Summary
An insurer rejected a factory-damage claim arising from an armed mob attack by invoking the policy’s terrorism exclusion. The Court held that the insurer had not established the political, religious, ideological or similar purpose required by the contractual definition. It restored the complaint for determination of quantum, directed a provisional deposit of Rs.89 lakh and left withdrawal to the Commission’s decision.
Issues
- Whether the armed attack fell within the policy’s definition of terrorism so as to exclude cover.
- What relief should follow when the exclusion failed but the payable amount remained unadjudicated.
Held
- The policy’s exhaustive definition governed the exclusion. Violence or intimidation alone was insufficient: the act had to serve a political, religious, ideological or similar purpose, with similar purposes construed ejusdem generis. Definitions in penal enactments could not replace the agreed definition. (¶¶ 6, 10, 13)
- The insurer bore the burden of bringing the loss within the exclusion. Its survey reports contained no relevant incident findings, the investigation did not conclusively identify Maoist or similar involvement, and the police material did not establish contractual terrorism. That burden was not discharged. (¶ 11-13)
- The policy expressly covered the relevant violent damage, so repudiation on the asserted exclusion could not stand. Quantum still required evaluation of evidence, valuation reports and policy limits. The surveyor’s approximate assessment justified an interim deposit, not a final award of that amount or an unconditional right to withdraw it. (¶ 14-17)
Result
Appeal allowed without costs. The Commission’s dismissal set aside and the complaint restored, permitting further evidence and requesting final disposal within four months. The insurer must deposit Rs.89 lakh within one month in an interest-bearing account with auto-renewal. The insured may apply for withdrawal, to be decided on merits; final quantum expressly left open.