Writ Jurisdiction Not Meant to Resolve Insurance Disputes Involving Factual Questions: Punjab & Haryana High Court Refuses to Interfere in Home Loan-Linked Policy Claim

“Consumer Forum Is the Proper Forum to Decide Whether Insurance Cover Existed on Date of Death” —  In a notable judgment clarifying the limits of writ jurisdiction in insurance-related disputes, the Punjab and Haryana High Court refused to adjudicate a challenge against the denial of a home loan insurance claim by SBI Life Insurance Company, citing disputed questions of fact that require evidence-based determination.

A Division Bench comprising Chief Justice Sheel Nagu and Justice Sanjiv Berry held:

“Whether the insurance company was deficient in service to be rendered to the petitioner or not is a question to be decided by the appropriate Consumer Forum and ought not to be dealt with while exercising writ jurisdiction, especially when the process of adjudication involves disputed questions of fact.”

Writ Petition Filed to Challenge Possession Notice Under SARFAESI Act Amid Insurance Dispute

The petitioner, Suman Sharma, widow of Rakesh Kumar (the original borrower), approached the High Court under Articles 226/227 of the Constitution, challenging a SARFAESI possession notice issued by the State Bank of India (SBI) after declaring the home loan account a Non-Performing Asset (NPA). She claimed that the loan was insured under the SBI Life – Super Suraksha Housing Loan Coverage, and the death of her husband in December 2021 should have triggered the insurance benefit.

However, the Bank and the Insurance Company contended that the Master Policy provided coverage only for 15 years, which expired on 29.09.2018, more than three years prior to the borrower’s death. Accordingly, the insurance claim was denied.

Court Declines to Decide Whether Policy Was Still Active — Refers Dispute to Consumer Forum

The High Court made it clear that it could not determine whether the insurance policy provided coverage at the time of death based on the documents on record, noting:

“The terms and conditions mentioned in the Master Policy are not very clear and explicit so as to facilitate this Court to adjudicate the present dispute.”

The Bench further held:

“This Court is not inclined to go into such disputed factual issues in writ jurisdiction. The appropriate remedy lies before the District or State Consumer Forum, which is equipped to examine evidence and assess alleged deficiency in service.”

Interim Protection Against Dispossession Continued — Liberty Granted to Approach Consumer Forum

While declining to rule on the merits of the insurance denial, the Court protected the petitioner from immediate dispossession, continuing the interim stay order passed earlier on 18.01.2023. Importantly, the Court granted liberty to the petitioner to approach the jurisdictional District or State Consumer Forum within 60 days, directing:

“If the complaint is filed within 60 days, the interim protection against dispossession shall continue till disposal of the complaint by the Consumer Forum.”

At the same time, the Court issued a caution:

“If the petitioner does not approach the Consumer Forum within the stipulated time, the Bank shall be free to proceed under the SARFAESI Act and liquidate the secured asset.”

No Finding on Merits — Dispute Hinges on Interpretation of Policy Terms

The Bench clarified that it had not returned any findings on whether the petitioner is entitled to the insurance cover, leaving the matter entirely open for the Consumer Forum to decide:

“We have not rendered any finding on the merits of the petitioner’s claim.”

The judgment underscores the limited role of constitutional courts under Article 226 when private disputes involve contractual obligations and factual controversies, especially when statutory alternative remedies, like the Consumer Protection Act, are available.

Insurance Dispute Must Go to Consumer Forum — Writ Not the Appropriate Remedy

In conclusion, the High Court reiterated the principle that writ jurisdiction cannot be used as a substitute for civil or consumer adjudication in cases involving interpretation of contracts, disputed facts, or alleged deficiency in service. It provided a balanced relief — protection from dispossession with a time-bound opportunity to seek redressal before the proper forum.

Date of Decision: January 8, 2026