Page No.# 1/13 vs The New India Assurance Company Limited
2025 Latest Caselaw 5705 Gua

Gauhati High Court

Page No.# 1/13 vs The New India Assurance Company Limited on 25 June, 2025

                                                                         Page No.# 1/13

GAHC010060812021




                                                                   2025:GAU-AS:8550
                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                               Case No. : WP(C)/2285/2021

            KAILASH CHAND JAIN
            S/O SRI BHANWAR LAL JAIN, SOLE PRORIETOR OF M/S SHREE KAILASH,
            HAVING HIS PRINCIPAL PLACE OF BUSINESS AT ALLAHABAD BANK
            BUILDING, S.R.C.B ROAD, FANCY BAZAR, GUWAHATI, KAMRUP M
            ASSAM, 781001, WITH ADDITIONAL OFFICE OR BRANCHES AT
            BRAHMAPUTRA JUTE MILLS PVT. LIMITED, A.K AZAD ROAD, GOPINATH
            NAGAR, GUWAHATI . 781016, DISTRICT KAMRUP (M) , ASSAM , ROOM NO.
            212, ALLAHABAD BANK BUILDING, S.R.C.B ROAD, FANCY BAZAR,
            GUWAHATI, KAMRUP M ASSAM, 781001, AND A.K AZAD ROAD,
            GOPINATHNAGAR, GUWAHATI 781016, DISTRICT KAMRUP M ASSAM

            VERSUS

            THE NEW INDIA ASSURANCE COMPANY LIMITED
            HAVING ITS REGISTERED AND HEAD OFFICE TA NEW INDIA ASSURANCE
            BUILDING, 87, MAHATMA GANDHI ROAD, FORT MUMBAI 400001 AND
            CENTRALISED CLAIMS HUB, N.E.R.O, G.S ROAD, LACHIT NAGAR,
            GUWAHATI 781007 AND CITY BRANCH OFFICE AT A.T ROAD (530907) PO
            GUWAHATI 781001, DIST KAMRUP (M) GUWAHATI. ASSAM


Advocate for the Petitioner   : MR. O P BHATI, MR. M K GOGOI,MR. P SARMA,MR T C DAS

Advocate for the Respondent : MR D DEKA, MR. R GOSWAMI,MS. P BORTHAKUR


                                  BEFORE
                 HONOURABLE MR. JUSTICE ARUN DEV CHOUDHURY

                              JUDGMENT & ORDER (ORAL)

Date : 25-06-2025

1. Heard Mr. O.P. Bhati, learned counsel for the petitioner Page No.# 2/13

and Mr. R Goswami, learned counsel for the Insurance Company.

2. By the present writ petition, the petitioner had challenged the validity of award dated 23.02.2021 passed by the Insurance Ombudsman, Guwahati, by affirming of order of repudiation by the respondent Insurance Company dated 09.10.2020.

3. It is the case of the petitioner that to ensure safety of business carried out by the petitioner, the petitioner obtained three separate insurance policies for three shop premises belonging to the petitioner. One of it is situated at A.K. Azad Road, Kalapahar, Campus of Brahamputra Jute Mills Pvt. Ltd, Guwahati. Other policies are for the shop premises situated at Shree Kailash, 206 Allahabad Bank Building, Fancy Bazar, and for the shop situated at 212, Allahabad Bank Building, Fancy Bazar, Guwahati. The subject matter of dispute is relatable to the policy No.53090748190600000205 in respect of shop premises at A.K. Azad Road, Kahilipara campus of Bramhaputra Jute Mills, Private Limited. (hereinafter referred to as the premise).

4. The aforesaid policy was valid from 24.03.2020 to 23.03.2021. It is not in dispute that the aforesaid policy was a shopkeeper's policy. The petitioner made a claim against such policy for damage of stock at the premise due to flood. On receipt of the intimation of the loss, the Insurance Company initially appointed one investigator namely, Shri Dipak Das to investigate the claim. Thereafter, the insurance company appointed one Shri Aswini Sarma, surveyor to assess the loss. The Surveyor on 22.07.2020, according to the petitioner, demanded certain documents, and those were duly provided to the said surveyor.

Page No.# 3/13

5. Thereafter, based on such report of the Surveyor, by a letter No.NERO/CCH/DK/1682 dated 09.10.2020, the respondent Bank repudiated the claim of the petitioner on different grounds which shall be dealt at a later stage of the judgment.

6. Being aggrieved by the aforesaid repudiation, the petitioner approached the Ombudsman and the Ombudsman by the impugned order also upheld the action of the respondent Bank to repudiate the claim and being aggrieved, the petitioner is before this court.

7. Mr. O.P. Bhati, learned counsel for the petitioner contends that one of the reason that the petitioner was not having a trade license on the date of the claim, cannot be a valid ground to repudiate such claim inasmuch as, in terms of section 180(2) of the Guwahati Municipal Corporation Act, a license can be obtained for previous years which has admittedly been done in the case and due license was obtained subsequent to the date of accident.

8. The second contention of Mr. Bhati is that the Ombudsman has erroneously based its decision on the photo/photos and report of the surveyor to the effect that the premises were used as a godown. According to Mr. Bhati, those photographs in no way can be based to arrive at a decision that the place was a godown and not a shop. According to Mr. Bhati, the photos were taken by a surveyor on the date of survey on 22.07.2020 and not prior to it and therefore, photographs of the damage goods lying in the business premises of the petitioner cannot be a ground to deny the right of the petitioner under the Insurance Contract, inasmuch as such evidence Page No.# 4/13

i.e., photos are not reliable evidence.

9. It is the further contention of Mr. Bhati that the Ombudsman was influenced by the enquiry report as well as by the photographs and the Ombudsman did not come to independent conclusion on its own, inasmuch as under the scheme of the Ombudsman Rules, an Ombudsman is duty bound to adjudicate a claim of an insured or an insurer by its own independent application of mind being a quasi judicial tribunal.

10. So far it relating to the contention of the Insurance Company that even in the intimation letter issued by the petitioner dated 20.07.2022, the premises is described by the petitioner as godown, the name cannot be a conclusive proof to arrive at a conclusion that the premises was not a shop and rather, it was a godown. So far relating to not having signboard on the business premises, Mr. Bhati argues that there is no requirement under law that there must be a signboard in the premises disclosing the same to be a shop.

11. Per contra, Mr. R Goswami, learned counsel for the respondent submits that the procedure before the Ombudsman is a summary procedure and in the present case the Ombudsman has duly considered the materials produced by either of the parties and arguments advanced by them.

12. According to Mr. Goswami, the petitioner has never raised any objection as regards the validity of the surveyors report and therefore, the petitioner cannot be permitted to raise such points before this court which is exercising power of writ of certiorari.

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13. Mr. Goswami, further contends that the Insurance Surveyor report clearly discloses that the premises was a godown which was supported by the application of the petitioner dated 20.07.2022 by disclosing that it was a godown, however, he obtained a policy of shopkeepers. Therefore, such fact is nothing but suppression of material facts which disentitles the petitioner to make an insurance claim in terms of paragraph 2 of the policy.

14. Mr. Goswami, further contends that this court may not interfere with the decision of the Ombudsman, more particularly, when there is no violations of principles of natural justice, when the ombudsmen did not exceed its jurisdiction or acted without any legal authority inasmuch as the procedure adopted by the Ombudsman was fair and has not violated the principles of natural justice.

15. According to Mr. Goswami, this court in exercising its jurisdiction of Writ of Certiorari may not deal the matter as an appellate authority.

16. Heard the learned counsel for the parties. Perused the materials available on record including the records of the Ombudsman.

17. The power and procedure of exercise of power by the Ombudsman are prescribed in Ombudsman Rule, 2017. It is seen from the Rule 2 of the Rules, 2017 that the object is to resolve all the complaints in a cost effective and impartial manner. Rules 7 of the Rules, 2017 prescribes for appointment of an Insurance Ombudsman and Rule 11 provides for its territorial jurisdiction. At the same time, Rule 13 provides for duties and function of the Insurance Ombudsman Page No.# 6/13

i.e. to receive complaints or disputes on various counts as specified in Clause (a) to (i) of the said Rule. Rule 14 prescribes the manner in which complaint is to be made by any person, who has grievance against its insurers inasmuch as such complain can be made by the complainant or their legal heirs, nominees or assignees in writing before the Ombudsman having territorial jurisdiction over the branch of the office of the insurer or within the jurisdiction place of residence of the complainant.

18. Sub-rule 4 of Rule 14 even empowers the Ombudsman to condone delay of one year as prescribed in Clause 3(b) of the Rule,

14.

19. Rule 15 mandates that Insurance Ombudsman is to act fairly and equitably, which also includes power to obtain opinion of professional expert, if disposal of the case so warrants. Sub-rule 4 of Rule 15 mandates that the Ombudsman should dispose of a complaint after giving the parties to the disputes a reasonable opportunity of being heard.

20. Rules 17 provides for an award to be made by the Insurance Ombudsman, when complaint is not settled by mediation. Under Rule 17, the Ombudsman is under obligation to pass an award which shall be based on pleadings and evidence placed on record. Such award needs to be in writing and to disclose/ state the reason on which the award is based. When such award is in favour of the complainant, in term of Sub-rule 3 of Rule 17, the amount awarded is to be stated, after deducting the amount already paid if any. Sub-rule 3 of Rule 17 bars an Ombudsman from awarding a compensation in Page No.# 7/13

excess of loss suffered and also bars from passing any award exceeding Rs. 30,00,000/-. A time limit of three months is also prescribed, within which such award is to be passed.

21. Such Ombudsman Rule, 2017 is a statutory scheme, which empowers the Ombudsman to make award inasmuch as from the scheme of the Rules, 2017 leaves no doubt in the mind of this court that Insurance Ombudsman is an adjudicating authority inasmuch as the rules mentioned and discussed hereinabove, has all trappings of adjudication by a Tribunal. The adjudication as mandated is obligated to act judicially and while exercising its power all essential ingredients, such as acceptance of pleadings, evidence, giving reasonable opportunity of hearing to the parties, passing of an award, determining the liabilities are akin to the function as discharged by a Tribunal in adjudicating disputes.

22. That being the position, this court cannot be unmindful of the settle principle of law that writ of certiorari under Article 226 of the Constitution of India can be issued only to correct errors of jurisdiction, where a court or tribunal acts with material irregularity or in violation of natural justice, but not for the purpose of re- appreciation of evidence or acting as a court of appeal. In this regard, this court can gainfully place reliance of the paragraph 7 of the judgment of the Hon'ble Apex Court rendered in Sayed Yakoob vs. KS Radhakrishnan reported in AIR 1964 SC 477 and the same are quoted hereinabove.

"7. The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in Page No.# 8/13

that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue Page No.# 9/13

a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104: ((S) AIR 1955 SC 233): Nagendra Nath v. Commr. of Hills Division, 1958 SCR 1240 (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168.

23. Now coming to the case in hand, the subject policy was a shopkeeper's policy. The petitioners made a claim against such policy for damage of stock at the premise due to flood. On receipt of the intimation of the loss, the Insurance Company initially appointed one investigator namely, Shri Dipak Das to investigate the claim. Thereafter, the insurance company appointed one Shri Aswini Sarma, surveyor to assess the loss. The Surveyor on 22.07.2020, according to the petitioner, demanded certain documents, and those were duly provided to the said surveyor. Thereafter, based on report of the Surveyor, by a letter No. NERO/CCH/DK/1682 dated 09.10.2020, the respondent Insurance Company repudiated the claim of the petitioner on different grounds, such as that the trade license of the insured premise was not provided by the claimant, even after repeated request of the Insurance company, and therefore, it is implied that the premises was operated without a license. No signboard was found in the premises by the investigators, the tax invoices issued to the buyers were delivered from the premises situated at Fancy Bazar and not from the premise in question, purchase and sale records were of Shri Kailash, located at SRCB Road, no sale record in the name of the Sri Kailash located at the premises in question was found and therefore, the concerned premises is not an independent shop Page No.# 10/13

premises but is used as storage of business goods related to their other two shops, which is also supported by the intimation letter of the petitioner that 20.07.2020, according to which the premises was a godown.

24. In this regard it is not in dispute that as on the date of damage and date of claim made by the petitioner, the petitioner was not having any trade license from the Municipal authorities though the same was subsequently obtained. So far relating to the application filed by the petitioner dated 20.07.2020 whereby it was intimated to the Insurance as regards the damage, the petitioner described the premises as their "godown".

25. The finding of the surveyor in its report dated 24.09.2020 is quoted herein below:

1. Trade License: The competent authority i.e Guwahati Municipal Corporation issued a trade license Vide No. 14964 dated 13.8.2005 in the name of M/s. Shree Kailash Prop. Mr. Kailash Jain & permitted to carry his business institution located at SRCB Road, Fancy Bazar, W/No. 10A, Guwahati-

781001.

But No Trade license could be produced by the insured which is permitted to operate his business from the concerned location i.e from M/s. Brahmaputra Jute Mill campus, A.K Azad Road, Gopinath Nagar, Guwahati-781016.

2. The GST Registration certificate also reveals that the M/s. Shree Kailash, a trader whose location of business institution is as under.Allahabad bank building, SRCB Road, Fancy Bazar, Guwahati-1

3. Tenancy Agreement: Though it is found that the concerned premise was let out to M/s Shree Kailash Prop. Kailash Chand Jain mentioning the premise as shop premise but no any Sign Board, availability of items with price list board etc. Page No.# 11/13

was noticed.

4. Tax invoices are found generated & issued to buyers and wherein the M/s. Shree Kailash, 206, Allahabad Bank Building, Fancy Bazar, Guwahati-1, is noticed as the seller of the goods which were delivered from concerned premise located at Brahmaputra Jute Mill campus, A.K Azad Road, Guwahati. An invoice bearing No. 99 dated 27.6.2020 (which was provided by the insured) is an example, enclosed herewith. AND no other invoice could be furnished by the insured which could ascertain that M/s. Shree Kailash located at Brahmaput Jute Mill campus, A.K Azad Road, Guwahati-16 is a seller of the goods.

5. Screen shot print showing the closing stock/ Sales A/c statement from 1.4.202017.8.2020 which is found belong to the business record of M/s. Shree Kailash, located at SRCB Road, Fancy Bazar, Guwahati-1. All the purchases & sells are the record of M/s. Shree Kailash, located at SRCB Road, Fancy Bazar. No record was found in the name & style of M/s Shree Kailash, located at Brahmaputra Jute Mill Complex, A.K Azad Road, Guwahati.

From the above findings, it is understood that the concerned premise located at Brahmaputra Jute Mill complex, Gopinath Nagar, Guwahati-16 is not an independent shop premises but from the documents & activities narrated above, it is clear that the concerned premise is being used as storage of business goods related to M/s. Shree Kailash which is located at SRCB Road, Fancy Bazar, Guwahati -1

26. The learned insurance ombudsman in its award under challenge duly considered the contentions of the parties including the survey report, the policy and also heard the parties. After consideration of the documents as well as the verbal submissions and perusal of record, the claim was rejected primarily on the ground that the claimants was not having any trade license and he got trade license on 09.10.2020, after the loss. The learned ombudsman also Page No.# 12/13

placed reliance on the report of the surveyor and accepted the same and also considered that though the premises which, was insured was a godown, however, policy was a shopkeepers policy.

27. Though Mr. Bhati has urged that in terms of section 180(2) the trade license was subsequently obtained with retrospective effect covering the period of accident and which is permissible under law, this court is not impressed with such an argument inasmuch as such validity with retrospective operation may have implication in a dispute under Guwahati Municipal Corporation Act, 1971, but cannot be accepted in a dispute like the present one, where admittedly the policy was a shopkeepers policy on the declaration of the petitioner himself and on the date of the claim there was no license to run such a shop. Such license bears significance, in the backdrop that the petitioner in its intimation letter dated 20.07.2020 described the premise as a godown. Had there been a valid trade license of a shop on the date of the incident and/or on the date of the claim, this court could have even accepted the argument of Mr. Bhati that the description of the premises in the intimation letter dated 20.07.2020 as godown was a mistake.

28. Even if it is assumed that the contention of Mr. Bhati that the learned ombudsman has unduly placed reliance on the photo/photos produced by surveyor to suggest that premises in question was used as a godown, in absence of any material from the claimant himself that it was a shop and he has trade license for running such shop, this court in exercise of certiorari jurisdiction cannot interfere with the impugned award.

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29. The reliance placed by the ombudsman upon the survey report, in a summary procedure like the present one, in absence of any cogent material being placed by the claimant, even prima facie creating a doubt upon such survey report, and/or any challenge to such survey report before the ombudsman cannot be said to be perversed. Therefore, the arguments advanced by Mr. Bhati in this context also stands negated.

30. In the totality of the matter, the factual determination made by the Ombudsman in the impugned award based on the material placed by the parties, in the considered opinion of this court, cannot be fastened with an unreasonable determination based on no evidence. That being the position, this court is not inclined to interfere with the impugned award passed by the learned ombudsman in exercise of its certiorari jurisdiction.

31. Accordingly, this writ petition stands dismissed. Parties to bear their own costs.

32. The records of the Ombudsman be sent back.

JUDGE

Comparing Assistant