sugar factory - The Legal Chamber

This Supreme Court judgment interprets the interplay between the priority of secured creditors under Section 26E of the SARFAESI Act and the statutory first charge for provident fund dues under Section 11(2) of the EPF & MP Act. The Supreme Court held that the statutory first charge for provident fund contributions overrides the priority granted to secured creditors, even under a non-obstante clause in a later enactment. Facts Of The Case: The appellant, Jalgaon District Central Co-operative Bank Ltd., is a secured creditor which had advanced loans to a co-operative sugar society, secured by a mortgage and hypothecation of the society's assets. The sugar factory became defunct, leading to loan defaults. The bank initiated recovery under the SARFAESI Act, took possession o...

The Supreme Court held that an insurer cannot repudiate a claim merely by invoking an exclusion clause for wear and tear. The burden lies on the insurer to prove material non-disclosure, fraud, or that the loss was definitively caused by an excluded peril. A valid statutory fitness certificate creates a strong presumption of the equipment's insurable condition, shifting the evidentiary onus onto the insurer. Facts Of The Case: The appellant, a sugar mill, held an insurance policy from National Insurance Co. Ltd. covering its boiler. During the policy period in May 2005, an incident occurred causing two boiler tubes to detach. The insurer repudiated the claim, citing Exclusion Clause 5, which excludes losses from wear, corrosion, and gradual deterioration. It relied on a surveyor's ...

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Supreme Court: Insurance Claim Can’t Be Denied Based on Age of Equipment