NCDRC Directs United India Insurance To Pay Rs. 2.35 Crores For Cancelled Cricket Match

The bench presided by Justice A.P. Sahi along with Mr. Bharatkumar Pandya as a member observed that the risk of cancellation of the cricket match was very well covered under the insurance policy, even if the cyclone occurred just before the official start of the insurance period. The cyclone was the clear and direct reason for the match's cancellation, thereby making the United India Insurance liable to pay the insurance claim.

Brief Facts

The Andhra Cricket Association had taken an insurance policy from United India Insurance Co. Ltd. to cover any losses, in case the ODI cricket match between India and West Indies scheduled on 14.10.2014 in Vishakhapatnam, got cancelled. The policy insured the match day i.e. 14th October 2014. But, on the 12.10.2014, a cyclone hit Vishakhapatnam. Due to heavy damage caused by this cyclone, the BCCI on 13^th October, cancelled the match scheduled for 14.10.2014. Thereafter the Cricket Association claimed the insurance amount from the Company, since the cancellation was due to storms and rain, which were covered under the policy.

Arguments of United India Insurance Co. Ltd.

The Company argued that the insurance policy was valid only for 24 hours, starting from the midnight of 14th October to the midnight of 15th October. They argued that the cyclone occurred on 12th October, and the match was cancelled on 13th October, when the policy period had not even started. According to them, the cyclone must occur during the policy period and not before it, for the claim to be valid.

Decision

The NCDRC held that the cyclone was clearly a covered peril under the insurance policy and rejected the insurer's claim that the cyclone occurred before the policy period. The bench observed that the insurance contracts cannot be given this narrow interpretation otherwise it will defeat the very purpose of it i.e. to indemnify losses caused due to such perils.

While applying the rule of 'Contra Proferentem', the Commission held that the repudiation of the insurance claim was unjustified and United India Insurance Co. Ltd. was guilty of deficiency in services. As a result, the Commission directed the insurance company to pay Rs. 2,35,81,470/- to the Andhra Cricket Association along with an interest of 6% from the date of filing the complaint.

(Latin Maxim: Verba ambigua fortius accipiuntur contra proferentem means that the language of a contract is to be taken most strongly against the party using it.)

Case No. NC/CC/1676/2016

For the Complainant: Mr. G.V.R Chaudhary, Advocate

For the Opposite Parties: Mr. Animesh Sinha, Ms. Ishita Pandey, Advocates