1. The present First Appeal has been filed under Section 51 of the Consumer Protection Act, 2019 (“the Act”) against the Order dated 13.10.2021 passed by the State Consumer Disputes Redressal Commission, Maharashra, Mumbai (the State Commission), in Consumer Complaint No.390 of 2015, wherein the Complaint filed by the Complainant (Respondent herein) was partly allowed. 2. As per report of the Registry, there is a delay of 6 days in filing the present First Appeal. As the delay was during the suspended period of limitation by the Hon’ble Supreme Court due to Covid-19, the First Appeal is treated to have been filed within limitation. 3. For the sake of Convenience, the parties in the present matter are being referred to as mentioned in the complaint before the State Commission. M/s. Geekay International Co. is identified as the Complainant and M/s. National Insurance Co. Ltd. is referred to as the Opposite Party / Insurer (OP). 4. Brief relevant facts of the case, as per the Complainant, are that the complainant is Geekay International Co. Ltd., a partnership firm based in Andheri, Mumbai, engaged in the business of cloth and garments. The OP is the National Insurance Company Limited, from whom the complainant purchased a Standard Fire and Special Perils insurance policy No. 261600/11/11/3100000292. The policy was intended to cover the stock of the complainant stored in rented premises. The business was being conducted from these premises, which were taken on rent under a leave and license agreement, for the period 2011 to 2012. On 18.07.2011, heavy rains led to the outpouring of rainwater, causing a partial collapse to the building where the complainant's stock was stored. As a result, the stock was spoiled due to the water damage. The complainant promptly informed the OP, National Insurance Company, via email about the damage. The OP appointed a surveyor to assess the damage and provide a report on the valuation of the loss. Despite the surveyor's report, the OP repudiated the insurance claim, stating that the Standard Fire and Special Perils policy covers flood and inundation, but does not cover damage caused by heavy rains. Aggrieved by the claim repudiation, the complainant approached the State Commission by filing a consumer complaint, alleging deficiency in service on the part of the insurance company sought a declaration that the OP is guilty of deficiency in service and a direction for the opposite party to pay the complainant the sum of ₹48,93,226/-, which represents the actual loss incurred, along with interest at the rate of 18% per annum from the date of the incident along with compensation of ₹25 Lakhs for mental harassment. 5. In its written statement before the State Commission, the OP opposed the complaint and contended that the Standard Fire and Special Perils policy purchased by the complainant does not cover losses caused by heavy rains and the insurance company's assessment, as determined by the surveyor, does not fall under the covered perils of the policy. Therefore, the repudiation of the claim is justified and in accordance with the policy terms. 6. The learned State Commission, vide the Impugned Order dated 13.10.2021 passed the following order: “ORDER i. The consumer complaint is partly allowed with costs quantified to Rs.25,000/- to be paid by the opposite party to the complainant. ii. It is declared that the opposite party is guilty of deficiency in service/ unfair trade practice. iii. The opposite party is directed to pay the complainant, Rs.46,48,565/- (Rs. Forty-Six Lakh Forty-Eight Thousand Five Hundred and Sixty-Five only) with an interest at the rate of 9% per annum from the date of loss and damage, i.e. 18th July 2011, within the period of one month from the date of this order, failing which, it will carry interest at the rate of 12% till realization of the order. iv. The opposite party is also directed to pay Rs. 1 Lakh towards compensation for mental harassment of the complainant.” 7. Being aggrieved the Appellant Insurance Company filed the instant First Appeal No.870 of 2021 with the following prayers: (a) Allow the instant First Appeal and set aside the Impugned Order dated 13.10.2021 passed by the State Consumer Disputes Redressal Commission, Maharashtra, Mumbai in Consumer Complaint No.CC/15/ 390; and (b) Pass any other or further order(s) deemed fit by this Commission in the facts and circumstances of the case.” 8. In the instant Appeal, the Insurance Company mainly raised the following grounds: A. The State Commission failed to appreciate that the Standard Fire and Special Perils policy is a named perils policy which explicitly covers losses due to flood but does not cover losses due to rain or heavy rain. The claim was rightly repudiated based on survey report as per the mandatory provisions of Section 64-UM of the Insurance Act, 1938. B. The State Commission overlooked the surveyor findings and Report dated 29.05.2012 clearly stating that the loss was due to heavy rains and/or defective construction, which are not insured perils under the policy. C. The State Commission failed to correctly apply the legal precedents and wrongly relied on the Supreme Court judgment in "Oriental Insurance Co. Ltd. v. M/s JK Cement Works," which is distinguishable on facts and thus not applicable to this case. D. The State Commission erroneously interpreted the meaning of the word "flood." The observation that the insurance company engaged in "unfair trade practice" by widely interpreting "flood". E. The State Commission failed to consider that the surveyor noted doubts regarding the legality of occupation of the affected premises by the complainant as the leave and license agreement for the premises was not signed by the owner. F. The State Commission erroneously awarded interest at an exorbitant rate of 9% per annum from the date of loss. As per settled law in United India Insurance Co. Ltd. Vs. MKJ Corporation, the insurer should settle claims within two months from the receipt of the survey report. In this case, the final survey report was dated 29.05.2012, and the claim was repudiated on 26.07.2013 and the incident occurred on 18.07.2011. The interest rate awarded is therefore excessive and unjustified. In any case, there was no deficiency in service on the part of OP. 9. In his arguments, the learned counsel for Appellant/OP reiterated the grounds advanced in the Appeal and asserted that the terms of the Standard Fire and Special Perils Policy. The claim of the Complainant for loss of stock due to the heavy rains. Thie same is not covered under the policy. The complainant failed to provide reasonable evidence that loss of stocks was covered under listed perils of the insurance policy. The case of Oriental Insurance Co. Ltd. v. M/s. JK Cement Works, Civil Appeal No.7402 of 2009 decided by the Hon’ble Supreme Court is not applicable in this case The case law relied upon by the complainant is devoid of any merit. The validity State Commission order is questionable and asserted that the facts of the present case are not covered in the insurance policy and thus no claim is payable. He relied upon the judgment of Hon’ble Supreme Court in Suraj Mal Ram Niwas Oil Mills Pvt. Ltd. v. United India Insurance Co. Ltd,. (2010) 10 SCC 567, decided on 08.10.2010. 10. On the other hand, the learned Counsel for the Respondent/ Complainant reiterated the issues in the Complaint and argued that the loss of stocks due to heavy rain is covered under the policy in question. The terms "flood" and "inundation" should be interpreted to include heavy rain, thereby covering the loss under the policy. The Respondent relied on several judgments, including The Oriental Insurance Company Limited v. M/s. J.K. Cement Works (2020 SCC OnLine SC 83), IFFCO Tokio General Insurance Co. Ltd. v. M/s. Prime Health Care Products (2012 SCC OnLine NCDRC 214), Vaibhav Dyestuff Industries and Ors. Vs. New India Insurance Co. Ltd. and Ors., F.A. Nos.613 and 633 of 2015, decided on 30.01.2024 by the NCDRC and Super Seeds Pvt. Ltd. v. Oriental Insurance Co. Ltd. (2019 SCC OnLine NCDRC 171), to support the argument that in cases of ambiguity in the terms of the insurance policy, the interpretation should favor the insured. He further argued that it is a settled principle of insurance law that any ambiguity in the terms of the policy should be interpreted in a way that benefits the insured. He asserted the case of Sangrur Sales Corporation v. United Insurance Company Ltd. & Ors. as authority, emphasizing that the burden of proof lies on the insurer to demonstrate that the claim falls under an exclusion clause. Hon’ble Supreme Court clarified that exclusion clauses in insurance contracts should be interpreted strictly against the insurer. The insurer must conclusively prove that the exclusion applies to the specific circumstances of the case. He further argued in favour of the impugned order passed by the State Commission and sought to dismiss the First Appeal. 11. I have examined the pleadings and associated documents placed on record are rendered thoughtful consideration to the arguments advanced by the learned Counsels of both the parties. 12. The main issue to be determined is ‘whether the loss of stock in the case due to heavy rain is covered under the Standard Fire and Special Perils Policy in question’? In this regard, the relevant portions of Insurance Policy covering the risks are as follows:- I. Fire; II. Lightning; III. Explosion; IV. Aircraft damage; V. Riot, Strike, Malicious and Terrorism Damage; VI. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation. VII. Impact Damage, VIII. Subsidence and landslide including Rockslide; IX. Bursting and/or overflowing of Water Tanks, Apparatus and Pipes; X. Missile Testing operations; XI. Leaking from Automatic Sprinkler Installations; XII. Bush Fire. 13. In catena of judgments, the nature of insurance contracts, scope and restraint to be exercised in interpreting the terms of the contracts are well discussed and crystallized by this Commission and Hon’ble Supreme Court. In Oriental Insurance Company Limited vs. J.K. Cement Works, 2020 SCC OnLine SC 83, the Hon’ble Supreme Court has held as follows: 8. Before delving into the particular facts of this case, it may be useful to refer to the dictionary meanings of the terms “flood” and “inundation”. 8.1. The word “flood” is defined in Concise Oxford English Dictionary, 8th Edn. (1990) as follows: “flood.— … 1a an overflowing or influx of water beyond its normal confines, esp. over land; an inundation. b the water that overflows. 2a an outpouring of water; a torrent (a flood of rain).” Particularly in the context of the insurance contracts, Stroud's Judicial Dictionary, 5th Edn. (1986) defines the word “flood”, in Young v. Sun Alliance & London Insurance Ltd. [Young v. Sun Alliance & London Insurance Ltd., (1977) 1 WLR 104 (CA)] , an English case decided by the Court of Appeal, and reads as follows: “… ‘Flood’ in an insurance policy meant a large movement or irruption of water, and did not cover mere seepage from a natural source…” 8.2. The word “inundate” is defined in Concise Oxford English Dictionary, 8th Edn. (1990) as follows: “inundate.— … 1 flood. 2 overwhelm (inundated with enquiries).” Further, per Black's Law Dictionary, 9th Edn. (1990), the word “inundate” means: “inundate.— To overflow or overwhelm; esp., to flood with water.” 9. Simply put, a flood may be described as overflow of water over land. Floods can be broadly divided into the following categories: coastal floods, fluvial floods (river floods), and pluvial floods (surface floods). 9.1. The coastal floods occur when water from a sea or an ocean flows into nearby areas. They are caused either by extreme tidal activity (high tides) or by a storm surge — strong winds from a hurricane or other storms forcing the water onshore — or by the simultaneous occurrence of both these phenomena. 9.2. The fluvial or river flood occurs when the water level exceeds the capacity of a river, stream, or lake, resulting in the overflow of the surplus water to surrounding banks and neighbouring land. They are usually caused by either excessive rainfall or unusually high melting of snow because of rising temperatures. 9.3. Lastly, the 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 body. The pluvial floods include the flash floods which take place due to intense, torrential rains over a short period of time. A pluvial flood may also occur if the area is surrounded by hilly regions from where the run-off water comes and accumulates in the low-lying area. In urban localities, because of the concrete streets and dense construction, rainwater is unable to seep into the ground. Steady rainfall over a few days or torrential rains for a short period of time may overwhelm the capacity of the drainage systems in place, leading to accumulation of water on the streets and nearby structures, and resulting in immense economic damage. 10. So far as the term “inundation” is concerned, it can be used to refer to both the act of overflow of water over land that is normally dry and to the state of being inundated. The inundation can also be intentional, which is sometimes carried out for military purposes, as well as for agricultural and river management purposes. In the latter sense i.e. as a state of being, inundation refers to accumulation of water in which objects or land may be submerged. In simpler terms, inundation can be used to refer both the act of overflow of water as well as the result of such overflow. 11. It flows from the above discussion that overflow of water due to a flood may result in the state of inundation. As discussed above, floods are of different types, and may be caused due to several factors complementing each other. Usually, non-coastal floods originate from rainfall, but the magnitude of rainfall sufficient to cause a flood, and the damage that a flood causes, may vary depending on a variety of aspects such as the location of land (low-lying or altitudinous), the water retention capacity of the soil, and the density of population and manmade construction in the area, among other things. In rare cases, a non-coastal flood may also occur without any rainfall. For instance, shortcomings in the construction of a dam may lead to its complete breakdown, resulting in a flood.” 14. Following the judgment of Oriental Insurance Co. Ltd. Vs JK Cement Works (Supra), this Commission in Vaibhav Dyestuff Industries and Ors. Vs. New India Insurance Co. Ltd & Ors, FA No.613 and 633 of 2015, decided on 30.01.2024 has held as under: 34. The inundation in the present case has resulted from excessive rainfall and according to the aforesaid orders and judgments, inundation would stand covered under the risk policy, which is also available in the present case. The accumulation of water to the extent of 9” to 1 foot as observed by the surveyor and its retention for about 16 hours in the premises, that to a certain extent is also supported by photographs, renders the claim to be preponderantly probable and therefore acceptable. Consequently, in view of the conclusions drawn hereinabove and the law as discussed, no error is discernable in the conclusions drawn by the State Commission, while allowing the complaint. The loss had occurred due to heavy rainfall and it appears that the surveyor seems to have inappropriately recommended non-payment of damages and his report, which contradicts his own observation is not creditworthy. 15. In the case in question, it is an admitted position that the complainant suffered stock loss due to the inundation due to heavy rainfall. As per the precedents cited above, inundation is covered as a risk under the policy, which is also available in the present case. 16. In view of the foregoing discussions, I do not find any reason to interfere with the order of the learned State Commission dated 13.10.2021. The present FA No. 870 of 2021 is, therefore, dismissed. 17. There shall be no order as to costs. 18. All pending Applications, if any, stand disposed of accordingly. 19. The Registry is directed to release the Statutory Deposit amount, if any due, as per law. | 
