Holding

The insurer is not liable because the temperature never exceeded 4.4°C, and the exception clause is clear and not in conflict with the policy’s main purpose.

Summary

The appellants, a cold‑storage operator, stored potatoes under a Deterioration of Stock (DOS) insurance policy and later claimed loss due to sprouting. The policy contained an explicit exception that the insurer would not be liable for any damage if the temperature in the refrigeration chambers did not exceed 4.4°C (40°F). Surveyor evidence and the appellants' own log‑book entries showed that the temperature never rose above this limit, a fact the appellants later contradicted in a February 2009 statement, which the NCDRC called an "afterthought". The Supreme Court held that the temperature‑exception clause was clear, unambiguous and not inconsistent with the main purpose of the policy, and therefore the insurer was not liable. Consequently, the appeal against the NCDRC’s dismissal of the consumer complaint was dismissed.

Issues considered

The exception clause limiting liability when temperature does not exceed 4.4°C is ambiguous or requires reading down.
Whether the insurer is liable for the potatoes' deterioration when the temperature remained within the stipulated limit.
The proper role and construction of exception clauses in insurance contracts.
Whether the NCDRC’s decision should be interfered with on these grounds.

Subjects

insuranceexception clauseDOS policytemperature limitcold storageclaim denialcontract interpretationNCDRC

Judgment

[2022] 2 S.C.R. 363 363

M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE & ANR. A
v.
NEW INDIA ASSURANCE COMPANY LIMITED & ORS.
(Civil Appeal No. 2371 of 2019)
JANUARY 24, 2022 B
[DR. DHANANJAYA Y CHANDRCHUD AND DINESH
MAHESHWARI, JJ.]
Insurance – Deterioration of Stock Policy (DOS policy) –
Specific exceptions in the policy – Stock of potatoes stored by the
C
appellant had sprouted while in the cold storage – Claim submitted
to the insurer – The exceptions to the policy made it clear that the
insurer would not be liable for any damage if the temperature in the
refrigeration chamber did not exceed 4.4 degree celsius (400F) – It
was stated by the appellant that the proper temperature was
maintained and it was recorded in the logbook – After some time, D
when the statement of the representative of the appellant was
recorded by the surveyor, it was asserted that the main cause for
rotting of the potatoes was a rise in the temperature – NCDRC
characterized the assertion as an “afterthought” and rejected the
consumer complaint – On appeal, held: In the instant case, there is
E
no ambiguity in the terms of the exception – The surveyor’s report
indicates that the temperature never exceeded 4.4 degree celsius,
which was also accepted by the appellants – The temperature of the
cold storage is fundamental to the health of the potatoes relating to
which the policy was undertaken – The insurer identified a
temperature of 4.4 degree celsius as the optimum temperature, at F
which rotting of the potatoes should not occur and thus has exempted
itself of any liability resulting from the deterioration of potatoes
occurring at a temperature that is below or equivalent to 4.4 degree
celsius – There is no reason to read down clause (vi) of exceptions
to the DOS Policy because it is not in conflict with the main purpose
G
of the policy – In terms of the insurance policy, the insurer is not
liable for damage caused to the potatoes as the temperature of the
storage did not rise above 4.4 degree celsius – No interference
required in the Judgment of the NCDRC.
Insurance – Role of exceptions in insurance policy – Discussed.
H
363
364 SUPREME COURT REPORTS [2022] 2 S.C.R.

A Dismissing the appeal, the Court
HELD: 1. In the present case, there is no ambiguity in the
terms of the exception. The exception to the Deterioration of
Stock Policy (DOS Policy) clearly provides that the insurer would
not be liable for “[a]ny damage if the temperature in the
B Refrigeration chambers does not exceed 4.4 degree Celsius.”
The surveyor’s report indicates that the temperature never
exceeded 40p F (4.4 degree Celsius), which was also accepted
by the appellants in their communication dated 14 October 2008.
The assertion that the rotting of the potatoes resulted from a
C higher temperature was only made on 17 February 2009, which
the NCDRC in its impugned judgement dated 14 August 2018
has characterised as an “afterthought”. Thus, in terms of the
insurance policy, the insurer is not liable for damage caused to
the potatoes as the temperature of the storage did not rise above
40p F. Further, unlike in BV Nagaraju, the exception, in this
D case, is neither too wide nor in conflict with the main purpose of
the insurance policy. The insurance policy covers the deterioration
of potatoes that have been stocked in cold storage by the
appellants. The temperature of the cold storage is fundamental
to the health of the potatoes relating to which the policy has been
E undertaken. This is distinguishable from the exception relating
to the number of persons a vehicle can carry, which was the subject
matter of the exception in BV Nagaraju. The insurer has identified
a temperature of 400 F as the optimum temperature, at which
rotting of the potatoes should not occur and thus has exempted
itself of any liability resulting from the deterioration of potatoes
F
occurring at a temperature that is below or equivalent to 40p F.
There is no reason to read down clause (vi) of exceptions to the
DOS Policy because it is not in conflict with the main purpose of
the policy. [Para 16][374-E-H; 375-A-B]

G New India Assurance Company Ltd. v. Rajeshwar
Sharma & Anr. (2019) 2 SCC 671 : [2018] 14 SCR
1181; Oriental Insurance Co. Ltd. v. Sony Cheriyan
(1999) 6 SCC 451 : [1999] 1 Suppl. SCR 622; BV

H
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 365
ASSURANCE CO. LTD.

Nagaraju v. Oriental Insurance Co. Ltd., Divisional A
Officer, Hassan (1996) 4 SCC 647 : [1996] 3 Suppl.
SCR 22 –relied on.
Sikka Papers Ltd. v. National Insurance Company Ltd.
& Ors. (2009) 7 SCC 777 : [2009] 9 SCR 1088;
Oriental Insurance Co. Ltd. v. Samayanallur Primary B
Agriculture Coop. Bank (1999) 8 SCC 543 : [1999] 4
Suppl. SCR 329; Sangrur Sales Corporation v. United
India Insurance Company Ltd. & Anr. (2020) 16 SCC
292 – referred to.
Case Law Reference C
[2009] 9 SCR 1088 referred to Para 12
[2018] 14 SCR 1181 relied on Para 13
[1999] 1 Suppl. SCR 622 relied on Para 14
[1999] 4 Suppl. SCR 329 referred to Para 14 D

[1996] 3 Suppl. SCR 22 relied on Para 15
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2371
of 2019.
From the Judgment and Order dated 14.08.2018 of the National E
Consumer Disputes Redressal Commission, New Delhi in Consumer
Complaint No.37 of 2010.
Sanjeev Kumar, Ajay Amritraj, Sanjay Kumar, Naik H. K.,
Sudhansu Palo, Advs. for the Appellants.
F
Ms. Awantika Manohar, Prashant Kumar, Ms. Meera Mathur,
Advs. for the Respondents.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
G
1. The appeal arises from a judgement of the National Consumer
Disputes Redressal Commission1 dated 14 August 2018 in Consumer
Case No 37 of 2010.

1
“NCDRC” H
366 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 2. The insurance claim of the appellants arose under a
Deterioration of Stock Policy2 which covered the stock of potatoes stored
by the appellant in cold storage. The relevant terms of the DOS Policy
indicated that:
“...THIS POLICY OF INSURANCE WITNEESETH that in
B consideration of the insured having paid to the company the
premium mentioned in the schedule hereon the company hereby
agrees with the insured that at any time during the period of
insurance stated in the Schedule II or during any subsequent period
for which the insured pays and the company may accept the
premium for the renewal of this policy the company will indemnify
C
the insured in the manner and to the extent hereinafter provided
for damage to the stocks described in schedule II by contamination
and/or deterioration, putrefaction as a result of rise in temperature
in the Refrigeration Chambers caused by any loss of or damage
due to an accident, as defined hereinafter to the Plant and
D Machinery specified in schedule I and indemnifiable under the
Machinery Insurance Policy in force. The total liability of the
Company under this policy shall be limited to the sum insured
specified in Schedule II.”
3. The proviso to the above provision stipulated that:
E
“Provided always that:
(i) During the entire period of this insurance the Insured shall
be in possession of a qualified permission in writing of the
competent Licensing Authority to operate the Cold Storage.
F (ii) At the time of loss or damage the said stocks are contained
in the said Refrigeration Chambers.
(iii) The Plant and Machinery specified in schedule I is insured
under the Machinery Insurance Policy in force and the
payment shall have been made or liability admitted under
G such insurance; if no payment shall have been made under
such insurance solely as a result of operation of any ‘Excess’
thereunder Liability of the company under this Policy shall
not be affected.

2
H “DOS Policy”
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 367
ASSURANCE CO. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(iv) The Insured maintains, on a daily basis, a stock book in the A
Proforma prescribed by the company, in which the type,
quantity and value of the stocks stored and the beginning
and end of the storage period are entered for each
Refrigeration chambers separately.
(v) During the entire period of storage the Insured records in B
Log Book as per the Proforma supplied by the company
the reading of the temperature and relative humidity of the
Refrigeration Chambers as also the suction discharge and
oil pressure on four hourly basis throughout the day.
(vi) stock Book, Log Book and all other records of the Insured C
relating to the stocks stored shall at all reasonable times be
open to inspections by duly authorized representatives of
the company.”
4. The expression “accident” was defined in clause (a) of the
definitions as follows: D
“a) Any sudden or unforeseen loss or damage to the Plant and
Machinery described in schedule of this Policy due to an
accident caused covered by the machinery insurance policy
specified in schedule I and not hereinafter excluded.”
5. Among the exceptions to the DOS Policy, clause (vi) stipulated E
that the insurer would not be liable for:
“(vi) Any damage if the temperature in the Refrigeration
chambers does not exceed 4.4 degree Celsius.”
6. Similarly, clause (viii) provided the following exception to the
F
liability of the insurer in the case of:
“(viii) Any loss arising from improper storage insufficient circulation
of air/non-uniformity of temperature for whatsoever
reasons.”
7. The warranties to the DOS Policy, inter alia, stipulated as G
follows:
“6. The Insured shall take care to see that:
i) the temperature inside the cold Chambers are brought down
to 34 Degree F (1.1. Degree C) in all floors of all the
chambers before loading commences and; H
368 SUPREME COURT REPORTS [2022] 2 S.C.R.

A ii) Further ensure that the temperature in all the chambers
does not exceed 59 Degree F (10 Degree C) during the
entire period of loading and 40 Degree F (4.4 Degree C)
during the subsequent period of storage.”
8. On 10 October 2008, the appellants furnished intimation to
B farmers that the stock of potatoes had sprouted while in the cold storage.
On 13 October 2008, a claim was submitted to the insurer. Significantly,
in the communication of the appellants dated 14 October 2008, it was
stated that the loading of the stock was carried out at the normal
temperature and that until then, the proper temperature was maintained,
which was mentioned in the logbook. The relevant extract from the
C communication contains the statement that:
“iii. …at the time of loading, the loading was done at the normal
temperature and till date the proper temperature was
maintained, which is mentioned in the log-book.”

D 9. The claim form which was lodged on 11 November 2008
required a specific disclosure in Clause 12 of what, according to the
insured, was the cause for the deterioration of the stock. The query was
not filled up. Subsequently, on 17 February 2009, the statement of the
representative of the first appellant was recorded by the surveyor in
which it was asserted that the main cause for rotting of the potatoes
E was a rise in the temperature in the months of September and October;
and that the appellants had regularly checked the temperature recorded
in the logbook which the operator had erroneously recorded. This was a
clear departure from the earlier statement that the required temperature
had been maintained, as recorded in the log sheets.
F 10. The log sheets which have been produced by the appellants
on the record indicate that the temperature was well within the stipulated
range of 4.40 C (400 F) prior to 18 October 2008. The material which
has been placed on the record indicates that the case of the appellants,
as evidenced in the letter dated 14 October 2008, was that both at the
G time of loading and until the date of the communication, the proper
temperature was maintained. This submission is, in fact, borne out by
the log sheet. The exceptions to the Policy made it abundantly clear that
the insurer would not be liable for any damage if the temperature in the
Refrigeration Chamber did not exceed 4.40 C. Consequently, clause 6 of
the warranties required the insurer to ensure that during the period of
H storage, the temperature did not exceed 400 F (4.40 C). Having regard
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 369
ASSURANCE CO. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

to the specific terms of the policy, the admission of the appellants that A
the temperature was maintained at all material times, would clearly attract
the exceptions to the policy.
11. Mr Sanjeev Kumar, counsel appearing on behalf of the
appellants, however, sought to rely on the conclusion which was reflected
in the report of the surveyor. The conclusion is as follows: B
“In my opinion the sprouting could have taken place only due to
higher humidity and temperature in the chamber, which however
does not tally with the dry and wet bulb temperatures recorded in
the log book. There seems to be no other cause for the sprouting.
The loading was within the licensed capacity, as per computerized C
stock details provided.”
12. The above conclusion cannot be read in isolation from the
entirety of the surveyor’s report. On the contrary, the report contains a
specific finding that the temperature had not exceeded 400 F. Further,
the surveyor notes that there is a contradiction in the statements of the D
appellants dated 14 October 2008 and 17 February 2009. The appellants
had earlier stated on 14 October 2008 that the temperature of the storage
was maintained within permissible limits, but claimed on 17 February
2009 that the sprouting was a result of the rise in the temperature in the
months of September and October, and theoperator had erroneously E
recorded the temperature. The surveyor specifically notes that “there is
no evidence in support of rise in temperature…the evidence in the shape
of logbooks and earlier statements of the insured establishes that the
temperature never exceeded 40 Deg F till 14 October 2008”. Therefore,
the surveyor observed that the claim could not be accepted in view of
clause (vi) of the exceptions to the policy. Thus, the insurer accordingly F
disclaimed any liability. In Sikka Papers Ltd. v. National Insurance
Company Ltd. & Ors. 3, this Court observed that although the
surveyor’s report is not the last word, there must be a legitimate reason
to depart from it. In the present case, the appellants have not advanced
any legitimate reasons to depart from the surveyor’s report and in fact G
have relied on a portion of the report to buttress the submission that the
temperature of the cold storage had arisen over 400 F, which as we have
highlighted above is a partial reading of the report.

3
(2009) 7 SCC 777 H
370 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 13. MN Srinivasan and K Kannan in Principles of Insurance
Law have explained the role of exceptions in an insurance policy. The
insurer seeks to indemnify the insured only against such losses that are
“caused by certain perils arising under normal conditions whose effects
are statistically estimated.” The insurer may not wish to accept liability
for other perils that may result in losses that are of great magnitude.
B
Thus, exceptions are inserted to exempt the liability of the insurer for
which it would be otherwise liable.4 Likewise, AW Baker in The Law
Relating to Accidental Insurancestates that ‘excepted clauses’ are
inserted ex abundanti cautela in insurance policies to inform the insured
that losses attributable to excepted causes will not be indemnifiable. In
C New India Assurance Company Ltd. v. Rajeshwar Sharma & Anr.5,
the following extract from The Law Relating to Accidental
Insurancewas relied upon by a two-judge Bench of this Court, of which
one of us (Justice DY Chandrachud) was a part:
“The object of exceptions is to define with greater precision the
D scope of the policy by making clear what is intended to be excluded
and contrasting with what is intended to be included.
Since exceptions are inserted in the policy mainly for the purpose
of exempting the insurers from liability for a loss which, but for
the exception, would be covered by the policy, they are construed
E against the insurers with utmost strictness and it is the duty of the
insurers to except their liability in clean and unambiguous terms.
The onus of proving that the loss falls within the exception lies
upon the insurers, unless by proving the language of the exception,
the assured is expressly required to prove that, in the circumstances,
the exception does not apply.”6
F
14. In New India Assurance (supra), it was held that if there is
no ambiguity in the clause exempting the insurer from a liability arising
from an excepted cause, the insurance claim can be rejected by the
insurer. In Oriental Insurance Co. Ltd. v. Sony Cheriyan7, a two-
judge Bench of this Court observed that an insurance policy must be
G
4
MK Srinivasan & K Kannan, Principles of Insurance Law (LexisNexis India, 10th Ed.,
2018)
5
(2019) 2 SCC 671
6
AW Baker Welford, The Law Relating to Accidental Insurance (Butterworth &
Company, 1923), p.126
7
H (1999) 6 SCC 451
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 371
ASSURANCE CO. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

strictly construed to identify the extent of the insurer’s liability. This A
Court held that where a truck was insured only for carrying unhazardous
goods in terms of the permit issued under the Motor Vehicles Act 1988,
an insurance claim could not have been raised when the truck caught
fire while carrying ether solvent which is classified as a hazardous
substance under Table III to Rule 137 of the Central Motor Vehicles
B
Rules 1989. Though the rules mentioned ‘ethyl ether’ as a hazardous
substance, this Court observed that ether solvent is only a descriptive
term for ether and ether and ethyl ether are the same substance. This
Court held thus:
“17. The insurance policy between the insurer and the C
insured represents a contract between the parties. Since
the insurer undertakes to compensate the loss suffered by
the insured on account of risks covered by the insurance
policy, the terms of the agreement have to be strictly
construed to determine the liability of the insurer. The
insured cannot claim anything more than what is covered D
by the insurance policy. That being so, the insured has also to
act strictly in accordance with the statutory limitations or terms of
the policy expressly set out therein.
18. In the instant case, while specifying the “Limitations as to
E
Use”, it was clearly mentioned that the policy was meant to cover
only carriage of goods as defined within the meaning of the Motor
Vehicles Act, 1988. The “permit” granted to the respondent under
the Act specified the nature of goods which he could carry on the
vehicle. It was provided in the “permit” itself that the respondent
could carry “all kinds of unhazardous goods including fish except F
those prohibited. It is obvious that the “permit” was not granted
for carrying hazardous goods. It has already been specified above
the ether which was being transported by the respondent in his
vehicle is a hazardous substance indicated in Table III under Rules
137. There was, therefore, a specific prohibition operating against G
the respondent from carrying a hazardous and, that too, flammable
substance in his vehicle which, under the “permit” granted to him,
could be utilised only for carrying unhazardous goods under the
Motor Vehicles Act.”
(emphasis supplied) H
372 SUPREME COURT REPORTS [2022] 2 S.C.R.

A In a similar vein, a two-judge Bench of this Court in Oriental
Insurance Co. Ltd. v. Samayanallur Primary Agriculture Coop.
Bank8 held that an insurance policy must be construed only with reference
to its stipulations and no artificial meaning can be given to the words of
the policy. This Court observed that a cash box cannot be classified as a
‘safe’ within the meaning of a burglary insurance policy and the insurer
B
was exempted from any liability arising from the theft of jewelry and
cash from the cash box. The exceptions to an insurance policy must be
construed strictly since they reflect the agreement between the parties
with respect to the losses that are covered by the insurance policy. Any
departure from this principle is possible only if the terms of the policy
C are ambiguous or unclear. In Sangrur Sales Corporation v. United
India Insurance Company Ltd. & Anr.9, a two-judge Bench of this
Court, of which one of us (Justice DY Chandrachud) was a part, held
that in the event two constructions are possible or if there is any ambiguity,
a construction that is beneficial to the insured should be adopted consistent
with the purpose of the policy.
D
15. Another instance where exception clauses may be interpreted
to the benefit of the insured is when the exception clauses are too wide
and not consistent with the main purpose or object of the insurance
policy. In BV Nagaraju v. Oriental Insurance Co. Ltd., Divisional
Officer, Hassan10, a two-judge Bench of this Court read down an
E exception clause to serve the main purpose of the policy. However, this
Court clarified that the breach of the exception clause was not so
fundamental in nature that would have led to the repudiation of the
insurance policy. In that case, the terms of the insurance policy allowed
an insured vehicle to carry six workmen, excluding the driver. When the
F vehicle met with an accident, it was carrying nine persons apart from
the driver. The insured had moved a claim for repair of the vehicle,
which was rejected by the insurer. Allowing the claim, this Court held
thus:
“7. It is plain from the terms of the Insurance Policy that
G the insured vehicle was entitled to carry 6 workmen,
excluding the driver. If those 6 workmen when travelling
in the vehicle, are assumed not to have increased any risk
8
(1999) 8 SCC 543
9
(2020) 16 SCC 292
10
H (1996) 4 SCC 647
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 373
ASSURANCE CO. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

from the point of view of the Insurance Company on A
occurring of an accident, how could those added persons
be said to have contributed to the causing of it is the poser,
keeping apart the load it was carrying. Here, it is nobody’s
case that the driver of the insured vehicle was responsible
for the accident. In fact, it was not disputed that the
B
oncoming vehicle had collided head-on against the insured
vehicle, which resulted in the damage. Merely by lifting a
person or two, or even three, by the driver or the cleaner
of the vehicle, without the knowledge of the owner, cannot
be said to be such a fundamental breach that the owner
should, in all events, be denied indemnification. The misuse C
of the vehicle was somewhat irregular though, but not so
fundamental in nature so as to put an end to the contract,
unless some factors existed which, by themselves, had gone
to contribute to the causing of the accident. In the instant
case, however, we find no such contributory factor. In Skandia
D
case [(1987) 2 SCC 654] this Court paved the way towards reading
down the contractual clause by observing as follows: (SCC pp.
665-66, para 14)
“… When the option is between opting for a view which will
relieve the distress and misery of the victims of accidents or their
dependants on the one hand and the equally plausible view which E
will reduce the profitability of the insurer in regard to the
occupational hazard undertaken by him by way of business activity,
there is hardly any choice. The Court cannot but opt for the former
view. Even if one were to make a strictly doctrinaire approach,
the very same conclusion would emerge in obeisance to the doctrine F
of ‘reading down’ the exclusion clause in the light of the ‘main
purpose’ of the provision so that the ‘exclusion clause’ does not
cross swords with the ‘main purpose’ highlighted earlier. The effort
must be to harmonize the two instead of allowing the exclusion
clause to snipe successfully at the main purpose. The theory which
needs no support is supported by Carter’s ‘Breach of Contract’ G
vide paragraph 251. To quote:
“Notwithstanding the general ability of contracting parties to agree
to exclusion clauses which operate to define obligations there
exists a rule, usually referred to as the ‘main purpose rule’, which
H
374 SUPREME COURT REPORTS [2022] 2 S.C.R.

A may limit the application of wide exclusion clauses defining a
promisor’s contractual obligations. For example, in Glynn v.
Margetson & Co. [1893 AC 351 : (1891-94) All ER Rep 693]
(AC at p. 357), Lord Halsbury, L.C. stated:
‘It seems to me that in construing this document, which is a contract
B of carriage between the parties, one must in the first instance
look at the whole instrument and not at one part of it only. Looking
at the whole instrument, and seeing what one must regard … as
its main purpose, one must reject words, indeed whole provisions,
if they are inconsistent with what one assumes to be the main
purpose of the contract.’
C
Although this rule played a role in the development of the
doctrine of fundamental breach, the continued validity of
the rule was acknowledged when the doctrine was rejected
by the House of Lords in Suisse Atlantique Societe d’
Armement Maritime SA v. NV Rotterdamsche Kolen
D Centrale [(1967) 1 AC 361 : (1966) 2 All ER 61 : (1966) 2
WLR 944]. Accordingly, wide exclusion clauses will be read
down to the extent to which they are inconsistent with the
main purpose, or object of the contract.”
(emphasis added)
E
16. In the present case, there is no ambiguity in the terms of the
exception. The exception to the DOS Policy clearly provides that the
insurer would not be liable for “[a]ny damage if the temperature in the
Refrigeration chambers does not exceed 4.4 degree Celsius.” The
surveyor’s report indicates that the temperature never exceeded 400 F,
F which was also accepted by the appellants in their communication dated
14 October 2008. The assertion that the rotting of the potatoes resulted
from a higher temperature was only made on 17 February 2009, which
the NCDRC in its impugned judgement dated 14 August 2018 has
characterised as an “afterthought”. Thus, in terms of the insurance policy,
G the insurer is not liable for damage caused to the potatoes as the
temperature of the storage did not rise above 400 F. Further, unlike in
BV Nagaraju (supra), the exception, in this case, is neither too wide nor
in conflict with the main purpose of the insurance policy. The insurance
policy covers the deterioration of potatoes that have been stocked in
cold storage by the appellants. The temperature of the cold storage is
H fundamental to the health of the potatoes relating to which the policy has
M/S SHIVRAM CHANDRA JAGARNATH COLD STORAGE v. NEW INDIA 375
ASSURANCE CO. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

been undertaken. This is distinguishable from the exception relating to A
the number of persons a vehicle can carry, which was the subject matter
of the exception in BV Nagaraju (supra). The insurer has identified a
temperature of 400 F as the optimum temperature, at which rotting of
the potatoes should not occur and thus has exempted itself of any liability
resulting from the deterioration of potatoes occurring at a temperature
B
that is below or equivalent to 400 F. There is no reason to read down
clause (vi) of exceptions to the DOS Policy because it is not in conflict
with the main purpose of the policy.
17. Therefore, we have, for the reasons indicated above, accepted
the submission which has been urged on behalf of the insurer by Ms
Awantika Manohar, learned counsel that the claim was correctly C
repudiated by the insurer, having regard to the specific exceptions in the
policy.
18. In this backdrop, the judgement of the NCDRC rejecting the
consumer complaint does not warrant interference. The appeal shall
accordingly stand dismissed. D

19. Pending application, if any, stands disposed of.

Ankit Gyan Appeal dismissed.
(Assisted by : Rahul Rathi, LCRA) E

F

G

H