UNITED INDIA INSURANCE CO. LTD. versus M/S KIRAN COMBERS & SPINNERS

UNITED INDIA INSURANCE CO. LTD. versus M/S KIRAN COMBERS & SPINNERS

There being no exclusion for subsidence in the policy and policy specifically covering flood and inundation (for which extra premium was paid), damage caused by flood waters resulting in collapse is not excluded. The insurer, having certified the construction as 'first class' and failed to notice any defect at inception, cannot rely on alleged structural defects discovered post-event, especially when the proximate cause of damage is established to be flood water. Hence, the insurer is liable to compensate the claimant as assessed by the surveyor.

Parties
Appellant: UNITED INDIA INSURANCE CO. LTD.; Respondent: M/s Kiran Combers & Spinners
Jurisdiction
India
Judgment Date
08 December 2006
Procedural Posture
Civil Appeal / Appeal From National Consumer Disputes Redressal Commission, Original Petition No. 74/1994
Outcome
Appeal dismissed.
Legal Topics
Fire Insurance, Flood Damage, Policy Exclusions, Compensation Liability
Insurance Law Consumer Protection Fire Insurance Flood Damage Policy Exclusions Compensation Liability

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Parties

UNITED INDIA INSURANCE CO. LTD.

Appellant

M/s Kiran Combers & Spinners

Respondent

Procedural Posture

Civil Appeal / Appeal From National Consumer Disputes Redressal Commission, Original Petition No. 74/1994

Legal Issues

  1. 1 Whether the insurance policy excluded compensation for damage due to subsidence caused by flood.
  2. 2 Whether the insurer could repudiate liability on the basis of alleged structural defects in the building.

Ratio Decidendi

There being no exclusion for subsidence in the policy and policy specifically covering flood and inundation (for which extra premium was paid), damage caused by flood waters resulting in collapse is not excluded. The insurer, having certified the construction as 'first class' and failed to notice any defect at inception, cannot rely on alleged structural defects discovered post-event, especially when the proximate cause of damage is established to be flood water. Hence, the insurer is liable to compensate the claimant as assessed by the surveyor.

Court Disposition

Appeal dismissed.

Orders

  • The decision of the National Consumer Disputes Redressal Commission decreeing the claim for Rs. 10,13,571.90 stands affirmed.
  • No order as to costs.