Page 28 - The Insurance Times November 2024

exclusion clause are to be construed against the insurer and policy clearly specify "Limitation of use", which indicate that
held that the deceased cannot be treated as regular em- policy was meant to cover only carriage of goods defined
ployee, especially in view of the fact the wording 'in the within the meaning of Motor Vehicle Act, 1988. The Hon'ble
course of' immediately before 'employment' can only meant court upheld the rejection of claim by the insurer.
for the person regularly employed by the employer.
In United India Insurance Co. Ltd Vs. Orient Treasures (P)
Limitation to the Rule of Contra Ltd, the Hon'ble Supreme Court upheld the repudiation of
claim of the insured on the ground that ornaments /
Proferentem jewelries were found to have been kept on the display win-
In the case of Suraj Mal Ram Niwas Mills (P) Ltd Vs. United dow and sales counter at the time of the burglary, contrary
India Ins. Co. Ltd., the Hon'ble Supreme Court held that to 'Jewelers Block Policy' which require insured to keep them
while construing the terms of a contract of insurance, the in safe after business hour. The Court held that the loss
words used therein must be given paramount importance, caused to insured is excluded.
and it is not open for the court to add, delete or substitute
any words. Therefore, the endeavor of the court should al- Main Purpose Rule
ways be to interpret the words used in the contract in the
manner that will best express the intention of the parties. The Hon'ble Supreme Court of India in the case of B.V.
Nagaraju Vs. Oriental Insurance Company Ltd., while de-
In the case of Vikram Green Tech(I) Ltd Vs. New India As- ciding the issue, whether the alleged breach of carrying
surance Co. Ltd, the Hon'ble Supreme Court held that an passenger in goods vehicle more the number permitted in
insurance contract, is a species of commercial transactions terms of the insurance policy is so fundamental breach, so
and must be construed like any other contract to its own as to afford ground to the insurer to eschew liability alto-
terms. In the case of Sikka Papers Ltd Vs. National Insur- gether held that the exclusion clause of the insurance policy
ance Co. Ltd, the Hon'ble supreme Court held that the court must be read down so as to serve the main purpose of the
while construing the terms of the insurance policy is not policy on the ground that carrying of extra passengers could
expected to venture into extra liberalism that result in re- not be contributed to the accident.
writing the contract or substitute the terms which were not
intended by the parties. The Supreme Court recently, in National Insurance Company
Ltd. v/s Vedic Resorts & Hotels Pvt. Ltd. , has held that the
In the case of Export Credit Guarantee Corp. of India Ltd burden of proof to show that a particular case falls within an
Vs. Garg Sons International, the insured purchased a policy exclusion clause lies upon the Insurer. In this case the Insurer
for the purpose of insuring shipment to a foreign Buyer. The issued two policies to the Insured, one to cover the building,
Foreign Buyer defaulted in payment in making payment and plant, machinery, accessories and furniture and the other for
claim was rejected on the ground that the insured failed to
communicate about the default made by the foreign buyer
within the stipulated time frame and non-compliance of the
said clause exonerate the insurer of all liability. The Supreme
Court upheld the rejection of claim and held that the insured
cannot claim anything more than what is covered by the
insurance policy. The terms of the contract have to be con-
strued strictly, without altering the nature of the contract
as the same may affect the interests of the parties ad-
versely.

In the case of Oriental Insurance Co. Ltd Vs. Sony
Cheriyan, the insured obtained a policy for their truck, which
caught fire while the same on its way carrying Ether Sol-
vent. The insured rejected the claim on the ground breach
committed by the insured by carrying hazardous goods. The

The Insurance Times November 2024 25