National Insurance Co. Ltd. v. Harsolia Motors and Ors., (2023) | Consumer Protection-Act,1986Facts

Rakesh Narula And Co. provided fire insurance to Harsolia Motors for sums of 90 lakhs and 75,38,000 rupees, respectively. During the 2002 Godhra riots, the insured properties were damaged by fire. While National Insurance Co. Ltd. accepted Rakesh Narula And Co.’s claim for 54,29,871 rupees, Harsolia Motors’ claim was denied. Both parties contested this decision before the Gujarat State Consumer Disputes Redressal Commission. The State Commission ruled that insured individuals do not fall under the definition of “consumers” as outlined in Section 2(1)(d) of the Consumer Protection Act, 1986 (the Act). Consequently, the complaint was dismissed on the grounds that the insured was using the property for commercial purposes, as defined by the Act. Upon appeal, the National Consumer Dispute Redressal Commission reversed this decision and ruled in favor of the insured.

Issues Raised

The case of National Insurance Co. Ltd. v. Harsolia Motors and Others primarily dealt with the liability of the insurance company under the Consumer Protection Act, 1986. The central issue concerned whether National Insurance Co. Ltd. was obligated to compensate Harsolia Motors and Others for their losses or damages, with a focus on the terms of the insurance policy and the provisions of the Act.


The case involved interpretation and application of the Consumer Protection Act, 1986, with key contentions revolving around the insurance company’s liability, coverage for damages suffered by Harsolia Motors and Others, breach of insurer’s obligations, and protection or infringement of consumer rights.


The issues in the case were underpinned by principles of consumer protection, contract law, and insurance regulation.

Laws Involved

The Consumer Protection Act, 1986, was the primary law pertinent to this case, specifically Section 2(1)(d) defining “consumer.” While the court extensively referred to this provision, other relevant clauses of the Act were also considered to supplement arguments presented by both parties and the court’s ruling.

Defects in the Law

The defects in consumer protection legislation highlight areas where legal frameworks may fail to meet intended objectives or adequately address societal needs. Although the Consumer Protection Act, 1986, has advanced consumer rights in India, shortcomings remain, necessitating improvements in legislation, enforcement, and consumer education to ensure fairness and safety in the marketplace.


Justices Ajay Rastogi and Bela M. Trivedi held that to determine whether an insured qualifies as a “consumer,” two factors must be considered: the relationship between the insurance service and profit-generating activities, and the primary intention behind the transaction. The bench provided an example illustrating that transactions facilitating profit generation for the insured constitute transactions for “commercial purposes.”


Addressing deficiencies in consumer protection legislation is crucial to safeguarding consumer interests and fostering trust in the economy. Streamlining laws, enhancing enforcement mechanisms, and promoting consumer awareness are essential steps toward creating a fair and equitable marketplace that benefits individuals and promotes economic stability and well-being.

Name: Vaibhav Pandey

College: Amity University, Uttar Pradesh.