Reportable

       IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  2080  OF 2002

Vikram Greentech (I) Ltd. & Anr.      ... Appellants

Versus

New India Assurance Co. Ltd.     ..Respondent

J U D G E M E N T

R.M. Lodha, J.

This  appeal  under  Section  23  of  the  Consumer

Protection Act, 1996 (for short, ‘The Act’) is directed against the

judgment  and  order  dated  October  30,  2001  passed  by

National  Consumer  Disputes  Redressal  Commission,   New

Delhi  (  for  short,  ‘  National  Commission’)   whereby  the

complaint filed by the appellant for  direction to the  respondent

to settle the insurance  claim alongwith  interest @  18%  per

annum and compensation of Rs.25 lakh on account of  mental

agony, harassment and  monetary loss  came to be dismissed.

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2. The  sequence  of   facts   may  be  noticed  first.

Vikram Greentech (I) Ltd. came to be incorporated in 1993 with

an object  of  setting  up a  floriculture  project  in  the  State  of

Maharashtra.   In 1995, the company started negotiations with

the   respondent  (hereinafter  referred  to  as  ‘Insurance

Company’) for  a comprehensive floriculture  insurance policy.

On January 18,1996, the company (hereinafter  referred to as

‘insured’) submitted a proposal  to the  Insurance Company for

a comprehensive floriculture insurance of poly-house (Rs.1.25

crore),  irrigation  system (Rs.25  lakh),   cost  of  cultivation  of

flowers (Rs.25 lakh) and  input cost from first flowering to the

harvest  (Rs.25  lakh).    The Insurance  Company  issued   a

comprehensive Floriculture Insurance Policy (‘Policy’, in short)

on January 23,1996,  period of insurance being from January

18,1996  to  January  17,1997  and  charged  premium  of  Rs.

2,31,000/-.   On  May 23,1996,  according to the  insured there

was a  severe storm/cyclone, which damaged the  floriculture

extensively and  substantial damage was caused to the roofs

and walls of the poly-houses.  On  June 18/19,1996,  there was

another  storm/cyclone.  As a result of which  the  floriculture

project of  the insured and the poly clothes and the roofs as

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well  as  walls  of  the  poly-houses  were extensively damaged;

certain poly-houses  even collapsed completely.  For the loss

suffered in the first storm/cyclone, a claim  for Rs.31,17,140/-

was  submitted  by the  insured  with  the  Insurance  Company.

The  insured  submitted  another  claim  for  Rs.38,97,906/-  in

respect  of  loss  suffered  due  to  second  storm/cyclone  that

occurred on June 18/19,1996.  

3.   The Insurance Company  appointed M/s Standard

Surveyors Private Limited as their Surveyors for assessing the

loss claimed by the insured.   The Surveyors submitted their

report on  October 24,1996 and  assessed  the loss suffered by

the insured at  Rs. 28,85,243/- in respect of the first storm.   On

October 28,1996,  the Surveyors  submitted its  second report

in respect of the  second storm/cyclone and  assessed the loss

at Rs.34,81,214/-.    

4. On  November  28,1996,  the  Insurance  Company

informed the  Surveyors that their report  included loss to poly-

houses Nos.  7,  8A and 8B whereas the policy covered only

poly-houses 1 to 6.   The Surveyors were, accordingly, asked to

reassess the loss.

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5. On  December  19,1996,  the  Surveyors  gave  their

clarification to the Insurance Company that all the  poly-houses

were  covered under  the  policy  and   their  assessment   was

correct and fair.   

6. The  Insurance  Company,  then,  appointed  M/s

Jupiter  Claim Consultants as  investigators for  verification of

the claim.   The insured was also asked to  furnish necessary

documents to the said investigators.    The investigators are

said  to  have  submitted  their  report  on  September  12,1997

stating  therein  that  they  were  not  able  to  submit  their

certification as regard the cost of poly-houses Nos. 1 to 6 and

other  related matters categorically for sum insured and claim

thereof.  

7. On November  6,1997,   the   Surveyors  submitted

their  addendum to the  earlier report  dated October  24,1996

with regard to the first storm and  reduced the  assessment of

loss  to  Rs.4,77,355/-.   The  Surveyors  submitted  another

addendum on  February 16,1998 to the report dated October

28,1996 with regard to  the second storm and  reduced the

assessment of loss to Rs.95,443/-.  

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8. The  insured  then  approached  the  National

Commission  alleging  therein  deficiency   of   service  by   the

Insurance  Company  in  not  settling  the  claim  and  sought

direction to the Insurance  Company to settle the claim of the

insured in full and pay interest on  due amount.

9. The Insurance Company contested the  claim and

set up the  plea that the claim on account of damages to poly-

houses 7, 8A and 8B was not admissible as these poly-houses

were  not  covered  under   the  policy.    As  regards  the  poly-

houses nos. 1 to 6, the Insurance Company  admitted that the

policy  covered   those  poly-houses.  They  stated  before  the

National Commission that insured has already been informed

that the loss finally assessed by the Surveyors is to the tune of

Rs.4,77,355/-  in  respect  of  first  storm  and  Rs.95,443/-   on

account of loss caused by  second  storm.

10. A rejoinder came to be filed by the  insured and it

was stated therein that at the relevant point of time, the  size of

the farm was  6.3 hectares and the entire area  was  covered

by the Insurance Company  and it was not limited to the area to

2.8 hectares as  contended by the Insurance Company.

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11. The National  Commission heard the arguments of

both the parties and held  that  at the time of taking policy only

six poly-houses were in existence and there was no evidence

or  proof  to  substantiate   that  the  insurance  was covered for

poly-  houses  7,  8A  and  8B.   The  National  Commission

recorded the admitted position that poly-houses 7, 8A and 8B

were not  in  existence at  the time of  taking  insurance  policy.

The National Commission held that the policy clearly mentioned

the  number of poly-houses as “six” and in view thereof  the

complainant  is   entitled  to  an  amount  of   Rs.5,72,798/-   on

account of  damages  to  these poly-houses (nos.1-6)  during

the   storm/cyclone  that  hit  on  May  23,1996  and   June

18/19,1996  alongwith   interest @ 12% from the date of the

first Surveyors report  i.e.  November 6,1997 upto the date of

payment, failing which the rate of interest shall be @ 18% per

annum.

12. Aggrieved  by  the  dismissal  of  the  complaint  with

regard to the claim for loss to  poly-houses 7, 8A and 8B, the

insured, as stated, is in appeal.

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13. We have heard Mr. Vijay Hansaria, learned senior

counsel for the appellant  and Mr. P.K. Seth, learned counsel

for the Insurance Company.

14. The question  that  arises  for  our  consideration  is:

whether comprehensive floriculture insurance policy issued by

the Insurance Company to the insured covered  poly-houses 7,

8A and 8B?

15. An  insurance contract, is a species of commercial

transactions  and must be construed like any other  contract to

its own terms and by itself.   In a contract of insurance, there is

requirement of uberimma fides i.e. good faith on the part of the

insured.  Except that, in other respects, there is no difference

between a contract of insurance and any other contract.  The

four essentials of a contract of insurance are, (i) the definition

of the risk, (ii) the duration of the risk, (iii) the premium and (iv)

the amount of insurance.   Since upon issuance of insurance

policy, the insurer undertakes to indemnify  the loss suffered by

the  insured on account  of risks  covered by the  insurance

policy,  its terms have to be strictly construed  to determine the

extent of liability of the insurer.  The  endeavour of the court

must always be to interpret the words in which the contract is

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expressed by the parties.  The  court while construing the terms

of policy is not expected to  venture into extra liberalism that

may  result in  re-writing the  contract or  substituting the  terms

which were not intended by the parties.  The insured cannot

claim  anything  more  than  what  is  covered  by the  insurance

policy. [General Assurance Society Ltd. Vs.  Chandumull Jain

and another 1,  Oriental Insurance Co. Ltd. Vs. Sony Cheriyan2

and    United   India  Insurance  Co.  Ltd.  Vs.  Harchand  Rai

Chandan Lal3]   

16. Document  like  proposal  form  is  a  commercial

document  and  being  an  integral  part  of  policy,  reference  to

proposal form may not only be appropriate but rather essential.

However, the surveyors’  report cannot be taken aid of  nor can

it furnish the basis for construction of a policy.  Such outside

aid  for construction  of   insurance policy is impermissible.  

17. That  the  insured  submitted  proposal  to  the

Insurance Company for comprehensive  floriculture insurance

on  January 18,1996  is not in dispute.  The insured furnished

1 AIR 1966 SC 1644 2 (1999) 6 SCC 451 3 (2004) 8 SCC 644

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particulars  for  the  following   components  which  were  to  be

covered:

“A)

Polyhouse                    1                  2                3                     4                _   

Total      

Value of      (Rs.  in  Crores)

1) Steel structure    0.25 2) Fabrication    0.15 3) Plastic Grippers    0.10 4) Plastic & Fittings charges         0.50 5) Cost of  constr. For polyhouses,           Gutters & other accessories    0.25

                      ______    1.25  

B)     Irrigation System (Capacities  value and specifications for the following)           In

lakhs

1)       Plasto make system   15.00 2)       Agricon Associates (Valves & Pipes)   00.50 3)       Fitting  charges   00.50 4) Reservoir   04.00

         ELECTRIC MOTOR

1)     Electric Motor, 15 HP 3 nos., 2 HP 20 nos.,  

        20 HP 1no.  with pumps, pipes & valves.  01.00

2)      D.G. set, 2 nos., POWERICA (Kirloskar),          140 KVA & 1.25 KVA Transformer, Starters          MCL –CTCL &  others access  04.00                                                                                        _____                                                                                        25.00

C) Details of flowers planted in Green house or             Open Cultivation      : Green House Cultivation i) No. of Green Houses : 6 Polyhouses ii) Area  under  Green Houses: 2.8 hectares iii) Area under Open Cultivation : No

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D) Details of Flowers plants under cultivation

i) Total area under Floriculture : 2.8 hectares ii) Survey/Gat/Hissa No. : 163, 158, 157, 156                                                                  148, 149, 147, 164 iii)      Name of the flower plants : Dutch Roses          under  cultivation

iv) Variety : Vivaldi,Texas, Konfetti,                                                                  First Red, Vanilla, Kiss,                                                                  Tiamo, Lambada v)       No. of flowers : 195500 vi)      Distance between flower           plants  : 14 cm. vii)     Expected date of harvest : September 1995

Input cost (From planting to  : Rs. 25 lacs           to first flowering i.e. 4 months)

 ix) Cost of saplings : Rs. 70 per plant

E) Cost of cultivation for flowers : 25 lacs.

i) No. of flowers : 19,55,500.00 ii) Input cost from first flowering            to harvest : 25 lacs. iii) Area under Open Cultivation : No”

18. Based  on  the  said  proposal,  the  Insurance

Company  issued  comprehensive  floriculture

insurance  policy  on  January  23,  1996   The

schedule  attached  to  the  said  insurance  policy is

thus:

‘SCHEDULE’

Insured : M/s VIKRAM GREENTECH (i) Ltd.           (Name and address) Plot No. 99, Sector 24,                                                         Rigdi-Pradhikaran

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                                                       PUNE- 411 044      Policy No. : 47/221200/00940

        Insured at : Surat          Proposal Date : 18th January, 1996          Name of the Crop : Floriculture          offered for insurance          Period of Insurance : 18/01/96 to 17/01/97

                  Address of the Site of : Village  : Sanghise,          the proposal to be Near Kamshet Railway Station          Insured Tal.: Maval, District: PUNE         Total sum Insured : Rs. 2 crore         Total Premium : Rs. 2,20,000/- + 11,000/-(s.o.)

__________________________________________________________ _

INVENTORY OF THE  PROPERTY INSURED (Sections I & II)

__________________________________________________________ _  Description of the item with sum Insured Rs.  Excess  Rate   Premium  Details  Rs.          Rs.           Rs. __________________________________________________________ _

I POLYHOUSE: a) Steel Structure 25,00,000/- b) Fabrication 15,00,000/- c) Gripper 10,00,000/- d) Plastic Fitting Charges 50,00,000/- e) Cutter | f) Plastic | 25,00,000/-

       -----------------                                      

                                             1,25,00,000/-           

II IRRIGATION  : A a) Plasto Make System 15,00,000/- b) Agricon Associates           50,000/-           (Valves & Pipes) c) Fitting Charges      50,000/- d) Reservoir   4,00,000/-

III ELECTRIC MOTOR

a) Electric Motor    HP    1,00,000/-

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b) Starter-MCL-CICL   } c)       Other Assessories, }            DG set  2 nos.,and }           Transformers      }    4,00,000/-

19. That the aforesaid policy covered  the insured for

the loss and and/or damage caused by storm/hailstorm/cyclone

over  the   insured  area   is  not  in  dispute.   The  Insurance

Company  under the policy also agreed that the sum insured

would  be  equal  to  the  costs  of  placement  of  the  insured

property by  new property of the same kind and same  capacity;

in other words replacement cost.

20. Although, Mr.Vijay Hansaria, learned senior counsel

for the insured strenuously  submitted that the Proposal  Form

did not specify the number of  poly-houses and, therefore, all

poly-houses including  7, 8A and 8B were covered under the

policy as they were in existence  at the time of  calamity that

occurred on May 23,1996 and June 18/19,1996,  we are afraid,

the  submission  of  the  senior  counsel  does  not  merit

acceptance.   Admittedly, at the time, the policy was taken ( i.e.

proposal  made  on  January  18,1996  and  insurance  policy

issued  on  January  23,1996),  poly-houses  1  to  6  were  in

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existence and poly-houses 7, 8A and 8B were not in existence.

These poly-houses (7, 8A and  8B) were completed in March

1996.   Moreover it is not correct to say that the Proposal Form

does not specify the number of poly-houses.  It does.  It clearly

mentions six poly-houses.   It is true that  six poly-houses are

mentioned  in  Clause(C)  of  the  Proposal  Form which  is  with

regard  to  green  house  cultivation  but  what  is  mentioned  in

respect of poly-houses in Clause(C) is necessarily referable to

the number of poly-houses in Clause(A) of the Proposal Form

as well.    

21. The  learned  senior  counsel  for  the  insured

submitted that the entire material  for poly-houses 7, 8A and 8B

had already been received at the time of making proposal  and

issuance  of  insurance  policy  and  the  intention  was  also  to

cover the material lying at the site for erection of poly-houses.

In this regard, the learned senior counsel sought to refer  to the

correspondence  between  the  parties  and   the  Surveyors’

reports  dated   October  24,1996 and October  28,1996.    He

would submit that cost of six constructed poly-houses on the

date of making proposal was around Rs.65-70 lakhs and for the

insurance cover of these six poly-houses, the insured would not

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have valued  their cost at Rs.1.25 crores  and paid premium of

Rs.2,31,000/-.

22.  A careful consideration of the Proposal Form that

sets  out the particulars  of the components which were to be

covered  and the inventory  of the property insured (Sections I

and II), mentioned in the policy leaves no manner of doubt that

what was insured was existing  poly-houses on the date of the

issuance of policy.    It is clear from the proposal and the policy.

The two documents admit of no ambiguity and it is clear that six

poly-houses covering an area of 2.8 hectares was  covered by

the policy.  It may be mentioned that Clauses (C)(ii), (D)(i) and

(ii)  of  the Proposal  Form mentions Survey/Gat/Hissa no.163,

158,157,156,148,149,147 and 164 and total area 2.6 hectares.

It is on this area that six poly-houses were existing on the date

the  proposal  was  made  and  policy  issued.   These  six  poly-

houses were only covered by the policy.

23. The National Commission concluded thus:

“  …..  we  are   unable  to  accept  the  contention  of  the complainant  that  only  houses  7,8A  or  8B   were  covered under  the  Insurance  Policy  in  question  especially  when admittedly,  they were non-existent  on the  date,  the  policy was taken and policy clearly mentioned the number of poly houses as “Six”.   In our view the complainant  has  failed to prove a case based on the material on record……”

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We  do  not  find  any  error  in  the  conclusion  of  the  National

Commission.

24. In  what  we have discussed  above,  the  appeal  is

liable to be dismissed and is dismissed with  no order as to

costs.                                                                

……………………..J (D.K. Jain)    

……………………..J (R.M. Lodha)    

New Delhi, April 1,  2009.

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