MURALIDHAR SARANGI versus THE NEW INDIA ASSURANCE CO. LTD.

Citation: [2000] 1 S.C.R. 1220 · Decided: 28-02-2000 · Supreme Court of India · Bench: S. SAGHIR AHMAD · Disposal: Dismissed

Judgment (excerpt)

A 
MURALIDHAR SARANGI 
v. 
THE NEW INDIA ASSURANCE CO. LTD. 
FEBRUARY 28, 2000 
B 
(S. SAGHIR AHMAD AND D.P. WADHWA, JJ.) 
Insurance-Trncks-Destrnction in terrorists attack-Liability of !11-
surance Company-Held insurance company not liable to indemnify such 
destrnction-Clause l(c) of Policy-Expression 'Malicious Act'-Scope 
C of-Insured held not entitled to claim in view of the provision (b) of Endor-
sement LM. T. 21. 
D 
E 
F 
Ten-01ist a11d Disrnptive Activities (Preve11tio11) Act, 1987: Applicability 
of 
Anned Force (Special Powers) Act, 195~Applicability of 
While carrying goods t.o the State of Assam on a National Highway 
two trucks belonging to the Appellant were completely destroyed in an 
attack by .Bodo extremists. The appellant's claim for indemnification in 
terms of the Insurance Policies was rejected by the Respondent-Insurance 
Company on the ground that the·claim was not payable as terrorist risk 
was not covered by the Insurance Policies. The State Consumer Disputes 
Redressal Commission, Cuttack held that Insurance Company was liable 
to make good the loss in terms of the Insurance Policies because the 
destruction of the two trucks by Bodo terrorists was covered by Clause ( c) 
of Condition No. 1 of the Policies which provided that the Insurance 
Company will indemnify the insured against loss of damage to the Motor 
vehicle and/or its accessories whilst thereon by malicious act. On appeal 
the National Consumer Disputes Redressal Commission held that the loss 
caused to the trucks in question by the act of Bodo terrorists was not 
covered by the terms of the Insurance Policies and as such the appellant 
G was not entitled to claim indemnification of the loss sustained by him. It 
gave a finding that the case was covered by Provision (b) of Endorsement 
No. I.M.T. 21 which provides "mutiny assuming the proportion of or 
amounting to popular rising, military rising, rebellion, revolution, insur-
rection, military or usurped power or any act of any person acting on 
H behalf of or in connection with any organisation with activities directed 
1220 
__,,.. 
).. . 
MURLIDHAR SARAN GI v. NEW INDIA ASSURANCE CO. 
1221 
towards the overthrow by force of the Government de jure or def acto or to A 
the influence of it by terrorism or violence or by the direct or indirect 
consequence of the said occurrences." Hence this appeal by the insured. 
:;i 
Dismissing the appeal, this Court 
HELD : 1. The National Commission was fully justified in its con· B 
clusion that the respondent was not liable for the loss suffered by the 
appellant at the hands of Bodo activists who completely destroyed the 
"trucks of the appellant by setting them on fire and killed one of the drivers. 
[1227-F·G] 
2. A 'malicious act', according to State Commission, would be an act c 
prohibited by law, which is done with intention to cause loss to another. 
The act which resulted in the destruction of the trucks belonging to the 
appellant could have been treated to be a "malicious act" but having regard 
to the circumstances of this case, specially that the incident took place in 
an area which had already been declared to be a "disturbed area" within D 
the meaning of the Armed Forces (Special Powers) Act, 1958 and where 
the provisions of TADA Act were enforced, such activity cannot be con· 
sidered in isolation. [1226-A-B] 
3. Endorsement IMT 21 consists of two distinct parts. The first part 
E 
speaks of mutiny assuming the proportion of popular rising, military 
rising, rebellion, revolution, insurrection etc. The second part con-
templates any act of any persons acting on behalf of or in connection with 
any organisation with activities directed towards the overthrow by force of 
the Government de jure or def acto or to the influence of it by terrorism or 
violence or by the direct or indirect consequence of the said occurrences. F 
Whether these acts of terrorism by Bodo activists are intended to over-
throw the Government, de facto or de jure, by force, have not been 
established by direct evidence, but the series of ~ts resulting in the loss 
of life and property so as to compel the authorities to declare the whole 
area as "disturbed area" for the purpose of the Armed Forces (Special G 
Powers) Act, 1958, as also to enforce the Terrorist and Disruptive Ac-
tivities (Prevention) Act, 1987, definitely point out that not only the com-
mon people but also the Government, established by law, is intended to be 
overawed by acts o

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