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Insurance  -  Policy - Interpretation  - Rule of Strict Interpretation - Coverage provisions and exclusions  - Principles relating to interpretation of insurance policies are well settled and not in dispute -  At the same time, the provisions of the policy must be read and interpreted in such a manner so as to give effect to the reasonable expectations of all the parties including the insured and the beneficiaries -  Coverage provisions should be interpreted broadly and if there is any ambiguity, the same should be resolved in favour of the insured -  On the other hand, the exclusion clauses must be read narrowly - The policy and its components must be read as a whole and given a meaning which furthers the expectations of the parties and also the business realities -  The entire policy should be understood and examined in such a manner and when that is done, the interpretation becomes a commercially sensible interpretation - Consumer Protection Act, 1986 (68 of 1986). Held, As far as the present case is concerned, if we read the tripartite agreement along with the terms of the policy it is obvious that the Bank insisted that the stock be insured. The farmers were told that they would pay the premium. The cold store while fixing the rent obviously factored the premium into the rent. It was obvious that the intention of the parties was that they would be compensated by the insurance company in case of any untoward loss. 2020 SCeJ 385


Insurance  - Voidable  -  Condition Nos. 1 & 8 of Part B of the General Conditions of the Insurance Policy provided that  “1. This policy shall be voidable in the event of misrepresentation, mis-description or non-disclosure of any material particular.” - Insurance company has not informed by the Bank, the cold store or the farmers that the farm produce or the insured goods belong to the farmers and therefore the policy is voidable - Insurance company never chose to declare the policy void for 3 long years when it was in existence and, at this stage, cannot be permitted to wriggle out of its liability by taking this objection - Consumer Protection Act, 1986 (68 of 1986). 2020 SCeJ 385


Insurance - Insurance company cannot take advantage of its own negligence -  Presumption that insurance company must have verified the details before insurance policy was issued  - Stock in trade was covered for a sum of Rs. 30 crores and premium was charged accordingly -  A prudent insurance company before issuing a policy of such a heavy amount, must or at least should have ascertained the value and the nature of the goods -  The insurance company before us is one of the largest nationalised insurance companies and a presumption has to be drawn that it must have verified the details before insurance policy was issued - If verification had been done by a visit to the cold store, it could have been easily found out who are the owners of the stock -  In case, the insurance company has chosen not to verify the stock it cannot take advantage of its own negligence -  The principle of uberrima fides has no application because the cold store had declared all necessary facts -  The bank clause clearly indicated that the goods were hypothecated/pledged to the Bank -  Therefore, the insurance company now cannot turn around and claim that the names of the owners were not supplied to it at the time of insurance - Policy was in existence for 3 years - If the insurance company chooses not to even write a letter to the insured or take any steps to verify the value of the goods and ownership of the goods, it cannot now turn around and urge that it was not aware about the nature or ownership of the goods - Consumer Protection Act, 1986 (68 of 1986). 2020 SCeJ 385


Insurance  - Non-disclosure of material facts – Proposal form  -  If a column is left blank, the insurance company should have asked the insured to fill in the column - There is no wrong information given in the proposal form though it may be true that all the requisite information was not supplied -  The column requires listing out the parties who have an insurable interest including financial institutions - Since the policy had a bank clause, the name of Canara Bank should have been mentioned  - That was not there - If the insurance company while accepting the proposal form does not ask the insured to clarify any ambiguities then the insurance company after accepting the premium cannot now urge that there was a wrong declaration made by the insured - In case the insured had written that there were no persons who had an insurable interest, the position may have been different but leaving out the column blank does not mean that there was some misdeclaration of facts. Satwant Kaur Sandhu v. New India Assurance Co. Ltd. (2009) 8 SCC 316,  not applicable - Consumer Protection Act, 1986 (68 of 1986). Held, the insurance company itself could have also taken some initiative in the matter. To make a contract void the non-disclosure should be of some very material fact. No doubt, it would have been better if the Bank and the insured had given at least 1 tripartite agreement to the insurance company but, in our view, in the peculiar facts of this case, not disclosing the tripartite agreement or the names of the owners cannot be said to be such a material fact as to make the policy void or voidable. We are clearly of the view that there is no fraudulent claim made. There is no false declaration made and neither is the loss and damage occasioned by any wilful act or connivance of the insured. 2020 SCeJ 385  



Insurance -  Calculation of claim – When amount not ascertainable  -  Policy provided that “Company shall pay to the insured the value of the property at the time of the happening of its destruction or the amount of such damage or at its option reinstate or replace such property or any part thereof.” – Loss caused to Byadgi chillies – Exact market value not ascertainable as quality/variety not disclosed - There is no way for any Court to determine what the exact price would have been without having the benefit of the quality of produce -  Even in the warehouse receipts there is no gradation or reflection of the quality of the produce - Affirm the decision of the National Commission that the value of the goods as reflected in the warehouse receipts should be taken to be the value on the date of fire - Consumer Protection Act, 1986 (68 of 1986). 2020 SCeJ 385 

Insurance – Burglary and/or housebreaking  - Concurrent findings of both the District Forum and the SCDRC that the terms of exclusion were not made known to the insured - If those conditions were not made known to the insured, as is the concurrent finding, there was no occasion for the NCDRC to render a decision on the effect of such an exclusion – Whether insurance company was justified in repudiating the claim on the basis of exclusion clause which was not communicated to the insured – Held : No. (2019-3)195 Punjab Law Reporter 609, 2019 SCeJ 939


Consumer Protection Act (68 of 1986), S.2(1)(g),  S.12- Evidence Act (1 of 1872), S.115- Insurance claim – Repudiation on ground of non-compliance of mandatory condition of reporting within 15 days - Plea of Consumer protection Act, 1986 being a beneficial legislation genuine claim should not have been rejected - Insured failing to fulfill conditions of policy - Requirement of reporting loss within 15 days by insured is not a technical matter but sine qua non for a valid claim to be pursued by the insured, as agreed upon between the parties - Relief cannot be granted to insurer. 2019 SCeJ 574


Consumer Protection Act, 1986  (68 of 1986), S.2(1)(g),  S.12- Evidence Act, 1872 (1 of 1872), S.115- Insurance - Claim filed for loss caused due to flooding in factory premises - Waiver - Intimation of loss given to insurer after gap of 3 months – Repudiation for non-compliance of clause of policy requiring insured to report loss within 15 days - Under Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000, it is mandatory to appoint surveyor on receipt of information about loss - Appointment of surveyor cannot be construed to be waiver on part of insurer - Insurance Regulatory and Development Authority Act (41 of 1999), S.26- Insurance Surveyors and Loss Assessors (Licensing Professional Requirements and Code of Conduct) Regulations (2000), Regn.4, 13 - Galada Power and Telecommunication Ltd. v. United India Insurance Co. Ltd. and Another, (2016) 14 SCC 161. 2019 SCeJ 574




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Insurance – Insured was undertaking the resurfacing, metalling and asphalting of roads - Among the 'major perils/Act of God perils' described in Memo 8 was "Flood/Inundation" – Exclusions provided in the insurance policy was normal wear and tear and gradual deterioration due to atmospheric conditions -  Claim that suffered a loss and damage to the roads which had been worked upon due to "abnormal rainfall and water logging" – Stated that due to heavy rains on 29 June 2007, the roads were inundated and the top layer had been washed out - Insurer rejected the claim, inter alia, on the ground that the damage had been caused by defective workmanship and materials and due to the failure to provide an alternative route for traffic and that the loss or damage to the roads had been caused due to (i) monsoon rains; and (ii) damage/peeling off of the top surface of the asphalt due to the plying of vehicular traffic on wet roads, resulting in wear and tear, that the exclusion in the insurance policy of damage due to normal wear and tear or due to gradual deterioration as a result of atmospheric conditions was relied upon - Surveyor, found that there was only surface damage and no evidence of the road having been washed out as a result of excessive monsoon rain or inundation - That apart, the dates on which the alleged damage is stated to have occurred had not witnessed excessive rainfall and the rain was within normal parameters - The failure of the Appellant to examine any expert in regard to the cause of the damage is a significant omission which has been correctly relied upon by the NCDRC - The insurance policy specifically excluded normal wear and tear - In order to establish that this was not a case involving normal wear and tear, the Appellant sought to rely upon what it described as abnormal rainfall and water logging - The evidence on the record did not sustain the basis of such a claim – Claim rightly repudiated - Consumer Protection Act, 1986. 2019 SCeJ 556


Insurance - Policy - Non issuance of - Unit Linked policy -  Loss of opportunity - Branch Manager of LIC had already received a decision to complete proposal with extra premium and admittedly, even extra premium of Rs. 10,000 was paid by Appellant, and remaining formalities that were required to be observed were to be fulfilled by Development Officer and not by Appellant - LIC retained moneys of Appellant for a period of nearly five years - No effort was made to refund moneys - Deficiency of service was clearly established - National Commission had awarded interest at 12% per annum on principal sum of Rs. 1,75,000 - Ends of justice would be met, if direction, which had been issued by National Commission, was modified and an additional amount of Rs. 2,00,000 was directed to be paid towards all claims, demands and outstanding, including litigation expenses -  Consumer Protection Act, 1986. 2019 SCeJ 570




Insurance Act, 1938,  Section 64 VB (2)  - Insurance  - Coverage from date of Payment of  premium - The risk would be covered from the date of payment of the insurance premium - The loan was secured from the date on which the insurance premium was paid -  The premium having been paid by the Appellant’s husband during his life-time, the loan was to be adjusted from the insurance policy – Finance Company was providing a loan facility to the borrowers, which was secured by an insurance policy issued by its own sister concern - It was a composite inter-linked transaction -   Loan was sanctioned on 27.02.2015, the amount was credited to the loan account after deducting the insurance premium - 1st loan instalment was paid on 07.03.2015  -  Respondent–Finance Company however delayed in forwarding the amount to the Insurance Company for obtaining the Group insurance policy, which was issued on 30.03.2015 for the period 30.03.2015 to 29.03.2016 - Complainant's husband died on 17.3.2015 - He had paid premium during his life time – Loan to be adjusted againsty insurance - Consumer Protection Act, 1986 Section 21(b). 2019 SCeJ 582


Surrender value -  Life Insurance  - Computation of. 2019 SCeJ 562


Surrender value -  Life Insurance  - Simply put, life insurance operates on the basis of the law of averages - Premium is collected from all policy holders in order to create a common fund - Payouts from the fund are received only by those who suffer the peril which is insured - The economic loss suffered by few is divided amongst many - Premia are fixed by the insurer on the basis of expected mortality rates - Hypothetically speaking, if mortality rates of all individuals were to be equal irrespective of age and everyone paid the same premium, the discontinuance of a policy during its term would not entitle the insured to a surrender value since the common fund would be depleted on a regular basis - In reality, the mortality rates increase with age - Actuarial tables provide a guide to the insurer - Hence, when an insurer initially collects premium from individuals of a younger age, the amount it collects is higher than the amount it pays out towards claims - The difference between them is the 'reserve' - Thus if a policy holder wishes to discontinue a policy before the end of the term, they will only be entitled to their share of the 'reserve' as a surrender value - Since the value of the 'reserve' is the amount which the insurer collects as premium from policy holders from which it deducts the amount of the claims it pays out, the surrender value payable to a policy holder can never be equal to the premia paid by them – Life Insurance - Insurance Act, 1938  S. 113 - Life Insurance Corporation Act, 1956 S. 49(2) -  Life Insurance Corporation Regulations, 1959 Regulation 18(2).              2019 SCeJ 562



Surrender value -  Life Insurance  - There are popular misconceptions about the concept of 'surrender value' in the sphere of life insurance -  In a policy of fire insurance, a policy holder has no expectation of a surrender value - In contrast, a holder of a policy of life insurance may believe that their surrender value will be equal to the total amount paid as premium -  This expectation is misconceived - Since the value of the 'reserve' is the amount which the insurer collects as premium from policy holders from which it deducts the amount of the claims it pays out, the surrender value payable to a policy holder can never be equal to the premia paid by them – Insurance - Insurance Act, 1938  S. 113 - Life Insurance Corporation Act, 1956 S. 49(2) -  Life Insurance Corporation Regulations, 1959 Regulation 18(2). 2019 SCeJ 562

Insurance  - Insured Declared Value  “IDV” -  If both the sides, with their eyes open, had arrived at a particular figure to be the real value of the subject matter of insurance, is it not open to any party to dispute said sum and contend that the real value was something different from what was declared by the parties to be the sum insured unless there is non-disclosure of material facts which may go to the root of the matter and as such the sanctity of the agreement itself may get affected or is vitiated by any misrepresentation, fraud or coercion. 2019 SCeJ 178


Insurance  - Insured Declared Value  “IDV” –   Depreciation –  Except in cases where the agreement on part of the Insurance Company is brought about by fraud, coercion or misrepresentation or cases where principle of uberrima fide is attracted, the parties are bound by stipulation of a particular figure as sum insured –   Surveyor and the Insurance Company were not justified in any way in questioning and disregarding the amount of “sum insured” –   Further depreciation, if any, can always be computed keeping the figure of “sum insured” in mind –   The starting figure, therefore, had to be the figure which was stipulated as “sum insured”. 2019 SCeJ 178

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Insurance  - Insured Declared Value  “IDV” –   Depreciation – Starts from the date of insurance  based on Sum Insured - If the surveyor was calculating the depreciation from the day when the policy was entered into till the date when the accident occurred, such exercise could certainly be justified -  But the exercise undertaken was in the nature of not only considering the depreciation post the policy but even including the period prior thereto -  That exercise was already undertaken by the parties and in their assessment the real value of the machine  as on the day when the policy was taken out while fixing the “sum Insured” / IDV - In the face of such agreement and understanding, the surveyor could not have calculated depreciation for a period prior to the date of policy or contract -  He could have undertaken the exercise post the date of policy to assess the real value of the insured property as on the date when the loss actually took place -  For such purposes, the assessment must start with the amount described as “sum insured” on the day when the contract was entered into -  It was not open to the Surveyor or to the Insurance Company to  disregard the figure stipulated as ‘sum insured’.  2019 SCeJ 178





  1. Insurance - Claim - Words "received claim" are not a disclaimer of any further amount which may factually be true and correct with reference to assessment of actual loss of stocks - The insured, therefore, cannot be pinned down on this statement since he lodged the protest on the same day - The company was not doing any favour to the insured of paying the insurance claim as assessed by them by circumventing the joint surveyor's report. (177) P.L.R. 
  2. Insurance - Hole in the heart - Claim is being rejected on the ground that this disease is being related to the Caesarean operation which was conducted 3 days prior to her admission in the Fortis Hospital and as per the policy respondent No.3 could not claim any expenses incurred on disease traceable to pregnancy, child birth, miscarriage or Caesarean Section or Abortion etc. and it fell under Section 4.13 of the Exclusion Clauses of the policy - There was no expert evidence led by the Insurance Company that this disease was related to the above said clause - Therefore, a direction was given to make the payment - Order upheld - Legal Services Authorities Act, 1987 (39 of 1987) S. 2-C(8). (174) P.L.R. 
  3. Insurance - If insurer who wanted to contend that the particular cover note issued by the agent was fabrication, it could have been best proved only by confronting the cover note with the same number that purported to cover the risk for another vehicle - If he has not asked any question on the alleged valid cover note, then it should only be taken that the insurer had not availed to itself the best opportunity of proving what it was contending for. (176) P.L.R. 
  4. Insurance - If there was any wrong dealing by an agent, the insurer may have his remedy against his own agent and that cannot be set up against either the insured or a third party claimant - Motor Vehicles Act, 1988 (59 of 1988) S. 149. (176) P.L.R. 
  5. Insurance - Life Time Super Pension - ICICI Prudential - Petitioner has paid Rs. 1,00,000/- as premium in two years - Surrender value paid as per the foreclosure clause amount which came to Rs. 53,485.08 Ps. - Upheld. (177) P.L.R. 
  6. Insurance - Medical Insurance - Terms of the insurance policy have to be incorporated in the language and spirit with which, both the parties have  agreed - Applicant had suffered headache, giddiness and  hypertension - Careful reading of these clauses shows that certain usual diseases like arthritis, cataract, Piles, diabetes, gout and rheumatism, surgery of gallbladder etc. have been excluded for first two years - A perusal of these clauses further shows that heart disease does not find mention - In normal course, a patient suffering from hypertension is not required to be admitted in a hospital - Investigation shows that the symptoms could lead to a heart disease - X-ray of the chest and Echo test of the patient was  conducted - Prolonged treatment of four days could not be the result of simple hypertension - It could be the symptoms of heart disease or heart attack - Hence, the claim of respondent for reimbursement of medical bills could not be rejected. Held, in normal course, a patient suffering from hypertension is not required to be admitted in a hospital. Applicant-respondent was suffering from headache, giddiness and hypertension. As per the medical bills, the investigation shows that the symptoms could lead to a heart disease. X-ray of the chest and Echo test of the patient was conducted on 04.01.2012. Hence, a prolonging treatment of four days could not be the result of simple hypertension. It could be the symptoms of heart disease or heart attack. Hence, the claim of respondent No.1 for reimbursement of medical bills could not be rejected by relying on exclusion clause 4.3 as mentioned in the insurance policy. The object of the insurance policy is to secure a patient when he is admitted in hospital in an emergent condition. The exclusion clause has to be read to the benefit of the patient in genuine circumstances. (178) P.L.R. 
  7. Insurance - No doubt, the report of the surveyor is not sacrosanct and not binding, but each and every case has to be examined independently as to whether the report of the of surveyor was based upon the spot inspection much less whether the fire had broken out or not - Report of the surveyor clinches the issue vis-a-vis the cause of fire, much less the loss sustained as the site plans were taken into custody by the officers of the Insurance Company, who after making the investigation, agreed to certain amounts, but resiled from the same - It is an act of truncation where Manager of the appellant company denied his signatures - In fact, the Insurance Company was under legal obligation to pay the losses assessed by the surveyors - Appeal dismissed with costs of Rs.20,000/- to be recovered from the officer, who had chosen to file the appeal, to be deducted from his salary in accordance with law. (183) P.L.R.
  8. Insurance - Petitioner did not give the claim within 48 hours - The specification of time is invariably to ensure that the claim is genuine and the person who lodges a complaint of theft does not create documents to make appear as though it is a theft - If there are circumstances as to why he could not register complaint immediately and the Permanent Lok Adalat believed so - Has caused an abatement of 25% - Since the amount itself is not very large for the insurance company, the benefit of 25% is an exercise of discretion that shall not be taken as any justifiable ground for intervention. (178) P.L.R.  
  9. Insurance - Question for examination would be "whether an exclusion clause at all can be made in the Insurance Policy" - Exclusion of certain pre-existing diseases for a certain period - Condition has been accepted by the claimant-respondent No.1 and any payment with regard to hypertension can be disallowed by the insurance company, as the term `hypertension' does not require any further clarification. (178) P.L.R. 
  10. Insurance - Shopkeeper Insurance - Staff of the insured was tapped on his back when he was carrying money of the insured by some unknown person and tricked to keep down the bag in hand to turn and remove the dirt which was stated to be sticking to his shirt - The trickster ran away with the money contained in the bag - The amount in the hands of the employee in transit must include a situation of a person who keeps the article by his side for attending to a person who was distracting him and ought not to be given a literal meaning of money being held in the hand - This would defeat the very purpose of insurance, for, it was possible for an insurer to deny even the money held in the pocket, for, after all it was not a hand.(181) P.L.R. 
  11. Insurance - Standard fire and special Perils Policy - Signed a detailed letters of subrogation which was on a stamp paper accepting in full and final settlement of the claim under the policy - There was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice itself was after three weeks and that the financial condition of the respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence - There was full and final settlement of the claim.  (S.C.) (177) P.L.R. 
  12. Insurance - Theft of car - Delay in lodging claim with Insurance Company of 54 days - Instructions dated 20.09.2011, issued by Insurance Regulatory and Development Authority to all the insurance companies - As per the said instructions, this condition should not prevent the settlement of genuine claims particularly when there is delay in giving intimation or in submission of documents due to unavoidable circumstances -  The companies were advised that they must not repudiate such claims on the ground of delay, especially when the police has been promptly informed in this  regard. (176) P.L.R. 
  13. Insurance - Theft of motor cycle reported to the company after 30 days - Where theft took place and police was informed the same day - However FIR was recorded after about one and half month - The delay of registration of the FIR cannot be attributed to the claimant - IRDA instructions - Companies should not prevent settlement of genuine claims particularly when this delay in intimation or in submission of documents is due to unavoidable circumstances - The companies were advised that they must not repudiate such claims on the ground of delay - Keeping in view the above instructions, the PLA has given a direction to petitioner-Insurance Company to pay an amount. (175) P.L.R.   Keeping in view the above instructions, the PLA has given a direction to petitioner-Insurance Company to pay an amount. (175) P.L.R. 
  14. Insurance - Theft of vehicle - If the complainant was explaining his relative delay in lodging a complaint to the fact that he had immediately informed the Insurance Company on the same day of the loss of the vehicle by lodging a complaint through the toll free number to the Insurance company through its mobile on the date of the theft itself, then he was placing an important evidence of what he was contending - If this factual detail was required to be repudiated, it could have been done through the phone call log that ought to have been maintained by the Insurance Company at that toll free call number - If there are two views possible on a situation on whether such a complaint could have been accepted or not and if the Permanent Lok Adalat had decided to accept the same - If it had also punished the Insurance Company for mental pain and suffering which the complainant had suffered by the Insurance Company dragging its feet and not setting the claim for theft of  vehicle Permanent Lok Adalat was still justified in passing award and if it had also punished the Insurance Company for mental pain and suffering which the complainant had suffered by the Insurance Company dragging its feet and not setting the claim for theft of vehicle - Order upheld. (178) P.L.R. 
  15. Insurance - Tractor was stolen - There no dispute with regard to theft of the vehicle in question - The objection of the petitioner-company is that respondent No.1 had given intimation after a gap of 1/2 years - The fact that the FIR had been  registered the next day of the theft, clearly shows that there was no delay on the part of  respondent informing the police about the theft of vehicle - Award passed against the insurance company - Award by the Permanent Lok Adalat - Upheld. (176) P.L.R.  


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