Unilateral Deletion of Terms of Policy by Insurance Company is Arbitrary – Supreme Court

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Closeup of doctor filling life insurance form

February 01, 2019

Case name: M/S Twenty First Century Media Private Limited v. New India Assurance Company Limited

In the case, the appellant Company contended that the insurance policy protected the appellant-Company against floods, rains, etc., and the premium was accordingly paid on this basis.

The cause of action in the case arose when a match in Kochi was called off due to rain and consequently the appellant went to the insurance company to settle its claim, however the insurance company apprehending similar claims in future other matches, unilaterally deleted from the policy, the expression “floods, rains, etc.”

The Two-Judge Bench of the Supreme Court allowed the appeal and observed that the respondent’s action was wholly arbitrary and violated the appellant’s fundamental right under Article 14 of the Constitution. The Court opined that even within the contractual sphere, the State, as defined under Article 12 of the Constitution, cannot be arbitrary.

The entire case can be accessed here.

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