IMPORTANT POINT
When insurance policy itself defines acts of terrorism in Exclusion Clause, terms of policy being a concluded contract will govern rights and liabilities of parties – Parties cannot rely upon definitions of ‘terrorism’ in various penal statutes since Exclusion Clause contains an exhaustive definition of acts of terrorism.

JUDGMENT :

ABHAY S. OKA, J.

1. This is an appeal under Section 23 of the Consumer Protection Act, 1986. The appellant has challenged the judgment and order dated 18th October 2016 of the National Consumer Disputes Redressal Commission (for short, ‘the Commission’). By the said Judgment, the Commission dismissed the Consumer Complaint No. 165 of 2012 filed by the appellant.

2. The appellant had taken Standard Fire and Special Perils Policy from the respondent-insurance company for the period from 28th June 2009 to 27th June 2010. The policy was in respect of Engineering Workshop and Plant at Village Khunti District Saraikela, Jharkhand. The total sum assured was Rs. 26,00,00,000/- under different headings. The appellant paid a premium of Rs. 2,20,462/-. According to the appellant, the policy covered the loss caused to the property of the appellant on account of fire, lightning, explosion, riots, strike etc.

3. The appellant lodged a claim on the basis of the said policy, based on the incident of 23rd March 2010. As per the claim made by the appellant, after midnight of 22nd March 2010, about 5060 antisocial people with arms and ammunition entered the factory premises of the appellant at Village Khunti, District Saraikela in Jharkhand. According to the appellant’s case, the mob demanded money and jobs for local people. According to the case of the appellant, substantial damage was caused to its factory, machinery and other equipment. According to the appellant, the object of the incident was to terrorise the management of the appellant and workers in the factory by forcing them to pay a ransom to the miscreants. A First Information Report was also registered at the instance of the appellant based on the said incident. The appellant lodged a regular claim with the respondent company on the basis of the policy. According to the appellant’s case, a surveyor appointed by the respondent-insurance company carried out the survey and assessed the loss at Rs. 89,43,422/-. However, by addressing a letter on 21st December 2010, the appellant claimed that the respondent-insurance company was liable to make an interim payment of Rs. 1.5 crores.

4. By the letter dated 23rd December 2010, the respondent-insurance company repudiated the appellant’s claim by placing reliance on the Exclusion Clause in the policy regarding loss or damage caused by the acts of terrorism. Therefore, the appellant filed the complaint mentioned above before the Commission complaining about deficiency in the service offered by the respondent-insurance company. In the complaint, a prayer was made for the grant of monetary relief of Rs. 1,51,35,780/- on account of the loss suffered by the appellant. A separate amount of Rs. 25,00,000/- was claimed on account of agony and harassment caused to the appellant due to illegal repudiation of the policy by the respondent-insurance company. The appellant claimed interest at the rate of 18% p.a. on the amounts mentioned above and cost amount of Rs. 10,00,000/-.

5. By the impugned judgment and order, the Commission held that because of the “Terrorism Damage Exclusion Warranty” (for short ‘the Exclusion Clause’) the respondent company was justified in repudiating the claim of the appellant based on the policy of insurance. It was held that the damage caused to the factory and equipment of the appellant was due to an act of terrorism.

6. For the sake of convenience, we are reproducing the said Exclusion Clause, which reads thus:

“Terrorism Damage Exclusion Warranty:

Notwithstanding any provision to the contrary within this insurance it is agreed that this insurance excludes loss, damage cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any act of terrorism regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

For the purpose of this endorsement an act of terrorism means an act, including but not limited to the use of force or violence an