Burden lies with insurance company to prove claim falls in exclusionary clause: Supreme Court

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In the specific case before court, it was also pointed out that the surveyor in the final report also opined that the loss had occurred due to the insured peril and the claim was admissible.

The Supreme Court has held that wherever 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 a provision and in case of ambiguity, the contract of insurance has to be construed in favour of the insured. 

A bench of Justices Ajay Rastogi and Bela M Trivedi dismissed an appeal filed by National Insurance Company Limited against the judgement and order of January 07, 2019 passed by the National Consumer Disputes Redressal Commission, New Delhi.

The Commission here has allowed the complaint filed by Vedic Resorts and Hotels Pvt Ltd and directed the insurance company to pay a sum of Rs 202.216 lakhs to the complainant along with 9% interest per annum from six months from the date of lodgment of the claim till the date on which the said payment is made.

The resort at 24 Parganas (South), West Bengal has obtained two insurance policies.

On August 23, 2009 at about 5.00 pm, a mob of about 200-250 persons entered the resort and damaged and destroyed the insured property resulting in loss to the complainant. 

The incident was reported to the police and the FIR was registered on the written complaint given by one Santanu Bhattacharjya, General Manager of Vedic Village Resort, PS Rajarhat. 

Another FIR was also registered in the same police station on the same date for the offence of murder on a complaint by one Monirul Sardar, alleging one Gaffar Molla and his associates opened fire and hurled bombs during a football match. As a result, his brother Alam alias Amirul Sardar died instantly while several other spectators received injuries. 

During the course of investigation, it was revealed that the accused Gaffar Molla and his associates after the firing and throwing bombs at the football match venue, ran towards the resorts and took shelter over there. 

A group of people chased them and damaged the insured property of the complainant. During the course of investigation, the police conducted a search of Vedic village on August 24, 2009 and found pipe guns, live bombs in gunny bags and explosive substances in store room situated within its compound.

Following the claims made, a surveyor was appointed. He assessed the loss to the buildings and contents to the extent of Rs 197.842 lakhs and to the crockery and cutlery to the extent of Rs 4.274 lakhs.

However, the appellant-insurance company repudiated the claim on the ground that loss was an outcome of the malicious act and therefore fell within the exclusions of the policies.
During the hearing, the insurance company contended the resort had harboured the hardcore criminal Gaffar Molla and his associates who had killed one person and injured many others at the football match venue, using illegal fire-arms and explosives stored at the compound. The loss suffered by the respondent was an outcome of the malicious act on the part of the management of Vedic village, it contended.

It also submitted the resort had engaged Gaffar Molla and his associates for carrying out illegal activities and terrorising the people having their lands adjacent to the resort, to extend the area of his resort. It also contended that the surveyor's report terming the claim as admissible was highly erroneous and could not be treated as final.

The resort, on the opposite, defended the order passed by the consumer commission.

The court, however, said it is true that the said Gaffar Molla and his associates had taken shelter at the Vedic Village when the mob became frenzied and chased them, and though it is also true that during the course of investigation the pipe guns and other explosive materials were found lying in the compound of Vedic Village, nonetheless the alleged incident of firing and causing death of a person appears to have taken place on the spot during the football match being played at the ground. 

"There is hardly any material to show that the entire incident and the resultant damage to the insured property was caused as a result of the malicious act of the respondent-complainant. Even if, the allegations against the said Gaffar Molla and his associates are taken at their face value, it is difficult to accept the contention that the damage caused by the frenzied mob which had chased said Gaffar Molla and his associates, was caused due to the malicious act on the part of the respondent and therefore was excluded from the coverage," the bench said.

The court declared that the insurance company had failed to discharge its burden of bringing the case within the exclusionary clause V(d) of the policies in question. 

It also pointed out the surveyor in the final report 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. We are afraid in the instant case, the appellant-insurance company has failed to make out any such cogent reason for not accepting the surveyor’s report," the bench said.