unjust 
enrichment, towards the insured.
53. The key question here is whether the insurance claim should 
include the customs duty amount of Rs. 2,13,00,061.01/- as claimed by the 
respondent. The insurance company argued that customs duty should not 
be included because the Customs Act, 1962 speciﬁ es that only the importer 
of goods is liable to pay customs duty when they ﬁ le a bill of entry.
54. The insurer anchored their stand on Section 15(1)(b) of the Customs 
Act stating that duty rates for warehoused goods are determined when a bill of
entry for home consumption is ﬁ led, and duty assessment (Section 17) only 
occurs when a bill of entry (Section 46) is presented. In this case, no bills 
of entry were ﬁ led, and no assessed goods were lost in the ﬁ re. According 
to the insurer, since the taxable event never happened, there is no customs 
duty liability. The counsel also cited Section 23 of the Customs Act, which 
required the Assistant Commissioner of Customs to remit duty for lost or 
destroyed goods, before clearance. 
55. However, the counsel for the claimant rightly contended that the 
privileges enshrined in Sections 22 and 23 of the Customs Act, pertaining to 
abetment and remission, extend exclusively to those classiﬁ ed as ‘importers’ 
of insured goods. The crux of the argument revolves around the claimant’s 
distinct position, as the claimant neither assumes the role of importer nor 
owner; instead, they function solely as a custodian entrusted with the goods 
on behalf of their clients. 
NEW INDIA ASSURANCE CO. LTD. & ORS. v. M/S. MUDIT 
ROADWAYS [HRISHIKESH ROY, J.]
1048 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
56. The upshot of the above discussion is that the reports suggesting 
electrical short circuit as the trigger for the warehouse ﬁ re, is found to ﬁ t in 
with the attendant circumstances. As a corollary, the ﬁ re at the warehouse 
cannot be attributable to any negligent act of the insured. Moreover, the ﬁ re 
is found to have occurred within the insured warehouse and the appellant’s 
plea to the contrary, is not believable. Therefore, it is a case of wrongful 
repudiation by the appellants. No legal inﬁ rmity is thus seen with the 
impugned decision favouring the respondent’s insurance claim.
57. In the realm of risk and uncertainty, individuals and organisations 
seek solace in the bastion of insurance – a covenant forged on the bedrock 
of trust. Trust serves as the cornerstone, forming the essence of the insurer-
insured relationship. The fundamental principle is that insurance is governed 
by the doctrine of uberrimae ﬁ dei – there must be complete good faith 
on the part of the insured.9 The heart & soul of an insurance contract lies 
in the protection it accords to those who wish to be insured by it. This 
understanding encapsulates the foundational belief that insurance accords 
protection & indemniﬁ cation, preserving the sanctity of trust within its 
clauses. Eﬀ ectively, the insurer assumes a ﬁ duciary duty to act in good faith 
and honour their commitment. This responsibility becomes particularly 
pronounced when the
insured, in their actions, have not been negligent. In 
light of the vital role that trust plays in insurance contracts, it is important 
to ensure that the insurer adequately fulﬁ ls the duty that has been cast on 
it, by virtue of such a covenant.
58. Accordingly, the appeal of the Insurance Company deserves to be 
dismissed. But even while dismissing the appeal, to avoid any confusion, 
the customs duty component of the claim should, in the given event, be 
discharged directly to the Customs Department. All other legal consequences 
will follow on upholding the claim of the insured against the appellants. It 
is ordered accordingly. 
59. With the above, the appeal stands dismissed favouring the insured. 
The parties to bear their own cost.
Headnotes prepared by:  
Appeal dismissed.
Nidhi Jain
9 
MacGillivray on Insurance Law – 12th Ed., John Birds, Sweet and Maxwell (2012).