The Hon’ble Supreme Court in a remarkable judgement in Oriental Insurance Company Ltd v. M/s J K Cement Works Ltd interpreted the meaning of the words ‘floods and inundation’. This was an appeal arising out of the order from National Consumer Disputes Redressal Commission, where the Respondent who was a cement manufacturer had taken a Standard Fire and Peril Insurance coverage from the appellant, an Insurance Company. This coverage was inclusive of damages occurring due to ‘flood and inundation’.

The Respondent claimed insurance of Rs. 1.32 crore, as their stock of coal got washed away due to heavy rainfall. This claim was allowed by the NCDRC, however, the Appellant contended that heavy rainfall was not the same as flooding and inundation and filed an appeal in the Supreme Court.

In order to decide this matter, the court had to observe the meaning of these terms given by various authorities such as Black’s Law dictionary and Stroud’s Judicial Dictionary. It was found that floods could be classified into three categories; coastal, fluvial and pluvial floods. Pluvial floods are also inclusive of the water accumulated in a specific area due to excessive rainfall. Inundation refers to both overflowing water as well as the result of such overflow.

The Supreme Court dismissed the appeal while observing that the location of the stock of coal was such that under normal circumstances, there was no risk of water from any water body overflowing into it and destroying it. Therefore, the intention of the parties entering into the concerned contract could not have been to give a restrictive meaning to it. and imparting such a meaning to this phrase would render the very act of using this word in the first place redundant.

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Link for Judgement: Oriental Insurance Co ltd. v. JK Cement Works