2023 (5) TMI 752 - SC - Indian Laws

Repudiation of Insurance claim - mob of about 200-250 persons entered the resort and damaged/destroyed the insured property resulting in loss to the complainant. - malicious act on the part of the management of Vedic village, which fell within the exclusions provided under Clause V(d) of the Insurance Policy - it is also submitted that the Survey Report of the Surveyor opining that the loss had occurred due to the insured peril and the claim was admissible was highly erroneous and could not be treated as final - HELD THAT - From the reading of Clause V of the subject policies, it is discernible that the loss of or visible physical damage or destruction by external violent means directly caused to the property insured was covered, but the loss, damage or destruction to the property caused by burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind of any person in any malicious act was not covered - In the instant case, the appellant-Insurance company had repudiated the claim of the respondent taking recourse to the said Clause V(d) of the subject policy on the ground that the loss caused to the respondent was an outcome of the malicious act/acts on the part of the respondent Vedic Village management and it fell within the exclusions provided under Clause V(d) of the Insurance Policy. For the purpose of coming to the said conclusion, the appellant- Insurance Company in its letter dated 02/05/2011 while repudiating the claim of the respondent, had relied upon the incident which had taken place at the football match ground, where the accused Gaffar Molla and his associates had fired and caused death of one person and injured others, and thereafter they had taken shelter at the Vedic Village of the respondent. It is trite to say that wherever such an exclusionary clause is contained in a policy, it would be for the insurer to show that the case falls within the purview of such clause. In case of ambiguity, the contract of insurance has to be construed in favour of the insured. In the instant case, the appellant-Insurance Company had failed to discharge its burden of bringing the case within the exclusionary clause V(d) of the policies in question. The surveyor in the Final Survey Report dated 16.06.2011 had also opined that the loss had occurred due to the insured peril and the claim was admissible. Though it is true that the Surveyor s Report is not the last and final one nor is so sacrosanct as to the incapable of being departed from, however, there has to be some cogent and satisfactory reasons or grounds made out by the insurer for not accepting the Report. In the instant case, the appellant-Insurance Company has failed to make out any such cogent reason for not accepting the surveyor s Report. Appeal dismissed.

Summary

Issues involved: Appeal under Section 23 of the Consumer Protection Act challenging a judgment and order passed by the National Consumer Disputes Redressal Commission.

Summary:

Issue 1: Insurance claim repudiation based on exclusion clause V(d) of the policy.
The respondent-complainant, operating a Resort, suffered property damage due to a mob incident. The Insurance Company repudiated the claim citing Clause V(d) of the policy, alleging the loss was due to a malicious act by the respondent. The appellant argued that the loss was a result of the respondent harboring criminals, falling under the exclusion clause. However, the Court found insufficient evidence to link the damage to the respondent's actions. The Court emphasized that in cases of ambiguity, the insurance contract should favor the insured. Citing past judgments, the Court held that the burden of proof lay with the insurer to establish the applicability of the exclusionary clause. As the Insurance Company failed to provide compelling reasons to reject the surveyor's report, the Court dismissed the appeal.

Decision: The appeal was dismissed as the Insurance Company failed to prove that the loss fell within the exclusion clause V(d) of the policy and did not provide sufficient grounds to reject the surveyor's report.