Whether Insurance Company Can Unilaterally Delete Policy Terms To Reduce Coverage?

The appellant-Company has knocked at the doors of this Court
for the reason that the insurance policy dated 15.10.2010 clearly
protected the appellant-Company against floods, rains, etc., and
the premium was paid on this basis.
3) It so happened that a match in Kochi was called off due to
rain on 17.10.2010. As a result of which, the appellant went to
the insurance company to settle its claim which was eventually
settled on 31.05.2011. Apprehending that similar claims may be
made in future qua other matches, the insurance company,
unilaterally, by an endorsement dated 18.10.2010, deleted from the
policy, the expression “floods, rains, etc.”
4) On 20.10.2010, the appellant before us immediately lodged its
protest against this unilateral deletion. On 24.10.2010, the match
at Goa was called off under similar circumstances, owing to rain.
The appellant knocked at the doors of the High Court in which it
stated that the action of the insurance company in unilaterally
doing away with the expression, “floods, rains”, from the policy,

was arbitrary and affects its fundamental right under Article 14 of
the Constitution of India. Both the single Judge and the Division
Bench, thought it fit not to interfere as disputed questions of
fact arise and as the dispute pertains purely to the realm of
contract.
5) Having heard learned counsel for both the sides, we are of the
view that the judgment of the High Court needs to be set aside.
There is no dispute whatsoever that the action in the present case
by the respondent was wholly arbitrary and violated the appellant’s
fundamental right under Article 14. No disputed question of fact
is raised, and it is settled by several decisions of this Court
that even within the contractual sphere, the State, as defined
under Article 12 of the Constitution, cannot be arbitrary.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1128 OF 2019

M/S TWENTY FIRST CENTURY MEDIA PRIVATE LIMITED 
Vs
NEW INDIA ASSURANCE COMPANY LTD.
Dated: January 25, 2019.



1) Leave granted.
2) The appellant-Company has knocked at the doors of this Court
for the reason that the insurance policy dated 15.10.2010 clearly
protected the appellant-Company against floods, rains, etc., and
the premium was paid on this basis.
3) It so happened that a match in Kochi was called off due to
rain on 17.10.2010. As a result of which, the appellant went to
the insurance company to settle its claim which was eventually
settled on 31.05.2011. Apprehending that similar claims may be
made in future qua other matches, the insurance company,
unilaterally, by an endorsement dated 18.10.2010, deleted from the
policy, the expression “floods, rains, etc.”
4) On 20.10.2010, the appellant before us immediately lodged its
protest against this unilateral deletion. On 24.10.2010, the match
at Goa was called off under similar circumstances, owing to rain.
The appellant knocked at the doors of the High Court in which it
stated that the action of the insurance company in unilaterally
doing away with the expression, “floods, rains”, from the policy,

was arbitrary and affects its fundamental right under Article 14 of
the Constitution of India. Both the single Judge and the Division
Bench, thought it fit not to interfere as disputed questions of
fact arise and as the dispute pertains purely to the realm of
contract.
5) Having heard learned counsel for both the sides, we are of the
view that the judgment of the High Court needs to be set aside.
There is no dispute whatsoever that the action in the present case
by the respondent was wholly arbitrary and violated the appellant’s
fundamental right under Article 14. No disputed question of fact
is raised, and it is settled by several decisions of this Court
that even within the contractual sphere, the State, as defined
under Article 12 of the Constitution, cannot be arbitrary.
6) For this reason, we set aside the judgment of the High Court.
In consequence thereof, the respondent will now process the claim
of the appellant so far as the Goa match is concerned.
7) The Appeal is disposed of accordingly.
......................J.
(ROHINTON FALI NARIMAN)
......................J.
(VINEET SARAN)
New Delhi,
Dated: January 25, 2019.