Twenty First Century Media Private Limited v. New India Assurance Company Ltd (Nia)

S. RAVINDRA BHAT, J

R.K. GAUBA, J AUGUST 29, 2017

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 29.08.2017 + LPA 354/2016 TWENTY FIRST CENTURY MEDIA PRIVATE LIMITED ..... Appellant Through: Mr. Amit Sibal, Senior Advocate with Ms. Meghna Mishra, Mr. Rohan Sharma, Mr. Dheeraj P. Deo and Mr. Tahir Ashraf Siddiqui, Advocates versus NEW INDIA ASSURANCE COMPANY LTD (NIA) ..... Respondent Through: Mr. Pankaj Seth, Advocate CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K. GAUBA MR. JUSTICE S. RAVINDRA BHAT % Facts 1. The appellant is aggrieved by the decision of the learned Single Judge dated 30.03.2016, by which its writ petition was dismissed. Its claim in the writ petition was that the refusal to cover an event, which had been insured, is arbitrary and unreasonable. 2. The appellant, a private company is engaged in event management business. On 13.09.2010, a letter was issued to one M/s. Prerana International by the Goa Cricket Association in pursuance of a tender floated by it, granting "instadia" advertising rights for the cricket match to be played between India and Australia on 24.10.2010.On 24.09.2010 itself, M/s. Prerana entered into an Instadia Advertising Agreementwith the appellant by sub-contracting its rights as a successful bidder, to the appellant. The appellant, on 15.10.2010 entered into an insurance contract agreement policy with New India Assurance Company Limited (hereafter "insurer") to cover for the loss of revenue for the matches to be played during the India versus Australia One Day International (ODI) series from 17.10.2010 till 24.10.2010 (this included both the match at Goa to be played on 24.10.2010 as well as the match to be played at Kochi on 17.10.2010). 3. The petitioner paid the premium amount of ₹3,24,284/-. The insurer thereafter provided the appellant with the terms and conditions of the policy. On 17.10.2010, the ODI to be held at Kochi was called off due to heavy rain. The appellant accordingly claimed insurance cover with the insurer invoking the clause of the insurance document, which covered the standard fire and special perils, including cover for rain causing cancellation of the match. It appears that this claim was duly settled between the parties and the insurer paid the appellant the sum that was due as the insurance amount. At the same time however, on 18.10.2010, the insurer sent an endorsement to the petitioner which stated: "Notwithstanding anything herein contained to the contrary, it is hereby declared and agreed that the perils of storm, cyclone, typhoon, tempest, hurricane, tornado, flood, inundation, rains, bad pitch conditions and wet ground conditions are hereby deleted from the scope of within mentioned policy for Goa ODI match to be played on 24.10.2010." On 24.10.2010, the ODI at Goa also got cancelled due to heavy rain. The petitioner on 25.10.2010 wrote a letter to the insurer requesting it to settle the claim under the policy. The insurer vide letter dated 27.10.2010 rejected the claim of the appellant by referring to the earlier endorsement it had sent on 18.10.2010, by which cover for cancellation of the match due to rain was deleted from the scope of the insurance policy. Contentions 4. The appellant's grievance is that the impugned order, is erroneous. Learned senior counsel Mr. Amit Sibal appearing for the appellant contends, that the insurer is an instrumentality of the State under Article 12 of the Constitution and has to act reasonably and bona fide. It is contended that deleting the rain cover from the insurance policy, after the insurer had paid the premium amount, was illegal and arbitrary. The insurer's actions, says Mr. Sibal, were mala fide since after the Kochi ODI was cancelled due to rain, and it had to pay the insurance amount to the appellant, it decided to unilaterally revoke the rain cover from the insurance policy so as to escape the rain cover liability for the Goa event. It is contended that such arbitrary and unilateral action on the part of the insurer violates