NCDRC Must Record Cogent Reasons For Its Conclusions: Supreme Court

The Supreme Court has held that a quasi-judicial body like the National Consumer Disputes Redressal Commission (NCDRC) is under a duty to record cogent reasons for its conclusions and that an order which fails to discuss material issues or disclose any application of mind to the rival contentions is unsustainable and liable to be set aside.

A Bench of Justices Ahsanuddin Amanullah and R Mahadevan made the observation while setting aside an order passed by the NCDRC and remanding the matter for fresh consideration due to the lack of reasoning in the impugned order.

Why Did The Supreme Court Set Aside The NCDRC Order?

The present appeal was filed by ICICI Lombard General Insurance Co Ltd against an order passed by the NCDRC, New Delhi, on May 03, 2023. By the order, the NCDRC had directed the appellants to pay a claim amount of Rs 9,61,90,263, along with interest at 9% per annum from the date of lodging of the claim till its realisation.

The NCDRC had further directed that if the amount was not paid, the interest would increase to 12% per annum. It also directed the appellants to pay Rs 50,000 towards litigation costs to the complainant.

Counsel for the appellants submitted that the NCDRC judgment was delivered almost three years and four months after the matter had been reserved for judgment.

He further pointed out that the judgment was delivered a day before the then President of the NCDRC was due to demit office.

According to the counsel, although the order ran into 20 pages, the actual consideration of the issues was restricted to only one paragraph, paragraph 18. The remaining paragraphs, he submitted, merely dealt with the case put forward by the respective parties.

The counsel argued that paragraph 18 did not disclose any reasoning, much less any application of mind, as to why the NCDRC had concluded that the amount awarded was just and fair in the facts and circumstances of the case.

He submitted that if the dispute had been limited only to the amount of compensation, there could have been some justification for relying on the survey report submitted on behalf of the appellants as against the report submitted on behalf of the respondent.

However, in the present case, where the entire claim had been repudiated, it was the duty and obligation of the NCDRC to give cogent reasons and discuss the issues in some depth, he argued.

What Did The Insurance Company And Complainant Argue?

Counsel for the appellants also relied on an earlier order passed by a Coordinate Bench of the Supreme Court in New India Assurance Company Limited & Ors. vs. M/s Louis Dreyfus Commodities Pvt. Ltd. on April 09, 2026, where the matter had been remitted for reconsideration in similar circumstances.

On the other hand, counsel for the respondent submitted that the Surveyor appointed on behalf of the appellants was thoroughly compromised and that his appointment was contrary to the statutory provisions.

It was argued that the Surveyor had close connections and an interest in the appellant-company, which made him ineligible to act as a Surveyor.

The respondent's counsel further submitted that an independent Surveyor, who was fully competent, had conducted the survey. Though the Surveyor had been appointed at the respondent's instance, his report was fair and objective, it was contended.

According to the respondent, the NCDRC had examined the report and rightly found it to be well considered and authentic and had relied upon it.

NCDRC Failed To Give Reasons

The Supreme Court found merit in the appellants' submissions and held that the reasoning contained in paragraph 18 of the NCDRC judgment could not be sustained.

"Having considered the matter in its entirety, we find force in the submissions of counsel for the appellants that the consideration made in paragraph no.18 of the impugned judgment, cannot be sustained. In fact, we do not find any reasoning whatsoever in the said judgment," the Bench said.

Court observed that merely holding that the report submitted by the Surveyor appointed by the respondent appeared to be more authentic and was based on a proper appreciation of the terms and conditions, without examining the details, did not satisfy the requirement for passing an order awarding Rs 9,61,90,263.

The amount, the Bench said, had to be ascertained after determining whether the claim itself was rightful and whether the amount of compensation awarded was adequate.

"On none of these issues, there is even a reference, much less, any discussion in the impugned judgment," the Bench said.

Court also agreed with the approach adopted by the Coordinate Bench in the New India Assurance Company Limited case and decided to pass a similar order.

NCDRC To Reconsider The Insurance Claim

The Supreme Court accordingly allowed the appeal and set aside the NCDRC's May 03, 2023 judgment.

The matter was remanded to the NCDRC for de novo consideration, and the consumer complaint was restored to its original number on the NCDRC's file.

"As the case is of the year 2013 and the issue is of the year 2011, we request the NCDRC to dispose of the matter expeditiously, and preferably within a period of four months," the Bench said.

The Supreme Court also noted that there were two conflicting survey reports. It therefore left it open to the NCDRC to decide whether reassessment by an independent Surveyor would be required.

Case Title: ICICI Lombard General Insurance Co Ltd Vs M/s HCC CPPL JV

Bench: Justices Ahsanuddin Amanullah and R Mahadevan 

Date of Judgment: August 12, 2026