United
India Insurance Co. Ltd. Vs. M/S. Pushpalaya Printers [2004] Insc 120 (25 February 2004)
Shivaraj
V. Patil & Dr. Ar.Lakshmanan. Shivaraj V. Patil, J.
The
respondent filed a complaint before the District Consumer Disputes Redressal
Forum (District Forum) under Section 12 of the Consumer Protection Act, 1986
(for brevity 'the Act') praying for settlement of an insurance claim at
Rs.75,000/- along with interest at the rate of 18% per annum. The appellant
repudiated the claim on the ground that damage caused to the building and
printing press of the respondent was not covered by Clause 5 of the insurance
policy. The District Forum accepting the contention urged on behalf of the
appellant held that there was no deficiency of service on the part of the appellant
and dismissed the complaint as not maintainable. The respondent filed appeal
before the State Consumer Disputes Redressal Commission (State Commission)
against the order of the District Forum. The State Commission, on
interpretation of the word "impact" contained in Clause 5 of the
insurance policy, allowed the appeal, set aside the order of the District Forum
and granted relief to the respondent directing the appellant to pay a sum of
Rs.75,000/- with interest at the rate of 12% per annum with effect from
18.10.1994 till the date of payment.
The
appellant, dissatisfied with the order of the State Commission, filed revision
petition before the National Consumer Disputes Redressal Commission (National
Commission). The National Commission, while accepting the interpretation given
by the State Commission, however, reduced the amount of payment to the
respondent from Rs.75,000/- to Rs.56,000/-. Aggrieved by said order of the
National Commission, this appeal is brought before this Court by the appellant.
Before
us, learned counsel for the parties in their arguments reiterated their
respective contentions, which were urged before all the forums.
In
order to consider the respective contentions urged on behalf of the parties, it
is both necessary and useful to quote the relevant portions from the insurance
policy: - "IN CONSIDERATION OF THE insured named in the Schedule hereto
having paid to United India Insurance Company Limited (hereinafter called THE
COMPANY) the premium mentioned in the said schedule.
Till
company agrees, (subject to the condition and exclusion contained herein or
endorsed or otherwise expressed hereon) that if after payment of premium the
property insured described in the said schedule or any part of such property,
be destroyed or damaged by the following: -
1.
.......
2.
.......
3.
.......
4.
.......
5.
Impact by any rail/road vehicle or animal."
In the
order of the District Forum it is noticed that the appellant contested the
claim by filing written objection contending that the damage caused due to
vibration from the operation of bulldozer was not an incident of impact by any
road vehicle, as per Clause 5 of the insurance policy for risk, and so the
complaint was not maintainable. Para
4 of the order of the District Forum reads: -
"4.
Neither party led any evidence because it was admitted by the Opposite Party
that in connection with a road construction with the help of a bulldozer near
the complainant's printing press in question there was damage to that building.
And, both parties agreed that it all depends upon the interpretation of the
term (5) of the Insurance Policy." Thus, from the order of the District
Forum it is clear that the appellant did not dispute as to damage caused to the
building and machinery of the respondent on account of the bulldozer driven
close to the building on the road for the purpose of road construction and that
both the parties agreed that the sustainability of the claim depended upon the
interpretation of Clause 5 of the insurance policy. The District Forum took a
narrow view that the word "impact" contained in clause 5 of the
insurance policy covered risk of only contingent impact of a road vehicle
forcibly coming in contact with another. It held that the damage caused to the
building and machinery in the instant case was not due to such forcible contact
but it was due to the consequential effect of vibration on account of operating
of a bulldozer by the side of the respondent's printing press building and as
such it was not covered by clause 5 of the insurance policy; thus, there being
no deficiency of service on the part of the appellant the complaint filed by
the respondent was not maintainable.
According
to the State Commission the only point, which arose for decision in the appeal
was whether the damage caused to the building and the machinery of the
respondent was the resultant of the impact by the bulldozer. Considering the
meaning of the word "impact" given in various dictionaries the State
Commission took the view that when the word "impact" has got meanings
more than one and the word "impact" not only means "coming
forcibly in contact with another", it also means "to drive
close", "effective action of one thing upon another" and
"effect of such action". The "impact" covered damage caused
to the building and machinery in view of the admitted fact that such damage was
caused because of close drive by the bulldozer on the road. Expressing thus the
State Commission set aside the order of the District Forum and granted relief
to the respondent.
The
National Commission concurring with the view expressed by the State commission
interpreting the expression "impact" observed that the said word has
to be construed liberally and in its wider sense.
The
only point that arises for consideration is whether the word "impact"
contained in clause 5 of the insurance policy covers the damage caused to the
building and machinery due to driving of the bulldozer on the road close to the
building. It is evident from the terms of the insurance policy that the
property was insured as against destruction or damage to whole or part. The
appellant company agreed to pay towards destruction or damage to the property
insured to the extent of its liability on account of various happenings. In the
present case both the parties relied on clause 5 of the insurance policy.
Clause 5 is also subject to exclusions contained in the insurance policy. That a
damage caused to the building or machinery on account of driving of vehicle on
the road close to the building is not excluded. Clause 5 speaks of
"impact" by any rail/road vehicle or animal. If the appellant company
wanted to exclude any damage or destruction caused on account of driving of
vehicle on the road close to the building, it could have expressly excluded.
The insured possibly did not understand and expect that the destruction and
damage to the building and machinery is confined only to the direct collusion
by vehicle moving on the road to the building or machinery. In the ordinary
course, the question of a vehicle directly dashing the building or the
machinery inside the building does not arise.
Further,
"impact" by road vehicle found in the company of other words in the
same clause 5 normally indicates that damage caused to the building on account
of vibration by driving of vehicle close to the road is also included. In order
to interpret this clause, it is also necessary to gather the intention of the
parties from the words used in the policy. If the word "impact" is
interpreted narrowly the question of impact by any rail would not arise as the
question of a rail forcibly coming to the contact of a building or machinery
would not arise. In the absence of specific exclusion and the word
"impact" having more meanings in the context, it cannot be confined
to forcible contact alone when it includes the meanings "to drive
close", "effective action of one thing upon another" and
"the effect of such action", it is reasonable and fair to hold in the
context that the word "impact" contained in clause 5 of the insurance
policy covers the case of the respondent to say that damage caused to the
building and machinery on account of the bulldozer moving closely on the road
was on account of its "impact". It is also settled position in law
that if there is any ambiguity or a term is capable of two possible
interpretations one beneficial to the insured should be accepted consistent
with the purpose for which the policy is taken, namely, to cover the risk on
the happening of certain event. Although there is no ambiguity in the
expression "impact", even otherwise applying the rule of contra proferentem,
the use of the word "impact" in clause 5 in the instant policy must
be construed against the appellant. Where the words of a document are
ambiguous, they shall be construed against the party who prepared the document.
This rule applies to contracts of insurance and clause 5 of the insurance
policy even after reading the entire policy in the present case should be
construed against the insurer. A Constitution Bench of this Court in General
Assurance Society Ltd. vs. Chandumull Jain & Anr. [1966 (3) SCR 500] has
expressed that "in a contract of insurance, there is requirement of uberrima
fides, i.e. good faith on the part of the assured and the contract is likely to
be construed contra proferentem i.e. against the company in case of ambiguity
or doubt." In the light of what is stated above, no fault can be found
with the impugned order. The interpretation placed by the State Commission as
well as by the National Commission in relation to the expression
"impact" is in order and appropriate. Hence the point is answered in
the affirmative.
Under
the circumstances we find no merit in the appeal. Consequently it is dismissed.
No
costs.
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