JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          The complainant, which is running a resort at Village Shikharkpur, P.S. Rajarhat, District 24 Paraganas (South) of West Bengal and obtained two insurance policies from the OP; one being policy no. 100900/11/08/3300000420 for the period from 16.09.2008 to 15.09.2009 in respect of the buildings of the said resort with plant/machinery, accessories and furniture etc. and the other being policy no.100900/11/09/3100000270 for the period from 13.07.2009 to 12.07.2010 in respect of two hotel buildings at the aforesaid resort with stock.  At about 5 pm, on 23.08.2009, a mob of about 200-250 persons entered the resort and damaged/destroyed the insured property resulting in loss to the complainant.  The mob was controlled by the police which was called to the resort and the fire was extinguished by the fire department.  The incident was reported to the police and was registered vide FIR No.144 of 2009. 

2.      On being informed of the incident, the OP appointed one Mr. K.B. Kuri, for assessment of the loss.  A claim of Rs.4.6772 Crores was lodged by the complainant with the insurer.  The surveyor vide his report dated 16.06.2011, assessed the loss at Rs.202.216 lacs.  The claim however, was not paid by the insurer, which, vide its letter dated 02.05.2011, informed the complainant inter-alia as under:

   “ (a)     In the final survey report it has been recorded that on 23^rd August 2009 at about 5 p.m. a mob gate-crashed into Vedic Village and damaged the properties of the assured and set fire on parts of the said resort.

1. On 23.8.2009 at about 16.30 hrs a football match was going on at Sekharpur Adarsha Sangha ground and on account of some dispute one Gaffar Molla, an accused in the said Charge-sheet and his associates present at the ground started firing and hurling bombs, which resulted in death of one Amirul Sardar due to bullet injury and several other persons also sustained injury. A frenzied mob chased the said Gaffar Molla and his associates and then the said Gaffar Molla took shelter in Vedic Village Resort and the frenzied mob damaged various properties of the said resort and set a portion of the resort on fire.

2. In course of investigation the Police conducted a search of Vedic Village on 24^th August 2009 and pursuant to the said search the following articles were recovered from the housing material cum electrical store room situated within the compound of the Vedic Village:-

3. One single shot pipe-gun

4. One SBBL shape short iron made pipe-gun measuring about 43 inches in length

5. One country-made single-shot SBBL shape pipe-gun measuring about 38 inches in length

6. One country-made single-shot SBBL shape pipe-gun measuring about 37 inches in length

7. One country-made single-shot pipe-gun measuring about 9 inches in length

8. One country-made single-shot pipe-gun measuring about 9.5 inches in length

9. 22 pieces live bombs in a gunny bag

10. Approximately 5 kgs of explosive substances including sutali and explosive powder

11. Subsequently, on 29^th August 2009, pursuant to the confessional statement of one accused namely Mahiuddin Molla raid was conducted at Vedic Village and from a room on the eastern side of the generator-meter room of Vedic Village four country-made single shot pipe-guns were recovered by the Police.

12. From search conducted at the residence of accused Gaffar Molla in presence of the Ld. Executive Magistrate of Barasat, one round 0.8 mm fired cartridge was recovered.

13. On 13^th September 2009 the police seized and recovered from the custody of accused Ranojit Shee one country-made single-shot pipe-gun one round 0.8 mm fired ammunition, one round 0.8 mm live ammunition. From other accused persons also pipe guns, 0.8 mm fired and live ammunitions and live bombs were recovered. The said Gaffar Molla was arrested from a village in Bankura District and fire-arms and ammunitions were recovered from his person.

14. The said investigation report submitted by the police before the Ld. Chief Judicial Magistrate, it is clearly indicated that the said accused Gaffar Molla was employed by the management of the Vedic Village and the said accused was instrumental in acquiring land for the resort by means of force and coercion.

15. In completion of investigation the Police submitted charge-sheet arresting Raj Kishore Modi, Biplab Biswas and Gaffar Molla and his associates as accused for offences committed under Sections 302/34/120B/506/212 of the Indian Penal Code, Sections 25/27 of the Arms Act and Sections 3/4 of the E.S. Act.

     From the aforesaid materials on record, it is clear that the said Gaffar Molla had a long-standing nexus with the management of the Vedic Village and was employed by the management of the Vedic Village for activities impermissible under the law and in detriment to law and order and the said Gaffar Molla and his associates had such degree of access inside the said resort that he and his associates were in a position to keep and preserve illegal fire-arms, ammunitions and explosives within the compound and generator room/meter room of the Vedic Village on the basis of a confessional statement of one of the co-accused and associate of Gaffar Molla further indicates that the said accused persons stored and stock piled illegal fire-arms and ammunitions within the Vedic Village compound. The incident of stock-piling of fire-arms ammunitions and explosives by the said Gaffar Molla and his associates, recovery of illegal fire-arms and ammunitions on their persons and the indiscriminate gun-shooting at the football ground by the said Gaffar Molla and his associates leading to death of one person and injury to several leads to the conclusion that the said Gaffar Molla and his associates had hard-core criminal background. The facts and circumstances as stated above reasonably lead to the conclusion that the said Gaffar Molla and his associates were harboured by the management of Vedic Village for purposes not permitted under law which is evident from the fat that accused Gaffar Molla stock-piled fire arms, explosives and ammunitions within the Vedic Village compound.

    The assured by harbouring people with hard-core criminal background and employing them to procure land by use of threat and coercion, had invited public grudge and the incident of killing of the one person and injuring several by using illegal fire-arms and explosives during a football match, had triggered immediate but obvious public outrage leading to destruction and torching of properties and structures of Vedic Village by a frenzied mob in pursuit of the said Gaffar Molla and his associates who took sanctuary within Vedic Village after such murder.

    From the facts and circumstances as stated above, it is evident that the management of Vedic Village had willfully and intentionally employed / used and harboured hard-core anti-socials for wrongful purposes against public order and allowed such anti-socials to stock-pile deadly fire-arms and ammunitions and explosives within the compound of the Vedic Village. By such illegal and malicious innocent spectator of a local football match by indiscriminate firing by such anti socials who were provided sanctuary within Vedic Village, triggered the subject loss of the assured at the hands of a frenzied mob in pursuit of the said anti-socials. In such view of the matter, the subject loss is an outcome of the malicious act/acts on the part of the Vedic Village management and falls within the exclusions provided under Clause V(d) of the Insurance Policy.

    For the reasons stated above, the insurer is of the view that the subject claim of the assured is not entertainable and thus it has been decided to repudiate the Claim No.100900/11/09/3390000063 of Vedic Resorts and Hotels Pvt. Ltd. under Fire Insurance Policy Nos.100900/11/08/3300000420 and 100900/11/09/3100000270.”

          The aforesaid letter was followed by a repudiation letter dated 06.07.2012. 

3.      Being aggrieved from the claim not being paid, the complainant is before this Commission seeking payment of Rs.4.6772 Crores from the insurer alongwith interest and compensation. 

4.      The complaint has been resisted by the insurer primarily on the ground taken in the above referred letter of the insurer dated 02.05.2012. 

5.      It would thus be seen that according to the insurer, the claim is excluded under clause V(d) of the insurance policy.  The said policy to the extent it is relevant, reads as under:       

IN CONSIDERATION OF the Insured named in the Schedule hereto having paid to the National Insurance Company Limited (hereinafter called the Company) the full premium mentioned in the said schedule, THE COMPANY AGREES, (Subject to the Conditions and Exclusions contained herein or endorsed or otherwise expressed hereon) that if after payment of the premium the Property insured described in the said Schedule or any part of such Property be destroyed or damaged by any of the perils specified hereunder during the period of insurance named in the said schedule or of any subsequent period in respect of which the Insured shall have paid and the Company shall have accepted the premium required for the renewal of the policy, the 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:

V. Riot, Strike and Malicious Damage

Loss of or visible physical damage or destruction by external violent means directly caused to the property insured but excluding those caused by:

d) burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind of any person ( whether or not such act is committed in the course of a disturbance of public peace) in any malicious act.

If the Company alleges that the loss/damage is not caused by any malicious act, the burden of proving the contrary shall be upon the insured.

          It would be seen from a conjoint reading of the aforesaid extracts from the insurance policy that any destruction or damage to the insured property by fire, physical damage or destruction by external violent means, directly caused to the insured property was covered under the policy unless the loss or damage came within the purview of one of the exclusion clauses contained in the policy.  In my opinion, in terms of clause V(d) of the insurance policy, even loss or damage due to a third party malicious act would be covered under the policy unless the said malicious act involved burglary, house breaking, theft, larceny or an attempt to commit burglary, house breaking, theft or larceny.  The case of the insurer in nutshell, based upon the charge-sheet submitted by the local police against several persons including the Managing Director and the Manager of the complainant company seems to be that the complainant was trying to acquire plots adjacent to its resort, so as to extend the area of the resort.  Since the persons engaged in cultivating on the said plots refused to sell their land to the complainant, one Gaffar Mollah, who had a criminal background, was hired by them for threatening those cultivators, so as to coerce them to sell their respective plots to the complainant.  It is alleged in the charge-sheet filed by the local police that on 23.08.2009, the Managing Director of the complainant instigated Gaffar Mollah to utilize the arms, ammunition and bombs which had been stored in the resort, to enforce postponement of a football tournament which was being held in the village with a view to frighten the local villagers.  Pursuant thereto, Mr. Gaffar Mollah and his associates opened fire and hurled bombs on the persons who were watching the football match.  As a result, the mob became frenzied and chased Gaffar Mollah and his associates who took shelter in the resort.  The mob following Gaffar Mollah and his associates, entered the resort and damaged its property.  Though the criminal prosecution against the persons named in the charge-sheet which included the Managing Director and the Manager of the complainant company is stated to be pending and no independent evidence was collected by the surveyor or produced by the insurer before this Commission to prove the allegations made against the management of the complainant in the charge-sheet, in my view, even if the said allegations are taken at their face value, the loss to the property of the complainant is still covered under the insurance policy taken by them since the loss was not due to any burglary, house breaking, theft, larceny or an attempt to cause burglary, house breaking, theft or larceny.

6.      The learned counsel for the insurer submits that any malicious act resulting damage to the insured policy is excluded from the coverage under the policy.  I however, find no merit in this submission.  In my interpretation of clause V(d) of the policy, damage to the insured property by any malicious act of a third party is covered under the said policy unless the loss is a result of burglary, house breaking, theft, larceny or an attempt to cause burglary, house breaking, theft or larceny. 

          Drawing my attention to the words “or any omission of any kind or any person”, the learned counsel for the insurer submits that the damage to the property happened on account of omission of the management of the complainant to abide by the law they having engaged Gaffar Mollah and his associates, stored fire arms in the resort and harboured them for the purpose of screening them.  I however, find myself unable to accept the contention.  Though the words “or any omission of any kind or any person”, in the context in which they are used, are rather vague and ambiguous, the interpretation suggested by the learned counsel for the insurer, in my view, does not naturally flow from them and therefore, cannot be accepted.

7.      For the reasons stated hereinabove, the repudiation of the claim cannot be sustained.  Though the complainant has claimed a sum of Rs.4.6772 Crores, the learned senior counsel for the complainant on instructions, states that the complainant is restricting its claim to the assessment made by the surveyor i.e. Rs.202.216 lacs alongwith appropriate interest.  The complaint is therefore, allowed in the following terms:

          (i)      The OP shall pay a sum of Rs.202.216 lacs to the complainant alongwith interest @ 9% per annum with effect from six months from the date of lodgment of the claim till the date on which the said payment is made. 

          (ii)      The payment in terms of this order shall be made within three months from today.

          (iii)     In the facts and circumstances of the case, there shall be no order as to costs.