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2025 Supreme(Online)(NCDRC) 2901
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mr. Sudip Ahluwalia, Presiding Member, Dr. Sadhna Shanker, Member
M/s Patel Home Furnishing Proprietor Shri Brajkishor Patel – Appellant
Versus
SBI General Insurance Co. Ltd. – Respondent
FIRST APPEAL NO. 1973 OF 2019
For the Appellants/Petitioners:Mr. H.A. Noronha, Advocate, Mr. Praful Shukla, Advocate
For the Respondents:Mr. Rajiv Kapur, Advocate, Ms. Rita Sood, Advocate
The insured must notify any changes affecting their risk promptly; failure to do so permits insurers to repudiate claims on grounds of breach of policy conditions.
Headnote:(A) Consumer Protection Act, 1986 - Section 19 - Appeal against dismissal of complaint regarding deficiency of service by insurance company and bank - Insurance relates to hypothecated stock for a Cash Credit facility - Insured failed to inform of change of stock location leading to repudiation - Arguments on timeliness of claim notification assessed - Insurance company’s grounds for repudiation upheld as valid deficiencies in service are not established against bank - (Paras 1, 5, 26)
(B) Insurance Policy - Conditions of policy require immediate intimation of change of circumstances - Delays must be justifiable; the complainant's failure to inform resulted in rejection - The duty of notification rests with the borrower - (Paras 10, 12, 24, 25)
Facts of the case:
The complainant engaged in furnishing business, had a Cash Credit Facility that required an insurance policy covering stock; in the absence of notification to the insurer about the new stock location after a fire, the claim was repudiated on procedural grounds.
Findings of Court:
The court concluded that the insurance company's repudiation was justified based on the complainant not informing of the change in risk location and the inherent delay in notifying the loss.
Issues: The key legal issue is whether a lack of notification constitutes a breach of the insured's duty and whether the bank can be held liable for not notifying said change.
Ratio Decidendi: The duty of notification rests solely with the insured; delays not justified will lead to a valid repudiation of claims; the bank does not owe a duty of care in notifying insurance adjustments for the complainant. The court found no grounds for interference with the State Commission's dismissal of the complaint.
Result: The appeal is dismissed.
| Table of Content |
|---|
| 1. filing appeal under consumer protection act. (Para 1 , 4 , 5) |
| 2. arguments regarding notification and claim process. (Para 7 , 8 , 9) |
| 3. insurance company's arguments on repudiation valid. (Para 10 , 12 , 14) |
| 4. court’s decision to uphold dismissal. (Para 26) |
| 5. outcome of the appeal. (Para 27) |
ORDER
Dr. SADHNA SHANKER, MEMBER
1. The present appeal has been filed under Section 19 of the Consumer Protection Act , 1986 (for short “the Act”) by M/s Patel Home Furnishing (hereinafter referred to as the “complainant”) against opponent no.1 SBI General Insurance Co. Ltd. (hereinafter referred to as the “Insurance Company”) and opponent no.2 State Bank of India (hereinafter referred to as “bank”) assailing the order dated 28.08.2019 passed by the State Consumer Dispute Redressal Commission, Maharashtra (hereinafter referred to as the “State Commission”) in Complaint No.CC/410/2016, whereby the complaint was dismissed.
2. There is a delay of 5 days in filing the present appeal. In the interest of justice, the delay in filing the appeal is condoned.
3. The facts, in brief, are that the complainant engaged in the business of curtains and fabrics, had availed a Cash Credit Facility of ?24,00,000/- from the bank by hypothecation of business stock. It is alleged that as per the loan conditions, the complainant obtained an insurance policy from the insurance company covering the hypothecated stock. The policy, jointly in the names of the complainant and bank was renewed for the period 19.12.2014 to 18.12.2015 for a sum insured of ?79,72,638/-. It is alleged further that in February 2015, the complainant shifted the insured stock from Shop No. A-4, Ram Niwas Building, Tapowan, Off Rani Sati Marg, Malad (E), Mumbai to Shop No. 2, Nagshi Khimsura Charan Chawl, Malad (East), Mumbai and duly informed bank, requesting it to intimate insurance company. The new location and stock were verified and accepted by bank. It is alleged that in the midnight KJIHGFEDCBA of 5/6th March 2015, a fire broke out in adjacent Shop No. 2/12, engulfing Shop No. 2, Nagshi Khimsura Charan Chawl Malad (East), Mumbai and caused a total damage to the complainant’s stock valued at approximately ?95,00,000/-. Though bank was informed immediately about the shifting of the location of the insured stock on 23.03.2015 but the insurance company never received intimation of the said shifting. The surveyor inspected shop No. 2. The insurance company repudiated the claim on 08.04.2015 on the grounds that the intimation of the loss was given late and the location of insured goods was changed.
4. Being aggrieved by the repudiation made by the insurance company, the complainant filed a complaint before the State Commission with the following prayer:
a. This Hon'ble Forum be pleased to declare that the Ops are guilty of deficiency in service under the provision of the Consumer Protection Act , 1986
b. The Hon'ble Forum be pleased to order and direct the OPs to pay to the complainant the said sum of Rs.59,73,165/- towards the claim of the complainant as per the Statement of Claim annexed as Exhibit “A” with interest 18% p.a. from April 2016 till payment and/or realization.
c. Direct the Ops to pay the complainant an amount of Rs. 15,00,000/- towards the compensation for mental agony, torture and troubles caused to the complainant.
d. Direct the Ops to pay to the complainant amount of Rs.2,00,000/- towards the cost of litigation incurred by the complainant.
e. Grant such further interim and ad-interim reliefs as the Hon’ble Forum may be pleased to pass as it deems fit and proper.
5. The State Commission vide its Order dated 28.08.2019, dismissed the complaint..
6. Being aggrieved by the order dated 28.08.2019 of the State Commission, the complainant has filed the present appeal before this Commission with the prayer:-
a. Allow the first Appeal against the impugned Final Judgment and Order dated 28.08.2019 passed in Complaint No CC/16/410 by the State Consumer Disputes Redressal Comm
