Delhi High Court
Universal Sompo General Insurance Co ... vs Suresh Chand Jain & Anr on 15 July, 2025
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 15th July, 2025
+ CM(M) 1791/2023 & CM APPL. 56785/2023
UNIVERSAL SOMPO GENERAL INSURANCE CO LTD
.....Petitioner
Through: Mr. D Varadarajan with Mr. Rajat
Khattry, Advocates.
versus
SURESH CHAND JAIN & ANR.
.....Respondent
Through: Mr. O P Gupta with Mr. Sanjeev,
Advocates.
CORAM:
HON'BLE MR. JUSTICE MANOJ JAIN
J U D G M E N T (oral)
1. Mr. Suresh Chand Jain (respondent No.1 herein) filed a complaint
under Section 17 of Consumer Protection Act, 1986 against M/s Universal
Sompo General Insurance Co Ltd (petitioner herein) and Allahabad Bank
(now known as Indian Bank).
2. Such complaint, filed before learned Delhi State Consumer Disputes
Redressal Commission (in short "State Commission"), was allowed vide
order dated 18.03.2016 and when insurance company filed an appeal before
the learned National Consumer Disputes Redressal Commission (in short
"NCDRC"), such appeal has also been dismissed on 16.01.2023.
3. Such order is under challenge by filing present petition under Article
227 of Constitution of India.
4. It, however, needs to be highlighted that, initially, the petitioner
herein had filed a Special Leave Petition (SLP) before the Hon‟ble Supreme
Court which was registered as SLP (Civil) No. 5263/2023 and the abovesaid
petition was disposed of without going into the merits of the case and the
petitioner was directed to first approach the jurisdictional High Court. In
terms of such directions contained in judgment dated 26.07.2023 passed by
the Hon‟ble Supreme Court of India, the present petition has been filed.
5. Heard arguments from both the sides.
6. For the sake of convenience, the parties would be referred as per their
nomenclature before the learned State Commission and, therefore, petitioner
as Opposite Party No.1/ Insurance Company, respondent No.1/ Suresh
Chand Jain as Complainant and respondent No.2 as Opposite Party
No.2/Bank.
7. In brief, the case of the complaint is that, it had taken two different
policies for the period 25.11.2011 to 24.11.2012.
8. One policy was covering the risk of burglary and the other was
covering the risk related to fire.
9. As per the policies, the risk location was 2049-A, Street No. 1,
Rajgarh Extension, Gandhi Nagar, Delhi -110031 and 1897/27, G.F., Hari
Ram Electrical Market, Bhagirath Palace, Chandni Chowk, Delhi-110031.
10. The sum insured, with respect to the burglary policy was Rs.
50,00,000/- whereas with respect to fire policy, the sum insured was Rs.
4,00,000/-.
11. According to complainant, a burglary took place at his premises
situated in Bawana on 29.06.2012 for which he got registered FIR with the
concerned Police Station and, thereafter, a fire incident also took place at his
premises on 18.10.2012.
12. For the abovesaid two separate incidents, complainant lodged his
claim(s) with the insurance company.
13. A Surveyor was appointed, who even conducted the survey.
14. However, since according to complainant these claims were not
processed and the delay was causing substantial loss to him, he was
compelled to file complaint before the learned State Commission.
15. As already noticed above, the learned State Commission has allowed
the complaint and has accordingly directed the insurance company to pay a
sum of Rs. 41,31,180/- in relation to claim under burglary policy with
interest @ 12% per annum w.e.f. 01.06.2013. Simultaneously, there is a
direction to the Opposite Parties to pay Rs. 2,00,000/- to complainant
towards compensation for mental agony, harassment and for deficiency in
providing services. As regards claim with respect to the fire policy, Opposite
Party No. 1 (insurance company) has been directed to process and finalise
the fire claim of Rs. 4,00,000/- within 30 days from the receipt of necessary
documents, as demanded from the complainant.
16. As noted already, the Insurance Company and the concerned Bank
were Opposite Parties before the learned State Commission and said order of
payment has been passed, jointly, against both the Opposite Parties.
17. Feeling aggrieved, the abovesaid order was assailed by Insurance
Company only and their such appeal (First Appeal No. 376/2016) has been
dismissed.
18. Interestingly, as informed, Opposite Party No.2 i.e. Bank did not
challenge said order passed by learned State Commission.
19. The prime most contention coming from the side of the Insurance
Company is to the effect that the policies in question were "specific to two
locations only" and, without any due intimation to them, the stock was
transferred to a third location i.e. DSIDC, Bawana where the alleged
burglary and fire took place. It is argued that in terms of the specific terms
of the policies, since the location had been changed unilaterally, the claims
were liable to be rejected, outrightly.
20. This Court has already noticed the two locations for which the
policies had been given and, it is also an admitted fact that the burglary and
fire had taken place at a third place i.e. at DSIDC, Bawana.
21. Though, on first blush, the contention of the petitioner looks very
attractive that if any insured person dares to change the location, it would do
the same at its own risk and peril and cannot be permitted to raise grievance
for rejection of its claim, but on deeper evaluation, such contention is found
to be specious.
22. The reason is not far to seek.
23. As noticed already, before the learned State Commission, the
Insurance Company as well as the Bank were Opposite Parties and their
versions were also taken on record.
24. According to the specific case of the complainant, when he
approached Allahabad Bank for loan, in terms of conditions of loan, he was
asked to take a policy of burglary as well as of fire. According to
complainant, the policy was arranged by said Bank only and they had never
approached any Insurance Company, with any request or proposal for grant
of any such policy.
25. The Bank in question acted as an intermediary and arranged the
abovesaid two policies and since the complainant had been able to construct
its premises in Bawana Industrial Area, he transferred his entire stock to
Bawana and also gave a specific intimation in writing to the Bank on
28.03.2012, when said two policies were valid and subsisting.
26. The Bank also duly acknowledged the abovesaid letter and the Bank,
even, intimated about the abovesaid "change in location" to the Insurance
Company by writing a letter to them on 31.03.2012.
27. This Court has gone through the orders passed by learned fora below
and both the fora have come to a specific finding of fact.
28. There is no dispute about the issuance of the policies and the learned
Commission also went on to hold that the Insurance Company and the Bank
in question were rather acting in joint-venture and since the change of
location had been duly communicated to the Bank, it had to be presumed to
be due intimation to the insurance company as well. The relevant
observation as recorded in the impugned order is as under:-
"11. The case of the complainant is that premises at Bawana had been
mortgaged with the Bank at the time when the loan had been taken
and that insurance policies had been obtained in order to insure the
property as well as the stock and that the premium had been paid by
the Bank at the time when the policy was taken and debited from his
account. The State Commission after perusing the relevant record has
also reached to the conclusion that the Bank and the Insurance
Company was having a joint venture. The State Commission has held
as under:
"It has also been proved on record that OP No.l/Insurance
Company is a joint venture of OP No.2 and the insurance
policies had been taken by OP No.2 bank to safeguard its
loan amount which is not denied by OP in their reply
therefore, OP No.2 bank had been rightly and correctly
impleaded as partly in the present complaint and the OP
No.2 is a necessary party. We are also of the opinion that
OP No.1 for the first time has filed before this commission
the assessment of the loss towards fire and we hold that
both the OPs have committed deficiency in service by not
assessing the loss caused to the complaint towards
burglary and fire as a result of which the compliantant
failed to liquidate his loan amount of OP No.2 bank and his
business bets been completely ruined and his property has
been taken by the bank charging compound interest@ 16%
with penalty.
In its Affidavit-in-Evidence, the OP No.2/Bank has stated
that on 17/8/2010, the complainant had taken a Term Loan
of Rs30,00,000/- and OD Limit of Rs.35,00,000/-
aggregating at Rs.65 lacs by furnishing D.P. Note for Rs.65
lacs in favour of the bank and mortgaging the subjected
property situated at Plot No.276, Pocket-C, Udyog Vihar,
Bavana Industrial Area, Delhi by virtue of registered lease
deed as document No.5662 dated 15/5/2007 as collateral
security. It has been further stated that as on 31/5/13, a
sum of Rs.60,75,077/- is outstanding as recoverable from
the complainant along with further interest. In nutshell
submission of the Bank are that it is legally entitled to
recover its loan amount alongwith interest from the
complainant. There is no denial by the bank that the OP
No.1/Insurance Company is not its joint venture and at
times the Managing Directors of both the OPs were not the
same person as specifically highlighted by the complainant.
There is also no denial by the bank that it had not
forwarded the letter dated 28/3/12 received from the
complainant to the OP No1l/Insurance Company.
Clause 6 of the Term Loan Agreement dated 17/10/10
executed between the complainant and the OP No.2/Bank
clearly lays down the basis and background which creates
an obligation on the complainant to ensure that the goods
in question are duly covered by the insurance policies.
Clause 6 further provides that in case of any failure on the
part of the complainant to comply with the requirement of
insurance covers, the OP No.2/Bank shall be entitled to
complete the said procedure and recover the cost of the
said procedure from the complainant. It is, therefore, clear
that the entire arrangement of having insurance cover for
the goods in question arose on account of loan
agreement/arrangement between OP No.2 and the
complainant and the records show that admittedly the
property situated at 276, Pocket-C, Sector-2, Bawana
Industrial Area, Delhi was mortgaged to the OP No.2/Bank
and OP-2 Bank had paid the entire premium of both the
insurance covers/policies by debiting the account of the
complainant."
12. It also stands proved and not denied by the Bank and rather
admitted by the Bank that the complainant had written a letter date
28.03.2012 to them informing them that they had shifted the stock at
their Bawana address which was mortgaged with the Bank. It is also
apparent that Bank had written a letter dated 31.03.2012 to the
insurance company which the insurance company has however,
denied. In view of the proved facts that the entire arrangement
between the Bank and the Insurance Company was a joint venture and
it was the Bank who purchased the insurance policy for the
complainant after paying the premium and debiting from the account
of the complainant with the Bank, it is sufficient that once the
complainant had informed the Bank about the change of address and
shifting of stock, it had complied with the terms and conditions of the
insurance policy and burden was, therefore, upon the Bank and the
Insurance Company to do the necessary endorsement in the policy. It
is also clear from the evidences that the Insurance Company had
failed to prove on record that it had sent the policies to the
complainant along with all the terms and conditions. The present case
is, therefore, distinguishable from the case laws relied upon by the
Appellant. In none of the cases, there was a contention that entire
arrangement was a joint venture between the Bank and the Insurance
Company and, therefore, findings of those cases are not relevant on
the facts and circumstances of this case. The State Commission has
also observed that terms and conditions of the policy were never
conveyed to the complainant and that insurance policy had never been
sent to the complainant. It has held as under:-
"After issuing the aforesaid insurance policy schedules, the
insurance policies have been claimed to have been
dispatched by the OP No.1 to the complainant on 16/12/11
but no such courier receipt showing dispatch or
acknowledgment of the complainant was placed on record
by the OP No.1 along with the Written Statement. However,
Original Courier Receipt bearing No.0212520239 dated
16/12/11 has been placed on record by the OP No.1 along
with its Evidence Affidavit which marked as Exh. RW-1/2.
A bare perusal of the said receipt shows that it nowhere
contains the acknowledgment of the complainant or
anybody on his behalf. Therefore, we have no hesitation in
holding that filing of the said courier receipt by the OP
No.l/Insurance Company is nothing but an attempt to fill
the lacunae of non-dispatch of insurance policies to the
complainant and thus the OP No.1 has been deficient in
rendering services to the complainant and accordingly is
not entitled to take any advantage of any of the clauses of
the said polices."
13. Regarding joint venture between the Bank and the Insurance
Company, the State Commission has observed as under:
"From a bare perusal of the Insurance Policy Schedules
filed by the complainant at page 11-14 of the complaint, it
is evident that the OP No.1/Universal Sompo General
Insurance Co. Ltd is a joint venture between Allahabad
Bank, Indian Overseas Bank, Karntaka Bank and Dabur
Investments. It is further evident from these Schedules that
the name of the OP No.2 viz Allahabad Bank has been
shown as Intermediary Name and hypothecation has also
been mentioned in favour of the OP No.2/Bank. Thus, we
find force in the contention of the complainant that both the
Opposite parties viz Insurance Company and the Bank
were engaged in joint venture business and the subjected
policies were arranged by the Bank as a part of entire
arrangement to cover the risks from certain perils and
during the entire period the OP No.2/ Allahabad Bank was
the de-jure owner of the stocks in question for the reason
that the entire stocks were admittedly hypothecated to the
bank and from the documents placed on record, it is clear
that the entire arrangement was mutually entered into
between the parties for protecting the interests of OP
No.2/Bank as well.
14. The State Commission on service of the letter of the
complainant dated 28.03.2012 regarding change of address has
observed as under:-
"The complainant has claimed that vide letter dated
28/3/12, he had informed the OP No.2/Allahabad Bank
about completion of construction and transfer of stocks to
276, Pocket-C, Sector-2, Bawana Industrial Area, Delhi.
Copy of the said letter has been placed at page 15 of the
complaint which, inter-alia, after giving necessary
particulars about Loan Account No. & stocks transferred
etc, clearly states as under:-
'This best of our knowledge & kindly do update our record
in your books as per this information, and kindly send the
copy of the same information to whom it ever be concerned
insurance company, of our above said premises by you.'
This very fact has not been disputed by the OPs and
therefore is deemed to be admitted. Therefore, from a
combined reading of Insurance Policy Schedules filed by
OP-1 and the Letter dated 28/3/12 written by the
complainant to the bank, a logical inference that can be
drawn is that as the Insurance Company and the Bank are
the joint ventures, the complainant found it sufficient to
intimate the Bank alone about shifting of stock at Bawana
with the request to further inform the insurance company
and there was no reason for the complainant to even
presume any failure on the part of the bank for not
complying with the instructions of the complainant. On
receiving the letter dated 28/3/12 written by the
complainant to the bank, a logical inference in fact, the OP
No.2/Bank has issued a letter bearing No.
LJP/Adv/Jaichand/163 dated 31/3/12 to the OP
No.1/Insurance Company under the heading 'Addition of
premises for stocks' and forwarded a copy of letter dated
28/3/12 received from the complainant. This very fact of
forwarding the letter dated 31/3/12 along with copy of
letter dated 28/3/12 to the OP No.1 has not been denied by
the OP No.2/Bank. However, OP No.1 has denied to have
received the said letter from OP No.2. There is nothing on
record to indicate that the said letter was not sent by the
OP No.2 to the OP No.1 as per request made by the
complainant and in all probabilities, it can safely be
presumed that the addition of Bawana premises as well as
shifting of stock there was well within the knowledge of
both the OPs and despite of specific knowledge the OP
No.1/Insurance Company did not care to protect the
interests of the OP No.2/Bank being the de-jure owner of
the goods and a joint venture of OP No.1 as well as the
interest of the complainant.
The presumption of having knowledge about the addition of
new premises by the OP No.1/Insurance Company is drawn
in favour of the complainant and further finds support from
the fact that it had appointed its surveyor to inspect and
survey the new premises which was done by the surveyor.
Moreover, the claim of the complainant of informing about
the newly added premises was not refuted by the OP
No.l/Insurance Company even after 29/6/12 i.e. the first
incidence of peril till the second date of peril/fire. Even
otherwise, if the version of the OP No.1/Insurance
Company is to be believed that it had not received the letter
dated 31/3/12 sent by the OP No.2/Bank, the bank has to be
held to be deficient in rendering due services to the
complainant and being the joint venture of OP No.1, both
the OPs are jointly or severally liable to compensate the
loss suffered by the complainant. The Counsel for the OP
No.1/Insurance Company has relied upon some decisions
of the Hon'ble National Commission. We have considered
the same. Suffice it to say that these cases are
distinguishable on facts inasmuch as in none of these cases
the Insurance Company and the Bank were the joint
venture of each other having common management
whereas in the present case the OP No.1/Insurance
Company is the joint venture of the OP No.1/ Allahabad
Bank."
29. Learned counsel for Insurance Company submits that the Bank in
question was, merely, its shareholder and there was no direct relation or
nexus between the two and, therefore, intimation to one could not have been
presumed as intimation to the other. He also submits that if one applies the
principle of Corporate Independence, the Bank and Insurance Company
would be two separate entities.
30. Be that as it may, fact remains that it is quite apparent from the
material placed on record that the complainant herein never ever directly
approached the Insurance Company for taking any policy. He had, merely,
gone to the bank for taking loan and while granting such loan, he was asked
by the bank to take such policies and it was the bank only which arranged
the abovesaid two policies.
31. Though the Bank had acted as intermediary, it was instrumental and
facilitator for arranging such policies. These were rather obtained by the
bank of their own, albeit, for its borrower.
32. In such peculiar facts and circumstances of the case, the moment the
location of the stock was changed and due communication was given to the
concerned Bank with the request that it be also duly intimated to the
Insurance Company, whatever was required to be done by the complainant
had, actually speaking, been done by the complainant.
33. It has been, in no uncertain terms, recorded by learned NCDRC that
even the Bank had written a letter on 31.03.2012 to the Insurance Company
and that being so, Insurance Company should have, rather, made immediate
and requisite correction in their record, with respect to the change in the
location.
34. This becomes important because when during the course of the
arguments, it was asked from learned counsel for the petitioner that whether
after issuance of policy, if there is any change in the location and intimation
to said effect is also sent to the insurance company directly, whether such
change would be incorporated in the record or not, the answer came in
affirmative as it was replied that it may happen, albeit, subject to insurability
of new location and subject to certain conditions.
35. Evidently, for the reasons best known to Insurance Company, it
denies receiving any such communication from Bank whereas Bank seems
very clear on said aspect. Thus, the endeavour of the Opposite Parties is to
merely frustrate the claim of complainant by indulging into a game of
„passing the buck‟.
36. Learned counsel for petitioner also submits that the repudiation was
not only on the ground of change in location, but there were other reasons
also which have not been appreciated.
37. Fact, however, remains that such factual aspects seem to be within the
domain of appreciation of evidence and while considering any petition under
Article 227 of Constitution of India, it may neither be feasible nor
appropriate for this Court to re-weigh and re-evaluate the entire evidence
and to come to any other opinion, particularly, when the view in question
seems to be a plausible one.
38. Viewed thus, this Court does not find any reason to interfere with the
impugned order. The petition is, accordingly, dismissed.
39. Before parting, this Court would, however, wish to clarify that the
abovesaid order has been passed while keeping in mind the peculiar facts of
the case. The change in the location was duly intimated to the concerned
Bank and the concerned Bank also sent intimation in this regard to the
Insurance Company but the location was not, somehow, recorded in their
record and, therefore, the present order shall not be taken as a precedent.
40. It is noticed that the 50% of the awarded amount was earlier deposited
by the petitioner herein with the learned Registrar General of this Court,
which was permitted to be withdrawn, subject to furnishing of security. Such
security has already been furnished by the complainant and in view of the
fact that the present petition is being dismissed, such security stands
discharged.
41. This Court may also supplement that there is a direction by learned
NCDRC with respect to the processing of the claim on account of fire and
when asked, learned counsel for the complainant submitted that all the
relevant documents have already been supplied to the Insurance Company
and they don‟t have further document which needs to be supplied to them.
42. In view of the above, this Court expects that in terms of the specific
directions given by learned NCDRC, said claim for the loss on account of
fire shall be processed, without any further delay.
43. The petition stands disposed of in aforesaid terms.
44. Pending application also stands disposed of in aforesaid terms.
(MANOJ JAIN)
JUDGE
JULY 15, 2025/sw/JS
