In Brief
A bank obtained insurance cover for a borrower's assets under a loan agreement. After a fire loss in 2007, the insurer rejected the claim. The State Consumer Commission ordered the bank to forward the claim to the insurer for processing, but did not hold the bank liable. The borrower later settled with the bank under SARFAESI proceedings and withdrew all claims. When the insurer appealed, the National Consumer Commission wrongly imposed liability on the bank. The Supreme Court allowed the bank's appeal, holding that: (1) an appellate court cannot impose liability not imposed by the lower court when the person most affected (the borrower) did not appeal; and (2) the borrower's settlement and affidavit withdrawing claims against the bank precluded this action."
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