Case Title: United India Insurance Co. Ltd. Vs. M/s Hyundai Engineering & Construction Co. Ltd. & Ors.
Case No.: CIVIL APPEAL NO. 1496 OF 2023
Order on: May 16, 2024
Quorum: J. PAMIDIGHANTAM SRI NARASIMHA, J. ARAVIND KUMAR
Facts:
In this case, United India Insurance Co. Ltd. is appealing against a decision made by the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC directed United India Insurance to pay an insurance claim of Rs. 39,09,92,828/- to M/s Hyundai Engineering & Construction Co. Ltd. and others. The dispute arises from a construction project awarded by the National Highway Authority of India (NHAI) to M/s Hyundai Engineering & Construction Co. Ltd. and another company. United India Insurance had issued a Contractor’s All Risk Insurance Policy for the project. However, during the construction, a part of the bridge collapsed, resulting in fatalities. An investigation found that the collapse was due to defects in design, construction, and supervision. The NCDRC ruled in favor of M/s Hyundai Engineering & Construction Co. Ltd. and others, ordering United India Insurance to pay the insurance claim. United India Insurance is now challenging this decision in the Supreme Court of India.
Issues framed by the Court:
- Whether United India Insurance Co. Ltd. is liable to pay the insurance claim of Rs. 39,09,92,828/- as directed by the National Consumer Disputes Redressal Commission (NCDRC)?
- Whether the collapse of the bridge, resulting in fatalities, falls within the coverage of the Contractor’s All Risk Insurance Policy issued by United India Insurance Co. Ltd.?
- Whether the defects in design, construction, and supervision, leading to the collapse of the bridge and loss of lives, are covered under the exclusions mentioned in the insurance policy?
Legal Provisions:
Section 304 IPC: Punishment for culpable homicide not amounting to murder.
Section 308 IPC: Attempt to commit Culpable Homicide.
Contentions of the Appellant:
In this case, United India Insurance Co. Ltd., herein, the appellant puts forward several contentions. Firstly, they state that they are not liable to pay the insurance claim of Rs. 39,09,92,828/- as directed by the NCDRC. Further, they assert that the collapse of the bridge, which resulted in fatalities, does not fall within the coverage of the Contractor’s All Risk Insurance Policy issued by them. Moreover, United India Insurance contends that the defects in the design, construction, and supervision, which led to the bridge collapse and loss of lives, are not coverage under the terms of the insurance policy. They uphold that the exclusions mentioned in the policy, such as faulty design and loss due to defective material or workmanship, release them from liability in this case. Additionally, the appellant argues that the NCDRC’s decision is flawed and should be overturned by the hon’ble Supreme Court of India. They seek relief from the court by challenging the validity of the NCDRC’s ruling and contesting their obligation to pay the insurance claim amount.
Contention of the Respondent:
M/s Hyundai Engineering & Construction Co. Ltd. and others, herein, the respondents argue that United India Insurance Co. Ltd. is liable to pay the claim of Rs. 39,09,92,828/-. They believe that the collapse of the bridge, which caused fatalities, is covered by the insurance policy. They state that the problems arising out of the bridge’s design, construction, and supervision holds a mere responsibility of the insurance company to cover. The respondents think that the insurance company cannot avoid or neglect the point of paying by saying that certain things aren’t covered by the policy. They also reflect that the decision made by the NCDRC was right and should be followed. However, they want the court to uphold the NCDRC’s decision and make the insurance company pay the claim.
Court’s Analysis and judgement:
After considering all the facts and analysing the arguments advanced by both the parties, the hon’ble court was of the opinion that United India Insurance Co. Ltd is entitled to pay the insurance claim of Rs. 39,09,92,828/-, as they can’t avoid it by citing mere exclusions of the policy. The court collectively analysed the provisions of the insurance policy and found that the collapse of the bridge, which caused fatalities, falls under the coverage of the insurance policy and hence, ruled that the problems out of the bridge’s design, construction, and supervision are the responsibility of the insurance company to cover. Additionally, the court agreed with the decision made by the National Consumer Disputes Redressal Commission (NCDRC) and upheld it. Therefore, the court ordered United India Insurance Co. Ltd. to release and pay the insurance claim amount as directed by the NCDRC.
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Judgement Reviewed By- Shramana Sengupta
