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SUPREME COURT OF INDIA
R.M. Lodha, J.
Vikram Greentech (I) Ltd. & Anr. —Appellants
versus
New India Assurance Co. Ltd. —Respondent
Civil Appeal No. 2080 of 2002
Decided on 1.4.2009
IMPORTANT POINT
Insured cannot claim anything more than what is covered by insurance policy.
Headnote:(A) Insurance—Policy—Interpretation—An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself—In a contract of insurance, there is requirement of uberrima fides(good faith on the part of the Insured)—Except that, in other respects, there is no difference between a contract of insurance and any other contract—Since upon issuance of insurance policy, insurer undertakes to indemnify loss suffered by insured on account of risks covered by insurance policy, its terms have to be strictly construed to determine extent of liability of insurer—Endeavour of court must always be to interpret the words in which contract is expressed by parties—Court while construing terms of policy is not expected to venture into extra liberalism that may result in re-writing contract or substituting terms which were not intended by parties—Insured cannot claim anything more than what is covered by insurance policy—Surveyors’ report cannot be taken aid of nor can it furnish basis for construction of policy—Such outside aid for construction of insurance policy is impermissible. (Paras 15 and 16)
(B) Consumer Protection Act, 1986—Section 23—Insurance—Floriculture Insurance Policy—Extensive damage to floriculture and poly houses due to cyclone/storm—Claim partly allowed by National Commission—Policy covered insured for loss and and/or damage caused by storm/hailstorm/cyclone over insured area—Insurance Company under the policy also agreed that sum insured would be equal to the costs of placement of insured property by new property of same kind and same capacity(replacement cost)—Only six poly houses were only covered by policy—No error in the conclusion of National Commission—Appeal dismissed. (Paras 19, 23 and 24)
R.M. Lodha, J.—This appeal under Section 23 of the Consumer Protection Act, 1996 (for short, ‘The Act’) is directed against the judgment and order dated October 30, 2001 passed by National Consumer Disputes Redressal Commission, New Delhi ( for short, ‘ National Commission’) whereby the complaint filed by the appellant for direction to the respondent to settle the insurance claim alongwith interest @ 18% per annum and compensation of Rs.25 lakh on account of mental agony, harassment and monetary loss came to be dismissed.
2. The sequence of facts may be noticed first. Vikram Greentech (I) Ltd. came to be incorporated in 1993 with an object of setting up a floriculture project in the State of Maharashtra. In 1995, the company started negotiations with the respondent (hereinafter referred to as ‘Insurance Company’) for a comprehensive floriculture insurance policy. On January 18,1996, the company (hereinafter referred to as ‘insured’) submitted a proposal to the Insurance Company for a comprehensive floriculture insurance of poly-house (Rs.1.25 crore), irrigation system (Rs.25 lakh), cost of cultivation of flowers (Rs.25 lakh) and input cost from first flowering to the harvest (Rs.25 lakh). The Insurance Company issued a comprehensive Floriculture Insurance Policy (‘Policy’, in short) on January 23,1996, period of insurance being from January 18,1996 to January 17,1997 and charged premium of Rs. 2,31,000/-. On May 23,1996, according to the insured there was a severe storm/cyclone, which damaged the floriculture extensively and substantial damage was caused to the roofs and walls of the poly-houses. On June 18/19,1996, there was another storm/cyclone. As a result of which the floriculture project of the insured and the poly clothes and the roofs as well as walls of the poly-houses were extensively damaged; certain poly-houses even collapsed completely. For the loss suffered in the first storm/cyclone, a claim for Rs.31,17,140/- was submitted by the insured with the Insurance Company. The insured submitted another claim for Rs.38,97,906 in respect of loss suffered due to second storm/cyclone that occurred on June 18/19,1996.
3. The Insurance Company appointed M/s Standard Surveyors Private Limited as their Surveyors for assessing the loss claimed by the insured. The Surveyors submitted their report on October 24,1996 and assessed the loss suffered by the insured at Rs. 28,85,243/- in respect of the first storm. On October 28,1996, the Surveyors submitted its second report in respect of the second storm/cyclone and assessed the loss at Rs.34,81,214/-.
4. On November 28,1996, the Insurance Company informed the Surveyors that their report included loss to polyhouses Nos. 7, 8A and 8B whereas the policy covered only poly-houses 1 to 6. The Surveyors were, accordingly, asked to reassess the loss.
5. On December 19,1996, the Surveyors gave their clarification to the Insurance Company that all the poly-houses were covered under the policy and their assessment was correct and fair.
6. The Insurance Company, then, appointed M/s Jupiter Claim Consultants as investigators for verification of the claim. The insured was also asked to furnish necessary documents to the said investigators. The investigators are said to have submitted their report on September 12,1997 stating therein that they were not able to submit their certification as regard the cost of poly-houses Nos. 1 to 6 and other related matters categorically for sum insured and claim thereof.
7. On November 6,1997, the Surveyors submitted their addendum to the earlier report dated October 24,1996 with regard to the first storm and reduced the assessment of loss to Rs.4,77,355/-. The Surveyors submitted another addendum on February 16,1998 to the report dated October 28,1996 with regard to the second storm and reduced the assessment of loss to Rs.95,443/-.
8. The insured then approached the National Commission alleging therein deficiency of service by the Insurance Company in not set
