Skip to main content

Coverage Of 'Flood & Inundation' Insurance Includes Damage Caused By Heavy Rains And Not Just Overflowing Of River

In Oriental Insurance Company Ltd v M/s J K Cement Works Ltd, Civil Appeal No. 7402/2009, an appeal was filed before the Supreme Court by the insurer against the order of the NCDRC allowing the claim of the respondent.

The respondent had purchased a Standard Fire and Peril Insurance Coverage from the appellant, which covered, among other things, damages due to "flood and inundation". Due to heavy rains, the coal stocked by the respondent got washed away. The appellant repudiated the claim in respect of that damage by saying that the damage due to heavy rains was not covered under 'flood and inundation'.

The insurer argued that ''flood' refers to overflowing of water bodies such as rivers, ponds, lakes etc. With respect to the term 'inundation', the company argued that the same refers to 'accumulation of water' and could thus not be applied to the instant case as the coal had merely been washed off due to heavy rains.

Rejecting the contention of the insurer, the Supreme Court held that as per Concise Oxford English Dictionary, Stroud's Judicial Dictionary, Black's Law Dictionary, floods can be broadly divided into the following categories: coastal floods, fluvial floods (river floods), and pluvial floods (surface floods). Pluvial or surface floods refers to the accumulation of water in an area because of excessive rainfall. These floods occur independently of an overflowing water bodies. "Inundation" was said to be referring to both the act of overflow of water as well as the result of such overflow. Further, the terms 'flood' and 'inundation' are often used synonymously to refer to the act of overflowing of water over land that is generally dry and pluvial floods occur independently of a water body, therefore floods are not restricted to overflow of water bodies.

The Court also noted that there was no water body near the factory and decided that here there was no risk of water from a water body overflowing onto the dry land where the coal yard was located, it could not have been the intention of the parties entering into the contract to give a restrictive meaning to the term 'flood'. Such a narrow interpretation would lead to the conclusion that the insertion of the term 'flood' was superfluous, which could not have been the case.




Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more