State Consumer Disputes Redressal Commission
M/S. Patel Home Furnisihig vs Sbi General Insurance Co. Ltd. & Anr. on 17 November, 2025
i
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
FIRST APPEAL NO. 1973 OF 2019
(Against the order dated 28.08.2019 in C. C. No. 410 of 2016 of
State Consumer Disputes Redressal Commission, Maharashtra)
WITH
I.A. No. 1024 of 2020
(for exemption from filing the certified copy)
M/s Patel Home Furnishing
Proprietor Shri Brajkishor Patel
F-1004, Ram Niwas,
Tapowan Rani Sati Marg,
Malad (E), Mumbai-97 Appellant
Versus
1. SBI General Insurance Co. Ltd. and Anr.
3rd floor, Metro House,
Pot No. 53, Mahatma
Gandhi Road, Fort
Mumbai-400020
2. State bank of India
Branch at Gokul Dham,
B-2, 1st Floor, Shagun Mall,
Near Dindoshi Bus Depot,
Film City Road, Malad (E),
Mumbai-400063 Respondents
BEFORE:
HON'BLE MR. JUSTICE SUDIP AHLUWALIA, PRESIDING MEMBER
HON'BLE DR. SADHNA SHANKER, MEMBER
For the Appellant : Mr. H.A. Noronha, Advocate with
Mr. Praful Shukla, Advocate
For the Respondent No. 1 : Mr. Rajiv Kapur, Advocate
For the Respondent No. 2 : Ms. Rita Sood, Advocate
Pronounced on : IT November 2025
ORDER
Dr. SADHNA SHANKER, MEMBER Page 1 of 14 of FA No. 1973 of 2019
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 Page 2 of 14 of FA No. 1973 of 2019 1 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.
Page 3 of 14 of FA No. 1973 of 2019 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 Commission, Maharashtra, Mumbai.
b. That the Hon'ble Commission may be pleased to order and direct the Respondents to pay to the Appellant the said sum of Rs.59,73,165/- towards the claim of the Appellant as per the statement of claim with interest @ 18% per annum from filing Sth April 2015 till realization. c. That the Hon'ble Commission may be pleased to order and direct the Respondents to pay an amount of Rs. 15,00,000/- towards compensation for mental agony, torture and troubles caused to the Appellant.
d. That the Hon'ble Commission may be pleased to direct the Respondent to pay to the Appellant an amount of Rs.2,00,000/-towards the cost of litigation.Page 4 of 14 of FA No. 1973 of 2019
e. Pass such other and further order as this Hon'ble Commission deems fit and proper under the facts and in circumstances of the case.
7. Before us, the counsel for the complainant argued that the complainant, vide letter dated 20th February 2015, had duly informed the bank about the change in "risk location," which was acknowledged by the bank on 23rd February 2015. Further, the stock statement submitted by the complainant on 11th March 2015 explicitly mentions the new location (Shop No.2). Despite such clear intimation, the bank failed to notify insurance company regarding the change in location, thereby committing a patent act of deficiency in service. Reliance was placed on the case of M/s. Universal Sompo General Insurance Co. Ltd. v. Suresh Chand Jain & Ann, First Appeal No. 376 of 2016 (NCDRC) and State Bank of Bikaner and Jaipur vs. S. Ponnusamy & Ann, Revision Petition No. 486 of 2016 (NCDRC). It is further stated that the burden of proof lies on the respondents to show that they did not have the information or knowledge regarding the change in the location of the insured premises to escape their responsibility and duty and the onus cannot be shifted on the complainant to deal with issues that have merely been alleged by the respondents, without producing any evidence in support thereof. Reliance was placed on the case of Mahakali Sujata v. The Branch Manager, Future Generali India Life Insurance Co. Ltd. & Ann 8 Further, it was argued that the State Commission has erred in dismissing the complaint on the ground of a mere delay of 15 days in intimating the insurance company about the fire incident. It is further stated that the delay was purely inadvertent and cannot defeat the complainant's lawful rights under the Page 5 of 14 of FA No. 1973 of 2019 Policy. Clause 7(i) of the Policy permits reporting of loss within 15 days, extendable up to 30 days or further with the insurer's consent; hence, reliance on General Condition 6(i) in the repudiation letter dated Sth April 2015 is misplaced. The complainant had, in fact, intimated the Bank on 6th March 2015 and requested that the insurance company be informed, which fact was concealed by the Respondents and overlooked by the State Commission. Moreover, IRDAI Circulars dated 20th September 2011 and 28th June 2017 mandate a liberal approach in cases of delayed intimation.
9. Further, it was argued that it is trite law that, usually, mere delay in informing about the incident when the same was already informed to the law enforcement authorities, cannot amount to a breach of "duty to cooperate" of the insured. Reliance was placed on the case of Jaina Construction Company vs. The Oriental Insurance Company Limited & Anr., (2022) 2 S.C.R. 175]. It is an admitted position that the fire occurred due to short-circuit and there exists no foul play on part of. the complainant. Yet the insurance company proceeded to repudiate the claim of the complainant on frivolous and arbitrary grounds, which clearly amounts to deficiency in service.
10. Further, it was argued that the essence of an insurance contract lies in the protection and indemnity it affords to the insured, thereby upholding the sanctity of mutual trust. The insurer, being in a position of fiduciary responsibility, is bound to act in good faith and honour its commitments, particularly when there is no negligence on the part of the insured. In view of the pivotal role of trust in such contracts, it is imperative that the insurance company discharges the duty cast upon it under the covenant with due fairness and diligence. Reliance was Page 6 of 14 of FA No. 1973 of 2019 placed on the case of [New India Assurance Co. Ltd. & Ors. vs. M/s. Mudit Roadways., (2022) 2 S.C.R. 175]. Moreover, it is a trite law that while settling the claims, the insurance company should not be too technical. It is important to ensure that the insurer adequately fulfills the duty that has.been cast on it, by virtue of such covenant. Reliance was placed on the case of Gurmel Singh vs. Branch Manager, National Insurance Co. Ltd., CIVIL APPEAL NO. 4071 OF 2022 (SC)].
11. The counsel for the insurance company argued that the repudiation was in order as, firstly, under the policy general condition no. 6(i), it is provided that "on the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company and shall within 15 days (for claims under Section II not later than thirty days after the expiry of the period of Indemnity) after the loss or damage or such further time as the Company may in writing allow in that behalf, deliver to the Company ". In this case, although the loss occurred on 06.03.2015, it was intimated only on 23.03.2015. Further, the shifting of the stock to another shop was admittedly never intimated to the insurance company by the insured and therefore, on both these counts, the repudiation was correct.
12. The learned counsel for the bank reiterated the facts of the case and argued that the complainant had failed to inform the Insurance Company about the change of location from shop no. A-4 to shop no. 2/12 where the goods were stored. She further argued that as the policy in question was not rectified which was the responsibility of the complainant/borrower, the place of risk in the policy could not be changed and inspection of stocks could not be carried Page 7 of 14 of FA No. 1973 of 2019 out by the Insurance Company. She furthermore argued that the premises in which the fire took place within two weeks after the shifting of the stocks was not insured, therefore, the complainant is not entitled for any relief.
13. Further, it is submitted that the insurance policy was obtained jointly in the name of the bank and the complainant to secure hypothecated goods under the credit facility. As per the loan terms, it was solely the borrower's duty to insure the goods and to notify any change of address. The bank, being a financial institution, cannot be held liable for the insurance or for the borrower's failure to update the insurance company.
14 Further, it was submitted that there is no specific allegation or evidence of deficiency in service against the Bank. Further, the claim was repudiated by the insurance company because the fire occurred at a location not mentioned in the policy. The bank never undertook to inform the insurer about the changed address, nor was it obligated to do so. The responsibility for ensuring correct policy details rested entirely with the complainant borrower. Additionally, the bank merely facilitated the procurement of the insurance policy as part of the loan arrangement and acted as a mediator without assuming any liability. It was the primary duty of the insurance company to ensure that the goods are covered by the insurance policy and the burden to get the address changed in the records of the policy is upon the complainant/borrower and not on the bank. The bank cannot be held liable for the lapse on part of the complainant and burden is on the complainant for obtaining insurance policy. Page 8 of 14 of FA No. 1973 of 2019
15. Further, the bank never took any responsibility for the loss due to fire, malicious damages including any act, default of the officer of the bank or its agent. All renewals of the policy were to be effectively done by the borrower at all material time, hence, the bank cannot be held liable for gratuitous service. Hence, there was no deficiency in service on the part of the bank.
16. We have considered the rival contentions and perused materials available on record. The question which falls for our consideration is whether there is deficiency in service on the part of the respondents.
17. Firstly, it is relevant to reproduce the repudiation letter dated 08.04.2015, which is reproduced as under:-
"Sir / Madam, RE: Reservation of rights under claim no 167239 for alleged loss of stock reported on 23rd March 2015 under Policy No. 0000000002397055 We refer to your claim intimated to our contact center on 23/03/2015 under fire policy no 0000000002397055 for alleged damage-to stocks that reportedly-occurred on 06/03/2015. Without prejudice to admissibility of claim, we had appointed M/s Padamsey P. Shah & co. an IRDA licensed "A" category independent surveyor firm from Mumbai to inspect evaluate and verify the loss.
A) It has been noticed that loss that was reported to have occurred on 06m March 2015 as per loss intimation, however it has been reported to SBI General only on 23rd March 2015. We note that there has been an inordinate delay of more than fifteen days in loss intimation.
We bring your attention to policy general condition no 6. (i) that stipulates "on the happening of any loss or damage, the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or Page 9 of 14 of FA No. 1973 of 2019 damage, or such further time as the Company may in writing allow in that behalf, deliver to the Company."
The delayed loss intimation from your end has severely prejudiced our rights of inspection of alleged damaged material in the original state of damages and corroborate the same with alleged cause of loss. B) The policy covers your stocks lying at the address mentioned on policy schedule and the captioned policy has been issued with risk location address as shop no A-4, Ram Niwas Bldg, Tapowan, Rani Sati Marg, Malad East, Mumbai. The loss has been reported at Nagshi- Khimsua Charan Chawl, Rani Sati Marg, Malad (East) and said location is not covered on date of loss under the policy issued by us. In view of above observations, we hereby reserve our rights under the policy. We expressly notify you that any survey, investigation or further action taken by us or the counsel or experts retained by us does not, and shall not be constituted or considered an estoppel or waiver of any of our rights or an admission of any obligation or liability under the aforesaid policy of insurance.
We reserve the right to extend or modify in the event of new/additional facts or circumstances brought to our knowledge."
18. It is seen that in this case, there is a delay of 17 days in informing about the loss to the insurance company and the complainant has stated that he was under some confusion as the stocks that were damaged were also insured in part by another insurance company and therefore, there was some delay in intimation. He has also argued that the insurance company did not repudiate the claim on the ground of not being genuine but on mere technicality of there being delay in intimation. Even if the complainant's arguments are accepted and the repudiation on the ground of delay is not upheld, the second leg of repudiation has to be examined.
Page 10 of 14 of FA No. 1973 of 2019
19. It is seen that through the letter dated 20.02.2015, the complainant had intimated the bank about the change of premises 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 which is duly acknowledged on that letter by the Bank on 23.02.2015. The contents of the letter reads as follows:
"Dear Sir / Madam I am Brajkishor R. Patel (Proprietor of Patel Home Furnishing,) heaving, an account ( C.C. A/c. no.33009054963) in your Bank. I would request you to record in your system and inform the same to insurance company of my present godown cum office address are sifted at shop no. 2, Nagshi K. Charan Chawl, Rani Sati Marg, Pathanwadi, Shivajl Nagar, Malad East, Mumbai: 400097 from shop no.4, A wing, Ramniwas Buld. Off. Rani Siti Marg, Tapovan, Malad East, Mumbai:
400097.
Your kindly performance on this matter is highly appreciated to » me.
20. A perusal of the same shows that the complainant had also requested the bank to inform the insurance company in the said letter. It is the complainant's case that the bank was the first name in the insurance policy and the petitioner's name was the second and that the goods insured were hypothecated with the bank. Further, that the policy clauses clearly indicate that any intimation given by the insurance company to the bank were to be like intimation to the other parties in the insurance. On similar lines, once the bank Page 11 of 14 of FA No. 1973 of 2019 had been informed of the change of the location of the shop, the same would suffice as notice to the insurance company.
21. In the written submissions, the complainant has also stated that the insurance company is a joint venture of bank and Insurance Australia Group, with bank holding around 74% stake in the insurance company and the subject Insurance Policy has been arranged by the Bank as a part of entire arrangement to cover the risks from certain perils during the entire period and the bank was the de-jure owner of the stocks in question for the reason that the entire stocks were admittedly hypothecated with the bank. It has also been stated that the entire arrangement was mutually entered into between the respondents inter-se with a sole intent to protect and secure the commercial interests of bank. However, these arguments are not substantiated by any evidence nor were they part of original pleadings at any stage or taken in the memorandum of appeal.
22. It is an admitted position that the insurance company was never informed about the change of location either by the bank or by the complainant at any stage. The complainant's case is that change of location was intimated to the bank, who was like an agent of the insurance company and it had to inform the same to them. However, no copy of hypothecation / loan agreement or any document has been produced on record to show that the bank had taken the responsibility of informing the insurance company of changes, if any, in the policy.
Page 12 of 14 of FA No. 1973 of 2019
23. In the absence of any documents that thrust the responsibility on the bank for informing the insurance company informed, the assertion of the complainant that once he had informed the bank, it was the duty of the bank to inform the insurance company cannot be accepted. Since the insurance company never knew of the change of location and there were no alteration made in the insurance policy as to the place of risk, the repudiation by the insurance company on ground no. 2 is correct and upheld.
24. As regards bank, it was argued by the complainant that despite having information of the change of location of the risk, the bank, which was also the insured under the policy, did not inform the insurance company, which amounts to deficiency in service on the part of the bank. It has been argued by the bank that no averment of deficiency in service was made against the bank in the original complaint and hence, the complaint had been dismissed against bank. It is the prime responsibility of the complainant / borrower to insure the goods and to obtain the policy in order to secure hypothecated goods. The responsibility of giving information about the change of address of the place of risk was also on the complainant / borrower and the bank cannot be held liable for any negligence. Further, the bank never took the responsibility of getting the insurance policy modified. As already noted earlier, the hypothecation agreement or any other document that related to the contract between the complainant and the bank has not been brought on record to show the responsibility of the bank vis-a-vis the insurance of the hypothecated goods. It Page 13 of 14 of FA No. 1973 of 2019 'S-
is to be noted that the banks provide financial services and are not in the business of providing insurance service to their customers.
25. In view of the above, the responsibility for getting the policy modified by directly communicating with the insurance company lay squarely with the complainant - insured and on this count, there can be no deficiency in service against the respondent bank.
26. In view of the above, we are of the considered view that the State Commission has passed a well-reasoned order and there is no ground to interfere with the same.
27. The appeal, being without merit, is dismissed. All pending applications, if any, stand disposed of.
Sd/-
(SUDIP AHLUWALIA, J ) PRESIDING MEMBER Sd/-
J
( DR. SADHNA SHANKER )
Naresh/reserved MEMBER
.. j
Page 14 of 14 of FA No. 1973 of 2019