1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7315 OF 2016
MAHAVIR ROAD AND INFRASTRUCTURE PVT LTD. APPELLANT(s)
VERSUS
IFFCO TOKIO GENERAL INSURANCE CO LTD RESPONDENT(s)
J U D G M E N T
DR DHANANJAYA Y CHANDRACHUD, J
Delay condoned.
Admit.
This appeal arises from a judgment and order dated 23
February 2016 of the National Consumer Disputes Redressal
Commission1. The NCDRC rejected the complaint of the
appellant alleging a deficiency of service in the
rejection of a claim under an insurance policy.
The appellant was undertaking the resurfacing,
metalling and asphalting of roads in Nashik. An
insurance policy was obtained by the appellant. The
insurance cover encompassed ‘material damage’. Section 1
of the insurance policy was in the following terms:
“SECTION-1 MATERIAL DAMAGE
The Company hereby agrees with the insured
(subject to the exclusions and conditions
contained herein or endorsed hereon) that if, at
any time during the period of insurance stated in
the said Schedule, or during any further period
of extension thereof the property (except packing
1 “NCDRC”
2
materials of any kind) or any part thereof
described in the said Schedule be lost, damaged
or destroyed by any cause, other than those
specifically excluded hereunder, in a manner
necessitating replacement or repair the Company
will pay or make good all such loss or damage
upto an amount not exceeding in respect of each
of the items specified in the Schedule the sum
set opposite thereto and not exceeding in the
whole the total sum insured hereby.
The Company will also reimburse the insured for
the cost of clearance and removal of debris
following upon any event giving rise to an
admissible claim under this Policy but not
exceeding in all the sum (if any) set opposite
thereto in the Schedule.”
However, the exclusions to Section 1, inter alia,
were to the following effect:
“EXCLUSIONS TO SECTION – 1
The Company shall not, however, be liable for:
***
c) normal wear and tear, gradual deterioration
due to atmospheric conditions or lack of use or
obsolescence or otherwise, rust scratching of
painted or polished surfaces or breakage of
glass;”
There were specific conditions applicable to Section
1. Among the ‘major perils/Act of God perils’ described
in Memo 8 was “Flood/Inundation”.
The appellant submitted a claim on the ground that
between 25 June 2007 and 5 July 2007, it had suffered a
loss and damage to the roads which had been worked upon
due to “abnormal rainfall and water logging”. By its
letter dated 14 September 2007, the appellant stated that
due to heavy rains on 29 June 2007, the roads were
inundated and the top layer had been washed out.
3
By a communication dated 28 March 2008, the 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. Subsequently, after
further correspondence, the insurer informed the
appellant on 13 May 2008 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. 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.
The report of the Surveyor, B.P. Shah & Associates,
dated 21 March 2008, was in the following terms, insofar
as is material:
“PROBABLE CAUSE:
According to the insured loss was caused due to
heavy abnormal rains etc. Copy of their letter
dated 28th July 2007 is enclosed herewith
(Encl.4).
What was observed was surface damages & neither
any rain cuts nor erosion of base soil of the
roads by flowing floodwater were seen. Top
surface of the asphalt had peeled off/got damaged
due to movement of traffic over a period of time
on wet roads and normal wear & tear which also
crerated few pot holes. Policy excludes normal
wear & tear, gradual deterioration due to
atmospheric conditions (Exclusion C under Section
1) & also damage due to movement of traffic,
which is by no means fortuitous.”
4
The NCDRC rejected the consumer complaint on several
grounds. It held that:
(i) The appellant had initially stated in its claim
form that the loss had occurred between 25 June 2007 and
5 July 2007. In its letter dated 14 September 2007, the
appellant claimed that due to heavy rains on 29 June
2007, the roads were inundated and the top layers were
washed out. The report of the Surveyor indicated that
the stand taken before it was that the damage had
occurred on 2/3 July 2007. Thus, the appellant had not
been consistent in the date of the allaged damage;
(ii) In breach of the obligation contained in the
insurance policy which required that the damage should be
immediately notified, intimation was furnished only on 9
July 2007 and there was no explanation for the delay in
reporting the damage to the insurer;
(iii) According to the Surveyor, there was no evidence
of any damage on account of flood water and only surface
damage was found. The data of the Meteorological
Department indicated minimal rains on the alleged dates
of damage;
(iv) No expert had been examined by the appellant in
support of its claim that rainfall, to the extent that
had occurred, would have resulted in severe damage to the
road.
Mr. Anirudha Joshi, learned counsel appearing on
behalf of the appellant, submits that the insurance
5
policy covered damage due to ‘any cause whatsoever’.
Hence, it was urged that whether or not the damage had
been caused by excessive rainfall was really not material
at all since the appellant was entitled to be indemnified
for the damage which was sustained to the roads. In this
regard, Section 1 of the insurance policy was relied
upon, which has been extracted earlier.
On the alleged failure of the appellant to intimate
the insurer of the cause of the loss or damage, learned
counsel submitted that Clause 5 of the General Conditions
stipulated that the insurer shall not be liable, in any
case, when no notice has been received within fourteen
days of the occurrence. In the present case, it was
submitted that the notice on 9 July 2007 was within a
period of fourteen days. On these grounds, it has been
submitted that the reasons which have weighed with the
NCDRC in dismissing the complaint are unsustainable.
On the other hand, it was urged on behalf of the
insurer by Mr. Abhishek Mishra, learned counsel that the
specific ground on which the claim was filed under the
terms of the insurance policy was that there was abnormal
rainfall and water logging. This was evidently in
pursuance of the provisions of the insurance policy under
which flood/inundation constituted the major perils which
were within the purview of the insurance cover. Learned
counsel has adverted to the claim form, the letter dated
14 September 2007 and the Surveyor’s report dated 21
6
March 2008. The basis of the claim was found to be
false.
While analyzing the rival submissions, it must, at
the outset, be noted that the basis of the claim which
was submitted by the appellant was that there was
abnormal rainfall and water logging between 25 June 2007
and 5 July 2007. Subsequently, in its letter dated 14
September 2007, the appellant claimed that it was due to
heavy rains on 29 June 2007 that the roads were inundated
and the top layer had been washed out.
While dealing with this submission, the NCDRC has
made the following findings:
“As per the data quoted from the Meteorological
Department, the rainfall was 15.2 mm on
25.6.2007, 9.2 mm on 26.6.2007, 0 mm on
27.6.2007, 5mm on 28.06.2007, 0 mm on 29.6.2007,
0 mm on 30.6.2007, 10.6 mm on 01.7.2007, 49.2 mm
on 02.7.2007 and 116.6 mm on 30.7.2007.”
Upon analysing the data which was placed before it,
the NCDRC observed:
“In fact, there was no rain at all on 29.6.2007
or even on 30.6.2007. In fact, the rainfall from
25.6.2007 to 01.7.2007 was nil or nominal. The
rainfall on 02.7.2007 was 49.2 mm, whereas the
rainfall on 03.7.2007 was 111.6 mm.”
But, it has been urged on behalf of the appellant
that, whether or not, there was abnormal rain and water
logging is irrelevant because the appellant was entitled
to claim in terms of Section 1 of the insurance policy
where damage had been caused by any cause other than what
was specifically excluded. In this background, it is
7
necessary to note that among the exclusions provided in
the insurance policy was normal wear and tear and gradual
deterioration due to atmospheric conditions. The case of
the appellant was that it was due to excess rainfall that
the roads were damaged. By necessary implication, the
submission was that this would not constitute normal wear
and tear in terms of the exclusions contained in the
policy.
We have adverted to the report of the Surveyor, which
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, as we have noted from the findings of the
NCDRC, 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.
In this view of the matter and for the reasons we
have indicated, we are unable to come to the conclusion
8
that the order pased by the NCDRC suffered from any
error. We accordingly do not find any reason to
entertain the appeal. The appeal is dismissed.
Pending application, if any, stands disposed of.
.............................J.
(DR DHANANJAYA Y CHANDRACHUD)
.............................J.
(HEMANT GUPTA)
NEW DELHI
MARCH 26, 2019
9
ITEM NO.38 COURT NO.8 SECTION XVII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s).7315/2016
MAHAVIR ROAD AND INFRASTRUCTURE PVT LTD. Appellant(s)
VERSUS
IFFCO TOKIO GENERAL INSURANCE CO LTD Respondent(s)
(WITH APPLN.(S) FOR CONDONATION OF DELAY IN FILING APPEAL)
Date : 25-03-2019 This appeal was called on for hearing today.
CORAM :
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE HEMANT GUPTA
For Appellant(s) Mr. Anirudha Joshi, Adv.
Mr. Abhishek Singh, Adv.
Mr. Onkar Singh, Adv.
Mr. Saurabh Mishra, AOR
For Respondent(s) Mr. Abhishek Mishra, Adv.
Mr. Rajat Khattry, Adv.
Mr. Vivek Kishore, AOR
UPON hearing the counsel the Court made the following
O R D E R
Delay condoned.
Admit.
The appeal is dismissed in terms of the signed
reportable judgment.
Pending application, if any, stands disposed of.
(SANJAY KUMAR-I) (SAROJ KUMARI GAUR)
AR-CUM-PS COURT MASTER
(Signed reportable judgment is placed on the file)
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7315 OF 2016
MAHAVIR ROAD AND INFRASTRUCTURE PVT LTD. APPELLANT(s)
VERSUS
IFFCO TOKIO GENERAL INSURANCE CO LTD RESPONDENT(s)
J U D G M E N T
DR DHANANJAYA Y CHANDRACHUD, J
Delay condoned.
Admit.
This appeal arises from a judgment and order dated 23
February 2016 of the National Consumer Disputes Redressal
Commission1. The NCDRC rejected the complaint of the
appellant alleging a deficiency of service in the
rejection of a claim under an insurance policy.
The appellant was undertaking the resurfacing,
metalling and asphalting of roads in Nashik. An
insurance policy was obtained by the appellant. The
insurance cover encompassed ‘material damage’. Section 1
of the insurance policy was in the following terms:
“SECTION-1 MATERIAL DAMAGE
The Company hereby agrees with the insured
(subject to the exclusions and conditions
contained herein or endorsed hereon) that if, at
any time during the period of insurance stated in
the said Schedule, or during any further period
of extension thereof the property (except packing
1 “NCDRC”
2
materials of any kind) or any part thereof
described in the said Schedule be lost, damaged
or destroyed by any cause, other than those
specifically excluded hereunder, in a manner
necessitating replacement or repair the Company
will pay or make good all such loss or damage
upto an amount not exceeding in respect of each
of the items specified in the Schedule the sum
set opposite thereto and not exceeding in the
whole the total sum insured hereby.
The Company will also reimburse the insured for
the cost of clearance and removal of debris
following upon any event giving rise to an
admissible claim under this Policy but not
exceeding in all the sum (if any) set opposite
thereto in the Schedule.”
However, the exclusions to Section 1, inter alia,
were to the following effect:
“EXCLUSIONS TO SECTION – 1
The Company shall not, however, be liable for:
***
c) normal wear and tear, gradual deterioration
due to atmospheric conditions or lack of use or
obsolescence or otherwise, rust scratching of
painted or polished surfaces or breakage of
glass;”
There were specific conditions applicable to Section
1. Among the ‘major perils/Act of God perils’ described
in Memo 8 was “Flood/Inundation”.
The appellant submitted a claim on the ground that
between 25 June 2007 and 5 July 2007, it had suffered a
loss and damage to the roads which had been worked upon
due to “abnormal rainfall and water logging”. By its
letter dated 14 September 2007, the appellant stated that
due to heavy rains on 29 June 2007, the roads were
inundated and the top layer had been washed out.
3
By a communication dated 28 March 2008, the 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. Subsequently, after
further correspondence, the insurer informed the
appellant on 13 May 2008 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. 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.
The report of the Surveyor, B.P. Shah & Associates,
dated 21 March 2008, was in the following terms, insofar
as is material:
“PROBABLE CAUSE:
According to the insured loss was caused due to
heavy abnormal rains etc. Copy of their letter
dated 28th July 2007 is enclosed herewith
(Encl.4).
What was observed was surface damages & neither
any rain cuts nor erosion of base soil of the
roads by flowing floodwater were seen. Top
surface of the asphalt had peeled off/got damaged
due to movement of traffic over a period of time
on wet roads and normal wear & tear which also
crerated few pot holes. Policy excludes normal
wear & tear, gradual deterioration due to
atmospheric conditions (Exclusion C under Section
1) & also damage due to movement of traffic,
which is by no means fortuitous.”
4
The NCDRC rejected the consumer complaint on several
grounds. It held that:
(i) The appellant had initially stated in its claim
form that the loss had occurred between 25 June 2007 and
5 July 2007. In its letter dated 14 September 2007, the
appellant claimed that due to heavy rains on 29 June
2007, the roads were inundated and the top layers were
washed out. The report of the Surveyor indicated that
the stand taken before it was that the damage had
occurred on 2/3 July 2007. Thus, the appellant had not
been consistent in the date of the allaged damage;
(ii) In breach of the obligation contained in the
insurance policy which required that the damage should be
immediately notified, intimation was furnished only on 9
July 2007 and there was no explanation for the delay in
reporting the damage to the insurer;
(iii) According to the Surveyor, there was no evidence
of any damage on account of flood water and only surface
damage was found. The data of the Meteorological
Department indicated minimal rains on the alleged dates
of damage;
(iv) No expert had been examined by the appellant in
support of its claim that rainfall, to the extent that
had occurred, would have resulted in severe damage to the
road.
Mr. Anirudha Joshi, learned counsel appearing on
behalf of the appellant, submits that the insurance
5
policy covered damage due to ‘any cause whatsoever’.
Hence, it was urged that whether or not the damage had
been caused by excessive rainfall was really not material
at all since the appellant was entitled to be indemnified
for the damage which was sustained to the roads. In this
regard, Section 1 of the insurance policy was relied
upon, which has been extracted earlier.
On the alleged failure of the appellant to intimate
the insurer of the cause of the loss or damage, learned
counsel submitted that Clause 5 of the General Conditions
stipulated that the insurer shall not be liable, in any
case, when no notice has been received within fourteen
days of the occurrence. In the present case, it was
submitted that the notice on 9 July 2007 was within a
period of fourteen days. On these grounds, it has been
submitted that the reasons which have weighed with the
NCDRC in dismissing the complaint are unsustainable.
On the other hand, it was urged on behalf of the
insurer by Mr. Abhishek Mishra, learned counsel that the
specific ground on which the claim was filed under the
terms of the insurance policy was that there was abnormal
rainfall and water logging. This was evidently in
pursuance of the provisions of the insurance policy under
which flood/inundation constituted the major perils which
were within the purview of the insurance cover. Learned
counsel has adverted to the claim form, the letter dated
14 September 2007 and the Surveyor’s report dated 21
6
March 2008. The basis of the claim was found to be
false.
While analyzing the rival submissions, it must, at
the outset, be noted that the basis of the claim which
was submitted by the appellant was that there was
abnormal rainfall and water logging between 25 June 2007
and 5 July 2007. Subsequently, in its letter dated 14
September 2007, the appellant claimed that it was due to
heavy rains on 29 June 2007 that the roads were inundated
and the top layer had been washed out.
While dealing with this submission, the NCDRC has
made the following findings:
“As per the data quoted from the Meteorological
Department, the rainfall was 15.2 mm on
25.6.2007, 9.2 mm on 26.6.2007, 0 mm on
27.6.2007, 5mm on 28.06.2007, 0 mm on 29.6.2007,
0 mm on 30.6.2007, 10.6 mm on 01.7.2007, 49.2 mm
on 02.7.2007 and 116.6 mm on 30.7.2007.”
Upon analysing the data which was placed before it,
the NCDRC observed:
“In fact, there was no rain at all on 29.6.2007
or even on 30.6.2007. In fact, the rainfall from
25.6.2007 to 01.7.2007 was nil or nominal. The
rainfall on 02.7.2007 was 49.2 mm, whereas the
rainfall on 03.7.2007 was 111.6 mm.”
But, it has been urged on behalf of the appellant
that, whether or not, there was abnormal rain and water
logging is irrelevant because the appellant was entitled
to claim in terms of Section 1 of the insurance policy
where damage had been caused by any cause other than what
was specifically excluded. In this background, it is
7
necessary to note that among the exclusions provided in
the insurance policy was normal wear and tear and gradual
deterioration due to atmospheric conditions. The case of
the appellant was that it was due to excess rainfall that
the roads were damaged. By necessary implication, the
submission was that this would not constitute normal wear
and tear in terms of the exclusions contained in the
policy.
We have adverted to the report of the Surveyor, which
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, as we have noted from the findings of the
NCDRC, 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.
In this view of the matter and for the reasons we
have indicated, we are unable to come to the conclusion
8
that the order pased by the NCDRC suffered from any
error. We accordingly do not find any reason to
entertain the appeal. The appeal is dismissed.
Pending application, if any, stands disposed of.
.............................J.
(DR DHANANJAYA Y CHANDRACHUD)
.............................J.
(HEMANT GUPTA)
NEW DELHI
MARCH 26, 2019
9
ITEM NO.38 COURT NO.8 SECTION XVII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s).7315/2016
MAHAVIR ROAD AND INFRASTRUCTURE PVT LTD. Appellant(s)
VERSUS
IFFCO TOKIO GENERAL INSURANCE CO LTD Respondent(s)
(WITH APPLN.(S) FOR CONDONATION OF DELAY IN FILING APPEAL)
Date : 25-03-2019 This appeal was called on for hearing today.
CORAM :
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE HEMANT GUPTA
For Appellant(s) Mr. Anirudha Joshi, Adv.
Mr. Abhishek Singh, Adv.
Mr. Onkar Singh, Adv.
Mr. Saurabh Mishra, AOR
For Respondent(s) Mr. Abhishek Mishra, Adv.
Mr. Rajat Khattry, Adv.
Mr. Vivek Kishore, AOR
UPON hearing the counsel the Court made the following
O R D E R
Delay condoned.
Admit.
The appeal is dismissed in terms of the signed
reportable judgment.
Pending application, if any, stands disposed of.
(SANJAY KUMAR-I) (SAROJ KUMARI GAUR)
AR-CUM-PS COURT MASTER
(Signed reportable judgment is placed on the file)
