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NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice S.N. Kapoor, Presiding Member &
Mr. B.K. Taimni, Member
Indrayani Paper Products Pvt. Ltd., Nagpur—Appellant
versus
National Insurance Co. Ltd. & Ors.—Respondents
First Appeal Nos. 183 & 202 of 1999—Decided on 1.9.2005
For the Appellant :Mr. S.V. Deshpande & Mr. Pramit Saxena, Advocates.
For the Respondent: Nemo.
The court emphasized that compliance with the orders of the Civil Court could not be considered unwarranted and that the alleged wrongful exercise of jurisdiction of a Civil Court could not be looked into in the proceedings.
Headnote:
Insurance - Riot, Strike, Malicious and Terrorist Damage - Section 144 of the CPC
Fact of the Case:
The appellant's factory premises were demolished due to a partition decree, and they claimed compensation under a fire insurance policy. The insurance company repudiated the claim, stating that the loss was not covered under the Riot, Strike, Malicious and Terrorist Damage clause.
Finding of the Court:
The court found that the demolition was carried out in compliance with the Civil Court's order and was not a riot, malicious act, or terrorist activity. The court also held that the repudiation of the claim was justified and there was no deficiency in service on the part of the Insurance Co.
Issues: The issues involved the interpretation of the Riot, Strike, Malicious and Terrorist Damage clause in the insurance policy and the jurisdiction of the Civil Court in issuing the order for possession.
Ratio Decidendi: The court held that the demolition was not covered under the insurance policy as it was carried out in compliance with the Civil Court's order. Additionally, the court emphasized that restitution could only be claimed after the decree was set aside, and the alleged wrongful exercise of jurisdiction of a Civil Court could not be looked into in the proceedings.
Final Decision: The impugned order was set aside, and the complaint was dismissed. First Appeal No. 183 was dismissed, and First Appeal No. 202 was allowed.
Mr. Justice S.N. Kapoor, Presiding Member—The appellant-Indrayani Paper Products Pvt. Ltd., Nagpur had taken a fire policy ‘C’ in respect of their premises. The policy amongst others covered the risk of Riot, Strike, Malicious and Terrorist Damage clause.
2. The State Commission awarded compensation of Rs. 15.00 lakh taking into consideration probably the observations made in the order passed by the High Court and also the survey report and the order passed the Supreme Court.
3. In terms of partition decree the Civil Court issued warrant of possession in respect of a piece of land of the appellant’s factory premises. It is claimed that in order to execute the partition decree in pursuance of the directions of the Civil Court 300-400 persons came down on the premises, drove away the workers and Managers from the factory and thereafter pulled down the entire structure of the mill, uprooted the machinery, destroyed the stock in trade and virtually caused the total destruction to the complainant mill. The operation of the demolition commenced at about 5.30 p.m. on 26.11.1996 and it ended in the dawn of 27.11.1996. According to the complainant, it was riot and a high-handed act of the terrorists resulting in colossal loss to the premises of the factory and production paper. They preferred claim under the policy with the National Insurance Co. Ltd.
4. A Surveyor was appointed. He assessed the damage caused to the complainant to the extent of 14,75,744/-. But, by the letter dated 21.11.1997, the Insurance Co. repudiated the claim. According to them, the entire instance was occasioned on account of the exercise of legal process by the Court bailiff in consonance with the order passed in the Special Darkhast No. 414 of 1996 arising out of Civil Suit No. 238 of 1997. This was sequel to the M.J.C. No. 237 of 1978 and hence, under the Policy Clause (C) risk for loss due to Riot, Strike, Malicious and Terrorist Damage clause was not attracted to indemnify the complainant for the loss under the policy.
5. The State Commission had gone into the question of jurisdiction of Civil Court in issuing the order on Special Darkhast No. 414 of 1996 and took the view that the Civil Court had no jurisdiction. The State Commission also noticed that after issuing the directions to the Collector, the jurisdiction of the Civil Court came to an end. However, the Civil Court again revived the above M.J.C. proceedings on the basis of the report of the Tehsildar that the land over which the factory is constructed and other adjoining land could be allotted to the share of the original plaintiffs and that the Civil Court should pass necessary orders accordingly. The Civil Court issued warrant of possession of the above lands. Learned State Commission also took exception to the exercise of jurisdiction while issuing warrant of possession which was allegedly not vested with the Civil Court and the learned State Commission held the Insurance Co. should not be allowed to take shelter against above exclusion clause and passed the award as said hereinabove.
6. It may be mentioned that the claim of the complainant under Insurance Policy could be covered in either Clause ‘C’ or Clause ‘D’ of the policy under the heading Riot, Strike, Malicious and Terrorist Damage clause. It reads as under:
“The insurance does not cover loss or damage occasioned by permanent or temporary dispossession resulting from confiscation, commandeering or requisition by any lawfully constituted authority.”
In item II Loss of or damage to the property insured by explosion or otherwise directly caused by—
(h) An act of terrorism committed by a person or persons acting on behalf of or in connection with any organisation.
(i) The action of any lawfully constituted Authority in suppressing or attempting to suppress any such act of terrorism or in minimising the consequences thereof.
For the purpose of this clause “Terrorism” shall mean the use of violence for political ends and shall include any use of
