PARESH NATH BAKSI vs National Insurance Co. Ltd.

THE only short point that arises for determination in this appeal is the interpretation of the expression "malicious damage" occurring in a policy of insurance. THE appellants-complainants insured their house at D-226 C.I.T. Road, Calcutta-700 010 with the opposite party Insurance Company under a policy against fire and allied risks including riot, strike and malicious damage on payment of due premium. During the risk period the complainants suffered damage to their house during the construction of a new building on the adjacent plot by some promoter. It has been alleged that during the construction mortar and dirty water splashed on the painted wall of the complainants soiling the same as a result of which they suffered loss of Rs. 6,000/- which was subsequently enhanced to Rs. 7,000/-. THE complainants had made a claim to the opposite party Insurance Company who appointed a Surveyor for assessing damages. THE Surveyor assessed the damages and made a recommendation for payment of an amount of Rs. 2,906/- subject, however, to a decision whether it was a case of malicious damage. THE Insurance Company, however, repudiated the claim on the ground that it was not a case of malicious damage and was as such not covered by the insurance policy.

THE appellants accordingly filed a complaint demanding Rs. 7,500/-. THE case was contested by the Insurance Company. THE District Forum after an examination of the terms of the policy upheld the contention of the Insurance Company and dismissed the case. THE present appeal is against the said decision. Before the Commission the appellants argue that the Forum has misinterpreted the legal position. According to them there was admittedly damage to their wall. This damage was caused by the promoter with the full knowledge that their construction would cause damage to the neighbour''s wall. It was an offence of mischief under Section 425 of the Indian Penal Code. The view of the District Forum is that for being covered by the terms of the policy there must be an element of malice in causing the damage.

Indeed the expression "malicious damage" has not been explained in the Penal Code or the Insurance Act. In tort malicious prosecution is a civil wrong for which damage may be awarded. Malicious prosecution is malicious institution against another of unsuccessful criminal or bankruptcy or liquidation proceedings. The malice necessary in such a prosecution may be a malice in law or malice in fact - malus animus - indicating that the party was actuated either by spite or ill will towards an individual, or by indirect or improper motives although they may be wholly unconnected with any uncharitable feeling towards anybody.

ON the above analogy how can a malicious damage be explained ? In this case the causing of damage is the main consideration. In ordinary parlour the damage may be accidental or unintentional or intentional with a malicious intention. The policy in question is a Fire Policy ''A''. Item No. 4 of this policy reads as follows : "4. Riot, Strike and Malicious Damage Clause printed hereon". This Clause has been printed on the last page of the Conditions. Item No. 5 of this Clause is as follows : ."5. Any malicious act but excluding any omission of any kind of any person (whether or not such act is committed in the course of a disturbance of public peace) provided that the Company shall not be liable for any loss or damage arising out of or in the course of burglary, house-breaking, theft or larceny or any attempt caused by any person taking part therein".

IT will be clear from the above item that damage caused by any malicious act but excluding any omission of any kind of any person shall be covered by the policy. Here damage has been caused by the splashing of the mortar mixed with soiled water. This has happened on account of carelessness of the masons engaged in the construction of the new building. The masons ought to have been careful in this regard. This is clearly an omission to take sufficient care, but it cannot be said to be malicious. The damage in such circumstances has been clearly omitted by item 5. Hence in our opinion the damage caused in this case is not covered by the terms of the insurance policy. We believe that the action of the promoter''s men is likely to constitute an offence of mischief as defined in Section 425, IPC. But it is a criminal offence and has got nothing to do with the claim of damage against the Insurance Company. For mischief any civil or criminal case can be initiated only against the person or persons who actually caused the damage. For all the above reasons we are of the opinion that the Insurance Company has rightly repudiated the claim of the complainants. This appeal is accordingly dismissed on contest. Having regard to the circumstances of the case we order that the parties do bear their own costs throughout. Appeal dismissed.