Summary
The Supreme Court restored the insured shopkeeper’s award for collapse caused by excavation in a neighbouring plot. On the wording of this policy, the excavation exclusion did not expressly extend to an independent third party’s work. The phrase “of any property” qualified the preceding demolition, construction, alteration and repair activities, rather than the excavation wording that followed. With no excavation attributable to the insured, the NCDRC’s broader reading of the exclusion was unreasonable.
Issues
- Whether this policy’s excavation exclusion defeated a claim arising from independent excavation on a neighbouring property.
Held
- The insured had undertaken no demolition, construction, alteration, repair or excavation causing this loss. Without express wording extending the excavation exclusion to third-party work, its reasonable construction concerned excavation by the insured on its own property; the words “of any property” qualified the preceding activities. (¶¶ 7, 8, 9)
- Where two constructions or ambiguity exist, the construction beneficial to the insured and consistent with the policy’s risk-covering purpose should be preferred. Applying the exclusion to independent neighbouring works, with no act or omission attributable to the insured, was unreasonable here. (¶¶ 10, 11, 12)
Result
Appeal allowed; NCDRC judgment dated 7 March 2018 set aside and the District Forum award, affirmed by the State Commission, restored: Rs.18 lakh with 9% annual interest from institution of the complaint. No costs.