Case Note & Summary
The dispute arose from an insurance claim made by the appellant, the owner of two trucks, which were destroyed by Bodo terrorists while transporting goods. The appellant had two insurance policies covering the trucks, and after the incident on March 23, 1989, he sought indemnification from the respondent, New India Assurance Co. Ltd. The respondent initially offered a settlement, but later repudiated the claim, arguing that the policies did not cover losses due to terrorist actions. The appellant then approached the State Consumer Disputes Redressal Commission, which ruled in his favor, stating that the destruction constituted a malicious act covered by the policies. However, the National Consumer Disputes Redressal Commission overturned this decision, concluding that the loss was not covered due to the endorsement excluding terrorist risks. The Supreme Court, upon reviewing the case, noted that the area where the incident occurred was declared a disturbed area under the Armed Forces (Special Powers) Act, 1958, and that the acts of the Bodo terrorists fell under the definition of terrorism as per the Terrorist and Disruptive Activities (Prevention) Act, 1987. The court found that the endorsement in the insurance policy explicitly excluded coverage for losses resulting from such acts. Consequently, the appeal was dismissed, affirming the National Commission's decision that the respondent was not liable for the loss.
Headnote
A) Insurance Law - Coverage of Malicious Acts - Definition of Malicious Act - Insurance Policies - The court examined whether the destruction of trucks by terrorists constituted a malicious act under the insurance policy. It held that the act was not covered due to the specific exclusion of terrorist activities in the policy's endorsement, thus denying the claim (Paras 1-4).
Issue of Consideration
Whether the loss caused to the appellant's trucks by Bodo terrorists was covered under the insurance policies.
Final Decision
The Supreme Court dismissed the appeal, affirming the National Commission's ruling that the respondent was not liable for the loss due to the exclusion of terrorist acts in the insurance policy.
Law Points
- Insurance coverage
- malicious act
- terrorist act
- liability exclusion
- consumer protection
