Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCDRC) 368

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Member, Sudhir Kumar Jain, Member
Max Prints – Appellant
Versus
National Insurance Co. Ltd. – Respondent
CONSUMER COMPLAINT NO. 984 OF 2017

Advocates:
For the Appellants/Petitioners: Sanjoy Kumar Ghosh
For the Respondents: Sanidhya Kumar, Hetu Arora Sethi, Praveen Gautam, Rohan Bansla

An insurance contract is based on the principle of utmost good faith, and coverage is strictly limited to the insured premises disclosed in the policy; failure to notify the insurer of a change in business location renders the insurer not liable for losses at an unnotified premise.

Headnote:(A) Consumer Protection Act, 1986 - Section 21(a)(i) - Insurance policy - Standard Fire & Special Perils - Repudiation of claim - Change of business premises without intimation - Insured failed to inform the insurer or the bank about the change of address before the fire incident occurred - Material particulars in insurance contract require utmost good faith - Loss occurred at a location not covered under the insurance policy - Repudiation of claim held justified. (Paras 8, 11)

(B) Consumer Dispute - Summary proceedings - Pecuniary jurisdiction and disputed facts - Simply because a complaint requires investigation of facts does not mean it cannot be tried in summary proceedings under the Consumer Protection Act - Sufficient safeguards exist under the Act. (Para 10)

Facts of the case:
The complainant, a printing unit, obtained a credit facility from a bank, which included a mandatory fire insurance policy covering specific premises. The complainant shifted its unit to a new location without notifying the insurance company or the bank. A fire occurred at the new, unreported location. The insurance company repudiated the claim on the grounds that the loss occurred at a location not covered by the policy. The complainant alleged that the bank was informed of the move, but the evidence showed the correspondence was received after the incident.

Findings of Court:
The commission found that the insured had failed to disclose the change of address to the insurer or the bank prior to the fire. It held that address is a material particular in an insurance contract and the policy only covered the specified premises. Consequently, the insurer was justified in repudiating the claim.

Issues: Whether the insurance company was justified in repudiating the claim due to the insured's failure to disclose a change of business location, and whether the matter was suitable for summary adjudication.

Ratio Decidendi: An insurance contract is founded on the principle of utmost good faith; since the property was moved to an unnotified location not defined in the policy, the insurer is not liable for damages occurring at that location.

Result: Complaint dismissed.

Table of Content
1. complaint background regarding insurance claim and policy details. (Para 1 , 2 , 3)
2. arguments concerning non-disclosure of material change in policy address. (Para 4 , 5 , 6 , 7 , 8 , 9)
3. jurisdiction and procedural validity of consumer complaints. (Para 10)
4. court finding that failure to disclose location change invalidates insurance liability. (Para 11 , 12 , 13)

ORDER

DR.INDER JIT SINGH, PRESIDING MEMBER

1. The present Consumer Complaint (CC) has been filed under Section 21 (a) (i) of the Consumer Protection Act, 1986 by the Complainant against the Opposite Parties - 1 & 2 as detailed above, inter alia praying for directions to OPs:-

a) To hold and declare that the Opposite Parties to be guilty of deficiency in service and unfair trade practice as per the provisions of the Consumer Protection Act, 1986;

b) To direct the Opposite Party no.1 to pay to the Complainant the sum of Rs.94,67,740/- (Rupees Ninety Four Lakhs, Sixty Seven Thousand Seven Hundred and Forty) being the loss suffered by the Complainant in the fire accident and covered under the Standard Fire & Special Perils (Fire Claim) Policy no. 240400/11/14/ 3100000353 along with the interest at 18% p.a. from the date of the accident till realization.

c) To direct the Opposite Party no.1 to pay to the Complainant the sum of Rs.22,72,258/- being the interest at 18% p.a. on the above claim amount (Rs.94,67,740/-) from date of the accident (11/11/2015) calculated upto date of filing of the complaint (31/03/2017 for 16 months) and further direct to pay future interest w.e.f. from 01/04/2017 till realization.

d) To direct the Opposite Party No.1, Insurance Company to pay to the Complainant an amount of Rs.25,00,000/- (Rupees Twenty Five Lakhs) as compensation for the business loss, loss of reputation, mental torture and agony suffered by the Complainant due to negligence, deficiency in service and unfair trade practice of the Opposite Parties.

e) To direct the Opposite Party No. 1 Insurance Company to pay to the Complainant the sum of Rs.50,000/- (Rupees Fifty Thousand only) as costs of litigation.

2. Complaint was admitted and notice was issued to the Opposite Parties on 20.07.2017 with the direction to file their written statement within 30 days from the date of service of the notice of the Complaint. OPs filed their reply on 18.09.2017 (OP-1) and on 11.09.2017 (OP-2). Parties filed their Rejoinder, evidence and written synopsis.

3. It is averred/stated in the Complaint that:-

The Complainant M/s Max Print owned by Mr. Harji Kanji Devda is engaged in the business of Offset Printing specialized in needs of Pharma Sector. On 24.06.2014, the Complainant got sanctioned a financial assistance in the form of Cash Credit Hypothecation Limit of Rs.100.00 Lakhs for working capital needs of the unit from Bank of Baroda (BOB), which was sanctioned by BOB under a collateral free loan scheme of Government of India known as Credit Guarantee Trust for Micro and small Enterprises (CGTMSE). The BOB while sanctioning the said financial assistance imposed a condition regarding insurance of securities charged to BOB i.e. “the Branch to ensure to obtain adequate insurance cover with banks clause for primary and collateral securities under Bank assurance scheme with NIC”. Accordingly, the Bank obtained Standard Fire & Special Perils Policy cover from the National Insurance Company Ltd. for Stock in Trade of the unit at Gala No. 22 and 39 in Building No. A/2 Shah & Nahar Industrial Estate, S.J. Marg, Lower Parel (W), Mumbai, for the value of Rs.125.00 lakhs by debiting relevant premium from the account of the Complainant M/s Max Print, which was valid from 26.03.2015 till 25.03.2016. On 11.09.2015, the Complainant changed the Unit from Building No. A/2 Shah & Nahar Industrial Estate, S.J. Marg, Lower Parel (W), Mumbai to Unit 52 & 53, A/2 Shah & Nahar Industrial Estate, S.J. Marg, Lower Parel (W), Mumbai and moved its stock to the said Unit under verbal/writte

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2026 Supreme(Online)(NCDRC) 368

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONInder Jit Singh, Member, Sudhir Kumar Jain, MemberMax Prints – AppellantVersusNational Insurance Co. Ltd. – RespondentCONSUMER COMPLAINT NO. 984 OF 2017

An insurance contract is based on the principle of utmost good faith, and coverage is strictly limited to the insured premises disclosed in the policy; failure to notify the insurer of a change in business location renders the insurer not liable for losses at an unnotified premise.

Cases Referred (1)

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Member, Sudhir Kumar Jain, Member
Max Prints – Appellant
Versus
National Insurance Co. Ltd. – Respondent
CONSUMER COMPLAINT NO. 984 OF 2017