Summary
The Court dismissed the insurer’s appeal against an award for mob damage to a resort. Although armed offenders had sheltered there and weapons were recovered from the compound, the insurer did not establish that the resulting property damage arose from a malicious act by the insured within the relied-on exclusion. Nor did it give cogent grounds to reject the surveyor’s assessment. The compensation and interest award remained undisturbed.
Issues
- Whether the insurer proved that the mob damage fell within the policy’s malicious-act exclusion.
- Whether sufficient reasons justified departing from the surveyor’s report.
- How ambiguity and the burden of establishing an exclusion should be addressed.
Provisions considered
- Clause V(d), Riot, Strike and Malicious Damage, Insurance policies covering Vedic Resorts and Hotels Pvt. Ltd.The insurer failed to establish the asserted exclusion by linking the mob damage to a malicious act of the insured. Shelter to the offenders and recovery of weapons did not, on this record, supply that link. (¶¶ 7, 9, 11, 12, 13, 14, 17)
Held
- An insurer invoking an exclusion must establish that the loss falls within it. Where the insurance contract is ambiguous or doubtful, it is construed in favour of the insured and against its drafter. (¶¶ 14, 15, 16, 17)
- The shooting occurred at the football ground, after which the offenders fled to the resort and were pursued by the crowd. Their shelter there and the subsequent discovery of weapons did not establish that the mob’s damage to the insured property resulted from the resort management’s malicious act. The asserted exclusion therefore remained unproved. (¶¶ 3, 4, 5, 12, 13, 17)
- A surveyor’s report is neither final nor immune from departure, but the insurer must provide cogent and satisfactory reasons for rejecting it. Here the report found an insured peril and assessed the loss, and the insurer offered no adequate grounds to depart from it. (¶¶ 6, 17)
- The insurer’s appeal was dismissed, leaving intact the National Commission’s award of Rs 202.216 lakh with interest at 9% per annum from six months after lodgment of the claim until payment. (¶¶ 1, 6, 17, 18)
Result
Insurer’s appeal dismissed. Award of Rs 202.216 lakh with 9% annual interest from six months after lodgment of the claim until payment remains undisturbed.