Holding

The policy covered only the six poly‑houses specified in the proposal form; poly‑houses 7, 8A and 8B were not insured.

Summary

Vikram Greentech (I) Ltd. and others took a comprehensive floriculture insurance policy covering six poly‑houses. Severe storms damaged seven poly‑houses, including three (7, 8A, 8B) that were constructed after the policy was issued. The insurer refused to pay for the latter, leading the claimants to approach the National Consumer Disputes Redressal Commission, which held that only the six poly‑houses existing at the policy date were covered. On appeal, the Supreme Court examined the terms of the policy and the accompanying proposal form, emphasizing that insurance contracts must be strictly construed and that external documents such as surveyors' reports cannot be used to expand coverage. The Court affirmed that the policy expressly covered only the six poly‑houses and that the claimants could not recover for the later‑built structures. Consequently, the appeal was dismissed.

Issues considered

Whether the comprehensive floriculture insurance policy issued by New India Assurance covered poly‑houses 7, 8A and 8B which were constructed after the policy was taken

Subjects

insurance contractpolicy constructionstrict constructionproposal formfloriculture insuranceconsumer protectionclaim denialcoverage limitationgood faith

Judgment

- ) [2009) 5 S.C.R. 437

VIKRAM GREENTECH (I) LTD. & ANR. A
v.
NEW INDIA ASSURANCE CO. LTD.
(Civil Appeal No. 2080 of 2002)
~---
APRIL 1, 2009
' B
'
[D.K. JAIN AND R.M. LODHA, JJ.]

Contract - Contract of insurance - Essentials of -
Discussed - Terms of insurance policy to be strictly construed
- Insured cannot claim anything more than what is covered c
by the insurance policy - Strict construction.

,,. Insurance - Insurance policy - Construction of -
._. Reference to proposal form may not only be appropriate but
rather essential - However, the surveyors' report cannot be D
taken aid of nor can it furnish the basis for construction of a

-- policy - Such outside aid for construction of insurance policy
is 1.npermissible - On facts, the two document::. i.e. the
insurance policy and the proposal form made it clear that the
comprehensive f/oriculture insurance policy in question
E
covered poly-houses 1-6 which were in existence on the date
of issuance of the policy and not poly-houses 7, BA and BB
which though in existence at the time of the calamity were not

• in existence on the date of issuance of the policy - Deeds
and Documents - Commercial document.

Appellant No.1-company, incorporated with the
F

... object of setting up a floriculture project in the State of
Maharashtra, took a comprehensive floriculture
insurance policy from respondent-insurance company in
respect of poly-houses, irrigation system, cost of G
cultivation of flowers and input cost from first flowering
to the harvest. Severe storms/cyclones caused extensive
damage to the poly-houses. For the loss suffered,
appellant no.1 submitted claim with respondent-
437 H
438 SUPREME COURT REPORTS (2009] 5 S.C.R.

A insurance company and thereafter approached the
National Consumer Commission alleging deficiency of
service by respondent-insurance company in not settling
the claim.

Respondent-insurance company admitted that the
8
policy covered poly-houses nos. 1 to 6 but pleaded that
the claim on account of damages to poly-houses 7, SA
and 88 was not admissible as these poly-houses were
not covered under the policy.

C The National Commission arrived at a finding that at
the time of taking policy only six poly-houses were in
existence and that there was no evidence or proof to
substantiate that the insurance was also covered for
poly- houses 7, SA and S8 and consequently held that
D appellant no.1 was entitled to claim on account of
damages to poly-houses nos.1-6 only.

In appeal to this Court, the question which arose for
consideration was whether the comprehensive
-
E floriculture insurance policy issued by respondent-
insurance company covered poly-houses 7, SA and 88.

Dismissing the appeal, the Court

HELD:1. An insurance contract, is a species of
F commercial transactions and must be construed like any
other contract to its own terms and by itself. In a contract
of insurance, there is requirement of uberimma fides i.e.
good faith on the part of the insured. Except that, in other
respects, there is no difference between a contract of
G insurance and any other contract. The four essentials of
a contract of insurance are, (i) the definition of the risk,
(ii) the duration of the risk, (iii) the premium and (iv) the
amount of insurance. Since upon issuance of insurance
policy, the insurer undertakes to indemnify the loss
H suffered by the insured on account of risks covered by
.
~

VIKRAM GREENTECH (I) LTD. & ANR. v. NEW INDIA 439
ASSURANCE CO. LTD.
,.. the insurance policy, its terms have to be strictly A
construed to determine the extent of liability of the
insurer. The endeavour of the court must always be to
interpret the words in which the contract is expressed by
/
~ the parties. The court while construing the terms of policy
is not expected to venture into extra liberalism that may B
1 result in re-writing the contract or substituting the terms
which were not intended by the parties. The insured
t cannot claim anything more than what is covered by the
• insurance policy. [Para 15] [444-0-G]
..
_.,
-< c
General Assurance Society Ltd. v. Chandumul/ Jain and
another AIR 1966 SC 1644; Oriental Insurance Co. Ltd. v.
.. Sony Cheriyan (1999) 6 SCC 451 and United India Insurance
Co. Ltd. v. Harchand Rai Chandan Lal (2004) S SCC 644,

-" relied on.

.. 2. Document like proposal form is a commercial
document and being an integral part of policy, reference
to proposal form may not only be appropriate but rather
D

essential. However, the surveyors' report cannot be taken
aid of nor can it furnish the basis for construction of a E
policy. Such outside aid for construction of insurance
policy is impermissible. [Para 16] [445-A-8]

3. The submission of the insured that the Proposal
~
Form did not specify the number of poly-houses and,
therefore, all poly-houses including 7, SA and 88 were F
covered under the policy as they were in existence at the
.. time of calamity, has no merit. Admittedly, at the time, the
policy was taken, poly-houses 1 to 6 were in existence
and poly-houses 7, SA and 88 were not in existence. The
poly-houses 7, 8A and 88 were completed later on. G
Moreover it is not correct to say that the Proposal Form
does not specify the number of poly-houses. It does. It
clearly mentions six poly-houses. It is true that six poly-
houses are mentioned in Clause(C) of the Proposal Form
which is with regard to green house cultivation but what H
440 SUPREME COURT REPORTS (2009] 5 S.C.R.

A is mentioned in respect of poly-houses in Clause(C) is
necessarily referable to the number of poly-houses in
Clause (A) of the Proposal Form as well. [Para 20] [449-
B-E]

B
4. A careful consideration of the Proposal Form that
sets out the particulars of the components which were
• -
to be covered and the inventory of the property insured
(Sections I and II), mentioned in the policy leaves no
manner of doubt that what was insured was existing
poly-houses on the date of the issuance of policy. It is
c clear from the proposal and the policy. The two
documents admit of no ambiguity and it is clear that six
poly-houses covering an area of 2.8 hectares were only
covered by the policy. [Para 22] [449-H; 450-A-C] .,
..-
D Case Law Reference:
AIR 1966 SC 1644 relied on Para 15
(1999) 6 sec 451 relied on Para 15 --
(2004) s sec 644 relied on Para 15
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2080 of 2002 .
•
From the Judgment & Order dated 30.10.2001 of the
y
F National Consumer Disputes Redressal Commission in
Original Petition No.66 of 1998.

Vijay Hansaria, Sneha Kalita and Sunil Kumar for the
Appellant.

G P.K. Seth and Sudhir Kumar Gupta for the Respondents.

The Judgment of the Court was delivered by

R.M. LODHA, J. 1. This appeal under Section 23 of the
Consumer Protection Act, 1996 (for short, The Act') is directed
H against the judgment and order dated October 30, 2001
VIKRAM GREENTECH (I) LTD. & ANR. v. NEW INDIA 441
ASSURANCE CO. LTD. [RM. LODHA, J.]

passed by National Consumer Disputes Redressal A
Commission, New Delhi ( for short, ' National Commission')
whereby the complaint filed by the appellant for direction to the
respondent to settle the insurance claim alongwith interest @
18% per annum and compensation of Rs.25 lakh on account
of mental agony, harassment and monetary loss came to be B
dismissed.

2. The sequence of facts may be noticed first. Vikram
Greentech (I) Ltd. came to be incorporated in 1993 with an
object of setting up a floriculture project in the State of
Maharashtra. In 1995, the company started negotiations with
c
the respondent (hereinafter referred to as 'Insurance Company')
for a comprehensive floriculture insurance policy. On January
18, 1996, the company (hereinafter referred to as 'insured')
submitted a proposal to the Insurance Company for a
comprehensive floriculture insurance of poly-house (Rs.1.25 D
', ....__)l

crore), irrigation system (Rs.25 lakh), cost of cultivation of
flowers (Rs.25 lakh) and input cost from first flowering to the
harvest (Rs.25 lakh). The Insurance Company issued a
comprehensive Floriculture Insurance Policy ('Policy', in short)
on January 23, 1996, period of insurance being from January E
18, 1996 to January 17, 1997 and charged premium of Rs.
2,31,000/-. On May 23, 1996, according to the insured there
was a severe storm/cyclone, which damaged the floriculture
extensively and substantial damage was caused to the roofs
• and walls of the poly-houses. On June 18/19, 1996, there was F
another storm/cyclone. As a result of which the floriculture
project of the insured and the poly clothes and the roofs as well
""'( as walls of the poly-houses were extensively damaged; certain
., poly-houses even collapsed completely. For the loss suffered
-~
in the first storm/cyclone, a claim for Rs.31,17,140/- was G
submitted by the insured with the Insurance Company. The
. ~ insured submitted another claim for Rs.38,97,906/- in respect
of loss suffered due to second storm/cyclone that occurred on
June 18/19, 1996.
H
442 SUPREME COURT REPORTS [2009] 5 S.C.R.

A 3. The Insurance Company appointed M/s Standard
Surveyors Private Limited as their Surveyors for assessing the
loss claimed by the insured. The Surveyors submitted their
report on October 24, 1996 and assessed the loss suffered by
the insured at Rs. 28,85,243/- in respect of the first storm. On
8 October 28, 1996, the Surveyors submitted its second report in
respect of the second storm/cyclone and assessed the loss at
Rs.34,81,214/-.

4. On November 28, 1996, the Insurance Company
informed the Surveyors that their report included loss to poly-
c houses Nos. 7, 8A and 88 whereas the policy covered only
poly-houses 1 to 6. The Surveyors were, accordingly, asked to
reassess the loss.

5. On December 19, 1996, the Surveyors gave their
D clarification to the Insurance Company that all the poly-houses .,_-#
were covered under the policy and their assessment was
correct and fair.

6. The Insurance Company, then, appointed M/s Jupiter
Claim Consultants as investigators for verification of the claim.
E
The insured was also asked to furnish necessary documents
to the said investigators. The investigators are said to have
submitted their report on September 12, 1997 stating therein
that they were not able to submit their certification as regard
the cost of poly-houses Nos. 1 to 6 and other related matters
F categorically for sum insured and claim thereof. ... ·'

7. On November 6,1997, the Surveyors submitted their
addendum to the earlier report dated October 24, 1996 with
regard to the first storm and reduced the assessment of loss
•
G to Rs.4,77,355/-. The Surveyors submitted another addendum
on February 16, 1998 to the report dated October 28, 1996 with
regard to the second storm and reduced the assessment of loss
"'
.
to Rs.95,443/-.

8. The insured then approached the National Commission
H
VIKRAM GREENTECH (I) LTD. & ANR. v. NEW INDIA 443
ASSURANCE CO. LTD. [R.M. LODHA, J.]

alleging therein deficiency of service by the Insurance Company A
in not settling the claim and sought direction to the Insurance
Company to settle the claim of the insured in full and pay
interest on due amount.
... ~ 9. The Insurance Company contested the claim and set up
8
the plea that the claim on account of damages to poly-houses
7, BA and B8 was not admissible as these poly-houses were
not covered under the policy. As regards the poly-houses nos.
1 to 6, the Insurance Company admitted that the policy covered
those poly-houses. They stated before the National
Commission that insured has already been informed that the
c
loss finally assessed by the Surveyors is to the tune of
Rs.4, 77,355/- in respect of first storm and Rs.95,443/- on
account of loss caused by second storm.
~ .... ~¥-
10. A rejoinder came to be filed by the insured and it was D
stated therein that at the relevant point of time, the size of the
farm was 6.3 hectares and the entire area was covered by the
Insurance Company and it was not limited to the area to 2.B
hectares as contended by the Insurance Company.
E
11. The National Commission heard the arguments of both
the parties and held that at the time of taking policy only six poly-
houses were in existence and there was no evidence or proof
to substantiate that the insurance was covered for poly- houses
7, BA and B8. The National Commission recorded the admitted
position that poly-houses 7, BA and B8 were not in existence F
at the time of taking insurance policy. The National Commission
held that the policy clearly mentioned the number of poly-houses
as "six" and in view thereof the complainant is entitled to an
,,. amount of Rs.5,72,79B/- on account of damages to these poly-
houses (nos.1-6) during the storm/cyclone that hit on May G
..... 23, 1996 and June 1B/19, 1996 alongwith interest@ 12% from
the date of the first Surveyors report i.e. November 6, 1997 upto
the date of payment, failing which the rate of interest shall be
@ 18% per annum.
H
444 SUPREME COURT REPOKT::> (2009] 5 S.C.R.

A 12. Aggrieved by the dismissal of the complaint with
regard to the claim for loss to poly-houses 7, BA and B8, the
insured, as stated, is in appeal.

13. We have heard Mr. Vijay Hansaria, learned senior
counsel for the appellant and Mr. P.K. Seth, learned counsel for t
8
the Insurance Company.

14. The question that arises for our consideration is:
whether comprehensive floriculture insurance policy issued by
the Insurance Company to the insured covered poly-houses 7,
C BA and B8?

15. An insurance contract, is a species of commercial
transactions and must be construed like any other contract to
its own terms and by itself. In a contract of insurance, there is
0 requirement of uberimma fides i.e. good faith on the part of the
insured. Except that, in other respects, there is no difference
between a contract of insurance and any other contract. The
four essentials of a contract of insurance are, (i) the definition
of the risk, (ii) the duration of the risk, (iii) the premium and (iv)
the amount of insurance. Since upon issuance of insurance
E policy, the insurer undertakes to indemnify the loss suffered by
the insured on account of risks covered by the insurance policy,
its terms have to be strictly construed to determine the extent
of liability of the insurer. The endeavour of the court must always
be to interpret the words in which the contract is expressed by
F the parties. The court while construing the terms of policy is not
expected to venture into extra liberalism that may result in re-
writing the contract or substituting the terms which were not
intended by the parties. The insured cannot claim anything more
than what is covered by the insurance policy. [General
G Assurance Society Ltd. Vs. Chandumull Jain and another1 ,
Oriental Insurance Co. Ltd. Vs. Sony Cheriyan 2 and United ,, .
India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lafl]
1. AIR 1966 SC 1644.
2. (1999) 6 sec 451.
H 3. (2004) a sec 644.
VIKRAM GREENTECH (I) LTD. & ANR. v. NEW INDIA 445
ASSURANCE CO. LTD. [R.M. LODHA, J.]

16. Document like proposal form is a commercial A
document and being an integral part of policy, reference to
proposal form may not only be appropriate but rather essential.
However, the surveyors' report cannot be taken aid of nor can
it furnish the.basis for construction of a policy. Such outside aid
for construction of insurance policy is impermissible. B

17. That the insured submitted proposal to the Insurance
·company for comprehensive floriculture·insurance on January
18, 1996 is not in dispute. The insured furnished particulars for
the following components which were to be covered:
c
"A)

Polyhouse 1 2 3 4 Total

Value of (Rs. in Crores)
D
(1) Steel structure 0.25
(2) Fabrication 0.15
, (3) Plastic Grippers 0.10
(4) Plastic & Fittings charges 0.50
(5) Cost of constr. For 0.25 E
polyhouses,Gutters &
other accessories
1.25
B) Irrigation System (Capacities value
and specifications for the following) In lakhs
F
(1) Plasto make system 15.00
(2) Agricon Associates (Valves & Pipes) 00.50
(3) Fitting charges 00.50
(4) Reservoir 04.00
G
ELECTRIC MOTOR

(1) Electric Motor, 15 HP 3 nos., 2 HP 01.00
20 nos., 20 HP 1no. with pumps,
pipes & valves.
H
446 SUPREME COURT REPORTS [2009] 5 S.C.R.

A (2) D.G. set, 2 nos., POWERICA 04.00
(Kirloskar), 140 KVA & 1.25 KVA
Transformer, Starters MCL -CTCL
& others access

B 25.00
(C) Details of flowers planted in Green
house or Open Cultivation : Green House
Cultivation
c (i) No. of Green Houses 6 Polyhouses
(ii) Area under Green Houses 2.8 hectares
(iii) Area under Open Cultivation No
(D) Details of Flowers plants under .
D cultivation .....
(i) Total area under Floriculture : 2.8 hectares
(ii) Survey/Gat/Hissa No. : 163, 158, 157, 156
148, 149, 147,
E 164
(iii) Name of the flower plants Dutch Roses
under cultivation
(iv) Variety Vivaldi, Texas,
F
Konfetti, First
Red, Vanilla, Kiss,
Tiamo, Lambada
-
(v) No. of flowers 195500
(vi) Distance between flower plants 14 cm.
G
(vii) Expected date of harvest September 1995 •
Input cost (From planting to Rs. 251acs ..,.
to first flowering i.e. 4 months)

(ix) Cost of saplings Rs. 70 per plant
H
- i
VIKRAM GREENTECH {I) LTD. & ANR. v. NEW INDIA
ASSURANCE CO. LTD. [R.M. LODHA, J.]
447

(E) Cost of cultivation for flowers 25 lacs. A
(i) No. of flowers 19,55,500.00

(ii) Input cost from first flowering 25 lacs.
to harvest
f B
(iii) Area under Open Cultivation : No"

18. Based on the said proposal, the Insurance Company
issued comprehensive floriculture insurance policy on January
23, 1996 The schedule attached to the said insurance policy
is thus: c
'SCHEDULE'
Insured M/s VIKRAM GREENTECH
\
(i) Ltd.
~ (Name and address) Plot No. 99, Sector 24, D
Rigdi-Pradhikaran
PUNE-411044
Policy No. 47/221200/00940
Insured at Surat
Proposal Date 18th January, 1996 E
Name of the Crop Floriculture
offered for insurance
Period of Insurance 18/01/96 to 17/01/97
___.. Address of the Site of ,: Village : Sanghise,
~
the proposal to be Near Kamshet Railway F
Station
Insured Tai.: Mavai, District: PUNE
Total sum Insured Rs. 2 crore
Total Premium Rs. 2,20,000/- + 11,000/(s.o.)
.' G

~

H
448 SUPREME COURT REPORTS [2009] 5 S.C.R.

A INVENTORY OF THE PROPERTY INSURED
(Sections I & Ill
Description of the item Rs. Excess Rate Premium
with sum Insured Details Rs. Rs. Rs.
B I POLYHOUSE: t .
(a) Steel Structure 25,00,000/-
(b) Fabrication 15,00,000/-
(c) Gripper 10,00,000/-
(d) Plastic Fitting Charges 50,00,000/-
C (e) Cutter I
(f) Plastic I 25,00,000/-
--------------

D A
I IRRIGATION :
1.25,00.000/-

(a) Plasto Make System 15,00,000/-
., .,.

(b) Agricon Associates 50,000/-
(Valves & Pipes)
E (c) Fitting Charges 50,000/-
(d) Reservoir 4,00,000/-

Ill ELECTRIC MOTOR
(a) Electric Motor HP 1,00,000/-
F (b) Starter-MCL-CICL }
(c) Other Assessories, }
DG set 2 nos.,and}
Transformers } 4,00,000/"
G 19. That the aforesaid policy covered the insured for the
loss and and/or damage caused by storm/hailstorm/cyclone
over the insured area is not in dispute. The Insurance Company
under the policy also agreed that the sum insured would be
r ,

equal to the costs of placement of the insured property by new
property of the same kind and same capacity; in other words
H
VIKRAM GREENTECH (I) LTD. & ANR. v. NEW INDIA 449
)
ASSURANCE CO. LTD. [R.M. LODHA, J.]
replacement cost. A

20. Although, Mr.Vijay Hansaria, learned senior counsel for
the insured strenuously submitted that the Proposal Form did
not specify the number of poly-houses and, therefore, all poly-
- / houses including 7, BA and B8 were covered under the policy 8
as they were in existence at the time of calamity that occurred
on May 23, 1996 and June 1B/19,1996, we are afraid, the
submission of the senior counsel does not merit acceptance.
Admittedly, at the time, the policy was taken ( i.e. proposal
made on January 1B,1996 and insurance policy issued on
January 23,1996), poly-houses 1 to 6 were in existence and
c
poly-houses 7, BA and B8 were not in existence. These poly-
houses (7, BA and B8) were completed in March 1996.
Moreover it is not correct to say that the Proposal Form does
,.,. not specify the number of poly-houses. It does. It clearly
•
- __., mentions six poly-houses. It is true that six poly-houses are D
mentioned in Clause(C) of the Proposal Forln which is with
'~
regard to green house cultivation but what is mentioned in
respect of poly-houses in Clause(C) is necessarily referable to
the number of poly-houses in Clause(A) of the Proposal Form
as well. E

21. The learned senior counsel for the insured submitted
that the entire material for poly-houses 7, BA and B8 had already
been received at the time of making proposal and issuance of
.........._, insurance policy and the intention was also to cover the material F
........ lying at the site for erection of poly-houses. In this regard, the
learned senior counsel sought to refer to the correspondence
between the parties and the Surveyors' reports dated October
24, 1996 and October 2B, 1996. He would submit that cost of
six constructed poly-houses on the date of making proposal G
was around Rs.65-70 lakhs and for the insurance cover of these
six po!y-houses, the insured would not have valued their cost
y
at Rs.1.25 crores and paid premium of Rs.2,31,000/-.

22. A careful consideration of the Proposal Form that sets
H
450 SUPREME COURT REPORTS [2009] 5 S.C.R.

A out the particulars of the components which were to be covered
and the inventory of the property insured (Sections I and II),
mentioned in the policy leaves no manner of doubt that what
was insured was existing poly-houses on the date of the
issuance of policy. It is clear from the proposal and the policy.
B The two documents admit of no ambiguity and it is clear that
six poly-houses covering an area of 2.8 hectares was covered
by the policy. It may be mentioned that Clauses (C)(ii), (D)(i)
and (ii) of the Proposal Form mentions Survey/Gat/Hissa
no.163, 158,157,156,148,149,147 and 164 and total area 2.6
c hectares. It is on this area that six poly-houses were existing
on the date the proposal was made and policy issued. These
six poly-houses were only covered by the policy.

23. The National Commission concluded thus:

D " ..... we are unable to accept the contention of the
complainant that only houses 7,8A or 88 were covered
.-
under the Insurance Policy in question especially when
admittedly, they were non-existent on the date, the policy
was taken and policy clearly mentioned the number of poly
E houses as "Six". In our view the complainant has failed to
prove a case based on the material on record ...... "

We do not find any error in the conclusion of the National
Commission.

F 24. In what we have discussed above, the appeal is liable
to be dismissed and is dismissed with no order as to costs.

B.B.B. Appeal dismissed.

G

..,