1.      This Revision Petition No.460 of 2021 is filed under Section 58(1)(b) of the Consumer Protection Act, 2019 (‘the Act’) against impugned order dated 24.02.2021 passed by the State Consumer Disputes Redressal Commission, UP, Lucknow (State Commission) in FA No. 630/2018 wherein the State Commission dismissed the Appeal and affirmed the order of District Consumer Disputes Redressal Forum, Sambhal Bahjoi (‘District Forum’) dated 07.03.2018 wherein the District Forum partly allowed the Complaint.

2.      As per office report, there is 13 days delay in filing the Revision Petition. As delay occurred during the suspended period of limitation on account of Covid-19 by the Hon’ble Supreme Court, this Revision Petition is treated to have been filed within limitation.

3.      For convenience, the parties involved in this matter are referred to as mentioned in the Complaint before the District Forum. "Smt. Rajani Saxena" is denoted as the Complainant. "The Oriental Insurance Co. Ltd,” is denoted as the Opposite Party (OP).

4.      Brief facts of the case, as per the complainant, are that she obtained Standard Fire and Special Perils Policy (Material Damage) No.253500/11/2007/379 for sum Insured Rs.3,10,000 for building from OP valid from 29.01.2007 to 28.01.2017. Due to an earthquake on 25.04.2015 and again on 12.05.2015 the building sustained several cracks and rendered in a devastated condition. Intimation was given to OP on 26.05.2015 and a claim was filed. The surveyor report dated 03.11.2015 recommended no claim on two grounds viz. non furnishing of details required by the policy terms and conditions; and the loss occurred was due to earthquake, not covered under the said policy. Later, her claim was repudiated by OP vide letter dated 30.12.2015 based on surveyor’s report dated 03.11.2015. Being aggrieved, she filed a Complaint before the District Forum.

5.      In reply before the District Forum, OP admitted the insurance policy in question and contended that the surveyor report dated 03.11.2015 recommended no claim due to non-furnishing of details as required by the policy terms and conditions; and that the loss occurred due to earthquake which is not covered by the said policy and thus there was no deficiency in service in repudiating the claim.

6.      The learned District Forum vide order dated 07.03.2018 partly allowed the complaint with the following directions:

“ORDER

The dispute is being allowed partly against the respondents.  The respondents are hereby ordered that they should pay a sum of Rs.3,10,000/- plus Rs.2500/- towards cost of the case to the applicant within one month failing which the respondent would be responsible to pay 9% p.a. interest on the sum insured to the applicant.”

(Extracted from translated copy)

7.      Being aggrieved, Appeal No.630 of 2018 was filed by the OP. The State Commission, vide order dated 24.02.2021, dismissed the said Appeal and passed the following order:

“ORDER

The appeal is dismissed with costs and the judgment / Order of the District Forum/ Commission passed by the majority dated 10.04.1994 is upheld with addition that the Appellant / Opposite Party shall pay Rs 100000.00 (one lac) as compensation for Mental agony and Rs 50000.00(Fifty thousands) as cost to be paid to Respondent/ Complainant. He is also pay interest @ 10% on these amount from the date of the judgment of the District Consumer Forum and shall pay it within 30 days from the date of judgment of this appeal and if not paid, the rate of interest will be 15%. If this amount is not paid within 30 days, the respondent/ complainant will be at liberty to recover it through court at the cost of the appellant/ opposite party. The copy of the judgment be provided as per rules.”

8.      Hence, the present Revision Petition by the Insurer/OP.

9.      In his arguments, learned Counsel for Petitioner/OP reiterated the grounds in the reply and asserted that the terms of contract stated in the Standard Fire and Special Perils Policy (Material Damage) is clear and needs to be adhered to. The complainant's claim for damage to the building due to earthquake is not covered under the terms of the policy. They failed to usher reasonable evidence that damage of building due to earthquake is covered under the perils listed. The claim is not covered under the policy and thus no claim is payable. There was no deficiency in service by OP.

10.    On the other hand, the learned Counsel for the Complainant/ Respondent reiterated the issues raised in the Complaint. He argued that the claim falls under the policy in question. He also argued in favour of the concurrent finding of both the Fora below. He sought to dismiss the Revision Petition with costs.

11.    We have examined the pleadings and associated documents placed on record, including the orders of the learned District Forum and the learned State Commission and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.

12.    The main issue in question is ‘‘whether the damage of building due to earthquake was covered under the policy in question’?

13.    It is in common knowledge that various types of insurance products are available in the market for providing insurance cover on life, health, buildings, properties, stocks, motor vehicles, personal/ professional risks, trees, furniture, goods, precious metals etc. Each of these insurance products have their specific scope of cover, duration, terms and conditions, exceptions as well as inherent safety/ security precautions the insured is liable to ensure so as to be entitled for the claim within the scope contract of insurance.

14.    Undisputedly, the complainant obtained a Standard Fire and Special Perils Policy (Material Damage) No.253500/11/2007/379 for sum Insured Rs.3,10,000 for building from OP valid from 29.01.2007 to 28.01.2017. Due to an earthquake on 25.04.2015 and again on 12.05.2015 the building sustained cracks and rendered in damaged condition. She informed OP on 26.05.2015 and a claim was filed. It is an admitted position that the complainant suffered damage to the insured building due to earthquake and the claim preferred is for earthquake damage. The policy obtained by the complainant is Standard Fire and Special Perils Policy (Material Damage) for the building and the damage occasioned during the course of the policy. The scope for insurance cover under the said policy is against the perils of Fire; Lightning Explosion/Implosion; Aircraft Damage; Riot, Strike and Malicious Damage; Storm, Cyclone, Typhoon, Tempest, Hurricane Tornedo, Flood and Inundation; Impact Damage; Subsidence and Landslide Including Rockslide; Bursting and/or Overflowing of Water Tanks, Apparatus and Pipes; Missile Testing Operations; Leakage from Automatic Sprinkler Installations; and Bush Fire. These risks are covered under the policy are subject to the stipulations mentioned thereat. The coverage of the policy in question does not include protection against damage due to earthquake, as the complainant chose to not to opt for policy to include cover against earthquake risk and no premium was paid for the same. In the absence of opting for cover against the peril of earthquake and paying premium, no claim is for the damage caused due to earthquake is admissible.

15.    The complainant’s contention that based on the claim submitted by her, a surveyor was appointed, does not by itself constitute admissibility of an otherwise uncovered peril under the policy. Further, if there was any impropriety in the conduct of the surveyor appointed by OP as alleged, the same would entail action as per law. However, the alleged misconduct of the surveyor, if any, does not bring the claim of the complainant, which is otherwise inadmissible, within the scope of the policy. Even for the sake of discussion, if the surveyor admits the claim for certain reasons, it was within the mandate of OP Insurer to review the same within the scope of the terms of the insurance policy in question.

16.    In catena of judgements, the nature of insurance contracts, scope, and restraint to be exercised in interpreting the terms of the contracts are well discussed and crystallized by this Commission and Hon’ble Supreme Court. In Civil Appeal No. 4769 of 2022 in of National Insurance Co Ltd Vs The Chief Electoral Officer & Ors, the Hon’ble Supreme Court has held as follows:

27. The insurance contracts are in the nature of special class of contracts having distinctive features such as utmost good faith, insurable interest, indemnity subrogation, contribution and proximate cause which are common to all types of insurances. Each class of insurance also has individual features of its own. The law governing insurance contracts is thus to be studied in three parts, namely, (1) general characteristics of insurance contracts, as contracts; (2) special characteristics of insurance contracts, as contracts of insurance, and (3) individual characteristics of each class of insurance.

28.  Now turning to some of the judicial pronouncements, wherein it has been opined that the words used in a contract of insurance must be given paramount importance and it is not open for the Court to add, delete or substitute any words (Suraj Mal Ram Niwas Oil Mills (P) Ltd. vs. United India Insurance Co. Ltd.). Insurance contracts are in the nature where exceptions cannot be made on ground of equity and the Courts ought not to interfere with the terms of an insurance agreement (Export Credit Guarantee Corporation of India Limited vs. Garg Sons International).

29. This Court in Vikram Greentech India Ltd. v. New India Assurance Co. Ltd. reiterated that the insured cannot claim anything more than what is covered by the insurance policy. The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely. The clauses of an insurance policy have to be read as they are. Consequently, the terms of the insurance policy, that fix the responsibility of the insurance company must also be read strictly.

30. In several other judgements, this court has held that the insurance contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.

17.    In is an established legal position that the terms of insurance contract agreed between the parties are to be appreciated and interpreted as per terms stated thereat. As regards the sacrosanct nature of the terms and conditions of a contract, Hon’ble Supreme Court in Suraj Mal Ram Niwas Oil Mills Pvt. Ltd. v. United India Insurance Co. Ltd, (2010) 10 SCC 567, decided 08.10.2010 held:

“26. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavor of the court should always be to interpret the words in which the contract is expressed by the parties.”

18.    In Canara Bank v. United India Insurance Co. Ltd. (2020) 3 SCC 455, decided on 06.02.2020 Hon’ble Supreme Court has held:

“21. The 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. It is also well settled that 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. According to us, the entire policy should be understood and examined in such a manner and when that is done, the interpretation becomes a commercially sensible interpretation...”

19.    The Standard Fire and Special Perils Policy (Material Damage) held by the complainant did not cover earthquake damage risk, unless specifically added as an "add-on" to the policy. The complainant failed to demonstrate that earthquake damage was listed under the perils covered. The complainant could not establish that the policy in question included earthquake damage, and the insurance company adhered to the terms of the policy, which did not include earthquake coverage. The surveyor's detailed assessment indicated that the claim of the complainant is for building damage was due to an earthquake and the same was established. But since the policy did not cover such damage, the insurance company had no obligation to settle the claim. The complainant did not demonstrate that measures were taken to mitigate the risk of damage from earthquake. Thus, there is no deficiency in service on the part of the Petitioner Insurer in repudiating the claim.

20.    After due consideration of the entire facts and circumstances of the case and the foregoing discussions, the order of the learned State Commission dated 24.02.2021 and the District Forum dated 07.03.2018 are set aside. The Revision Petition No.460 of 2021 is allowed.

21.    There shall be no order as to costs.

22.    All pending Applications, if any, stand disposed of accordingly.