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2025 Supreme(Online)(NCDRC) 2969
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AVM J. RAJENDRA, Member
State Bank of India – Appellant
Versus
M/s. S J Syndicate – Respondent
First Appeal No. 1137 of 2023
For the Appellants/Petitioners:Mr. B B Sawhney, Sr. Advocate, Mr. Vipin Jain, Advocate
For the Respondents:Mr. Senthil Kumar, Advocate, Mr. B.C. Santosh Kumar, Advocate for R-1, None for R-2
The insured bears the responsibility to ensure active insurance coverage; failure to maintain such coverage absolves the insurer of liability.
Headnote:This appeal challenges the order of the State Consumer Disputes Redressal Commission, Karnataka dated 17.02.2022, which allowed the complaint in part concerning an insurance claim following a fire incident. The Court found that the responsibility to maintain insurance coverage rested with the complainant. The primary issue framed concerns liability under the insurance coverage at the time of the incident. The court concluded that there was no active policy at the time of the fire, thus dismissing the complaint against the respondents.
| Table of Content |
|---|
| 1. insurance responsibility lies with the complainant. (Para 1 , 3 , 4) |
| 2. overview of complaint and fire incident details. (Para 5) |
| 3. arguments cite negligence and responsibilities. (Para 8 , 9) |
| 4. arguments presented by the appellant and respondent. (Para 10) |
| 5. court observations on responsibility of insurance. (Para 12 , 16) |
| 6. court reinforced contractual obligations in insurance. (Para 19 , 20) |
| 7. final judgment and conclusion of the appeal. (Para 21) |
| 8. the complaint is dismissed. (Para 22) |
(AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER )
1. This Appeal is filed under section 51 of the Consumer Protection Act, 2019 (“the Act”), against the Order dated 17.02.2022 passed by the State Consumer Disputes Redressal Commission, Karnataka (“State Commission”) in CC No. 104 of 2016, wherein the State Commission allowed the complaint in part.
2. For the convenience, the parties are referred to as placed in the original Complaint filed before the State Commission.
3. Brief facts of the case, as per the Complainant , are that he is a proprietary concern operating under the name and style of SJ Syndicate, engaged in the business of dealing in plastic scrap and the sale of notebooks and textbooks. Initially, the Complainant dealt with the purchase and sale of used plastic scrap. In 2001, he expanded his operations to include plastic recycling. For this purpose, in 2005, he obtained an All Purpose Mortgage Loan of Rs. 14,00,000 from Opposite Party (OP) No.1, mortgaging the premises No.18/3, Cart Stand Road, Jolly Mohalla, Bengaluru-560053. OP-1 sanctioned the loan on 04.02.2005 and was fully repaid by 2012. While the said loan was active, OP-1 sanctioned a Cash Credit Loan of Rs.6,00,000 in 2006 against stocks, to support business improvement. This loan was enhanced in 2008 by additional Rs.1.50 lakhs, making the total Rs.7.50 lakhs. In 2012, OP-1 further increased the cash credit facility and granted a new loan of Rs. 9,00,000 as per letter of arrangement dated 29.11.2012. He regularly submitted monthly statements of production, goods, materials stored in the factory, accounts, office records, inventory of furniture, fixtures, and computers. OP-1 arranged for insurance policy on Building and Stock through National Insurance Company Ltd. (OP-3) under Policy No. 603901/11/11/3100004343, valid from 31.01.2012 to 20.01.2013. Annual premium of Rs.1,721 was debited from the Complainant ’s account. It is the allegation of the Complainant that the insurance details were never communicated to him. On 12.08.2013, a fire accident occurred in the factory, causing damages exceeding Rs. 52,00,000, resulting in substantial mental anguish, shock, and distress to him and his family, including health deterioration of his aged parents. Panchanama was held documenting damage to machinery and stock, though, due to inadvertence, details of textbooks, notebooks, furniture, and fixtures were not included. A police complaint was lodged on the same day by his brother, Mr. Syed Ansar, and an FIR was registered following a spot inspection and report. He informed the Chief Manager of OP-1 over phone, who visited the site on 13.08.2013 at 4:00 PM, verified the incident, and advised submission of a formal complaint along with supporting documents for compensation. Also, the Complainant submitted a letter dated 17.08.2013 to OP-1’s Shankarpuram Branch and Head Office, enclosing the Panchanama, Fire Brigade Report and other documents. He was assured that the matter would be examined and compensation provided. As the insurance claim was expected to take time, he requested and was granted a fresh cash credit loan of Rs.11,00,000 to resume business operations. Despite regular follow up OP-1 continued to assure the Complainant that the insurance claim would be processed through OP-3. In 2014, OP-1 sanctioned further loan of Rs.2,00,000 as cash credit and Rs.32,00,000 for machinery purchase, increasing the total loan amount to Rs. 69,00,000. In 2015, additional sum o
