West Bengal Power Development Corporation Ltd & Anr -vs- The New India Assurance Company Limited

Summary of the Case: West Bengal Power Development Corporation Limited had obtained a comprehensive Mega/ Industrial Risk Insurance from New India Assurance Company Limited for its thermal power plant at Bakreswar, West Bengal. Sudden vibrations were observed in the Generator Rotor at the thermal power plant and in August, 2018 a claim was lodged before the insurance company. The surveyor of the Insurance company initially deemed the claim inadmissible stating that the damage was gradual. The surveyor, however, after considering the Root Cause Analysis report of the independent agency, TCR Advanced Engineering changed its earlier stand and held that the damage was accidental and sudden and admitted loss payable is Rs. 32 crores. However, in a cryptic email dated 24th January, 2022, the insurance company decided to maintain its earlier stand of repudiation without any reasons.

WBPDCL thus filed a writ petition before the Hon’ble Calcutta High Court challenging repudiation of the insurance claim. The Hon’ble Court by its judgment dated 29th January, 2024 allowed the writ petition by setting aside the impugned repudiation of the insurance claim and directed the insurance company to revaluate the claim considering the addendum reports.

Outcome: The Hon’ble High Court at Calcutta by its judgment and order dated 29th January, 2024 allowed the writ petition by setting aside the impugned repudiation of the insurance claim due to arbitrariness and palpable illegality in repudiation process. The Hon’ble Court has directed the insurance company to revaluate the claim considering the addendum reports.

West Bengal Power Development Corporation Limited was represented by Fox & Mandal team led by Mr. Debanjan Mandal, Managing Partner, Mr. Sandip Dasgupta, Partner and Mr. Aviroop Mitra, Senior Associate.

Read the Judgement: Click Here