Pranav B Prem

The National Consumer Disputes Redressal Commission (NCDRC), in a significant ruling, held United India Insurance Co. Ltd. liable for deficiency in service and directed it to pay a sum of ₹2,35,81,470/- to the Andhra Cricket Association (ACA) over its wrongful repudiation of an insurance claim. The claim arose due to the cancellation of a One Day International (ODI) match between India and West Indies, scheduled on 14.10.2014 in Visakhapatnam, following the devastating impact of Cyclone Hudhud.

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The complaint, filed by the Andhra Cricket Association, stemmed from the insurance company’s refusal to indemnify the loss suffered due to the match cancellation, despite having issued a “Special Contingency Insurance Policy” covering such risks. The bench, comprising Justice A.P. Sahi (President) and Mr. Bharatkumar Pandya (Member), categorically held that the cyclone, which hit Visakhapatnam on 12.10.2014, was the proximate and sole cause for the match's cancellation and that such a peril was squarely covered under the policy.

Background of the Dispute

The Andhra Cricket Association had taken out an insurance policy from United India Insurance Company specifically for the ODI match slated for 14.10.2014. The policy clearly listed cancellation of matches due to perils like storm, rain, flood, and other such natural calamities. As per the terms, the period of insurance was from 14.10.2014 to 15.10.2014. However, Cyclone Hudhud struck the region on 12.10.2014, severely damaging Visakhapatnam, including the stadium where the match was to be held.

Following the cyclone, the Board of Control for Cricket in India (BCCI), on 13.10.2014, announced the cancellation of the match, citing natural calamity. The ACA then submitted a claim of ₹4.5 crores under the policy for losses arising from ticket refunds and advertisement contracts.

Insurer’s Stand and Rejection of Claim

United India Insurance rejected the claim by letter dated 30.10.2014, asserting that the peril (cyclone) occurred before the policy period had commenced, which was from the midnight of 14.10.2014 to 15.10.2014. According to the insurer, the match was cancelled prior to the policy’s operative period, and hence the claim was not admissible. They also contended that the cancellation was an administrative decision, not directly attributable to a covered peril.

The Commission’s Findings

Rejecting the insurer’s narrow interpretation, the Commission emphasized that the nature and timing of the cyclone were directly responsible for the cancellation of the match. The bench noted that there was no dispute over the fact that Cyclone Hudhud had made landfall on 12.10.2014, damaging the city and rendering the stadium unfit for the match.

The bench observed that “the damage caused was due to the cyclone and the match was cancelled on account of the same. The proximity and the timing of the cyclone is therefore a determinative factor in arriving at this preponderant probability that has been established by way of evidence.” It held that the cancellation was not a standalone administrative act but a necessary consequence of the cyclone’s aftermath.

The Commission invoked the principle of “contra proferentem”, noting that ambiguities in an insurance contract must be interpreted against the drafter, i.e., the insurer. It stated that the coverage clause does not restrict indemnity only to events that occur during the policy period if the loss-causing peril had clearly triggered the cancellation.

“In our assessment,” the bench stated, “when the terms of the policy do not declare any such prohibition and a rational analysis leads us to accept the admissibility of a claim, then the rule of 'contra proferentem' deserves to be invoked and the benefit given to the insured.”

Surveyor's Assessment and Quantum of Loss

The insurer’s appointed surveyor had assessed the loss at ₹2,48,22,600/-. This included ₹1,70,10,000/- refunded by the ACA to M/s Frontiers Group (India) Pvt. Ltd., the advertisement rights holder, and ₹78,12,600/- refunded to spectators and stakeholders for ticket and corporate box bookings. After deducting 5% under the Excess Clause of the policy, the net indemnifiable amount was ₹2,35,81,470/-. The Commission found no justification in the insurer’s objection to the surveyor’s findings and clarified that all losses calculated were fully supported by documentation, including bank statements and contractual obligations.

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Final Direction

Concluding that United India Insurance was guilty of deficiency in service, the Commission allowed the complaint and directed the insurer to pay ₹2,35,81,470/- along with interest at 6% per annum from the date of filing the complaint (07.10.2016) till the date of actual payment. In case of delay beyond three months, the rate of interest would increase to 9% per annum.

Appearance

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

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

Cause Title: The Andhra Cricket Association (Regd.) V. United India Insurance Co. Ltd. & 2 Ors.

Case No: NC/CC/1676/2016

Coram: Hon'ble Mr. Justice A.P. Sahi [President], Hon'ble Mr. Bharatkumar Pandya [Member]