As per the case facts an appellant secured a fire insurance policy for a basement shop which was inspected by the insurer However the policy contained an exclusion clause for ... basements After a fire the claim was denied due to this clause The State Commission granted compensation which the National Commission later set aside The reason for the appeal to the Supreme Court was to challenge the denial of compensation based on an exclusion clause that contradicted the known nature of the insured property and was deemed an unfair trade practice The question arose whether an insurance company can repudiate a claim based on an exclusion clause for a property they knew was a basement and if such a clause constitutes an unfair trade practice Finally the Supreme Court found that repudiating a claim for a basement knowing it was a basement is an unfair trade practice and the exclusion clause was an unfair term rendering the contract un-executable from its inception The Court set aside the National Commission's order restoring the compensation but declined to award amounts for harassment and mental agony as the respondents had merely taken a legal stand The Court also cautioned insurance companies regarding mandatory compliance with IRDA Regulations stating that non-compliance would preclude them from using contractual terms for repudiation

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