In Brief
A cement manufacturer's coal yard suffered damage during heavy rains in August 2003. The manufacturer had purchased a Standard Fire and Special Perils insurance policy covering loss from "flood and inundation." The insurance company denied the claim, arguing the loss resulted from rainfall, not flood. The Supreme Court held that 'flood' and 'inundation' in insurance policies are synonymous terms covering overflow of water over normally dry land, including surface flooding from excessive rainfall. Since no water body was near the premises, a narrow interpretation limiting 'flood' to water body overflow would render the policy term meaningless. The court upheld the consumer commission's award of Rs. 58,89,400 with 9% annual interest.
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