Delhi District Court
Devender Singh Jamwal vs Container Corporation Of India Ltd on 21 March, 2025
IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 03 - SOUTH EAST
DISTRICT SAKET COURTS, NEW DELHI.
CS (COMM) 29/2024
DEVENDER SINGH JAMWAL
Proprietor/ Authorized Person of
M/s Devender Singh Jamwal Security Agency
Through SPA Sh. Rajpal Singh Negi
Shop No. 106, Agarwal Tower, Pocket O & P,
Dilshad Garden, Delhi-110095.
Ismail Pur. Agwanpur, Faridabad-121009 ..... PLAINTIFF
VERSUS
1. CONTAINER CORPORATION OF INDIA LTD.
Inward Container Deport, Tughlakabad
New Delhi-110020
2. THE NEW INDIA ASSURANCE CO. LTD.
Through its Manager
301-310, 3rd Floor, Bhandari House,
91, Nehru Place, New Delhi-110019
Also at :
New India Assurance Building, 87,
M.G. Road, Fort Mumbai-400001 .....DEFENDANTS
Date of Institution : 16.01.2024
Date when final arguments heard: 10.03.2025
Date of Judgment : 21.03.2025
CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 1/ 23
JUDGMENT
1. Vide this judgment, I shall decide the suit for recovery filed by the plaintiff against the defendants.
2. Brief facts of the case are that the plaintiff is the Sole Proprietor of M/s Devender Singh Jamwal Security Agency. Defendant no. 1 has employed the services of the plaintiff as Sub- Contractor who insured his employees through its group insurance policy from defendant no. 2 under the Workmen's Compensation Insurance Policy. The said policy covers the legal liability of the employers under the Workmen's Compensation Act and Fatal Accident Act. The said policy enable the employer to pay the compensation to the employees or for their family in case of death or body injury arising out of in the course of employment. This policy also provides coverage for medical expenses, occupational disease, compressed air disease and terrorism etc..
3. One employee namely Amir Chand aged 51 years while working at the site suffered accident on 11.10.2020 due to fall of heavy gate of defendant no. 1 and consequently expired on 13.10.2020. He survived by his wife and two sons. The claim was filed before the defendant no. 2 insurance company and a survey was done. The survey report dt. 15.06.2021 given by surveyor, which favoured the claim of defendant no. 2. The claim however was repudiated by defendant no. 2 on the flimsy ground vide letter dt. 19.09.2022 that at the time of accident, there were 145 workers CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 2/ 23 engaged and the policy was taken only for 99 workers. It is also stated that the deceased Amir Chand was under the same 99 workers who were covered under the policy and number of employees keeps on increasing and decreasing as per the requirement of contractor. The plaintiff claimed an amount of Rs. 5,70,000/- alongwith 24% interest from the date of claim or date of repudiation of claim. The plaintiff initiated pre-mediation litigation but defendant did not appear and non-starter report was issued, pursuant to which the plaintiff filed the present suit with following reliefs :
i. Pass a decree in sum of Rs. 5,70,000/- with cost, alongwith pendent-lite with interest thereon @ 24% compounded monthly from the date of claim dt. 13.10.2020 be kindly passed in favour of the plaintiff and against the defendant no.2.
ii. Cost of the suit be awarded in favour of the plaintiff and against the defendants.
4. In written statement, the defendant no. 1 stated that defendant no. 1 has nothing to do in the present case and the entire relief was against the defendant no. 2. It is submitted that the plaintiff has not settled the case under the Employees Compensation Act, however, an amount of Rs. 14,44,635/- has been deposited by defendant no. 1 before Labour Commissioner on 28.09.2023 in terms of Section 12 of Employees Compensation Act acknowledging its own accountability as principal employer. The said amount was deducted from the dues of M/s Devender Singh Jamwal, however till date no CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 3/ 23 award of compensation has been passed in favour of Amir Chand, Security Staff of plaintiff by Labour Commissioner, as per their knowledge. It is also stated that present dispute is not in commercial nature.
5. Defendant no. 2 in his written statement stated that the present case do not involve any commercial dispute rather a consumer dispute. It is also stated that the plaintiff has concealed the true and complete facts. The plaintiff firm taken the policy upto 99 employees, however on the date of accident, there were 145 employees deployed for defendant no. 1 through the employer firm.
6. In parawise reply, it is stated that the plaintiff insured 99 employees through the group insurance policy taken from defendant no. 2 under the Workmen's Compensation Insurance Policy. It is stated that it is correct that group insurance policy was taken by the plaintiff but the said policy was extended only for 99 employees, however there were 145 employees deployed on the date of accident and this fact was concealed from defendant no. 2. The surveyor gave the report based only on the facts available to the surveyor. The final call with respect to awarding the insurance claim lies with the defendant no. 2. The report of the surveyor does not have any binding effect on the decision to be taken by defendant no. 2. It is further stated that it was the duty of the plaintiff to make and amend the insurance policy as and when the requirements changed. The defendant no. 2 should not be liable for the insurance claim since the CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 4/ 23 policy was taken from it based on misrepresented facts about the number of workers. It is prayed that suit be dismissed.
7. In replication to the written statement of defendant no. 1, the plaintiff submitted that the accident took place due to fault of defendant no. 1 who did not repair its gate. Furthermore, the case discloses commercial dispute. The plaintiff company finished its contract with defendant no. 1 on 29.09.2023 and a total amount of Rs.
33,35,323/- was due on defendant no. 1 and the same amount is still pending upon defendant no. 1. The plaintiff is not aware that the defendant no. 1 had deposited an amount of Rs. 14,44,635/- before the Labour Commissioner. The plaintiff reiterated its stand in the replication.
8. In replication to the written statement of defendant no. 2, it is stated by the plaintiff that the present case involved commercial dispute not a consumer dispute. It is further stated that deceased was covered under the list of employees when the policy was purchased after some new workers were recruited by the plaintiff that is why the list shows 145 employees, however the deceased was covered under the policy. On 02.06.2020, the policy was taken for 99 workers, although total 94 workers are employed at that time and the plaintiff given a list of 94 workers to the defendant no. 2 and in the said list, the name of deceased Amir Chand was at second place in the list of 94 workers.
CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 5/ 23
9. In parawise reply, it is stated that surveyor surveyed the each fact thoroughly and found that deceased Amir Chand included in the list of 94 workers. The number of workers may increase or decrease but it does not mean the defendant no. 2 is not liable to compensate in this matter as the deceased was impleaded in the list of those workers against whom the policy was taken. The surveyor also gave the report that defendant no. 2 is liable to compensate the legal heirs.
10. In affidavit of admission denial of documents, the plaintiff admitted the copy of delegation of power dt. 25.03.2021, however denied the copy of payment of employee compensation in respect of deceased Amir Chand, documents filed by defendant no. 1. The plaintiff admitted the copy of the attendance sheet of the employees, copy of the records of the wages of the employees of plaintiff's company, however denied the investigation report by Merit Insurance Surveyors and Loss Assessors Pvt. Ltd., documents filed by defendant no. 2.
11. In affidavit of admission denial of documents, the defendant no. 1 denied the SPA and ID proof of SPA Holder, however admitted the copy of agreement dt. 20.12.2019 between plaintiff and defendant no. 1. The defendant no. 1 neither admitted nor denied the copy of employment details and other forms of Lt. Sh. Amir Chand, copy of hospitalization and medical document and death certificate of deceased, copy of group insurance policy schedule alongwith list of of CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 6/ 23 employees covered, copy of EPFO payment confirmation alongwith list of employees, letter of appointment of deceased, copy of addendum to the final surveyor M/s Mack Insurance Surveyors & Loss Assessors Pvt. Ltd., copy of letter dt. 19.09.2022 issued by defendant no. 2. The defendant no. 1 though admitted copy of photographs of site, copy of Form-B showing employee at the time of accident and non-starter report.
12. The defendant no. 2 in his affidavit of admission denial of documents neither admitted nor denied the copy of agreement dt. 20.12.2019 between plaintiff and defendant no. 1, copy of employment details and other forms of Lt. Sh. Amir Chand, copy of hospitalization and medical document and death certificate of deceased, photographs of the site, copy of EPFO payment confirmation alongwith list of employees, copy of Form B showing employee at the time of accident, letter of appointment of deceased alongwith workers' sheet. The defendant no. 2 though admitted the copy of group insurance policy schedule alongwith list of employees covered, however denied the correctness of the document and execution of the document but admitted the issuance of receipt and stated that it is in the custody of plaintiff. In affidavit of admission denial of documents, the defendant no. 2 denied the report of M/s Mack Insurance Surveyors & Loss Assessors Pvt. Ltd., however admitted the existence of such document, denied its execution but CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 7/ 23 admitted the issuance of receipt. The defendant no. 2 admitted the letter dt. 19.09.2022 and denied the non-starter report.
13. On completion of pleadings, following issues were framed on 11.09.2024 :
1. Whether the plaintiff is entitled for the recovery of Rs. 5,70,000/-
against the defendant no. 2 ? OPP.
2. Whether the plaintiff is entitled to any interest? If so, at what rate and for which period? OPP.
3. Relief.
The matter was referred to Local Commissioner for recording of evidence. The plaintiff examined PW1 Rajpal Singh Negi Authorized representative of plaintiff. The defendant examined DW1 Ms. Archana Soni, Authorized representative of defendant no. 2. Brief summary of evidence
14. PW1 Rajpal Singh Negi tendered his affidavit of evidence Ex.PW1/1 and in cross examination stated that it is correct that group insurance policy (Ex.PW1/8) is taken for 99 employees and it is also correct that at the time of death of deceased, there were 145 employees with the plaintiff firm. He further stated that survey report was directly sent by the surveyor to the insurance company. He denied suggestion that insurance company did not engage Mack Insurance Surveyors and Loss Assessors Pvt. Ltd.
15. DW1 Ms. Archana Soni tendered her affidavit of evidence Ex.DW1/1 and in cross examination stated that she worked CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 8/ 23 as Deputy Manager in defendant no. 1 company and the plaintiff company purchased this policy in June, 2020, and duration of the policy is of 7 months i.e. June, 2020 to January, 2021. Devender Jamwal purchased this policy for the employees of the plaintiff. The group insurance policy was signed between the plaintiff and defendant no. 2. In reply to the question whether any loss of employees were covered under this policy, she stated that it was un-named policy and there is no list of employees insured was attached and declared for 99 employees without mentioning their names. She denied suggestions that list of employees insured was attached and declared for 99 employees without mentioning their names. She denied that the list of employee insured was attached at the time of taking the insurance company. As per PF statement of employees of plaintiff company, the plaintiff company is liable to pay any risk or loss mentioned in the policy. Accident took place on 13.10.2020, and they appointed IRDA Licensed, Surveyor/ Investigator. She further submitted that Mack Insurance Surveyor and Loss Associate Pvt. Ltd. is not associated with their company and document presented by the plaintiff company are forged and fabricated and they have rejected the claim on the basis of the facts.
Material Exhibits :
16. Ex.PW1/2 is the SPA of AR, Ex.PW1/3 is the Aadhar Card of AR; Ex.PW1/4 is the copy of agreement dt. 20.12.2019 between plaintiff and defendant no. 1 for providing security and allied CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 9/ 23 services at ICD/TKD; Ex.PW1/5 (Colly) is the copy of employments details and other form of Lt. Sh. Amir Chand; Ex.PW1/6 (Colly) is the photographs of the site; Ex.PW1/7 (colly) is the copy of hospitalization, medical documents and death certificate; Ex.PW1/8 (Colly) is the copy of group insurance policy scheduled alongwith list of employee covered; Ex.PW1/9 (Colly) is the copy of EPFO payment confirmation alongwith list of employee; Ex.PW1/10 is the copy of Form B showing employee present at the time of accident; Ex.PW1/11 is the letter of appointment of deceased alongwith worker seat; Ex.PW1/12 is the final survey report of M/s Mack Insurance Surveyor & Loss Assessors Pvt. Ltd.; Ex.PW1/13 is the copy of letter dt. 19.09.2022 issue by defendant no. 2; Ex.PW1/14 is the non-starter of pre-mediation litigation.
Ex.DW1/2 is the copy of investigation report prepared by Merit Insurance Surveyors and Loss Assessors Pvt. Ltd.; Ex.DW1/3 is the copy of attendant sheet of October month 2020 of the plaintiff; Ex.DW1/4 is the copy of record of wages of the employees of plaintiff's company for the month of October, 2020. Submissions of counsels :
17. Ld. Counsel for plaintiff submitted that the deceased Amir Chand suffered accident while on duty on 11.10.2020 and pursuant to that expired on 13.10.2020. The plaintiff have taken the Workmens Insurance policy from defendant no. 2 which covers the legal liability of the employer under the Workmen Compensation Act CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 10/ 23 and Fatal Accident Act, 1885. This group insurance policy was taken for 99 workers and at that time, the list of employees were duly served. However, the employees keeps on increasing and decreasing and on the date of accident, 145 workers are working. There is no material concealment from the defendant no. 2 at the time of taking of policy. The defendant no. 2 had not filed any terms and conditions nor all the documents taken from the plaintiff at the time of issuance of policy. The defendant is taking the plea of non-disclosure and material concealment and for this purpose, the defendant has to show all the documents in his power and possession. The defendant no. 2 employed the services of Mack Insurance Surveyor & Loss Assessors Pvt. Ltd. which gave report in favour of the claimant, however the defendant no. 2 later on alleged to have engaged some other insurance surveyor who gave report against the plaintiff. The defendant no. 2 is baldly denying the report of first surveyor without any explanation.
Ld. Counsel submitted that even otherwise, the defendant no. 2 is liable to compensate in terms of the insurance policy as the deceased employee was working in the plaintiff's firm at the time when the group insurance policy was taken. The suit be decreed accordingly in favour of the plaintiff.
18. Ld. Counsel for defendant no. 2 submitted that the plaintiff had violated the fundamental principles of insurance namely uberrima fides (utmost good faith) by failing to disclose the material facts to the defendant no. 2. The plaintiff obtained the insurance CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 11/ 23 policy for 99 employees, however there were 145 employees enrolled on the date of accident. This discrepancy alone renders the insurance policy void and same amount to misrepresentation of the plaintiff. It is submitted that in insurance contract, both the contracted party are under duty to disclose all material facts relevant to the risk being insured. The plaintiff in present case misrepresented the material facts by failing to inform the defendant no. 2 about the increase in number of employees from 99 to 145 employees. It is false and denied that the plaintiff has disclosed that deceased was part of original 99 employees insured under the group insurance policy. In this unnamed insurance policy, the individual covered are not specified by name but instead insured as a part of defined group. On the date of accident, the number of employees had increased to 145 exceeding the limit of 99 employees and this material change infact was not informed to defendant no. 2, hence, defendant no. 2 is fully justified in repudiating the plaintiff's claim. The plaintiff had not furnished any list of employees to the defendant no. 2 at the time of taking of policy. (Relied upon Texco Marketing (P) Ltd. Vs. Tata AIG General Insurance Co. Ltd., (2023) 1 SCC 428; Mahakali Sujatha Vs. Future General India Life Insurance Co. Ltd., (2024) 8 SCC 712; Oriental Insurance Co. Ltd. Vs. Mahendra Construction (2019) 18 SCC 209 and United India Fire and General Insurance Company Ltd. Vs. Kalsum Begum and Ors. 1986 SCC Online Gau 177) CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 12/ 23
19. Ld. Counsel for defendant no. 1 submitted that no relief is claimed against the defendant no.1, however defendant no. 1 had already deposited the amount with Labour Commissioner in terms of Section 12 of Employees Compensation Act acknowledging its accountability as principal employer. Ld. Counsel submitted that the defendant no. 1 has nothing to do with the group insurance policy in question.
20. All the parties also filed written submissions.
21. Arguments heard. Record perused.
22. My issue wise findings are as under :
Issue No. 1 : Whether the plaintiff is entitled for the recovery of Rs. 5,70,000/- against the defendant no. 2 ? OPP.
Issue No. 2 : Whether the plaintiff is entitled to any interest? If so, at what rate and for which period? OPP.
The case of the plaintiff is that the plaintiff has been engaged as a Sub-Contractor by defendant no. 1 as an agency for providing security and allied services to defendant no. 1 through agreement dt. 20.12.2019 (Ex.PW1/4). The deceased Amir Chand was employed with the plaintiff and letter of appointment w.e.f. 30.01.2019 (Ex.PW1/11) and relevant ID card was also issued (part of Ex.PW1/4) on 30.11.2019. The accident took place on 11.10.2020 and deceased expired on 13.10.2020. The accident and death is corroborated through police report and the medical documents which CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 13/ 23 are also not disputed. The plaintiff while taking the group insurance policy had submitted the Employers Provident Fund, Challan-cum-
return (Ex.PW1/9) showing the number of employees 94, however the policy was taken for 99 employees. The group insurance policy (Ex.PW1/8) was issued by defendant no. 2 for the period 02.06.2020 to 01.01.2021, therefore found valid on the date of accident i.e. 11.10.2020. This insurance policy suggests that it is for 95 guards and 4 supervisors employed by the plaintiff.
23. The insurance company (defendant no. 2) has rejected the claim vide letter dt. 19.09.2022 (Ex.PW1/3) on the ground that the total number of workers found to have been employed on the date of accident are145 whereas the coverage is only for 99 workers.
24. Before appreciating the contentions, it is pertinent to notice that there are two surveyors report are on record, one filed by the plaintiff and the other filed by defendant no. 2. The surveyor report dt. 15.06.2021 (Ex.PW1/12) is addressed to New India Assurance India Co. Ltd. This surveyor i.e. Mack Insurance Surveyor & Loss Assessors Pvt. Ltd. is for insured M/s Container Corporation of India Ltd. bearing Policy No. 11180046202400000002. This survey report (Ex.PW1/12) is not specifically denied in written statement by defendant no. 2 nor it probative value discredited in cross examination of PW1 but DW1 in cross examination stated that this report is forged and fabricated. The relevant portion of the report (Ex.PW1/12) is reproduced as under:
CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 14/ 23 "ADDENDUM TO OUR FINAL SURVEY REPORT/ MACK REF NO. 20-21/13241 DT. 05.04.2021 Reg : Death Claim of Ms. Amir Chand, Employee of Container Corporation of India (Contractor : M/s Deveneder Singh Jamwal Security Agency) Insured : M/s Container Corporation of India Ltd. Policy No. : 11180046202400000002 Dear Sir, "In addition to our Final Survey Report dt. 05.04.2021, we have to report that the liability of the Insurance company exists in this case and they are liable to pay the amount to the Insured after the insured deposited the money awarded by Labour Commissioner."
This surveyor appears to be for the policy taken by the Container Corporation of India i.e. defendant no. 1 in which it has categorically mentioned that the liability is that of insurance company and the insurance company is liable to pay the amount to the insured (i.e. defendant no. 1 Container Corporation of India) on depositing of the money awarded by the Labour Commissioner by the insured i.e. Container Corporation of India. The defendant no. 1 has already deposited the money in the Labour Commissioner as per their pleadings.
25. The second surveyor report is of Merit Insurance Surveyors and Loss Assessors Pvt. Ltd. (Ex.DW1/2) for the insurance policy of the insured/ plaintiff i.e. M/s Devender Singh Jamwal Security Agency. This surveyor is appointed on the policy of the CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 15/ 23 plaintiff bearing no. 21022063620010000003 valid from 02.06.2020 to 01.01.2021 and the sum insured is Rs. 5,00,000/-. As per this report (Ex.DW1/2), the accident was reported to the insurer i.e. defendant no. 2 on 12.10.2020 and there is no delay in intimation but the investigation was allotted to the surveyor on 13.05.2021 and the commencement of investigation is on 14.05.2021. This surveyor found 145 employees on the date of accident, therefore, stated that the claim fall out of the scope of policy and recommended no claim. Pursuant to which, vide letter dt. 19.09.2022 (Ex.PW1/13) the claim was rejected.
26. There are two surveyors report Ex.PW1/12 dt.
15.06.2021 and Ex.DW1/2 dt. 08.02.2022. The first surveyor report (Ex.PW1/12) is for the insurance policy taken by the Container Corporation of India and the second surveyor report (Ex.DW1/2) is on the policy taken by the plaintiff firm from the defendant no. 2.
27. The surveyor report dt. 08.02.2022 (Ex.DW1/2) shows that the accident was reported to the defendant no. 2 Insurance company on 12.10.2020 without any delay, however the investigation was allotted by defendant no. 2 after much delay on 13.05.2021. It is not being explained by defendant no. 2 why there is so much delay in starting the investigation. It is also pertinent to notice that the defendant no. 2 has not filed any insurance policy of the plaintiff, the application form alongwith the documents submitted by the plaintiff while taking the insurance policy, and only filed the investigation CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 16/ 23 report that too without accompanying documents of the surveyor. The defendant no. 2 Insurance company also not filed any terms and conditions of the insurance. These documents are essential as the claim is repudiated on the ground of material concealment of non- disclosure of employees. The defendant no. 2 has to show what documents are disclosed at the time of taking of the insurance policy in question by the plaintiff to infer misrepresentation and non- disclosure. Ex.DW1/3 is the attendance register showing 147 employees on the day of accident and Ex.DW1/4 is the record of wages of the employees for the month of October, 2020. These exhibits are at the time of accident not at the time when policy was taken in June, 2020.
28. The reason of repudiation of the claim vide Ex.PW1/13 is that there are 145 employees were found employed on the date of accident whereas the policy (Ex.PW1/8) was taken for 99 employees. The plaintiff, however in evidence has filed the employees provident fund, challan-cum-return (Ex.PW1/9) showing 94 employees in June, 2020 at the time of taking of policy. This document is not at all discredited by the defendant no. 2 in cross examination of PW1. At the time of taking of policy, the plaintiff as per his version has disclosed the list of employees and taken the policy for 99 employees, however the employees increased upto 145 till the date of accident i.e. 11.10.2020. There is nothing filed on record by defendant no. 2 that CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 17/ 23 any change in number of employees during the subsistence of the policy is to be informed to the Insurance company forthwith.
It is the burden on insurance company to prove its terms and conditions, however the insurance company not filed any terms and conditions and only relying upon the fact that on the day of accident, there were 145 employees found working with the plaintiff. To repudiate the claim, the defendant no. 2 also has to show that the plaintiff has concealed on the day of taking of policy i.e. June, 2020 that it employed 145 employees but declared only 99 employees. The insurance company not able to substantiate the said fact whereas the plaintiff has relied upon Ex.PW1/9 regarding the number of employees employed on the day of taking of policy around 94 employees which is not discredited in cross examination and found reliable.
29. The conduct of defendant no.2 in appointing the surveyor on the policy of the plaintiff is also suspect as the accident was reported as per surveyor report on 12.10.2020 to the insurance company, however the insurance company (defendant no. 2) appointed the surveyor on 13.05.2021. It can be inferred that this surveyor might be appointed to nullify the survey report dt. 05.04.2021 conducted on the policy of Container Corporation of India (defendant no. 1) which casts the liability on the insurance company. The defendant no. 2 insurance company neither filed any application form vide which the insurance policy allotted to the plaintiff nor the CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 18/ 23 documents attached with the said insurance policy. The defendant no. 2 even not filed any terms and conditions raised at the time of issuing of the insurance policy. The defendant no. 2 also not filed any document annexed with the surveyor report (Ex.DW1/2). The defendant no. 2 is repudiating the claim on the basis of misrepresentation of number of employees by the plaintiff, however not able to show what is represented by the plaintiff at the time of taking the policy whereas the plaintiff has relied upon Ex.PW1/9 to show the number of employees employed by the plaintiff at the time of taking the policy in June, 2020 which includes the name of deceased Amir Chand at S. No. 2 (pg. 77 of the plaint).
30. In Isnar Aqua Farms vs. United India Insurance Co. Ltd. 2023 INSC 680, the Apex Court reiterated the principle of uberrima fides (utmost good faith) in insurance contracts, emphasizing that both the insurer and insured must disclose all material facts. Insurance companies must act fairly and honor their commitment to indemnify the insured. In Texco Marketing Pvt. Ltd. vs. Tata AIG General Insurance Co. Ltd. (2023) 1 SCC 428, the Apex Court emphasized that the burden of proving an exclusion clause in an insurance contract lies with the insurer. The insurer is responsible for ensuring that the insured receives all necessary information to make informed decisions about coverage. Thus, it was the responsibility of defendant no. 2 to prove reliance on a clause requiring the plaintiff to inform them of added employees. The plaintiff firm had already disclosed 99 insured CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 19/ 23 employees, and the premium was paid accordingly. The defendant no. 2 i.e. insurance company is liable to cover these employees under the agreed terms of the contract, regardless of any subsequent changes in the company's workforce particularly as the insurance company not placed any contrary terms and conditions on record.
31. In Mahakali Sujatha vs. Branch Manager, Future Generali India Life Insurance Co. Ltd., (2024) 8 SCC 712, the insurance company failed to prove that the appellant had suppressed information about existing policies with other companies when entering into the contract. The court upheld the insurance claim, noting the insurance company's failure to discharge the burden of proof regarding the suppression of policies. In the present case, defendant no. 2 argued that the plaintiff firm should have informed about additional employees for premium adjustments. However, the group insurance contract was already concluded with premiums paid for 99 employees. The plaintiff firm was not seeking claims for employees beyond the initial list. The insurance company filed no document or terms and conditions that the plaintiff is obliged to inform the added employees.
32. In Oriental insurance Company ltd. vs. Mahendra Construction (2019) 18 SCC 209 in para no. 11 observed that "It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 20/ 23 account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted."
In present case, the plaintiff firm disclosed all relevant facts, including the list of employees, at the time of the insurance proposal, fulfilling its duty. The proposal was accepted without any requirement to update the insurance company on changes in the number of employees. The insurance company did not request updates on daily business changes. It is reiterated that insurance company neither filed any terms and conditions of policy nor application form or other documents to infer non-disclosure or duty to disclose added empolyees. The said burden is on the insurance company.
33. In United India fire & General insurance Co. vs. Kalsum Begum & Ors. 1986 SCC OnLine Gau 177, it was held that the burden of proof lies with the party asserting the affirmative of the issue, and it may shift during the trial. In present case, the insurance company failed to produce the terms and conditions or any other document by which this court could infer that plaintiff violated the terms and conditions of policy. Ld. Counsel for defendant no.2 argued on an exclusion clause but unable to substantiate through evidence.
34. During arguments, the contention raised that no commercial dispute is disclosed in this case, however, Section 2 (c) (xx) of Commercial Courts Act includes dispute arising out of CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 21/ 23 insurance and re-insurance as commercial dispute. In present case, the motive of the plaintiff firm behind seeking insurance for the employees was to keep them protected and indemnify them or their families in case of death or injury. The insurance in the present matter has direct nexus with profit generation activity since, it was the workers who were generation profit for the plaintiff firm and they were the ones who were insured for indemnification. Plaintiff firm did not purchase the said group insurance policy for himself but for his workers who are actively engaged for bringing money into the plaintiff firm. Hence, having a direct nexus with profit generation. The said dispute thus is of commercial nature.
35. On appreciation of the evidence, the plaintiff able to prove its entitlement to receive the insured amount, however defendant not able to prove the contention of non-disclosure or any material concealment. The plaintiff is found entitled for the insured amount of Rs. 5,00,000/- as per policy, though claimed a sum of Rs. 5,70,000/-. The plaintiff has not substantiated on what basis the plaintiff is claiming Rs. 5,70,000/- from the insurance company when the sum insured as reflected from the surveyor report (Ex.DW1/2) is Rs. 5,00,000/-. Accordingly, the plaintiff is entitled for a claim of Rs. 5,00,000/- from the defendant no. 2 (insurance company) alongwith interest @ 9% per annum from the date of filing of the suit till its realization. The defendant no. 1 is not found liable under the present CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 22/ 23 insurance policy (Ex.PW1/8), thus, no relief is also claimed by the plaintiff from defendant no. 1. Accordingly, the issue nos. 1 & 2 are decided in favour of the plaintiff and against the defendant no. 2.
RELIEF
36. In view of the above discussions, the suit is decreed in favour of plaintiff and against the defendant no. 2 for a sum of Rs. 5,00,000/- along with interest @ 9% per annum from the date of filing of suit till its realization. Cost of the suit be awarded to the plaintiff. Decree sheet be drawn accordingly.
File be consigned to record room after due compliance.
Digitally AJAY signed by AJAY KUMAR JAIN KUMAR Date:
2025.03.21 JAIN 16:48:03 +0530 Announced in the open court on 21st March, 2025 (Ajay Kumar Jain) District Judge, Comm-03 South-East, Saket Courts, Delhi CS (COMM) 29/2024 Devender Singh Jamwal Vs. Container Corporation of India Ltd. & Anr. dt. 21.03.2025 23/ 23