When a building is insured, that includes the surrounding boundary wall, too. Insurance companies had considered the boundary wall to be separate from the building and refused to pay any claim with respect to the same, unless specifically covered under the policy. Let’s look at a judgement delivered by the Maharashtra State Consumer Disputes Redressal Commission.
Vrundavan Co-operative Housing Society, comprising 24 flats in two buildings, had a surrounding compound wall and had taken a fire policy from United India Insurance. In June 2002, heavy rainfall caused considerable devastation in the area, resulting in the collapse of the compound wall and damage to the electric meters and cables.
The society lodged an insurance claim for the reconstruction of the collapsed wall and repairing the electric meters and cable wires. The surveyor carried out the inspection. It was observed that under the policy, only the building had been insured. The insurance firm’s stand was that the compound wall and the electrical fittings had not been insured. Hence, the claim was rejected.
The society filed a dispute before the Thane District Forum, which allowed the complaint and directed the insurance company to pay Rs 4,34,355 to the society. The insurer challenged this order in an appeal before the Maharashtra State Commission.
The commission considered the purpose of a boundary wall — usually constructed prior the building — as avoiding trespass on the property. It affords the occupants additional protection and safety and, therefore, is necessary. Therefore, any enclosure made of wood, metal or brick, forming the compound wall, would come within the definition of the term “building”. The land under the compound wall and that under the building cannot be separated, but form an integral part of the plot on which the buildings are erected.
While interpreting the word “building” in this manner, the commission relied on the Supreme Court’s judgement in the cases of Municipal Corporation of Greater Bombay & Ors v/s Indian Oil Corporation [AIR 1991 SC 686], Commissioner of Income Tax, Bombay v/s Gwalior Rayon Silk Mfg Co Ltd [AIR 1992 SC 1782] and the judgement of the Bombay High Court in the case of the Pune Municipal Corporation v/s Nanasahed Nagoji Bhosale [AIR 1995 Bombay 164].
In these cases, the courts had held the legal interpretation of the word “building” would bring under its ambit structures like outhouse, garage, stable, shed, hut and any other enclosure. These could be made of any material and used as a human dwelling or otherwise, a verandah, platform, plinth, doorstep, wall, compound wall and fencing, which may even be separate entities. Even roads laid as links or approach paths to the buildings are necessary adjuncts and would be covered. Similarly, an enclosure such as a compound wall or fencing made of wood, metal, etc, would also come within the definition of building.
Accordingly, the commission dismissed the insurer’s appeal and held the claim would have to be paid.
(The author is a consumer activist)
