REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4979 OF 2019

NATIONAL INSURANCE COMPANY LTD. .....APPELLANT

VERSUS

VEDIC RESORTS AND HOTELS

PVT. LTD. .....RESPONDENT

J U D G M E N T

BELA M. TRIVEDI, J.

1.The aggrieved appellant-Insurance Company has filed the present

appeal under Section 23 of the Consumer Protection Act, 1986

(hereinafter referred to as the said Act) challenging the judgment

and order dated 07.01.2019 passed by the National Consumer

Disputes Redressal 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 the complainant (respondent herein), and directed the appellant

to pay a sum of Rs. 202.216 lakhs to the complainant along with

1 2023 INSC 545

interest @ 9% per annum from six months from the date of

lodgment of the claim till the date on which the said payment is

made.

2.The respondent-complainant, running a Resort at Village

Shikharkpur, P.S. Rajarhat, District 24- Paraganas, (South) of

West Bengal had obtained two insurance policies from the

appellant-Insurance Company, one being Policy No. 100900/11 /

08/3300000420 for the period from 16

th

September, 2008 to 15

th

September, 2009 in respect of the buildings of the said Resort

with plant and machineries accessories and furniture etc. and the

other being Policy No. 100900/11/09/3100000270 for the period

from 13

th

July, 2009 to 12

th

July, 2010 in respect of two hotel

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 the

resort and damaged/destroyed the insured property resulting in loss

to the complainant. The incident was reported to the police and the

FIR being No. 144 of 2009 was registered on the written complaint

given by one 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 one

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Gaffar Molla and his associates, at the instance of a written

complaint given by one Monirul Sardar to the effect that when the

said complainant and his brother were returning home, they saw a

football match going on at Sekharpur Adarsha Sangha Ground.

When the said football match was going on, suddenly one Gaffar

Molla and his associates started firing and hurling bombs to

postpone the match. As a result, thereof, the brother of the

complainant, namely, Alam @ Amirul Sardar received gunshot injury

on his person causing his instant death. Several other spectators

also received injuries due to bomb explosion.

5.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, 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

given shelter in the said Vedic Resort, the crowd chased them and

damaged the insured property of the respondent-complainant.

During the course of investigation, the police conducted a search of

Vedic village on 24

th

August, 2009 and found that there were pipe

guns, live bombs in gunny bags and explosive substances found

and recovered from the housing material-cum-electrical store room

situated within the compound of the Vedic village of the respondent.

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6.On the surveyor being appointed, as per the Final Survey Report

dated 16.06.2011, the Surveyor assessed the loss to the buildings

and contents to the extent of Rs. 197.842 lakhs in Policy No. 420

and the loss to the crockery and cutlery to the extent of Rs. 4.274

lakhs in Policy No. 270, in aggregate assessed the loss to the tune

of Rs. 202.216 lakhs under both the policies.

7.The appellant-Insurance company repudiated the claim of the

respondent vide letter 06.07.2012 inter alia stating that loss in

respect of which the subject claim was made, was an outcome of

the malicious act and therefore fell within the exclusions under

Clause V(d) of the Subject policies; and that there had been a

breach of warranty on the part of the assured in respect of the

class of constructions covered under the subject policies.

8. The respondent therefore filed the Consumer Complaint being No.

227 of 2012 challenging the said repudiation of claim under

Section 21 of the said Act before the National Commission, which

by the impugned order dated 07.01.2019 partly allowed the same

as stated hereinabove.

9.The learned counsel Mr. Vishnu Mehra, appearing for the

appellant-Insurance Company vehemently submitted that the

respondent had harboured the hard-core 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

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stored at his own compound of Vedic village and had invited public

grudge which had caused damage to his insured property. Hence,

according to him, the loss suffered by the respondent was an

outcome of the 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. He further submitted that the

words “or any omission or any kind or any person” occurring in

Clause V(d) of the Policy would cover the damage to the property

caused on account of omission of the management of the

respondent-complainant to abide by the law, and the respondent

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. He 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.

10.However, the learned counsel Mr. Sukumar Pattjoshi, appearing

for the respondent supporting the findings recorded by the

National Commission submitted that the repudiation of his claim by

the appellant-Insurance Company was erroneous and the

Commission had rightly granted the same.

11.The appellant having relied upon the Clause V of the subject

policies, the relevant extract thereof is reproduced as under:

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“V. Riot, Strike and Malicious Damage:

Loss of or visible physical damage or destruction by

external violent means directly caused to the

property insured but excluding those caused by:

(a) to (c)………………

(d) burglary, housebreaking, theft, larceny or any

such attempt or any omission of any kind of any

person of any person (whether or not such act is

committed in the course of a disturbance of public

peace) in any malicious act.

If the Company alleges that the loss/damage is

not caused 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 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. It further states that if the Insurance company alleges that

the loss/damage was not caused by any malicious act, the burden

of proving the contrary would be upon the insured. 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

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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.

13.Though, 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 football 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 raised by the learned counsel for

the appellant that the damage caused by the frenzied mob which

had chased said Gaffar Molla and his associates, was caused due

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to the malicious act on the part of the respondent and therefore

was excluded from the coverage in view of Clause V(d) of the

subject Policy.

14.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.

15.Beneficial reference of the decision in National Insurance

Company 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 the applicability of insurance cover.

Wherever such exclusionary clause is contained in

a policy, it would be for the insurer to show that the

case falls within the purview thereof. In a case of

ambiguity, it is trite, the contract of insurance shall

be construed in favour of the insured. “

16. The Constitution Bench in case of General Assurance Society

Ltd. Vs. Chandumull Jain and Another

2

had also observed as

back as in 1966 that: -

“11.……there is no difference between a contract

of insurance and any other contract except that in a

contract of insurance there is a requirement

of uberrima fides i.e. good faith on the part of the

assured and the contract is likely to be

construed contra proferentem that is against the

company in case of ambiguity or doubt”.

1 (2007) 4 SCC 105

2 AIR 1966 SC 1644

8

17.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. 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.

18.In that view of the matter, we do not find any merit in the present

appeal and the same is accordingly dismissed.

..………………………. J.

[AJAY RASTOGI]

…..................................J.

[BELA M. TRIVEDI]

NEW DELHI;

17.05.2023

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