Interpretation of insurance policy clauses and the applicability of coverage to specific types of damages.

ORDER

V.B. Gupta, (P.M) - This appeal has been filed by M/s. Ind-Swift Limited against the order dated 15.9.2014 of the Punjab, State Consumer Disputes Redressal Commission, (in short 'the State Commission') in Consumer Complaint No. 09 of 2012.

2. The brief facts of the case are that there were heavy rains in Northern India, at Derabassi area on 23.07.2011, which damaged the stock and premises of the appellant covered under the Fire & Special Peril Insurance Policy bearing No. 110301/11/11/11/00000023, for the period from 26.4.2011 to 25.4.2012, got damaged. The appellant intimated the loss of Rs. 60 lakhs due to heavy rains to the insurer, United India Insurance Company Ltd on 23.07.2011. The Insurance Company appointed a surveyor, who visited the site on 26.7.2011. The Insurance Company repudiated the claim on 3.11.2011 stating that loss due to seepage of rain water is not covered under the said policy. The appellant filed the Consumer Complaint bearing Consumer Complaint No. 09 of 2012 before the State Commission praying for damages towards loss suffered due to seepage of rainwater. The State Commission vide its order dated 15.09.2014 dismissed the Consumer Complaint stating that the loss suffered by the appellant was not covered under the said policy.

3. We heard the counsel for the appellant and perused the records carefully.

4. Learned counsel for the appellant stated that the day of rain i.e. 23.7.2011 is fully covered under the validity of the policy. Under the policy, the building stocks, packing material, parts and machinery all were covered. The loss has occurred due to heavy rains, which damaged the roof of the building and water poured by way of seepage through the roof and false-ceiling. The concerned clause of the policy is mentioned below:-

"VI. Storm cyclone typhoon tempest hurricane tornado flood and Inundation: Loss destruction or damage directly caused by storm cyclone typhoon tempest hurricane tornado flood or inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature (wherever earthquake cover is given as an "add on cover" the words "excluding those resulting from earthquake volcanic eruption or other convulsions of nature" shall stand deleted."

5. Learned counsel pointed out that the case of seepage is covered under flood and inundation. He mentioned that the dictionary meaning of the flood and inundation is as follows:-

"Flood

1. An overflow of a large amount of water over dry land,

2. The inflow of the tide

3. An outpouring of tears or emotion

4. Overwhelming quantity of things or people appearing at once.

Inundation

1. Flood

2. Overwhelm with things to be dealt with."

6. Learned counsel cited the judgment of National Consumer Disputes Redressal Commission, in the case of Oriental Insurance Co. Ltd. v. Sathyanarayana Setty & Sons, II (2012) CPJ 456 (NC), wherein it has been held that seepage caused directly by inundation due to heavy rains is covered by Insurance Policy-Repudiation not justified. It was also mentioned that seepage only occurred due to heavy rains otherwise there was no point of seepage in the premises, which were duly inspected by the Insurance Company while agreeing to Fire & Special Peril Insurance Policy for the said premises. The State Commission has wrongly interpreted that the seepage is not covered under flood and inundation. Each and every possibility of damage cannot be listed in the policy document and the main clause is to be interpreted in the common sense of the words of the policy documents. The policy document does not specify what kind of flood and what kind of inundation will be covered under the policy. Hence, the general interpretation would be that the seepage, which is also caused by inundation, will be covered under the policy.

7. We have perused the policy document carefully. The policy covers Storm cyclone typhoon tempest hurricane tornado flood and inundation. The appellant case is that seepage of water took place from the f