Citation: M/s. New India Assurance Company Ltd. v. M/s. Hemkund Duplex and Board Pvt. Ltd., 2026 INSC 1023 decided on September 21, 2026.
A dispute between an insurance company and a factory owner over a fire insurance claim. The Court ruled in favor of the insurance company, holding that it was legally justified in rejecting the factory’s multi-crore insurance claim because the owners had manipulated their books of accounts, made false declarations about the materials stored, and violated the core conditions of their insurance policy.
In May 2009, a fire broke out in the waste paper yard of a paper board factory in Najibabad, which was owned by M/s. Hemkund Duplex and Board Pvt. Ltd. The factory had two fire insurance policies with M/s. New India Assurance Company Ltd. covering its stock and buildings. Following the incident, the factory filed a massive insurance claim exceeding ₹73 crore (later revised down to around ₹7.31 crore) for the damages allegedly suffered.
The insurance company appointed multiple surveyors and an investigative agency to review the case. Their reports revealed major suspicious circumstances: the fire station was notified nearly an hour late despite being only 6 to 7 kilometers away, the workers made no genuine attempts to extinguish the fire, and an investigation showed the storage shed had actually been broken down by a mechanical excavator (JCB) before the fire. Furthermore, physical inspections and financial audits proved that the factory had massively inflated its claims by keeping fake stock records and trying to pass off old, unusable waste as valuable raw materials.
The Supreme Court held that the insurance company was fully justified in rejecting the factory’s insurance claim because the factory owners violated the terms of their policy by making false declarations and manipulating their books of accounts to inflate the loss. The Court found that the lower consumer commission (NCDRC) was wrong to ignore the thorough reports provided by the surveyors and investigators, which had exposed suspicious circumstances surrounding the fire, false stock records, and an absence of genuine attempts to put out the blaze. Consequently, the Supreme Court set aside the lower commission’s order directing the insurance company to pay out millions, dismissed the factory’s appeal, and allowed the insurance company’s appeal.
