Interpretation of Insurance Policy Exclusions: United India Insurance Co Ltd v Pushpalaya Printers

In a significant legal decision, the Supreme Court of India provided guidance on the interpretation of insurance policy exclusions in the case of United India Insurance Co Ltd v Pushpalaya Printers. The ruling clarifies the application of exclusion clauses in insurance policies and emphasizes the importance of construing such clauses in favor of the insured party. This landmark judgment will have far-reaching implications in insurance law. #InsuranceLaw #LegalInterpretation #SupremeCourtOfIndia


  • The insurer repudiated the claim on 11 May 2012.
  • District Consumer Disputes Redressal Forum allowed the claim of Rs 18,00,000 with nine percent interest per annum.
  • State Consumer Disputes Redressal Commission upheld the District Forum’s decision on 5 May 2016.
  • The NCDRC, in a revision, reversed the decision awarding the claim.
  • No representation from the insurer’s side in the present proceedings.

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  • The crucial exclusion in the insurance policy, sub-clause (e) of Clause VIII, does not apply to situations where excavation is carried out by a third party in independent premises.
  • The exclusion in sub-clause (e) should only be interpreted to apply when the insured is conducting excavation on their own property.
  • In this case, the appellant was not engaged in any demolition, construction, structural alterations, or repairs on their property.
  • The error made by the NCDRC was applying the exclusion regarding excavations to a situation where the cause of damage was the work of a third party.
  • Sub-clause (a) of Clause VIII refers to normal cracking, settlement, or bedding down of new structures.
  • The exclusion in clause (d) pertains to defective design, workmanship, or the use of defective materials in any property.
  • The words “of any property” in the clause qualify the actions of “demolition, construction, structural alterations, or repair.”
  • In case of two possible constructions or ambiguity, the beneficial construction to the insured should be accepted.
  • The purpose of the policy is to cover the risk on the happening of a certain event.
  • Refer to the decision in United India Insurance Co Ltd v Pushpalaya Printers for guidance on interpretation in favor of the insured.
  • Excavation was not caused by the appellant.
  • The exclusion in the insurance policy does not apply in this case.
  • The policy of insurance should be reasonably construed.

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  • The appeal was allowed and the impugned judgment was set aside.
  • The order of the District Forum dated 5 May 2016 was restored, as affirmed by the SCDRC.
  • No costs were awarded in the circumstances.

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Case Number: C.A. No.-000378-000378 / 2020

Click here to read/download original judgement

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