Vikram Greentech (I)
Ltd. & ANR. Vs. New India Assurance Co. Ltd.  INSC 683 (1 April 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2080 OF 2002 Vikram
Greentech (I) Ltd. & Anr. ... Appellants Versus New India Assurance Co.
Ltd. ..Respondent JUDGEMENT 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
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
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 poly- houses Nos. 7, 8A and 8B whereas the policy covered only
poly-houses 1 to 6. The Surveyors were, accordingly, asked to reassess the
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 settling the claim and sought direction to the
Insurance Company to settle the claim of the insured in full and pay interest
on due amount.
9. The Insurance
Company contested the claim and set up the plea that the claim on account of
damages to poly- houses 7, 8A and 8B was not admissible as these poly-houses
were not covered under the policy. As regards the poly- houses nos. 1 to 6, the
Insurance Company admitted that the policy covered those poly-houses. They
stated before the National Commission that insured has already been informed
that the loss finally assessed by the Surveyors is to the tune of Rs.4,77,355/-
in respect of first storm and Rs.95,443/- on account of loss caused by second
10. A rejoinder came
to be filed by the insured and it was stated therein that at the relevant point
of time, the size of the farm was 6.3 hectares and the entire area was covered
by the Insurance Company and it was not limited to the area to 2.8 hectares as
contended by the Insurance Company.
11. The National
Commission heard the arguments of both the parties and held that at the time of
taking policy only six poly-houses were in existence and there was no evidence
or proof to substantiate that the insurance was covered for poly- houses 7, 8A
and 8B. The National Commission recorded the admitted position that poly-houses
7, 8A and 8B were not in existence at the time of taking insurance policy.
Commission held that the policy clearly mentioned the number of poly-houses as
"six" and in view thereof the complainant is entitled to an amount of
Rs.5,72,798/- on account of damages to these poly-houses (nos.1-6) during the
storm/cyclone that hit on May 23,1996 and June 18/19,1996 alongwith interest @
12% from the date of the first Surveyors report i.e. November 6,1997 upto the
date of payment, failing which the rate of interest shall be @ 18% per annum.
12. Aggrieved by the
dismissal of the complaint with regard to the claim for loss to poly-houses 7,
8A and 8B, the insured, as stated, is in appeal.
13. We have heard Mr.
Vijay Hansaria, learned senior counsel for the appellant and Mr. P.K. Seth,
learned counsel for the Insurance Company.
14. The question that
arises for our consideration is: whether comprehensive floriculture insurance
policy issued by the Insurance Company to the insured covered poly-houses 7, 8A
15. 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 uberimma fides i.e. 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. The four essentials of a contract
of insurance are, (i) the definition of the risk, (ii) the duration of the
risk, (iii) the premium and (iv) the amount of insurance. Since upon issuance
of insurance policy, the insurer undertakes to indemnify the loss suffered by the
insured on account of risks covered by the insurance policy, its terms have to
be strictly construed to determine the extent of liability of the insurer. The
endeavour of the court must always be to interpret the words in which the
contract is expressed by the parties. The court while construing the terms of
policy is not expected to venture into extra liberalism that may result in
re-writing the contract or substituting the terms which were not intended by
the parties. The insured cannot claim anything more than what is covered by the
insurance Chandan Lal3]
16. Document like
proposal form is a commercial document and being an integral part of policy,
reference to proposal form may not only be appropriate but rather essential.
surveyors' report cannot be taken aid of nor can it furnish the basis for
construction of a policy. Such outside aid for construction of insurance policy
17. That the insured
submitted proposal to the Insurance Company for comprehensive floriculture
insurance on January 18,1996 is not in dispute. The insured furnished 1 AIR
1966 SC 1644 2 (1999) 6 SCC 451 3 (2004) 8 SCC 644 particulars for the
following components which were to be covered:
"A) Polyhouse 1
2 3 4 _ Total Value of (Rs. in Crores) 1) Steel structure 0.25 2) Fabrication
0.15 3) Plastic Grippers 0.10 4) Plastic & Fittings charges 0.50 5) Cost of
constr. For polyhouses, Gutters & other accessories 0.25 ______ 1.25 B)
Irrigation System (Capacities value and specifications for the following) In
lakhs 1) Plasto make system 15.00 2) Agricon Associates (Valves & Pipes)
00.50 3) Fitting charges 00.50 4) Reservoir 04.00 ELECTRIC MOTOR 1) Electric
Motor, 15 HP 3 nos., 2 HP 20 nos., 20 HP 1no. with pumps, pipes & valves.
01.00 2) D.G. set, 2 nos., POWERICA (Kirloskar), 140 KVA & 1.25 KVA
Transformer, Starters MCL -CTCL & others access 04.00 _____ 25.00 C)
Details of flowers planted in Green house or Open Cultivation : Green House
Cultivation i) No. of Green Houses : 6 Polyhouses ii) Area under Green Houses:
2.8 hectares iii) Area under Open Cultivation : No 9 D) Details of Flowers
plants under cultivation i) Total area under Floriculture : 2.8 hectares ii)
Survey/Gat/Hissa No. : 163, 158, 157, 156 148, 149, 147, 164 iii) Name of the
flower plants : Dutch Roses under cultivation iv) Variety : Vivaldi,Texas,
Konfetti, First Red, Vanilla, Kiss, Tiamo, Lambada v) No. of flowers : 195500
vi) Distance between flower plants : 14 cm.
vii) Expected date of
harvest : September 1995 Input cost (From planting to : Rs. 25 lacs to first
flowering i.e. 4 months) ix) Cost of saplings : Rs. 70 per plant E) Cost of
cultivation for flowers : 25 lacs.
i) No. of flowers :
19,55,500.00 ii) Input cost from first flowering to harvest : 25 lacs.
iii) Area under Open
Cultivation : No"
18. Based on the said
proposal, the Insurance Company issued comprehensive floriculture insurance
policy on January 23, 1996 The schedule attached to the said insurance policy
`SCHEDULE' Insured :
M/s VIKRAM GREENTECH (i) Ltd.
(Name and address)
Plot No. 99, Sector 24, Rigdi-Pradhikaran 10 PUNE- 411 044 Policy No. :
47/221200/00940 Insured at : Surat Proposal Date : 18th January, 1996 Name of
the Crop : Floriculture offered for insurance Period of Insurance : 18/01/96 to
17/01/97 Address of the Site of : Village : Sanghise, the proposal to be Near
Kamshet Railway Station Insured Tal.: Maval, District: PUNE Total sum Insured :
Rs. 2 crore Total Premium : Rs. 2,20,000/- + 11,000/-(s.o.)
__________________________________________________________ _ INVENTORY OF THE
PROPERTY INSURED (Sections I & II)
__________________________________________________________ _ Description of the
item with sum Insured Rs. Excess Rate Premium Details Rs. Rs. Rs.
_ I POLYHOUSE:
a) Steel Structure
25,00,000/- b) Fabrication 15,00,000/- c) Gripper 10,00,000/- d) Plastic
Fitting Charges 50,00,000/- e) Cutter | f) Plastic | 25,00,000/-
----------------- 1,25,00,000/- II IRRIGATION :
A a) Plasto Make System
15,00,000/- b) Agricon Associates 50,000/- (Valves & Pipes) c) Fitting
Charges 50,000/- d) Reservoir 4,00,000/- III ELECTRIC MOTOR a) Electric Motor
b) Starter-MCL-CICL }
c) Other Assessories, } DG set 2 nos.,and } Transformers } 4,00,000/-
19. That the
aforesaid policy covered the insured for the loss and and/or damage caused by
storm/hailstorm/cyclone over the insured area is not in dispute. The Insurance
Company under the policy also agreed that the sum insured would be equal to the
costs of placement of the insured property by new property of the same kind and
in other words
Mr.Vijay Hansaria, learned senior counsel for the insured strenuously submitted
that the Proposal Form did not specify the number of poly-houses and,
therefore, all poly-houses including 7, 8A and 8B were covered under the policy
as they were in existence at the time of calamity that occurred on May 23,1996
and June 18/19,1996, we are afraid, the submission of the senior counsel does
not merit acceptance. Admittedly, at the time, the policy was taken ( i.e. proposal
made on January 18,1996 and insurance policy issued on January 23,1996),
poly-houses 1 to 6 were in existence and poly-houses 7, 8A and 8B were not in
These poly-houses (7,
8A and 8B) were completed in March 1996. Moreover it is not correct to say that
the Proposal Form does not specify the number of poly-houses. It does. It
clearly mentions six poly-houses. It is true that six poly-houses are mentioned
in Clause(C) of the Proposal Form which is with regard to green house
cultivation but what is mentioned in respect of poly-houses in Clause(C) is
necessarily referable to the number of poly-houses in Clause(A) of the Proposal
Form as well.
21. The learned
senior counsel for the insured submitted that the entire material for
poly-houses 7, 8A and 8B had already been received at the time of making
proposal and issuance of insurance policy and the intention was also to cover
the material lying at the site for erection of poly-houses.
In this regard, the
learned senior counsel sought to refer to the correspondence between the
parties and the Surveyors' reports dated October 24,1996 and October 28,1996.
He would submit that cost of six constructed poly-houses on the date of making
proposal was around Rs.65-70 lakhs and for the insurance cover of these six
poly-houses, the insured would not have valued their cost at Rs.1.25 crores and
paid premium of Rs.2,31,000/-.
22. A careful
consideration of the Proposal Form that sets out the particulars of the
components which were to be covered and the inventory of the property insured
(Sections I and II), mentioned in the policy leaves no manner of doubt that
what was insured was existing poly-houses on the date of the issuance of
policy. It is clear from the proposal and the policy.
The two documents
admit of no ambiguity and it is clear that six poly-houses covering an area of
2.8 hectares was covered by the policy. It may be mentioned that Clauses
(C)(ii), (D)(i) and (ii) of the Proposal Form mentions Survey/Gat/Hissa no.163,
158,157,156,148,149,147 and 164 and total area 2.6 hectares.
It is on this area
that six poly-houses were existing on the date the proposal was made and policy
issued. These six poly- houses were only covered by the policy.
23. The National
Commission concluded thus:
" ..... we are
unable to accept the contention of the complainant that only houses 7,8A or 8B
were covered under the Insurance Policy in question especially when admittedly,
they were non-existent on the date, the policy was taken and policy clearly
mentioned the number of poly houses as "Six". In our view the
complainant has failed to prove a case based on the material on
We do not find any
error in the conclusion of the National Commission.
24. In what we have
discussed above, the appeal is liable to be dismissed and is dismissed with no
order as to costs.