National Insurance Company Limited v. Om Prakash

Judgment

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.8421 of 2025 Decided on: 24th June, 2026 ------------------------------------------------------------------------------------- …..Petitioner National Insurance Company Limited Versus .....Respondent Om Prakash ------------------------------------------------------------------------------------- Coram Ms. Justice Jyotsna Rewal Dua Whether approved for reporting?1 Yes. For the Petitioner: Mr. Jagdish Thakur, Advocate. For the Respondent: Mr. Shashi Bhushan, Advocate. ------------------------------------------------------------------------------------ Jyotsna Rewal Dua, Judge It was in the year 2012 that respondent had instituted complaint under Sections 11 & 12 of the Consumer Protection Act, 1986 seeking insurance claim from the petitioner-Insurance Company in the sum of Rs.41,90,000/- alongwith interest @ 15% per annum on account of total loss of the insured ‘TATA Hitachi EX 200 LC Hydraulic Excavator Backhoe with bucket & kit, Model- February 2010’ on 13.08.2011. The loss was caused during the currency of the insurance period. Learned State 1 Whether reporters of print and electronic media may be allowed to see the order? Yes. 2 Consumer Disputes Redressal Commission (hereinafter to be referred as the ‘State Commission’) allowed the complaint on 01.05.2013 as under:- “17. As a result of the above discussion, we allow the complaint and in view of the submissions of learned counsel for the complainant noticed in the just preceding paragraph, direct the opposite party either to pay to the complainant a sum of Rs.24,57,427/-, with interest at the rate of 9% per annum, from the date of complaint to the date of payment of the aforesaid amount of money, and also to pay Rs.1.00 lac as compensation and Rs.15,000/- as costs and if the opposite party opts to take the salvage, then to pay a sum of (Rs.23,88,724/- + Rs.6,57,000/-) = Rs.30,45,724/-, with interest at the rate of 9% per annum, from the date of complaint to the date of payment of aforesaid amount of money, besides the compensation and costs, as ordered paying hereinabove. accordingly.” Complaint disposed stands Appeals preferred by the petitioner as also the respondent against the above order were dismissed by the learned National Consumer Disputes Redressal Commission (in ‘National Commission’)

13.03.2025 as under:- “21. For the aforesaid reasons, the appeal is upheld with the following directions: (i) Respondent insurance company is directed to pay the appellant a sum of Rs.24,57,427/- with interest at the rate of 9% per annum from the date of complaint till the date of payment; (ii) Respondent is also directed to pay litigation cost of Rs.50,000/-; and (iii) If the respondent opts the salvage, respondent is directed to pay Rs.30,45,724/- with 9% interest from the date of complaint till the date of payment.” 3 Taking exception to the orders passed by the learned State Commission as also by the learned National Commission, the Insurance Company has preferred the instant writ petition. 2(i). The pleaded case of the petitioner-Insurance Company in its reply filed to the complaint, as highlighted by its learned counsel, is that the respondent had taken Contractors Plant and Machinery Insurance for the excavator in question. The insurance policy was issued on

24.02.2011 with validity period from 25.02.2011 to

24.02.2012. The location of machine/excavator as mentioned in the policy was Bajoura, Kullu, H.P. That Contractors Plant and Machinery Insurance location policy. Any loss caused outside the location is not covered under the policy, which is clearly mentioned in the exception clause of the policy. As per exception No.(h) stipulated in the policy, the Insurance Company is not liable in respect of any loss caused to the excavator whilst in transit from one location to another location. In the instant case, the excavator was moving to the project site, therefore, the Insurance Company is not liable to pay claim to the respondent. Since attention was invited to the terms & conditions of the insurance policy, it will be appropriate 4 at this stage to make reference to the relevant terms as pressed into service:- “CONTRACTOR'S PLANT & MACHINERY INSURANCE POLICY (hereinafter called WHEREAS the insured named in the Schedule hereto by a proposal and declaration which shall be the basis of the contract and is deemed to be incorporated herein has applied to the National Insurance Company Limited insurance hereinafter contained and has paid the premium as consideration for such insurance in respect of accident or damage occurring during the period of in the schedule or during any insurance stated subsequent period for which the insured pays and the company may accept the premium for the renewal of this policy. the company) locations mentioned therein necessitating NOW THIS POLICY OF INSURANCE WITNESSETH THAT subject to the terms, exceptions, exclusions, provisions and conditions contained herein or endorsed hereon the company will at its own option by payment reinstatement or replace or indemnify the insured against unforeseen and sudden physical damage by any cause not hereinafter excluded to any insured property specified in the attached schedule(s), whilst at immediate repair or replacement. This Policy shall apply to the insured items whether they are at work or rest or being dismantled for the purpose of cleaning or overhauling or in the course of the aforesaid operations themselves or when being shifted within the premises or during subsequent re-erection, but in any case only after successful commissioners. The liability of the company for any item of the insured property shall not exceed in the aggregate in any one period of insurance the sum insured set against such item in the attached schedule(s) however the sum insured under such item can be reinstated after occurrence of a claim for balance period. EXCEPTIONS The company shall not be liable under this policy in respect of: (a) to (g) 5 Loss of damage whilst in transit from one (h) location to another location.” The submissions urged for the petitioner is that insurance claim would have been admissible only in case the excavator had suffered damage as per the terms & conditions of the policy at its specified location, i.e. Bajoura, Kullu, whereas, at the time the excavator suffered extensive damage, admitted reporting of its total loss, it was at place ‘Kartah (Sainj), Kullu’. In view of exception No.(h) (extracted above), insurance claim for the loss/damage caused to the excavator, which was not at Bajoura, Kullu, could not be accepted and was justly repudiated. That insurance is a contract between two parties, who are bound by the terms & conditions of the contract. The conditions of the contract are required to be given effect to and assigned the same meaning as is intended to be given to them in terms of the contract executed between the parties. Reference in this regard was made to Polymat India (P) Ltd. and another Versus National Insurance Co. Ltd. and others2, Vikram Greentech India Limited and another Versus New India Assurance Company 2 (2005) 9 SCC 174 6 Limited3, Export Credit Guarantee Corporation of India Limited Versus Garg Sons International4 and Oriental Insurance Co. Ltd. Versus Sony Cheriyan5. Learned counsel further submitted Contractors Plant and Machinery Insurance is distinct from motor vehicle insurance its coverage and scope. Contractors Plant and Machinery Insurance focuses on the equipments used in construction/industrial activities covering damage or loss to these items while on the project site. Motor Vehicle insurance on the other hand covers liability and damage related to the operation of motor vehicles on public roads. Motor Vehicles are specifically excluded from Contractors Plant and Machinery Insurance unless used exclusively at the construction site. Learned counsel also submitted that in case the respondent intended to use the excavator at a location other than specified in the policy, it was incumbent upon him to have intimated the change of location and got approval thereof from the petitioner-Insurance Company. For all the aforesaid reasons, prayer was made to set aside the orders