Page 54 - The Insurance Times September 2025

the opinion of the District Commission, manifested a glar- ance policy contains an exclusionary clause, the insurer
ing disregard for service. The complainant was not granted bears the burden of demonstrating that the insurance policy
the compensation to which he was entitled in accordance covers the particular incident in question.
with the PMFBY guidelines. Consequently, the District Com- The Supreme Court further emphasized that in situations
mission issued an order requiring both HDFC Bank and the where an insurance contract contains ambiguity, it is the
Insurance Company to remunerate the complainant with Rs. responsibility to construe it in the insured's favor. "Though
1,12,680 in compensation, plus interest and an additional it is true that the Surveyor's Report is not the last and final
Rs 10,000 for harm caused by harassment, mental anguish, one nor is so sacrosanct as to the incapable of being departed
and litigation costs. For the aforementioned payments, the from, however, there has to be some cogent and satisfac-
District Commission held both parties jointly and severally tory reasons or grounds made out by the insurer for not
liable. accepting the Report." The Supreme Court ruled.

The subject of this dispute was the resort owner (Respon-
The Supreme Court rules that an insurer
dent) in West Bengal, who held two insurance policies for
must provide reasonable denials for re- the resort's hotel buildings with the Insurance Company
jecting a surveyor's report. (Appellant). A throng of approximately 200-250 individuals
caused damage to the resort property when they entered
Case Title: National Insurance Company Ltd V. the premises following an altercation with a group attempt-
Vedic Resorts and Hotels Pvt. Ltd. ing to disrupt a football game. The police conducted an in-
vestigation into the incident in response to FIRs filed. The
Summary
The Supreme Court ruled in a case involving National Insur- investigation revealed that Gaffar Molla and his associates,
ance Company Ltd v. Vedic Resorts and Hotels Pvt. Ltd that in pursuit of the mob, concealed in the resort of the com-
plainant after firing and throwing bombs at a football match
an insurer must provide "cogent and satisfactory" reasons
for rejecting a surveyor's report in an insurance claim. The venue adjacent to the resort.
court emphasized that in cases where an insurance policy Following this, the rabble caused damage to the insured
contains an exclusionary clause, the insurer bears the bur- property. In addition to pipe guns, live grenades, and explo-
den of demonstrating that the policy covers the particular sive substances, the police discovered them within the
incident in question. The court also emphasized that in situ- resort's compound. According to the surveyor's concluding
ations where an insurance contract contains ambiguity, it is report, the complainant incurred a loss of approximately Rs
the responsibility to construe it in the insured's favor. The 202,216 lakhs across both policies. Nevertheless, the insur-
case involved a resort owner in West Bengal who held two ance company denied the complainant's claim, asserting that
insurance policies for the resort's hotel buildings with the the resort management committed a malevolent act that
Insurance Company. The insurance company denied the caused the loss suffered by the complainant.
complainant's claim, asserting that the resort management As such, the resort management claimed that the expense
committed a malevolent act that caused the loss. fell within one of the exclusions specified in Clause V(d) of
The National Consumer Disputes Redressal Commission is- the insurance policy. Subsequently, the complainant filed a
sued a directive to the insurance company, requiring repay- complaint with the National Consumer Disputes Redressal
ment of Rs. 202,216 lakhs plus interest at the rate of 9% Commission, which issued a directive to the insurance com-
per annum from the date the claim was filed until the pay- pany, requiring the repayment of Rs. 202,216 lakhs plus in-
ment was received. The court rejected the appeal, refer- terest at the rate of 9% per annum from the date the claim
encing cases National Insurance Company Limited vs. Ishar was filed until the payment was received. In opposition to
Das Madan Lal (2007) 4 SCC 105 and General Assurance the Commission's directive, the insurance company peti-
Society Ltd. vs. Chandumull Jain and Another AIR 1966 SC tioned the Apex Court for an appeal.
1644. Advocate Vishnu Mehra, representing the insurance com-
About the case pany, contended that the complainant had provided sanc-
In a case involving National Insurance Company Ltd v. Vedic tuary to a criminal and his accomplices who made use of
Resorts and Hotels Pvt. Ltd, the Supreme Court ruled that the resort's stored firearms and explosives. Before hiding at
although the Surveyor's Report is not conclusive and may the resort, Gaffar Molla and his cohorts incited the mob by
be modified in an insurance claim, the insurer must provide fatally wounding one individual and injuring several others
"cogent and satisfactory" reasons for rejecting the report. at the football stadium. The throng was provoked by their
A division bench consisting of Justices Ajay Rastogi and Bela actions and subsequently attempted to cause damage to the
M. Trivedi further emphasized that in cases where an insur- insured property.

The Insurance Times September 2025 49