Holding

The exclusion clause was valid and the insurer was justified in repudiating the claim; consequently, the NCDRC order directing payment was set aside.

Summary

United India Insurance Co. Ltd. issued a Contractor's All Risk policy for a bridge project that collapsed during construction, killing 48 workers. The insurer repudiated the claim, invoking an exclusion clause covering loss due to faulty design, workmanship and construction defects, and relied on a surveyor's report and a Government‑appointed Expert Committee that attributed the collapse to such defects. The respondents filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC), which held the expert reports inconclusive, relied on independent theoretical expert opinions, and directed the insurer to pay the claim with interest. The Supreme Court examined the strict interpretation of exclusion clauses, the burden on the insurer to prove their applicability, and the credibility of the surveyor and Expert Committee reports. Finding sufficient evidence to justify the insurer's repudiation, the Court set aside the NCDRC order and allowed the appeal, holding that the exclusion clause barred liability.

Issues considered

The applicability of the exclusion clause in the Contractor's All Risk policy to losses arising from design and construction defects.
Whether the burden of proving the exclusion clause lies on the insurer and if it was discharged.
Whether the NCDRC erred in its assessment of expert reports and in directing payment under the consumer complaint.
Whether the consumer jurisdiction under the Consumer Protection Act, 1986, is appropriate for such a complex insurance dispute.

Legislation cited

Subjects

Consumer ComplaintRelease and pay insurance claimContractor’s all risk insurance policyInvestigation reportSurveyor reportCommittee of Experts reportRepudiation of insurance claimDeficiency in serviceInsurance contract of indemnificationExclusion clauses in insurance contractsDischarge the burden

Judgment

[2024] 6 S.C.R. 355 : 2024 INSC 431

United India Insurance Co. Ltd.
v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.
(Civil Appeal No. 1496 of 2023)
16 May 2024
[Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.]

Issue for Consideration
Matter pertains to the correctness of the decision by the National
Commission which directed the appellant-insurer to release and pay
an insurance claim to the respondent-contractor for the collapse
of the bridge.

Headnotes†
Consumer Protection Act, 1986 – Insurance Contract –
Exclusion clause – Interpretation – Payment of insurance
claim – Contract for design, construction and management
of a bridge awarded to the respondent and another
company – Issuance of contractor’s all risk insurance policy
for the project by the appellant-insurer – However, during
the construction, part of the bridge collapsed resulting in
fatalities – Investigation report holding the respondents liable
due to defects in the design, construction and supervision –
Report submitted by Surveyor as also the Committee of
Experts – Respondents made a insurance claim, however the
appellant repudiated the same – Meanwhile the respondents
completed the work under the contract and the bridge was
put to public use – Almost after 2 years of the rejection of the
claim, the respondents filed a consumer complaint alleging
deficiency in the appellant’s service – National Commission
allowed the same, directing the appellant to pay the insurance
claim – Correctness:
Held: Insurance is a contract of indemnification, being a contract
for a specific purpose, which is to cover defined losses – Courts
have to read the insurance contract strictly – Essentially, the insurer
cannot be asked to cover a loss that is not mentioned – Exclusion
clauses in insurance contracts are interpreted strictly and against
the insurer as they have the effect of completely exempting the
insurer of its liabilities – Appellants-insurer discharged the burden –
* Author
356 [2024] 6 S.C.R.

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There was sufficient evidence to justify repudiation of the claim
on the basis of the exclusion clause – Reliance on the findings
of the Expert Committee justified – It was found from the Expert
Committee’s report that combination of factors such as lack of
stability and robustness in the structure, shortfall in design, lack
of quality workmanship all contributed to the collapse – On the
other hand, there was absolutely no evidence on behalf of the
respondents – Surveyor was examined and his evidence remained
unrebutted – Reports of independent experts relied on by the
respondents were not based on site inspection but were theoretical
in nature – Furthermore, continuation of work by respondents could
be due to various reasons – Even if the NHAI’s decision to continue
is taken to be a valid economic decision, that by itself cannot be
a reason for not applying the applicable clause of the contract if
such applicability is otherwise proved by cogent evidence – Thus,
the NCDRC erred in allowing the consumer complaint – Impugned
order passed by the NCDRC set aside. [Paras 16, 18, 20.3, 21,
23, 26, 28-30]

Case Law Cited
Oriental Insurance Co. Ltd. v. Sony Cheriyan [1999]
Supp. 1 SCR 622 : (1999) 6 SCC 451; United India
Insurance Co. Ltd. v. Levis Strauss (India) (P) Ltd.
[2022] 10 SCR 231 : (2022) 6 SCC 1; New India
Assurance Co. Ltd. v. Rajeshwar Sharma [2018] 14
SCR 1181 : (2019) 2 SCC 671; Canara Bank v. United
India Insurance Co. Ltd. [2020] 7 SCR 498 : (2020) 3
SCC 455; Oriental Insurance Co. Ltd. v. Samayanallur
Primary Agricultural Coop. Bank [1999] Supp. 4 SCR
329 : (1999) 8 SCC 543; Texco Marketing P. Ltd. v. TATA
AIG General Insurance Company Ltd. [2022] 9 SCR
1031 : (2023) 1 SCC 428; National Insurance Company
Ltd. v. Vedic Resorts and Hotels Pvt. Ltd. [2023] 7 SCR
419 : (2023) SCC OnLine SC 648; National Insurance
Co. Ltd. v. Ishar Das Madan Lal [2007] 2 SCR 1014 :
(2007) 4 SCC 105; National Insurance Company Ltd.
v. Hareshwar Enterprises (P) Ltd. [2021] 8 SCR 895 :
(2021) SCC Online SC 628 – referred to.

List of Acts
Consumer Protection Act, 1986; Penal Code, 1860.
[2024] 6 S.C.R. 357

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

List of Keywords
Consumer Complaint; Release and pay insurance claim;
Contractor’s all risk insurance policy; Investigation report; Surveyor
report; Committee of Experts report; Repudiation of insurance
claim; Deficiency in service; Insurance, contract of indemnification;
Exclusion clauses in insurance contracts; Discharge the burden.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1496 of 2023
From the Judgment and Order dated 16.01.2023 of the National
Consumer Disputes Redressal Commission, New Delhi in C.C. No.
160 of 2019
Appearances for Parties
Dr. Abhishek Manu Singhvi, Niraj Kishan Kaul, Sr. Advs., Amit Kumar
Singh, Ms. K Enatoli Sema, Ms. Chubalemla Chang, Prang Newmai,
Advs. for the Appellant.
Dama Sheshadri Naidu, Sr. Adv., Mahesh Agarwal, Rishi Agrawala,
Ankur Saigal, Ms. S. Lakshmi Iyer, Ms. Anwesha Padhi, Himanshu
Saraswat, E. C. Agrawala, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Pamidighantam Sri Narasimha, J.
1. The appellant, United India Insurance Co. Ltd., an insurance company,
challenges the decision by the National Consumer Disputes Redressal
Commission (hereinafter ‘the NCDRC’), which by its impugned order
dated 16.01.2023 allowed the Consumer Complaint No.160 of 2019
and directed the appellant to release and pay an insurance claim of
Rs. 39,09,92,828/-.
2. Facts: The National Highway Authority of India (‘NHAI’), respondent
no. 3 herein, awarded a contract for the design, construction and
maintenance of a cable-stayed bridge across the river Chambal on
NH-76 at Kota, Rajasthan to a joint venture company comprising
of respondent no. 1 and respondent no. 2. The value of the project
under the contract was Rs. 213,58,76,000/-. The contract provided
that the construction work was to be completed within 40 months
358 [2024] 6 S.C.R.

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and the joint venture was thereafter assigned the task of maintaining
the said bridge for a period of 6 years, of which, 2 years was the
‘defect-notification period’. NHAI also assigned consultancy services
for design, construction and maintenance of the bridge to another
joint venture of M/s Louis Berger Group Inc. (USA) and M/s COWI
A/S (Denmark).
3. The appellant issued a Contractor’s All Risk Insurance Policy covering
the interest of NHAI as principal, and M/s Hyundai Engineering
Infrastructure Co. Ltd. along with M/s Gammon India as JV Contractor
under the policy bearing No. 011900/44/07/03/60000001 for the
period from 05.12.2007 to 04.12.2011 for a total amount of Rs.
213,58,76,000/-. The relevant clauses of the policy are extracted
as follows:
“SECTION I - MATERIAL DAMAGE:
1. The Company hereby agrees with the Insured (subject
to the exclusions and conditions contained herein or
endorsed hereon) that if, at anytime during the period of
insurance stated in the Schedule, or during any further
period of extension thereof the property (except packing
materials of any kind) or any part thereof described in the
Schedule be lost, damaged or destroyed by any cause,
other than those specifically excluded hereunder, in a
manner necessitating replacement or repair, the Company
will pay or make good all such loss or damage upto an
amount not exceeding in respect of each of the items
specified in the Schedule the sum set opposite thereto
and not exceeding in the whole the total Sum Insured
hereby.
The Company will also reimburse the Insured for the cost of
clearance and removal of debris following upon any event
giving rise to an admissible claim under this Policy but not
exceeding in all the sum (if any) set opposite thereto in
the Schedule. The term debris only of the Insured property
and the cost of clearance and removal of debris pertaining
to property not Insured by the policy will not be payable.”
“EXCLUSIONS TO SECTION - I
The Company, shall not, however, be liable for;
[2024] 6 S.C.R. 359

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

a) the first amount of the loss arising out of each and
every occurrence shown as Excess in the Schedule;
b) loss discovered only at the time of taking an inventory;
c) normal wear and tear, gradual deterioration due to
atmospheric conditions or lack of use or obsolescence
or otherwise, rust, scratching of painted or polished
surfaces or breakage of glass;
d) loss by damage due to faulty design;
e) the cost of replacement, repair or rectification of
defective material and/or workmanship, but this
exclusion shall be limited to the items immediately
affected and shall not be deemed to exclude loss of
or damage to correctly executed items resulting from
an accident due to such defective material and/ or
workmanship;
f) the cost necessary for rectification or correction of any
error during construction unless resulting in physical
loss or damage
g) loss of or damage to files, drawings, accounts, bills,
currency, stamps, deeds, evidence of debt, notes,
securities, cheques, packing materials such as cases,
boxes, crates;
h) any damage or penalties on account of the
Insured’s non-fulfilment of the terms of delivery or
completion under this Contract of construction or
of any obligations assumed thereunder or lack of
performance including consequential loss of any
kind or description or for any aesthetic defects or
operational deficiencies;
i) loss of or damage to vehicles licensed for general road
use or waterborne vessels or machinery/equipment
mounted or operated or fixed on floating vessels/
craft/barges or aircraft.”
4. The construction project commenced in December, 2007. While the
construction was in progress, a part of the constructed bridge collapsed
on 24.12.2009, resulting in the death of 48 workmen. On 26.12.2009,
360 [2024] 6 S.C.R.

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the Ministry of Road Transport and Highways, Government of India
constituted a Committee of Experts (hereinafter, ‘Expert Committee’)
under the chairmanship of the Director General (Road Development)
and Special Secretary, Ministry of Road Transport and Highways.
The task of this committee was to investigate and report the cause
of the collapse. An FIR was also lodged against the respondents for
offences under Sections 304/308 of the Indian Penal Code, 1860.
After investigation, a final report dated 19.03.2010 was filed wherein
the officials of the respondent companies were charged under the
said provisions. It was found that they were liable for the loss of
48 lives due to several defects at the stage of design, construction
and supervision.
5. The NHAI intimated the appellant about the incident on 29.12.2009
and requested the deputation of a surveyor to assess the damage
caused due to the accident and also sought indemnification of the
loss. A surveyor was appointed. He commenced his work and by a
letter dated 06.01.2010, he called for certain details and clarifications
from the respondents. While furnishing the details, the respondents
made a claim of Rs. 151,59,94,542/-.
6. The Committee of Experts constituted by the Government of India
submitted its report on 07.08.2010. Relevant parts of some of the
important findings of the Committee are as follows:
“8.2.2 Views of the Committee
8.2.2.1 The majority of failures in structures occur during
construction stages when they are most vulnerable. The
Chambal Bridge Accident was a sudden and catastrophic
structural failure. It may be pointed out that the bridge was
at one of its critical stages at the time of the accident. […]
8.2.2.2 […] At this stage, as noted in para 5.8, the
stabilizing moment would become less than the
overturning moment. Uncontrolled rotation of the pylon
about the base would take place which would result in
its gaining momentum as it fell. This is borne out by
the fact that the catastrophic failure involved a catapult
action wherein the span P3-P4 as a whole, (which was
tied together by prestressing cables) was thrown some
100 m away.
[2024] 6 S.C.R. 361

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

8.2.2.3 The serious distress in span P3-P4 referred to para
8.2.2.2 could have been caused by shortfall in design, poor
workmanship, unexpected load, sub-standard material
or distress in foundation P4 or a combination of some of
these. […]
8.2.2.4 It can be seen that had there been additional stability
devices in place (such as those mentioned in para 8.2.2.1)
the cycle involving progressive loss of rotational restrain
at the base of the pylon and accentuation of distress in
P3-P4 might not have been initiated and the collapse might
not have occurred.”
7. The final conclusions of the committee are relevant for this case,
and are as follows:
“CONCLUSIONS
9.1 From all the information made available by the various
agencies as also the analysis and evaluation made by
the Committee, it is felt that a combination of factors
such as lack of stability and robustness in the partially
completed structure, shortfalls in design and lack of
quality of workmanship in the construction of span P3-
P4 have contributed to the collapse of this bridge. The
trigger for initiation of the collapse appears to have been
unpredictable and sudden additional loading due to failure
of supporting arrangement of the form traveller.”
9.2 Since this is a design-build “Turnkey Contract” which
covers planning, investigation, design, construction and
maintenance of the cable stayed bridge, the primary
responsibility for the collapse lies with the Contractor, M/s
Hyundai — Gammon (JV). The Contractors are responsible
for allowing the structure to reach a vulnerable stage without
taking adequate precautions with respect to stability and
robustness of the partially completed structure and the short
fall in the design. They are also responsible for deficiency
in workmanship in the construction of span P3-P4.
9.3 The design for this bridge was prepared by M/s
SYSTRA, the Design Consultants of the Contractor M/s
Hyundai-Gammon (JV). Since there have been shortfalls
362 [2024] 6 S.C.R.

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in design, the responsibility for the same also lies with
M/s SYSTRA.
9.4 The Supervision Consultants for this Project are M/s
LBG-COWI whose duties include construction supervision
along with the proof-checking of the design through M/s
COWI While carrying out the proof-checking work M/s
COWI have not highlighted the shortfalls in the design
which have been observed subsequently by the Committee.
Further, the Supervision Consultants have not been
sufficiently proactive in preventing lapses in workmanship.
They have also given tacit approval for major changes
during construction without insisting on a proper review
of the design by the Contractors / Design Consultants.
As such, the Supervision Consultants are responsible for
these lapses.
9.5 M/s Freyssinet acted as specialist Agency to M/s
Hyundai for supply, installation and operation of the form
traveller equipment for cantilever construction, post -
tensioning work and installation of stay cables. Since the
trigger for the collapse appears to be the failure of the
Freyssibar and / or the supporting arrangement for the
form traveller, the extent of their responsibility may be
examined keeping in view the Contract Agreement between
the concerned agencies.
9.6 Apportioning of extent of responsibility to the various
agencies for the collapse of the structure could be
examined further by the Employer (NHAI) keeping in view
the contracts for this Project entered into between various
agencies with each other and with NHAI.”
8. On 06.12.2010, NHAI issued a show-cause notice to the respondent
nos. 1 and 2 calling upon them to justify as to why they should not
be debarred. The respondents replied to the show cause notice, and
after perusing the reply, the NHAI took a decision to permit them to
carry out the remaining part of the contract.
9. In the meanwhile, the surveyor appointed by the appellant submitted
its final report on 28.02.2011. While assessing the net loss at Rs.
39,09,92,828/-, the surveyor recommended to the appellant that the
[2024] 6 S.C.R. 363

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

insurance claim must be rejected as the respondents no. 1 and 2
had violated the conditions of the insurance policy. Based on the
surveyor’s report and also the findings and conclusions of the Expert
Committee, the appellant repudiated the insurance claim in its letter
dated 21.04.2011.
10. By their letter dated 17.06.2011, respondents nos. 1 and 2 requested
the appellants to reconsider the decision of repudiation. In support
of their contentions, the respondents relied on certain independent
reports submitted by i) Mr. Jacques Combault; ii) M/s SETRA/CETE
(French Ministry of Transportation Technical Department); iii) M/s
Halcrow Group Ltd. and iv) AECOM Asia Co. Ltd. Relying on these
reports, the respondents urged stated that there is no fault in the
design of the bridge, and this is clearly reiterated by technical experts,
who are specialists in the field.
11. As the appellant agreed to reconsider the repudiation, respondents no.
1 and 2 submitted various documents in support of their claim. The
appellant re-considered the claim, and by a letter dated 17.04.2017
informed the respondents that the original decision of repudiation
is affirmed as they did not find any justifiable reason for accepting
the claim. The relevant portion of the said communication dated
17.04.2017 is as follows:
“We refer to your letter Ref: 17011/27/2006-kota/CAR/
RJ-05/3909, dt: 18.01.2017 and Contractor letter Ref:
HZ-6718, dt: 04.02.2017 and also the subsequent meeting
held at our office-Chennai. On perusal of the documents
provided, we find that no further points have emerged in
support of the claim.
In view of the above we regret our inability to reconsider
the claim which was repudiated.”
12. In the meanwhile, respondents no. 1 and 2 completed the work under
the contract by 31.07.2017. The bridge was inaugurated and put to
public use from 29.08.2017, and it is said to be operating since then.
13. Almost after 2 years of the rejection of the claim, on 24.01.2019,
respondents no. 1 and 2 filed a Consumer Complaint No. 160 of
2019 before the NCDRC alleging deficiency in the appellant’s service
and unfair trade practice adopted by it.
364 [2024] 6 S.C.R.

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14. Decision of the NCDRC: At the outset, the NCDRC rejected the
preliminary objection of the appellant that the summary jurisdiction
under the Consumer Protection Act, 1986 (hereinafter, ‘the CPA’) is
not appropriate for dealing with complicated questions of law and
fact. The objection relating to limitation in filing the complaint was
also dismissed by holding that the period for calculating the limitation
would commence from 17.04.2017 and not from 21.04.2011.
14.1 On merits of the matter, the NCDRC held that the report of the
Committee of Experts was inconclusive as it could not identify
the precise reasons for the collapse of the bridge. On the
other hand, the NCDRC placed reliance on the reports of i) Mr.
Jacques Combault, ii) the Halcrow Group, iii) SETRA and iv)
AECOM Asia Co. Ltd., and came to the conclusion that there
is no defect in the design of the bridge and that the respondent
nos. 1 and 2 are not at fault.
14.2 Finally, the NCDRC relied on the decision of the NHAI permitting
the respondent nos. 1 and 2 to proceed with the construction of
the remaining part of the bridge and held that if the NHAI found
the respondents to be competent enough to continue with the
contract, it can safely be concluded that they were not at fault.
14.3 In this view of the matter, the NCDRC directed the appellant to
pay the respondents no. 1 and 2 a sum of Rs. 39,09,92,828/-
with an interest at 9% p.a. from the first date of repudiation,
i.e., 21.04.2011.
14.4 Strangely, while the judgment of the NCDRC was pronounced on
16.01.2023, an addendum came to be added to the judgment.
This addendum is undated and seeks to amend paragraphs
28 and 29 and directs payment of Rs. 151,59,94,542/- instead
of Rs. 39,09,92,828/-. The relevant portion of the addendum
is extracted here for ready reference:
“32. It will be relevant to mention here that though the
Complainant No.1, vide letter dated 27.02.2010 had
submitted a detailed Claim Statement of ₹93,67,17,876
to the Surveyor but it was revised vide e-mail dated
07.03.2010 to the tune of ₹149,87,44,914/-. It was
again revised vide letter dated 24.06.2010 (Serial
No.2 of the Claim Statement - ₹8,29,15,604 to
[2024] 6 S.C.R. 365

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

₹10,01,65,232) to a final Claim of ₹151,59,94,542/- .
The Surveyor had, however, assessed the total
loss at ₹39,09,92,828/- . Even though in the Written
Submissions filed by the Learned Counsel for the
Complainants they have claimed that at least a
net loss of ₹39,09,92,828/- be payable towards the
insurance claim but in my considered opinion the
Complainants are entitled for the payment of entire
loss of ₹151,59,94,542/- claimed by them.
33. Consequently, the Complaint is partly allowed with
a direction to the Insurance Company to pay a sum
of ₹151,59,94,542/- to the Complainants along with
interest @9% p.a. from the date of repudiation of the
claim i.e. 21.04.2011 till the actual realization, within
a period of 8 weeks from the date of passing of the
order failing which the amount shall attract interest
@12% p.a. for the said period. The Complainants
shall also be entitled for a costs of ₹50,000/-.”
15. Mr. Dama Seshadri Naidu, learned senior counsel appearing for the
respondents has submitted that he is not in a position to support
the judgment amending the paragraphs 28 and 29 and directing
the payment of the revised amount of Rs. 151,59,94,542/-. It is
unimaginable as to how the NCDRC could unilaterally revise the
claim from Rs. 39,09,92,828/- to Rs. 151,59,94,542/-, without hearing
the parties and more surprisingly when respondent nos. 1 and 2
have themselves filed written submissions confining the claim to Rs.
39,09,92,828/-. Be that as it may, in view of the submission of the
learned counsel for the respondent that he will confine the claim Rs.
39,09,92,828/-, this issue need not detain us any further.
16. Analysis: Insurance is a contract of indemnification, being a contract
for a specific purpose1, which is to cover defined losses2. The courts
have to read the insurance contract strictly. Essentially, the insurer
cannot be asked to cover a loss that is not mentioned. Exclusion
clauses in insurance contracts are interpreted strictly and against the

1 Oriental Insurance Co. Ltd. v. Sony Cheriyan (1999) 6 SCC 451
2 United India Insurance Co. Ltd. v. Levis Strauss (India) (P) Ltd. (2022) 6 SCC 1
366 [2024] 6 S.C.R.

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insurer as they have the effect of completely exempting the insurer
of its liabilities.3
17. In Texco Marketing P. Ltd. v. TATA AIG General Insurance Company
Ltd.,4 while dealing with an exclusion clause, this Court has held that
the burden of proving the applicability of an exclusionary clause lies
on the insurer. At the same time, it was stated that such a clause
cannot be interpreted so that it conflicts with the main intention of
the insurance. It is, therefore, the duty of the insurer to plead and
lead cogent evidence to establish the application of such a clause5.
The evidence must unequivocally establish that the event sought to
be excluded is specifically covered by the exclusionary clause.6 The
judicial positions on the nature of an insurance contract, and how
an exclusion clause is to be proved, shall anchor our reasoning in
the following paragraphs.
18. Seeking to justify their repudiation, the appellant relied on the affidavit
of evidence by Mr. S. Anantha Padmanabhan, examined as RW 2.
He produced the surveyor’s report as well as the Expert Committee’s
report as Ex. RW 2/2. On the other hand, the reports of the independent
experts relied upon by the respondents no. 1 and 2 were not marked
as exhibits. They were not adduced in evidence as none of these
experts was examined as a witness. Under these circumstances, we
have no hesitation in coming to a conclusion that the appellants have
discharged the burden as enunciated in Texco (supra).
19. The Expert Committee was constituted by the Ministry of Road
Transport and Highways (‘MORTH’), Government of India. It was
chaired by the Director General (Road Development) and Special
Secretary, MORTH. The other members of the Committee were Mr.
Ninan Koshi DG (RD) & AS (Retd.), Prof. Mahesh Tandon, Bridge
Specialist, and Prof. A.K. Nagpal, Dept. of Civil Engineering, IIT
Delhi. We have referred to the constitution as well as the expertise
of the Committee only to assure ourselves that it comprised of

3 New India Assurance Co. Ltd. v. Rajeshwar Sharma (2019) 2 SCC 671; Canara Bank v. United India
Insurance Co. Ltd. (2020) 3 SCC 455;
Oriental Insurance Co. Ltd. v. Samayanallur Primary Agricultural Coop. Bank (1999) 8 SCC 543
4 [2022] 9 SCR 1031 : (2023) 1 SCC 428
5 National Insurance Company Ltd. v. Vedic Resorts and Hotels Pvt. Ltd., 2023 SCC OnLine SC 648
6 National Insurance Co. Ltd. v. Ishar Das Madan Lal, 2007 (4) SCC 105
[2024] 6 S.C.R. 367

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

experts in the field of civil engineering. It is also indicative of the fact
that the members were independent and well-qualified to examine
and submit a report. We would, therefore, be justified in relying on
the findings of the Expert Committee. In fact, the NCDRC’s opinion
about the Expert Committee is not about lack of credibility, or lack
of expertise, rather its opinion was only that the Committee was not
conclusive in its findings.
20. The proof of the pudding is in its eating - we will straight away refer
to the relevant portions of the Expert Committee’s report. Referring to
the variations introduced on-site without any approval by the design
checker, the Committee held as follows:
“5.1.2 Since this is a Design Build Contract, the Contractors
M/s Hyundai-Gammon (JV) had appointed M/s SYSTRA of
France as their Design Consultant. The designs prepared
by M/s SYSTRA were proof checked by M/s COWI, the
Proof Check Consultant. During the course of presentations
and discussions with various agencies, there were some
contradictions in the stand taken by M/s SYSTRA and M/s
COWI as regards the extent of proof checking of designs
by the Proof Check Consultant. In fact, M/s COWI in
their submission dated 28th May, 2010 (Annexure L-21)
have stated as follows: “The Design Checker verified the
Final Design prior to start of construction. The variations
introduced on site were introduced by the BOT Contractor.
We expect that all variations were subject to verification
and approval of the Designer. The Design Checker was
not requested to review any design verification following
variations on site from the Final Design. […]”
(emphasis supplied)
20.1 The Committee noted that each lateral span of the bridge was
supposed to be a monolithic structure. A lateral span is the
structure between two support pillars. However, the collapsed
lateral span was cast in multiple parts, as noted in the following
paragraph:
“5.3.3 M/s SYSTRA have expressed vide their
submission dated 17th April, 2010 (Annexure
H-11, page 3) that they have envisaged “one go”
368 [2024] 6 S.C.R.

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(i.e. monolithic construction) for each lateral span
during the development of the design. However,
during actual construction the lateral span P3-P4
was cast in seven parts. The lower part of the box
girder (U-shaped section comprising bottom slab and
webs upto about mid height) was concreted in four
different stages with three vertical construction joints.
The upper part of the box girder (comprising deck
slab and top half of the webs) was later concreted
in three stages (with two vertical construction joints).
It has been informed by M/s Hyundai-Gammon JV
vide their letter HN-1656 dated 1st September,
2009 (Annexure L-18, page 3) that M/s SYSTRA,
the designer of the main bridge including lateral
spans, were aware of this. In fact, Mr. J. Mirailles
of M/s SYSTRA had visited the site in the month of
July 2009 and stayed there for a couple of weeks to
inspect the ongoing construction. The construction
of lateral span P3- P4 in parts was being carried
out at that time…”
“5.3.5 The query of the Committee regarding
position of M/s LBG-COWI in respect of applicability
of Clauses of AASHTO relating to “Segmentally
Constructed Bridges” to the design of lateral span
P3-P4, was discussed with Mr. Nielsen of M/s COWI
on 23rd June, 2010. Mr. Nielsen mentioned that as
per his understanding, it was a case of segmental
construction. […]”
(emphasis supplied)
20.2 The Committee noted that the point at which the cable was
going to be suspended with the pylon was crucial. It observed
that the height at which the suspension took place was 77
metres, whereas, it was supposed to be 40 metres. The relevant
paragraph is as follows:
“6.2 The drawing No.A104-DWG-MB-FD-1301
REV. 1 dated 28th May, 2009 [Annexure H-01(ii)]
shows that the lateral spans P3-P4 as well as
[2024] 6 S.C.R. 369

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

P2-P3, should have been completed and external
tendons tensioned before the first stay cable was
installed. The steel box for anchoring the first stay
cable was to be placed in the pylon at the height of
33.30m. Also, the first cantilever segment towards
the river side from P4 was to be constructed only
after the lateral spans P3-P4 and P2-P3 had been
completed and fully prestressed. It is seen that this
sequence was changed in the actual construction.
Further, drawing No.A104-DWG-MB-FD-846 REV.
2(c) dated (??)/07/09 [Annexure H-01(ii)] specifically
mentions that “tendons tensioning on span P2-P3
must be performed before pouring segment S10”.
This requirement was also changed during actual
construction. […]
6.3…This implies that the height of the pylon should
have been about 40 m at the time of tensioning of
first stay cable at cantilever segment S10. However,
it is seen that at the time of casting of segment S10,
the free-standing pylon had already been constructed
to a height of 77 m.”
(emphasis supplied)
20.3 The other relevant portions cited to us from the Committee’s
Report include para 6.5, which speaks about the changes in
the sequence of construction without consulting or informing
the design consultants of the project. Para 6.8 was relied
on to highlight further discrepancies between the approved
drawing plans and the actual construction. Concrete batching
plants involved were of a lower capacity, leading to delays in
construction of the lateral spans. Para 8.1.2 (iii) was also brought
to our notice, as it spoke about the changes which were brought
about without a proper technical review. The conclusions of
the committee have already been quoted by us in paragraph
7 above, and it was found that:
a) a combination of factors such as lack of stability and
robustness in the structure, shortfall in design, lack of
quality workmanship have all contributed to the collapse;
370 [2024] 6 S.C.R.

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b) the primary responsibility lies with the contractor, M/s
Hyundai and Gammon (JV) who are responsible for
allowing the structure to reach a vulnerable stage without
taking adequate precautions and there is a shortfall in
the design;
c) there were shortcomings in the design for the bridge
prepared by M/s SYSTRA and the responsibility for the
design lies with M/s SYSTRA;
d) M/S COWI, the supervision consultants have not
highlighted the shortfall in the design. M/s COWI has
not been sufficiently proactive in preventing lapses in
workmanship. They have given tacit approvals for major
changes without insisting on a proper review of the design;
e) The trigger for the collapse appears to be the failure of
M/s Freyssinet. Their responsibility must be examined
in detail.
21. We are inclined to accept the appellant’s submission that there is
sufficient evidence to justify repudiation of the claim on the basis
of the exclusion clause. On the other hand, there is absolutely no
evidence on behalf of the respondents. His argument is only that
the Surveyor/Committee report is not clinching, it is open ended and
does not hold that the respondents no. 1 and 2 are responsible for
the negligence.
22. We will now refer to the surveyor’s report, the findings of which are
as follows:
“C) After a detailed study of the Insured’s submission vide
their letter dt; 27.02.2010 and several rounds of face to
face interactions with the Insured’s Engineers at site, we
derived the following inferences;
1). The junction at Pylon P4, was the most critical and
vulnerable in the entire construction and had to be
handled with due care and diligence.
2). It was clear and obvious, that, an unstable equilibrium
has been created at this junction, (where, the over
turning moment was in excess of resisting moment),
due to the shearing of the slab in lateral span P3
[2024] 6 S.C.R. 371

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

-P4 at about 15 mts from the P4 junction, which has
caused the tilting of the Pylon, dragging with it, spans
P3-P4, P3-P2 and Piers P4, P3. The shearing of the
slab is purely a Design aspect.
3). The restraints imposed on the movement of the
Bearings at P4 were released by the Insured prior
to completion of the main spans, which facilitated
movement of Pylon along with Lateral spans and this
is one of the most significant factors, contributing to
this massive failure.
4). The sequence of operations in the construction of the
Bridge were changed in actual construction to make
up for the time lost and this has adversely affected
the stability of the P4 joint.
5). Raising Pylon P4 to an abnormal height of 77 mts (out
of 80 mts) without any lateral anchorage in the form
of stringers, had left the Pylon P4 exposed to heavy
wind pressure and in a state of unstable equilibrium,
ready to collapse at any time, with the application of
a little external force in excess.
6). We were informed that, the concreting of Lateral
span P3-P4 was done in 7 stages, whereas, it should
have been done at ONE GO. This leaves vertical
joints which are vulnerable. We also noted that, the
Insured had to resort to concreting in stages, due to
insufficient Batching Plants.
7). Change in allocation of works amongst the Joint
Venture Partners also played a key role in the quality
of workmanship. At several places, M/s.Gammon had
to carryout the jobs, supposed to have been carried
out by M.s,Hyundai. Even in the affected location of
P4, the construction of Pier P4 was the responsibility
of M/s. Hyundai, whereas, it was carried out by M/s
Gammon.
8). Lack of co-ordination and planning between proof
checking consultant and design consultants could
have been streamlined.
372 [2024] 6 S.C.R.

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[…]
11). The sequence of concreting carried out on the date
of failure, as informed to us, was different from the
versions of the Insured. […]”
23. It is important to note that the surveyor was examined as RW-1 and
his evidence remained unrebutted. In National Insurance Company
Ltd. v. Hareshwar Enterprises (P) Ltd.7 and National Insurance
Company Ltd. v. Vedic Resorts and Hotels Pvt. Ltd.,8 this court has
held that the surveyor’s report is a credible evidence and the court
may rely on it until a more reliable evidence is brought on record. In
the present case, the surveyor’s report was the evidence tendered
by the insurance company, and it has not been treated as unreliable
by the NCDRC.
24. Mr. Naidu, appearing on behalf of the respondents, commenced his
submission by referring to certain portions of the judgment of this
court in Texco (supra) to emphasise that exclusionary clauses place
extraordinary burden on the insurance company. We have already
answered this question by referring to the evidence adduced by
the appellant, which we consider to be a sufficient discharge of the
burden. On the Expert Committee’s report, Mr. Naidu has re-iterated
the finding of the NCDRC that it is inconclusive apart from being a
mere opinion. Even this submission stands answered by extracting
specific and categorical findings of the Committee as well as the
surveyor’s report.
25. Mr. Naidu sought to draw support from the reports of independent
experts on the issue of design to establish that the respondents are
not at fault. Mr. Naidu sought to rely on reports by (i) Mr. Jacques
Combault; (ii) M/s SETRA/CETE (French Ministry of Transportation
Technical Department); (iii) M/s Halcrow Group Ltd.; and (iv) AECOM
Asia Co. Ltd.
26. At the outset, the concerned experts were never examined before the
NCDRC. Further, these reports were not based on site-inspection.
They are all theoretical in nature. For example, the report Mr. Jacques
Combault is based on:

7 [2021] 8 SCR 895 : (2021) SCC Online SC 628
8 [2023] 7 SCR 419 : 2023 SCC OnLine SC 648
[2024] 6 S.C.R. 373

United India Insurance Co. Ltd. v.
M/s Hyundai Engineering & Construction Co. Ltd. & Ors.

“The analysis reported in the following pages is based on:
- The description of Bridge Concept as proposed by
Systra
- The Main characteristics of the Structural Concept
as proposed by Systra
- The State of the Art in the field of prestressed concrete
cable stayed bridges
- Examples of similar bridges successfully achieved
in the past”
After a theoretical analysis, the following conclusion is drawn:
“The structural concept of the Chambal Bridge as proposed
by Systra is: -
- perfectly fitting the site-conditions
- conforming to the state of the art in the field of cable
stayed bridges
The construction methods, as proposed by Systra, are
simple and proven processes well adapted to the structural
concept.”
27. A similar approach was adopted by the other experts. On the other
hand, the surveyor has examined himself and adduced documents.
Further, there is sufficient evidence to indicate that the surveyor has
made site-visits and the proof of that was part of the pleadings filed
before us.
28. The submission that NHAI continuing the contract with respondent
nos. 1 and 2 and they have, in fact, completed the contract does
not impress us. The continuation of work by respondent nos. 1 and
2 could be due to various reasons. Even if the NHAI’s decision to
continue is taken to be a valid economic decision, that by itself cannot
be a reason for not applying the applicable clause of the contract if
such applicability is otherwise proved by cogent evidence.
29. For the reasons stated above, we are of the opinion that the NCDRC
fell into a clear error of law and fact in allowing the consumer complaint
for multiple reasons. As we have not agreed with the preliminary
objection of the appellant to reject the complaint and relegate the
374 [2024] 6 S.C.R.

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respondents to civil court, we made extra efforts to examine the
facts in detail. It is for this reason that the evidentiary value of the
reports, their scope and ambit, and their contents were examined
by us in some detail.
30. For the reasons stated above, we allow the appeal and set-aside
the impugned order dated 16.01.2023 passed by the NCDRC in
Consumer Complaint No. 160 of 2019.
31. Pending applications, if any, shall be disposed of.
32. There shall be no order as to costs.

Result of the case: Appeal allowed.

Headnotes prepared by: Nidhi Jain
†