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PETITIONER: MURALIDHAR SARANGI

       Vs.

RESPONDENT: THE NEW INDIA ASSURANCE CO.  LTD.

DATE OF JUDGMENT:       28/02/2000

BENCH: D.P.Wadhwa, S.S.Ahmad

JUDGMENT:

     S.SAGHIR AHMAD, J.  The appellant was the owner of two trucks  No.AMA 8761 and OAC 7123 in respect of which he  had obtained  two Policies, namely, (i) Policy No.3521504  00591 for  the period from 11.8.1988 to 10.8.1989 and (ii)  Policy No.31521504  00984 for the period from 5.2.1989 to 4.2.1990. On  23rd  of  March, 1989, while the aforesaid  trucks  were carrying  goods  to the State of Assam on  National  Highway No.31A,  they  were attacked at a place at  Thaplaijhara  in Kokrajhar  District by Bodo terrorists with the result  that both  the  trucks were completely destroyed by fire and  the driver  of one of the trucks was shot dead.  The matter  was reported  to  the  police and the Officer-in-charge  of  the Police  Station Gossaigaon, District Kokrajhar also issued a Certificate on 13.6.1989 that the incident, as reported, was found to be correct on investigation.  It was also certified that  the accused could not be traced nor could any clue  be found.  The appellant informed the respondent about the loss sustained by him and claimed indemnification in terms of the Insurance  Policies in respect of the two trucks which  were destroyed by the fire caused to them by the Bodo extremists. The respondent appointed Surveyors who submitted the reports dated  29.5.1989  and 30.5.1989 in respect of the trucks  in question and gave their own assessment of the loss sustained by the appellant.  It is stated that the respondent, through a  letter dated 2.3.1990, issued by the Divisional  Manager, New  India  Assurance  Co.  Ltd., offered an amount  of  Rs. 1,43,000/-  for settlement of the claim in respect of  truck No.AMA  8761.  It appears that it was not acceptable to  the appellant who consequently issued a notice to the respondent on  22.3.1991.   It  was in reply to this  notice  that  the respondent,  by their letter dated 30.7.1991, repudiated the claim of the appellant on the ground that the Policy did not cover  the  terrorist action and, consequently, nothing  was payable  to  the  appellant under both  the  Policies.   The appellant  filed  a  complaint  before  the  State  Consumer Disputes  Redressal Commission, Cuttack, Orissa (for  short, ‘the  State  Commission’)  which,  by  its  judgment   dated 9.4.1992,  allowed  the  claim together  with  Rs.5000/-  as damages  in respect of the vehicles in question for delaying the  settlement of the claim without any justification.   It was  directed  that the amount assessed by the Surveyors  in respect  of both the trucks would be paid to the  appellant. The  State Commission recorded a finding that the action  of the  Bodo  terrorists in damaging and completely  destroying the  trucks in question by fire would amount to a "MALICIOUS ACT,   contemplated  by  the   Policies  of  Insurance  and, therefore,  the respondent was liable to make good the  loss

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in  terms  of the Insurance Policies taken by the  appellant for  the two trucks.  The respondent challenged the order of the  State Commission before the National Consumer  Disputes Redressal  Commission, New Delhi, (for short, ‘the  National Commission’)  which,  by  its   judgment  dated  16.11.1993, allowed  their  appeal and held that the loss caused to  the trucks  in  question by the act of Bodo terrorists  was  not covered  by the terms of the Insurance Policies and as  such the  appellant was not entitled to claim indemnification  of the  loss  sustained by him.  It is in  these  circumstances that  the  present  appeal  has been  filed.   In  order  to understand  the respective claims of the parties, it will be useful  to  look to the case of the respondent and  consider the  facts  on the basis of which they are trying  to  avoid their  liability  under  the Insurance Policies.   In  their written  statement, filed before the State Consumer Disputes Redressal Commission, Cuttack, Orissa, the respondent, inter alia,  stated as under:- "11.  That as a matter of fact  the damage  to  the two vehicles were caused by  Bodo  Militants (Extremists)  by  bomb blast who burnt down  sixteen  loaded trucks  and  made a bomb attack on passenger there (as  come out  in  the Daily News paper "The Telegraph"  on  25.03.89. Xerox copies of news paper annexed as Annexures F & G.  This opp.   party  though  received the survey report  about  the total  loss of the two vehicles yet has some confusion crept up  as  to the admissibility of the claim (since the  policy was  not  extended to cover Terrorist activity), the  matter was  referred  to  the  Regional  Office  at  Calcutta.   In calcutta, the Regional Office discussed the matter at length and  obtained opinion from their legal experts as to whether the  claim was payable or not.  Even the Additional District Magistrate  of  Kokrajhar was contacted to apprise the  opp. party  as  to whether the area or place where  the  incident took place was declared as disturbed area within the meaning of  Armed Forces (Special Powers) Act, 1958.  The office  of the  Deputy Commissioner through the A.D.M., certified  that the  whole  of the district - Kokrajhar was declared  to  be disturbed area.  Xerox copy of the certificate is annexed as Annexure-H.   Being  informed  by the A.D.M.,  the  Regional Office,  Calcutta  forwarded the file to their head  office, Bombay on 9.3.90 seeking their further advice in the matter. This  opp.party also collected a letter issued by the  Govt. of  Assam to the A.G.M., Oriental Insurance Company in which it  was clearly mentioned that in the whole of the State  of Assam,  the Terrorist and Disruptive Activities (Prevention) Act,  1987  had  been promulgated with effect  from  5.5.88. Xerox copy annexed as Annexure-J.  12.  That the Head Office sent  a letter on 30.3.90 to the Calcutta Regional Office as the  claim  was  to  be  repudiated  since  no  coverage  of Terrorist  risk  was given in the policy and no premium  was accepted  from  the  complainant.   Xerox  copy  annexed  as Annexure-K.   13.  That after receiving the said letter  the Regional  Office sent instruction to the Divisional  Office, Jajpur   Road   to  inform   the  complainant   about   such repudiation.   Xerox  copy  is annexed as  Annexure-I.   14. That  the  Divisional  Office accordingly on 5.6.90  sent  a registered  letter  to the complainant stating therein  that the  claim  is  not payable as the Terrorist  risk  was  not covered in the policy and as such both the claims are closed as no claim.  Xerox copy is annexed as Annexure-M." From the above,  it  will  be seen that not only  the  Terrorist  and Disruptive  Activities  (Prevention) Act, 1987  (for  short, ‘the  TADA Act’) was promulgated in the State of Assam,  the Armed  Forces  (Special Powers) Act, 1958 was also  enforced there.  The Terrorist and Disruptive Activities (Prevention)

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Act  was  enforced  in the State of Assam with  effect  from 5.5.1988.   It  also  appears  that whole  of  the  District Kokrajhar  was  declared  as  "disturbed  area"  within  the meaning  of the Armed Forces (Special Powers) Act, 1958.  It is  in  this  background that the other contentions  of  the learned  counsel for the parties may be examined on  merits. It  is  contended by the learned counsel for  the  appellant that  the claim was covered by Section 1 of the Policy which provides,  inter  alia,  as under:- "1.   The  Company  will indemnify  the  Insured against loss or damage to the  Motor Vehicle  and/or its accessories whilst thereon.........  (c) by malicious act..................." Learned counsel for the respondent,  on the contrary, contended that the claim  made by  the appellant was not enforceable under the Policies  in question  on account of Provision (b) of endorsement  No.IMT 21  which  provides  as  under:- "(b)  mutiny  assuming  the proportion  of  or  amounting to  popular  rising,  military rising,  rebellion,  revolution, insurrection,  military  or usurped  power or any act of any person acting on behalf  of or  in  connection  with any  organisation  with  activities directed  towards  the overthrow by force of the  Government dejure  or defacto or to the influence of it by terrorism or violence  or  by the direct or indirect consequence  of  the said  occurrences." While the State Commission held that the destruction  of  the  two trucks at the hands  of  the  Bodo terrorists  would be covered by Clause (c) of Condition No.1 of  the  Policy  as it was a "malicious act",  the  National Commission  recorded  the  finding that the  case  would  be governed  by the Provision (b) of Endorsement No.IMT 21.   A ‘malicious  act’, according to State Commission, would be an act prohibited by law, which is done with intention to cause loss  to another.  The act which resulted in the destruction of  the  trucks belonging to the appellant could  have  been treated  to  be a "malicious act" but having regard  to  the circumstances of this case, specially that the incident took place  in  an area which had already been declared to  be  a "disturbed  area"  within  the meaning of the  Armed  Forces (Special  Powers) Act, 1958 and where the provisions of TADA Act  were  enforced, such activity cannot be  considered  in isolation.   Endorsement  IMT 21, which has been  reproduced above,  consists  of  two distinct parts.   The  first  part speaks  of mutiny assuming the proportion of popular rising, military  rising,  rebellion, revolution, insurrection  etc. The second part consists of :  "Any act of any person acting on  behalf  of or in connection with any  organisation  with activities  directed  towards the overthrow by force of  the Government  dejure  or defacto or to the influence of it  by terrorism  or  violence  or  by   the  direct  or   indirect consequence  of the said occurrences." The second part  thus contemplates individual acts, though, the acts may have been done  on behalf of or in connection with any organisation or under  the influence of it.  Whether these acts of terrorism by  Bodo activists are intended to overthrow the Government, de  facto or de jure, by force, have not been established by direct  evidence,  but the series of acts resulting  in  the loss of life and property so as to compel the authorities to declare  the whole area as "disturbed area" for the  purpose of  the Armed Forces (Special Powers) Act, 1958, as also  to enforce the Terrorist and Disruptive Activities (Prevention) Act,  1987,  definitely point out that not only  the  common people  but  also  the Government, established  by  law,  is intended to be overawed by acts of terrorism in an organised manner  for  and  on behalf of a group  which  is  basically responsible for such activites.  The second part also speaks of  the  acts  of "terrorism or  violence".   Terrorism,  as

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ordinarily  understood,  means the act of  terrorising.   In Webster’s  Comprehensive  Dictionary,  one  of  the  meaning assigned  to the word "terrorism" is that it means "unlawful acts  of  violence  committed  in an  organised  attempt  to overthrow  a  Government." Sub-section (1) of Section  3  of TADA  Act,  1987  provides as under:-  "3.   Punishment  for terrorist  acts.-(1)  Whoever  with intent  to  overawe  the Government  as  by  law established or to strike  terror  in people  or  any  section of the people or  to  alienate  any section  of  the people or to adversely affect  the  harmony amongst  different  sections of the people does any  act  or thing by using bombs, dynamite or other explosive substances or  inflammable  substances  or fire- arms or  other  lethal weapons or poisons or noxious gases or other chemicals or by any  other substances (whether biological or otherwise) of a hazardous  nature  in  such a manner as to cause, or  as  is likely  to  cause, death of, or injuries to, any  person  or persons  or  loss  of,  or damage  to,  or  destruction  of, property or disruption of any supplies or services essential to  the  life  of the community, or detains any  person  and threatens  to kill or injure such person in order to  compel the  Government  or any other person to do or  abstain  from doing  any act, commits a terrorist act." The above are acts which  are treated as terrorist acts and such acts are  made punishable  under Sub-section (2) with death or imprisonment for  life  etc.  etc.  The terrorist acts may be  done  with intent  to "overawe" the Government as by law established or to  strike terror in people or any section of the people  or to  alienate  any  section  of the  people  and  other  acts specified  therein.  Disruptive activities have been set out in  Section  4 of the Act which may not be enumerated  here. When  read in the light of the above statutory provisions as also  the  attending circumstances of this case, it  becomes clear  that  Provision  (b)  of Endorsement IMT  21  of  the Insurance  Policies  did not cover the risk  compalined  of. The  trucks were destroyed by acts of terrorism and a driver of  the  truck was also shot dead.  The National  Commission was,  therefore, fully justified in its conclusion that  the respondent  was  not  liable for the loss  suffered  by  the appellant  at  the  hands of Bodo activists  who  completely destroyed  the  trucks of the appellant by setting  them  on fire  and killed one of the drivers.  For the reasons stated above,  we  find no merit in this appeal which is  dismissed but without any order as to costs.