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Terms and Conditions of Policy have to be Strictly Construed to Determine Extent of Liability of Insurer

In Rajesh Kumar V. National Insurance Company Limited and Ors, revision petition has been filed before NCDRC against the impugned order passed by Haryana State Consumer Disputes Redressal Commission in Appeal No. 1192/2014, vide which, order passed by District Forum Kurukshetra, partly allowing complaint No. 24/2013, filed by present Petitioner, was set aside. State Commission held that there was fundamental breach of terms and conditions of policy on part of complainant, as vehicle was being used as a taxi.

Perusal of reply filed by OP Insurance Company before District Forum and orders passed by State Commission as well as District Forum reveals that after alleged incident, an FIR was registered by father of the Complainant before the local police, in which it was stated that three persons came to Complainant, when he was standing at the taxi stand. He settled a fare of Rs. 700/- with them for taking them to Ambala Cantt. However, when they were on their way, occupants of the car snatched the vehicle. Facts in present case revealed that, vehicle was being used as a taxi although it was insured as a private vehicle.

In the case of Suraj Mal Ram Niwas Oil Mills Private Limited vs. United India Insurance Company Limited & Anr, it was stated that it needs little emphasis that in construing the terms of a contract of insurance, words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.

It is clear from facts and circumstances of case that, there has been a fundamental breach of the terms and conditions of policy, because use of vehicle for commercial purpose as a taxi is duly proved. There is no illegality, irregularity or jurisdictional error in the orders passed by the State Commission, and the same is upheld.

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