Summary
The insurer established the applicable exclusion in a contractor’s all-risk policy through the unrebutted surveyor evidence and the government-appointed Expert Committee’s findings on the bridge collapse. Contrary reports were not proved through their authors and were theoretical rather than site-based. Continued engagement of the contractors did not negate the exclusion. The consumer award was set aside; the Court declined to relegate the dispute to a civil suit.
Issues
- Who bears the burden of establishing an insurance exclusion.
- Whether the technical evidence established excluded loss.
- Whether unproved contrary reports or continuation of the construction contract defeated repudiation.
- Whether the consumer forum should have declined the technically complex dispute.
Held
- Insurance indemnifies defined losses under the agreed policy, which must be read strictly. Exclusions are construed strictly against the insurer and consistently with the policy’s main purpose. The insurer must plead and lead cogent evidence unequivocally establishing the exclusion’s application. (¶¶ 3, 16, 17)
- That burden was discharged here. The insurer proved the surveyor and government Expert Committee reports; the surveyor’s testimony remained unrebutted. The material identified design shortfalls, construction-sequence changes, instability, deficient workmanship and inadequate coordination contributing to collapse. NCDRC erred in treating the committee’s findings as merely inconclusive. (¶¶ 18, 19, 20, 21, 22, 23, 24)
- A surveyor’s report is credible evidence capable of reliance unless more reliable evidence displaces it. The insured’s contrary reports were neither exhibited nor proved by examining the experts; they were theoretical and not founded on site inspections. They did not rebut the insurer’s site-based evidence. (¶¶ 18, 23, 25, 26, 27)
- NHAI’s permission to complete the project and eventual completion could reflect economic or other considerations. It did not establish absence of the relevant faults or prevent application of an exclusion otherwise proved by cogent evidence. (¶¶ 8, 12, 28)
- The undated addendum increasing the award from about Rs.39.10 crore to Rs.151.60 crore without hearing the parties was not supported even by insured’s counsel, who confined the claim to the lower amount. The Court therefore did not pursue that separate issue further. (¶¶ 14.3, 14.4, 15)
- The Court rejected the insurer’s preliminary request to send the insured to a civil court and instead examined the technical evidence on merits. It allowed the appeal and set aside NCDRC’s order awarding the insurance claim, with no costs. (¶¶ 29, 30, 31, 32)
Result
Insurer’s appeal allowed; NCDRC’s order allowing the insurance claim set aside. No order as to costs.