Saroj Yadav, J.

1. This Revision Petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 by M/s. Super Fashion, challenging the impugned Order dated 11.12.2017 passed by the Ld. State Consumer Disputes Redressal Commission, Delhi in First Appeal No. 1148 of 2008. Vide the impugned Order, the Ld. State Commission dismissed the Appeal preferred by the Petitioner and affirmed the Order dated 08.10.2008 passed by the District Consumer Disputes Redressal Forum-VII, Sheikh Sarai, New Delhi in Complaint Case No. 657 of 2007, whereby the Consumer Complaint seeking indemnification of an insurance claim under a Standard Fire and Special Perils Policy was dismissed.

2. The brief facts giving rise to the present dispute are that the Petitioner obtained a Standard Fire and Special Perils Policy bearing Policy No. 312001/11/05/00100 from the Respondent-Insurance Company covering its export garment fabrication factory premises situated at 12/4, Mathura Road, Sector-37, Faridabad, Haryana, for the period from 23.06.2005 to 22.06.2006 for a total sum insured of Rs. 6.67 Crores (with stocks alone covered up to Rs. 3.50 Crores) upon payment of a premium of Rs. 1,33,400/-. The policy covered perils such as storm, tempest, flood, and inundation, as well as the special peril described as bursting and/or overflowing of water tanks, apparatus and pipes. On the night of 24.06.2005, following routine closure of the premises at 6:15 PM, rain occurred, and on the morning of 25.06.2005, water accumulated inside the store room at ground floor. It was found that a toilet drain pipe had choked, causing leakage of water from a tap/pipe to trickle down and inundate the premises, which alongside rainwater entering through windows, damaged stocks of fabric, yarn, thread, finished garments and packing materials. The Petitioner lodged a claim for Rs. 8,45,779/-. The Respondent appointed Shri A.K. Gupta for a spot survey and thereafter M/s. Atul Kapur & Company as the final surveyor, who assessed the loss at Rs.4,50,266/- vide report dated 11.03.2006, but opined that the claim was not payable as the cause was leakage and continuous seepage over time. Relying on this opinion, the Respondent repudiated the claim vide an undated letter (which was received on 13.06.2007) stating that the loss was due to leakage of a toilet tap and casual rain, neither of which fell within the definition of insured perils. The Complaint filed by the Petitioner was dismissed by the District Forum on 08.10.2008, as well as the Petitioner's Appeal was dismissed by the Ld. State Commission on 11.12.2017 both on merits and for want of pecuniary jurisdiction.

3. Ld. Counsel for the Petitioner argued that the Ld. State Commission committed a grave error of law and jurisdiction in holding that the District Forum lacked pecuniary jurisdiction. It was contended that the Ld. State Commission completely misconstrued and misapplied the larger bench ruling of this Commission in Ambrish Kumar Shukla & Ors. v. Ferrous Infrastructure Pvt. Ltd. (CC No. 97 of 2016, decided on 07.10.2016), as the 'value of service' in a contract of insurance is determined by the premium paid or the actual amount claimed along with compensation, and not by the overall sum insured across the entire commercial establishment.

4. Ld. Counsel for the Petitioner further argued that the insurance policy is a Standard Fire and Special Perils Policy which expressly covered storm, tempest, flood, inundation, as well as bursting and/or overflowing of water tanks, apparatus, and pipes. It was urged that the terms of the policy must be read holistically and given their ordinary natural and grammatical meaning per standard lexicons. Ld. Counsel argued that the word 'inundation' is specified in the policy and covers inundation of all kinds, howsoever occurring. It was emphatically submitted that the loss was caused partially by rain entering through windows and partially by outflow from a leaking tap due to the choking of a drainage pipe, which prevented the water from draining away and caused it to accumulate and submerge the stocks. Ld. Counsel pointed out that such overflowing and choking of drainage apparatus is squarely covered under the special peril of overflowing of water apparatus and pipes, as well as inundation.

5. In support of the contention that water accumulation resulting from rain and choked drainage constitutes "inundation" and "flood" under the policy, Ld. Counsel for the Petitioner placed strong reliance on the judgment of the Hon'ble Supreme Court in 'Oriental Insurance Co. Ltd. v. J.K. Cement Works, (2020) 19 SCC 794,'; wherein it was authoritatively laid down that flood and inundation are often used synonymously to mean an overflow of water over land that is normally dry, that pluvial or surface floods occur independently of any overflowing water body due to heavy downpours, and that giving a narrow or restrictive meaning to "flood" in the absence of an adjacent water body would render the term completely superfluous. Ld. counsel also cited the consistent view taken by this Commission in 'Oriental Insurance Co. Ltd. v. M/s R.P. Bricks, 2013 SCC OnLine NCDRC 496,'; 'Bajaj Allianz General Insurance Co. Ltd. v. M/s Gondamal Hardyal Mal, 2009 SCC OnLine NCDRC 128,'; and 'Oriental Insurance Co. Ltd. v. M/s Sathyanarayana Setty & Sons, 2012 SCC OnLine NCDRC 124,'; along with 'United India Insurance Co. Ltd. v. Imperial Gift House, I (2007) CPJ 6 (NC),'; 'New India Assurance Co. Ltd. v. Dani Mourdhwaj Cold Storage Pvt. Ltd. (RP No. 4113/2007, decided on 10.02.2012),'; 'National Insurance Co. Ltd. v. Marthi Crystal Salt Co. Ltd., 1986-2002 Consumer 6043 (NS),'; 'United India Insurance Co. Ltd. v. Dipendu Ghosh, II (2009) CPJ 311 (NC),' and the English Court of Appeal decision in 'Young v. Sun Alliance & London Insurance Ltd., (1977) 1 WLR 104 (CA)',; to establish that damage caused by pouring in of water or seepage following rains falls squarely within the meaning of flood and inundation. Ld. counsel for the Petitioner further argued that the surveyor had arbitrarily and illegally deducted 5% on account of slow-moving stocks and another 5% on account of salvage value without any enabling condition in the policy, and prayed for allowing the full claim of Rs.8,45,779/- with interest and costs.

6. Per contra, Ld. Counsel for the Respondent argued that there is no infirmity or illegality in the concurrent Orders passed by the District Forum and the State Commission. It was argued that an insurance contract falls within the realm of contract law and its terms must be strictly construed, leaving no room for equitable relaxation or expanding liability beyond what is expressly stipulated. In support of this proposition, learned counsel relied upon the rulings of the Hon'ble Supreme Court in 'Oriental Insurance Co. Ltd. v. Sony Cheriyan, Civil Appeal No. 4913 of 1997 (decided on 19.08.1999),'; 'United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, Civil Appeal No. 6277 of 2004 (decided on 24.09.2004),'; and 'National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297,'; as well as the decision of this Commission in 'Vijay Concerns v. State Bank of India & Anr., IV (2013) CPJ 453 (NC)', 'Lourdes Society Snehanjali Girls Hostel and Ors vs H & R Johnson (India) Ltd., and Ors[(2016)8Supreme Court Case286]', 'M/s. Manappuram Finance Ltd. Versus Swapan Roy [Revision Petition No. 1038 of 2016, decided on 20.09.2022]', 'M/s Ind-Swift Limited vs. United India Insurance Company Ltd. (decided on 4 December 2015)' and 'M/s Ind-Swift Limited vs. United India Insurance Company Ltd. SLP (C) No. 22140 of 2016, decided on 16.08.2022)';

7. Ld. Counsel for the Respondent argued that the proximate cause of the loss was not an insured peril, but the gross negligence and lack of maintenance on the part of the Petitioner and its employees. It was contended that a tap in the first-floor toilet had been left open and running, and the attached drain was choked, leading to continuous trickling of water. Learned counsel emphasized that the surveyor's photographs clearly revealed large, persistent patches of dampness and seepage on the walls of the store and toilet, proving that seepage had been occurring over a prolonged period of time and could not have occurred overnight. It was further argued that neither running water from an open tap, continuous seepage, poor building maintenance, broken window panes, nor normal, casual rain constitute an insured peril under Clause VI or any other provision of the policy.

8. Learned counsel contended that the special peril of "bursting and/or overflowing of water tanks, apparatus and pipes" requires actual bursting of pipes, which never took place. It was also submitted that the surveyor M/s Atul Kapur & Company had rightly reported that the loss was outside the scope of the policy, which view was confirmed by letter dated 18.01.2007. Lastly, learned counsel for the respondent argued that even assuming without admitting that any peril was attracted, the petitioner's claim could never exceed the net sum of Rs.4,50,266/- as assessed by the independent surveyor, who had rightly disallowed fabricated building repairs and applied standard deductions for slow-moving stocks and salvage.

9. We have carefully considered the rival contentions of both parties in light of the material placed on record and the binding legal precedents.

10. Dealing first with the question of pecuniary jurisdiction, the view expressed by the State Commission that the District Forum had no pecuniary jurisdiction because the total sum insured across the entire industrial undertaking was Rs.6.67 Crores is wholly erroneous. In a dispute regarding the repudiation of an insurance claim, the determination of pecuniary jurisdiction under Sections 11(1) and 17(1) of the Act is governed by the value of the service availed which corresponds to the premium paid or the aggregate claim preferred together with compensation claimed, rather than the maximum policy limit. Here, the total premium was Rs.1,33,400/-, and the total relief claimed before the District Forum was well within the statutory ceiling of Rs.20,00,000/-. The finding of the State Commission on this count is therefore set aside.

11. On grounds of repudiation, we find that the interpretation adopted by the Respondent-Insurer and accepted by the fora below is contrary to the settled law. The Hon'ble Supreme Court in Oriental Insurance Co. Ltd. v. J.K. Cement Works (supra) has set at rest the controversy surrounding the interpretation of "flood and inundation", holding in unequivocal terms that inundation is not confined to the swelling or overflow of natural water bodies like rivers or lakes. The Supreme Court recognized pluvial or surface flooding caused by excessive rain independently of any water body as being covered under the peril of flood and inundation. The Supreme Court affirmed the consistent view taken by this Commission in Bajaj Allianz General Insurance Co. Ltd. v. M/s Gondamal Hardyal Mal (supra), Oriental Insurance Co. Ltd. v. M/s R.P. Bricks (supra), and Oriental Insurance Co. Ltd. v. M/s Sathyanarayana Setty & Sons (supra), holding that where rainwater enters a building, or where drainage systems fail during heavy rainfall resulting in accumulation and wetting of stocks, the said incident constitutes inundation under a Standard Fire and Special Perils Policy.

12. In the present case, the policy covered both inundation and the overflowing of water apparatus and pipes. It is undisputed that rain occurred on the night of 24.06.2005, rainwater entered through windows, and water discharged from a leaking tap was prevented from flowing out due to a choked drain pipe, leading to an overflow and substantial accumulation of water in the store room. This accumulation directly submerged and damaged the Petitioner's stocks. Such an occurrence constitutes an overflowing of water apparatus and pipes as well as inundation of the floor area. The insurer cannot be permitted to shelter behind technical semantic distinctions to escape its indemnification liability when the proximate cause falls squarely within the recognized scope of the insured perils.

13. The repudiation of the claim was therefore arbitrary, unjustified, and amounted to a clear deficiency in service. Regarding the quantum of compensation, the surveyor assessed the gross loss to stocks at Rs.5,00,296/- and rightly disallowed the claim of Rs. 55,000/- for building repairs, as the structure suffered no peril damage. However, the surveyor deducted Rs.25,014/- @5% towards slow-moving stocks and another Rs.25,015/- @5% towards possible salvage value.

14. The deduction for slow-moving stocks is entirely baseless and devoid of any contractual sanction under the policy. As regards salvage, since the damaged fabric and thread could not be utilized by an export unit and retained nominal scrap value, the deduction of Rs.25,015/- is justified. Setting aside the 5% deduction for slow-moving stock, the payable loss is determined at Rs.4,75,281/-.

15. Consequently, the impugned Order dated 11.12.2017 passed by the Ld. State Commission in First Appeal No. 1148 of 2008 and the Order dated 08.10.2008 passed by the District Forum-VII in Complaint Case No. 657 of 2007 are set aside.

16. The Revision Petition is accordingly allowed.

17. The Respondent, The New India Assurance Co. Ltd., is directed to pay to the petitioner a sum of Rs.4,75,281/- (Rupees Four Lakh Seventy-Five Thousand Two Hundred and Eighty-One only) along with interest @ 6% per annum from the date of repudiation, i.e., 13.06.2007, till the date of actual payment.

18. The Respondent shall also pay a sum of Rs.50,000/- towards litigation costs.

19. The entire amount shall be paid within a period of eight weeks from today, failing which the awarded sum shall attract enhanced interest @ 9% per annum from the date of expiry of the eight-week period until actual realization.

20. Pending Application(s), if any, stand disposed off as having been rendered infructuous.