Note: Blue Pencil Doctrine: The doctrine of blue pencil enables courts to remove unenforceable parts of a contract provision while preserving the remainder and maintaining the parties' original intent. It is frequently applied to eliminate problematic clauses for contract enforceability.

Facts:

• M/S Texco Marketing Pvt. Ltd., a marketing company, was the Appellant and TATA AIG General Insurance Company Ltd., an insurance company, was the Respondent.
• The Appellant secured a standard fire & special perils policy from Respondent, covering a shop situated in the basement of a building despite an exclusion clause specifically excluding coverage for basements.
• A dispute arose when a fire incident occurred at the shop, and the Respondent refuted the claim, invoking an exclusion clause despite prior inspections and knowledge of the shop's basement location.
• The Appellant approached the State Consumer Disputes Redressal Commission, where the decision was in favour of the Appellant.
• The National Consumer Disputes Redressal Commission (NCDRC) overturned the State Commission's decision.
• Aggrieved by the decision of the NCDRC, the Appellant approached the Supreme Court seeking to set aside the Commission's order.

Background:

State Commission’s Holding

• The case was initially filed before the State Consumer Disputes Redressal Commission (hereinafter referred to as 'the State Commission').
• The State Commission passed an order rejecting the contentions of Respondent, citing inadequate disclosure, non-compliance with mandatory provisions, and unfair trade practices by the insurer.
• The payable amount was subject to deductions for goods intended for third parties. (Paragraph 3)
  

Nation Commission’s Holding

• The National Consumer Dispute Redressal Commission (hereinafter referred to as ‘the National Commission’) overturned the State Commission's decision despite acknowledging the non-compliance by Respondent with legal mandates and conducting inspections both before and after contract execution.
• The National Commission justified its decision by placing reliance on the exclusion clause, which led to setting aside the State Commission's ruling and awarding a sum of Rs. 7.5 lakhs. (Paragraph 4)
• Aggrieved by this, the Appellant appealed to the Supreme Court to challenge the decision of the National Commission.
  

Main Issue:

Whether a party could invoke an exclusion clause which makes the contract void, thereby benefitting from it and escaping liability? (Paragraph 7)