NATIONAL INSURANCE COMPANY LTD. versus VEDIC RESORTS AND HOTELS PVT. LTD. on 17 May 2023

1. The aggrieved appellant-Insurance Company has filed thepresent appeal under Section 23 of the Consumer Protection Act, 1986(hereinafter referred to as the said Act) challenging the judgment andorder dated 07.01.2019 passed by the National Consumer DisputesFRedressal Commission, New Delhi (hereinafter referred to as the“National Commission”) in Consumer Complaint No. 227 of 2012,whereby the Commission has allowed the complaint filed by thecomplainant (respondent herein), and directed the appellant to pay asum of Rs. 202.216 lakhs to the complainant along with interest @ 9%Gper annum from six months from the date of lodgment of the claim tillthe date on which the said payment is made.

2. The respondent-complainant, running a Resort at VillageShikharkpur, P.S. Rajarhat, District 24- Paraganas, (South) of WestBengal had obtained two insurance policies from the appellant-InsuranceCompany, one being Policy No. 100900/11 / 08/3300000420 for the periodH

from 16[th]September, 2008 to 15[th] September, 2009 in respect of thebuildings of the said Resort with plant and machineries accessories andfurniture etc. and the other being Policy No. 100900/11/09/3100000270for the period from 13[th]July, 2009 to 12[th]July, 2010 in respect of twohotel buildings at the said resort with stock.

3. As per the case of the respondent-complainant on 23[rd]August,2009 at about 5.00 p.m., a mob of about 200-250 persons entered theresort and damaged/destroyed the insured property resulting in loss tothe complainant. The incident was reported to the police and the FIRbeing No. 144 of 2009 was registered on the written complaint given byone Santanu Bhattacharjya, General Manager of Vedic Village Resort,P.S. Rajarhat.

4. Another FIR being No. 143 of 2009 was registered at P.S.Rajarhat on 23[rd]August, 2009 for the offence under Sections 302/34,120B, 506, 212 IPC and Section 25 and 27 of the Arms Act against oneGaffar Molla and his associates, at the instance of a written complaintgiven by one Monirul Sardar to the effect that when the said complainantand his brother were returning home, they saw a football match going onat Sekharpur Adarsha Sangha Ground. When the said football matchwas going on, suddenly one Gaffar Molla and his associates startedfiring and hurling bombs to postpone the match. As a result, thereof, thebrother of the complainant, namely, Alam @ Amirul Sardar receivedgunshot injury on his person causing his instant death. Several otherspectators also received injuries due to bomb explosion.

5. During the course of investigation, it was revealed that theaccused- Gaffar Molla and his associates after the firing and throwingbombs at the football match venue, and upon being chased by the crowd,took shelter in Vedic Resorts and Hotels Pvt. Ltd. of the respondent-complainant. Since the said Gaffar Molla and his associates were givenshelter in the said Vedic Resort, the crowd chased them and damagedthe insured property of the respondent-complainant. During the courseof investigation, the police conducted a search of Vedic village on 24[th]August, 2009 and found that there were pipe guns, live bombs in gunnybags and explosive substances found and recovered from the housingmaterial-cum-electrical store room situated within the compound of theVedic village of the respondent.

6. On the surveyor being appointed, as per the Final Survey Reportdated 16.06.2011, the Surveyor assessed the loss to the buildings and A

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Acontents to the extent of Rs. 197.842 lakhs in Policy No. 420 and theloss to the crockery and cutlery to the extent of Rs. 4.274 lakhs in PolicyNo. 270, in aggregate assessed the loss to the tune of Rs. 202.216 lakhsunder both the policies.

7. The appellant-Insurance company repudiated the claim of theBrespondent vide letter 06.07.2012 inter alia stating that loss in respectof which the subject claim was made, was an outcome of the maliciousact and therefore fell within the exclusions under Clause V(d) of theSubject policies; and that there had been a breach of warranty on thepart of the assured in respect of the class of constructions covered underthe subject policies.C

8. The respondent therefore filed the Consumer Complaint beingNo. 227 of 2012 challenging the said repudiation of claim under Section21 of the said Act before the National Commission, which by the impugnedorder dated 07.01.2019 partly allowed the same as stated hereinabove.

D9. The learned counsel Mr. Vishnu Mehra, appearing for theappellant-Insurance Company vehemently submitted that the respondenthad harboured the hard-core criminal Gaffar Molla and his associateswho had killed one person and injured many others at the football matchvenue, using illegal fire-arms and explosives stored at his own compoundof Vedic village and had invited public grudge which had caused damageEto his insured property. Hence, according to him, the loss suffered by therespondent was an outcome of the malicious act on the part of themanagement of Vedic village, which fell within the exclusions providedunder Clause V(d) of the Insurance Policy. He further submitted thatthe words “or any omission or any kind or any person” occurring inFClause V(d) of the Policy would cover the damage to the property causedon account of omission of the management of the respondent-complainantto abide by the law, and the respondent had engaged Gaffar Molla andhis associates for carrying out illegal activities and terrorising the peoplehaving their lands adjacent to the resort, to extend the area of his resort.He also submitted that the Survey Report of the Surveyor opining thatGthe loss had occurred due to the insured peril and the claim was admissiblewas highly erroneous and could not be treated as final.

10. However, the learned counsel Mr. Sukumar Pattjoshi,appearing for the respondent supporting the findings recorded by theNational Commission submitted that the repudiation of his claim by theH

NATIONAL INSURANCE COMPANY LTD. v. VEDIC RESORTSAND HOTELS PVT. LTD. [BELA M. TRIVEDI, J.]

appellant-Insurance Company was erroneous and the Commission hadrightly granted the same.

11. The appellant having relied upon the Clause V of the subjectpolicies, the relevant extract thereof is reproduced as under:

“V.Riot, Strike and Malicious Damage:

Loss of or visible physical damage or destruction by externalviolent means directly caused to the property insured butexcluding those caused by:

(a) to (c)………………

(d) burglary, housebreaking, theft, larceny or any suchattempt or any omission of any kind of any person of anyperson (whether or not such act is committed in the courseof a disturbance of public peace) in any malicious act.

If the Company alleges that the loss/damage isnotcaused by any malicious act, the burden of proving”the contrary shall be upon the insured.

12. From the bare reading of the said clause, it is discernible thatthe loss of or visible physical damage or destruction by external violentmeans 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 anyperson in any malicious act was not covered. It further states that if theInsurance company alleges that the loss/damage was not caused by anymalicious act, the burden of proving the contrary would be upon theinsured. In the instant case, the appellant-Insurance company hadrepudiated the claim of the respondent taking recourse to the said ClauseV(d) of the subject policy on the ground that the loss caused to therespondent was an outcome of the malicious act/acts on the part of therespondent Vedic Village management and it fell within the exclusionsprovided under Clause V(d) of the Insurance Policy. For the purpose ofcoming to the said conclusion, the appellant- Insurance Company in itsletter dated 02/05/2011 while repudiating the claim of the respondent,had relied upon the incident which had taken place at the football matchground, where the accused Gaffar Molla and his associates had firedand caused death of one person and injured others, and thereafter theyhad taken shelter at the Vedic Village of the respondent.

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A13. Though, it is true that the said Gaffar Molla and his associateshad taken shelter at the Vedic Village when the mob became frenziedand chased them, and though it is also true that during the course ofinvestigation the pipe guns and other explosive materials were foundlying in the compound of Vedic Village, nonetheless the alleged incidentof firing and causing death of a person appears to have taken place onBthe spot during the football match being played at the football ground.There is hardly any material to show that the entire incident and theresultant damage to the insured property was caused as a result of themalicious act of the respondent-complainant. Even if, the allegationsagainst the said Gaffar Molla and his associates are taken at their faceCvalue, it is difficult to accept the contention raised by the learnedcounsel for the appellant that the damage caused by the frenzied mobwhich had chased said Gaffar Molla and his associates, was causeddue to the malicious act on the part of the respondent and thereforewas excluded from the coverage in view of Clause V(d) of the subjectPolicy.D

14. It is trite to say that wherever such an exclusionary clause iscontained in a policy, it would be for the insurer to show that the casefalls within the purview of such clause. In case of ambiguity, the contractof insurance has to be construed in favour of the insured.

E15. Beneficial reference of the decision in National InsuranceCompany Limited vs. Ishar Das Madan Lal[1]be made in this regard,in which it has been held that: - “8. However, there may be an express clause excluding theapplicability of insurance cover. Wherever such exclusionaryFclause is contained in a policy, it would be for the insurer to showthat the case falls within the purview thereof. In a case ofambiguity, it is trite, the contract of insurance shall be construed infavour of the insured. “

16. The Constitution Bench in case of General Assurance SocietyLtd. Vs. Chandumull Jain and Another[2]had also observed as back asGin 1966 that: - “11.……there is no difference between a contract of insuranceand any other contract except that in a contract of insurance there 1 (2007) 4 SCC 105H2 AIR 1966 SC 1644

NATIONAL INSURANCE COMPANY LTD. v. VEDIC RESORTSAND HOTELS PVT. LTD. [BELA M. TRIVEDI, J.]

is a requirement of uberrima fides i.e. good faith on the part ofthe assured and the contract is likely to be construed contraproferentem that is against the company in case of ambiguity ordoubt”.

17. In the instant case, the appellant-Insurance Company had failedto discharge its burden of bringing the case within the exclusionary clauseV(d) of the policies in question. The surveyor in the Final Survey Reportdated 16.06.2011 had also opined that the loss had occurred due to theinsured peril and the claim was admissible. Though it is true that theSurveyor’s Report is not the last and final one nor is so sacrosanct as tothe incapable of being departed from, however, there has to be somecogent and satisfactory reasons or grounds made out by the insurer fornot accepting the Report. We are afraid in the instant case, the appellant-Insurance Company has failed to make out any such cogent reason fornot accepting the surveyor’s Report.

18. In that view of the matter, we do not find any merit in thepresent appeal and the same is accordingly dismissed.

Ankit Gyan

Appeal dismissed.

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