The court enforced the principle that ambiguities in insurance policies favor the insured, ruling against the insurer for failing to adequately disclose exclusions.

1. The present case is filed under Section - 21 of the Consumer Protection Act,1986.

2. The case of the Complainant is that it is engaged in manufacturing of drugs at Units 14 & 15, KHB Industrial Area, Yelahanka, Bengaluru. The Complainant obtained Standard Fire & Special Peril Policy (SFSP) from the Opposite Party, vide Policy No. 421500/11/2010/151, for the period 23.11.2009 to 22.11.2010 for Rs. 8,77,66,000 covering the said manufacturing units. The Policy was got renewed from 23.11.2010 to 22.11.2011, vide Policy No. 421500/11/2011/149, for sum insured Rs. 13,11,34,962. The Complainant further got the Policy renewed from 23.11.2011 to 22.11.2012 for sum insured Rs. 17,77,97,189, vide Policy No. 421500/11/2012/139. On 23.02.2012 distillation was being carried out by taking 600L Toluene in the reactor and distilled Toluene was collected in the receiver. While draining, fire took place due to static current produced during distillation causing massive damage to the premises. The Complainant immediately informed the Opposite Party, vide e - mail dated 24.2.2012, who appointed Shri B. Gopalakrishnan as Preliminary Surveyor. He visited the premises and submitted inspection report dated 7.3.2012. In the Preliminary Report Shri B. Gopalakrishnan opined that this type of peril is generally inclusive in Standard Fire & Special Peril Policy. The Opposite Party thereafter appointed M/s. Flourish Insurance Surveyor and Loss Adjuster Pvt. Ltd. as final Surveyor. He visited the premises and submitted Final Survey Report, dated 22.9.2012. The Opposite Party, vide letter dated 10.10.2012, informed the Complainant that they received the Final Survey Report and on scrutiny of the report, prima facie the Insurance Claim was not tenable as per Clauses 1 and 3 of the General Conditions of the Policy. Complainant was, therefore, called to submit its explanation before final decision on the Claim of the Complainant. The Complainant sent his reply, vide letter dated 9.11.2012, pointing out that there were no change in the trade or occupation or other circumstances affecting the building insured under the Policy. Opposite Party, vide letter dated 23.11.2012 intimated the Complainant that the risk associated with the fire due to erection and testing were not covered under the Policy. Since the fire had occurred during testing, as confirmed in the Survey Report, it fell outside the scope of the operational cover. Complainant was also informed that at the time of renewal of the Policy, the Complainant did not disclose that new machinery / equipments were being erected / installed. The Opposite Party, therefore, repudiated the claim on 23.11.2012 on the ground that risk associated with erection and testing was not covered under the Policy, for which a separate Policy ought to have been taken. Aggrieved by the Repudiation and alleging deficiency in service, the present Complaint was filed before this Commission with the following prayer: -
'(a) to pass orders directing Opposite Party No.1 to pay a sum of Rs. 1,14,50,617.00 (Rupees one crore fourteen lacs fifty thousand six hundred and seventeen only) to the Complainant being the amount of the Insurance claim along with interest Thereon till the date of filling of the complaint;
(b) to award pendente lite and future interest on the amount awarded as per prayer Clause (a) above @18% per annum from the date of filling of the suit till realization of the amount aw