The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 13562 of 2022 M/s. Kalinga Polypacks Pvt. Ltd. ..…... Petitioner(s) Mr. B.K. Sharma Sr.Adv. along with associates -Versus- Chief Manager, Union Bank of India & Ors. ………. Opposite Party(s) Mr. Bhaskar Chandra Panda, Adv. (for O.Ps.1 & 2) Mr. G.P. Dutta, Adv. (for O.P.3) CORAM: DR. JUSTICE S.K. PANIGRAHI
Decision
ORDER 04.03.2025 Order No. 12. 1. This matter is taken up through hybrid arrangement. 2. Heard learned counsel for the parties. 3. The present Writ Petition has been filed by the Petitioner with the following prayer: “Under the aforesaid circumstances, it is humbly prayed that your Lordship’s may graciously be pleased to issue Rule NISI calling upon the Opp. Parties more particularly Opp. Parties No.l & 2 to show cause as to why the loss sustained by the petitioner because of cyclone dtd.4/5‘'’ of March, 2020 be assessed as requested vide communication dtd.8.3.2020 under Annexure-2 & reminders vide letter dtd.16.03.2020, dtd.23.04.2020, 26.06.2020, 18.09.2020, 15.10.2020 and 09.11.2020 under Annexure-3 Series and if the Opp. Parties fail to show cause or show insufficient cause make the said Rule NISI absolute; Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33 2 And further be pleased to issue a writ of mandamus directing Opp. Parties No.l and 2 to depute the Surveyor for the purpose of loss caused to the factory premises, plant, assessing the machinery, raw materials and finish goods of the petitioner as requested vide Annexure-2 & 3 Series; And pass such other writ/writs, direction/directions, order/orders as the Hon’ble Court may deem, fit and proper.” 4. Learned Senior Counsel for the Petitioner submits that the Petitioner is a private company represented by its Managing Director and is engaging in the business of manufacturing of packaged drinking water, pet soda and plastic bottles at Choudwar Industrial Estate, Cuttack. He further submits that the Petitioner had availed financial assistance from the Union Bank of India. In order to secure the loan, the Opposite Party No.1/Bank on behalf of the Petitioner had effected Insurance Policy and the Bank was acted as an agent of the Insurance Company. As per the IRDA (Licensing of Banks and Insurance Brokers) Regulations, 2013, the Bank conducts itself like an agent of the Insurance Company. 5. Learned counsel for the Petitioner further contends that the Petitioner had suffered due to the cyclone occurred on 4th and 5th March, 2020. The said cyclone caused heavy damaged to plant, machineries, raw materials and finish goods of the Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33 Petitioner’s Company. The Petitioner was regularly paying the premium and the Insurance Policy is very much alive on the 3 date of onset of the said cyclone. After occurrence of the said damages due to the cyclone, the Petitioner had approached the Bank along with all the documents relating to the claim. However, the Bank failed to send the said documents to the Opposite Party No.3/Insurance Company for the purpose of the claim made by the present Petitioner. 6. Learned counsel for the Petitioner further refers to the Rule-7 of Insurance Regulatory and Development Authority (Licensing of Banks as Insurance Brokers) Regulations, 2013. The said Rule-7 of the Insurance Regulatory and Development Authority (Licensing of Banks as Insurance Brokers) Regulations, 2013 is extracted hereunder: 7. Conduct in relation to claim by client.- Every insurance broker shall:- (a) explain to its clients their obligation to notify claims promptly and to disclose all material facts and advise subsequent developments as soon as possible; (b) request the client to make true, fair and complete disclosure where it believes that the client has not done so. If further disclosure is not forthcoming it shall consider declining to act further for the client; (c) give prompt advise to the client of any requirements concerning the claim; (d) forward any information received from the client regarding a claim or an incident that may give rise to a claim without delay, and in any event within three working days; (e) advise the client without delay of the insurer’s decision or otherwise of a claim; and give all reasonable assistance to the client in pursuing his claim; Provided that the insurance broker shall not take up recovery assignment on a policy contract which has not been serviced through him or should not work as a claims consultant for a policy which has not been serviced through him:” Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33 4 7. He further referred to a judgment in Canara Bank vs. M/s. Leatheroid Plastics Pvt. Ltd.1 wherein a similar sentiment has been expressed and the judgment was in favour of the insurer. The position of the Petitioner could have been different in the event the Bank had alerted the Petitioner regarding the status of his application or the Bank could have sincerely remitted the documents to the Insurance Company and inquired about its availability with the Insurance Company. Further, no particulars have been produced by the Bank regarding any communication. In such circumstances, there is an irresponsible behavior on the part of the Bank in not sending the documents to the Insurance Company. 8. At this juncture, learned counsel for the Opposite Party No.3/Insurance Company submits that the Insurance Company has not received any document relating to the claim of the present Petitioner from the Bank. 9. Learned counsel for the Insurance Company further submits that pursuant to the direction of this Court vide order dated 18.01.2024, the Insurance Company received some documents from the Bank on 31.01.2024. However, since the claim is of the year 2020 and now long time has been elapsed for assessing the loss suffered by the Petitioner due to cyclone, the real time Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33 1 (2020) 5 SCC 722 5 assessment is not at all possible. Hence, the Insurance Company cannot honor the claim filed by the present Petitioner. 10. Learned counsel for the Bank submits that the Bank has sent all the documents as well as the reminders sent by the Petitioner to the Insurance Company. However, there is no mentioned in any particular letter to the Insurance Company stating that the entire documents placed by the Petitioner have been remitted to the Insurance Company. 11. In such view of the matter and considering the submission made by the learned counsel for the parties and taking into account the fact of long lapse of time for assessment of the loss suffered by the Petitioner, this Court cannot direct the Opposite Party No.3/Insurance Company to honor the claim made by the present Petitioner. It is also important to note that the Petitioner has no fault in the entire process. In the entire episode, there is a blame game between the Insurance Company and the Bank which substantially affects the insurance claim of the present Petitioner without his fault. 12. Accordingly, this Court directs the Opposite Party Nos.1 and 2/Bank to pay Rs.10,00,000/- (Rupees ten lakhs) as compensation to the Petitioner for the lapse on the part of the Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33 6 Bank. The said amount shall be paid to the Petitioner within a period of one month from today. 13. It is further made clear that the actual loss suffered by the Petitioner cannot be compensated by the above amount. Hence, this Court is trying to redress the grievance of the Petitioner by way of awarding a token of compensation to be paid by the Bank. 14. Accordingly, the Writ Petition is disposed of. Judge ( Dr. S.K. Panigrahi) Murmu Signature Not Verified Digitally Signed Signed by: LITARAM MURMU Designation: Personal Assistant Reason: Authentication Location: OHC Date: 05-Mar-2025 18:24:33