The burden of proof lies on the Insurance Company to establish that conditions of their policy are violated by the insuree: High Court of Jammu & Kashmir

MIRZA MOHAMMAD YAQOOB BEIGH AND OTHERS …RESPONDENT(S) HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR Sr. No.209 Advance Notice OWP No.858 2012 DIVISIONAL MANAGER & OTHERS …PETITIONER(S) Through: Mr. J. A. Kawoosa Sr. Advocate with Mr. Areeb Kawoosa Advocate. CJ Court Through: None. CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE SANJAY DHAR JUDGE. Per Sanjay Dhar ‘J’ Instant writ petition is directed against the order dated 29.01.2011 passed by Division Consumer Protection Forum Kashmir “the Forum” for short hereinafter) and order dated 04.04.2012 passed by the J&K State Consumer Disputes Redressal Commission with the petitioner insurance company O W P N o . 8 5 8 2 0 1 2 P a g e | 2 in respect of all perils risks to the extent of Rs.3.00 lacs and the policy of insurance was valid with effect from 27.02.2004 to 26.02.2005. On 11.04.2004 the building in question got damaged in a fire incident. The complainant informed the petitioner insurance company about the loss suffered to the building and a surveyor was deputed by the petitioner insurance company to verify the claim of the respondent No.1. The surveyor assessed the loss at Rs.1 01 843 but on 15th of June 2006 the petitioner insurance company informed the respondent No.1 that his claim has been rejected on the ground that the building was lying abandoned at the relevant time. This compelled the respondent No.1 to file a complaint before the Forum claiming compensation from the petitioner insurance company for the loss caused to his building due to the fire which according to him was covered under the policy of The petitioner insurance company resisted the claim of the respondent No.1 primarily on the ground that the building in question was lying abandoned at the time of the incident of fire and as such as per the terms and conditions of the policy the respondent No.1 was not entitled to any compensation. The aforesaid contention of the petitioner insurance company was rejected by the Forum as well as by the Commission in the appeal filed against the order of the Forum on the ground that there was no breach of policy conditions in the instant case that would justify repudiation of claim of the respondent No.1. O W P N o . 8 5 8 2 0 1 2 P a g e | 3 The petitioner insurance company has challenged the aforesaid orders of the Forum and the Commission by way of instant writ petition by reiterating that the building in question was lying abandoned at the time of the incident of fire and as per the terms and conditions of the policy of insurance the respondentNo.1 is not entitled to any compensation. record of the case. 6) We have heard learned counsel for the parties and perused the The only question to be determined in this case is as to whether the action of the petitioner insurance company in repudiating the claim of the respondent No.1 can be justified in the light of any of the clauses conditions of the contract of insurance between the parties. Learned counsel for the petitioner insurance company has referred to Condition No.3 of the General Conditions of policy of insurance to support his contention that the claim of the respondent No.1 is not admissible on account of the fact that the building in question was lying abandoned at the time of incident of fire. In order to test the merits of the submission of learned Senior counsel appearing for the petitioner it is necessary to notice the covenants of Condition No.3 of the General Conditions of insurance policy. It reads as under: “Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the Insured before the occurrence of any loss or damage obtains the O W P N o . 8 5 8 2 0 1 2 P a g e | 4 sanction of the Company signified by endorsement upon the policy by or on behalf of the Company: a) If the trade or manufacture carried on be altered or if the nature of the occupation of or other circumstances affecting the building insured or containing the insured property be changed in such a way as to increase the risk of loss or damage by Insured perils. b) If the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30 c) If the interest in the property passes from the insured otherwise than by will or operation of law.” Emphasis supplied) From a perusal of the aforesaid Condition particularly Clause quoted above it becomes clear that it is only in case an insured building becomes unoccupied and remains so for a period of more than 30 days that the Conditions No.3 would come into play. Since the petitioner insurance company is taking shelter under the aforesaid Condition Clause to deny the claim of the respondent No.1 insured as such the burden of establishing the fact that the insured building was lying unoccupied and had remained so for a period of more than 30 days would lie upon the petitioner insurance company. There is nothing on the record to even remotely suggest that the petitioner insurance company had examined any witness or filed affidavit of any witness of the area in which the building in question was located to prove that the building in question was lying abandoned for a period of more than 30 days. In the absence of any evidence to this O W P N o . 8 5 8 2 0 1 2 P a g e | 5 effect the Forum as well as the Commission were fully justified in rejecting the contention of the petitioner insurance company in this In view of what has been discussed hereinbefore we do not find any ground to interfere with the impugned judgment and order of the Forum as modified vide impugned judgment and order passed by the Appellate Forum i.e. the State Commission. The writ petition is Record of the learned Commission along with a copy of this therefore dismissed judgment be sent back. “Bhat Altaf PS” SANJAY DHAR) JUDGE PANKAJ MITHAL) CHIEF JUSTICE Whether the order is speaking: Yes No Whether the order is reportable: Yes No 

Summary: The insurance company must establish why the insuree has violated the terms of conditions of the insurance policy if they wish to reject the insuree’s claim. This was held in the judgement passed by a two member bench of the High Court of Jammu and Kashmir consisting of Justice Sanjay Dhar and Justice Pankaj Mithal in the case of Divisional Manager &amp; others v Mirza Mohammad Yaqoob Beigh [OWP No. 858/2012] pronounced on 12th August 2021. The petitioner is the Divisional Manager representing an Insurance Company in Jammu and Kashmir, whereas respondent no.1 is the owner of a two storeyed building at Sarnal Bala in Anantnag which was being used for the husking of rice. According to the petitioner, the rice husker was inoperative for quite some time and respondent no.1’s s building was insured with the petitioner company for perils and risks to the extent of up to Rs. 3 lakhs. On 11th April 2004, the insured building was heavily damaged in a fire incident. The insurance company was informed about the loss suffered by respondent no.1’s building and deputed a surveyor to assess the losses which turned out to be Rs. 1,01,843. However the petitioner informed respondent no.1 that his claim was rejected on the grounds that they believed the building was lying vacant at the time of the fire. The Division Consumer Protection Forum, Kashmir through the order dated 4th April 2012 ruled that there was no breach of policy conditions and respondent no.1 was entitled to the compensation. The petitioner insurance company filed an appeal against the Division Consumer Protection Forum’s order through an instant writ petition by reiterating that the building was lying vacant at the time of the fire and as per the terms and conditions of their policy insurance, “If the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30 days”. For this reason the petitioners contended that their policy had been violated by the insuree and they were not obliged to compensate him for his losses. The High Court observed that the burden of proof was on the petitioner to prove that the conditions have been violated and they have simply contended before the court that the building was vacant at the time of the fire but failed to produce any evidence or statement indicating it had been lying vacant for a period of 30 days.