IMPORTANT POINTS
If Insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at stage of hearing of consumer complaint before NCDRC.

JUDGMENT :

KRISHNA MURARI, J.

The appellant purchased a standard fire and special perils policy from the respondent National Insurance Company Ltd. thereby insuring the risk of loss/damage to the stock of coal and lignite stored in its factory compound. An additional premium of Rs. 59,200/- was paid by the appellant company so as to cover the risk of loss of the aforesaid stock on account of spontaneous combustion. The appellant was declared a Sick Unit and was accordingly registered under SICA. The factory remained closed from 17.02.2006 to 09.08.2006 and was re-opened on 10.08.2006.

2. After re-opening it was noticed between the period from 11.8.2006 to 20.8.2006 that some amount of stock of coal and lignite has been diminished/destroyed on account of spontaneous combustion, causing loss and damage. Intimation in this regard was sent to the respondent-insurer on 12.09.2006.

3. Pursuant to the claim made, a surveyor was appointed who visited the premises of the appellant on 18.09.2006 and sought certain details, which were provided on 28.11.2006. After carrying out the requisite survey, the surveyor submitted his report on 11.04.2007 assessing total loss to the tune of Rs. 63,43,679/-.

4. The claim lodged by the appellant was however repudiated by the respondent-insurer vide communication dated 27.07.2007 on the ground that since spontaneous combustion did not result into fire thus, loss had not been caused by fire as stipulated in the relevant endorsement with respect to spontaneous combustion of the insurance policy. The appellant was further informed through the letter that unless spontaneous combustion results into fire, there is no liability under the policy.

5. On denial of the claim the appellant approached the National Consumer Disputes Redressal Commission (hereinafter referred to as the NCDRC) vide consumer complaint no. 115 of 2007 seeking following reliefs:-

(a) To direct the respondent company to allow the demanded claim of Rs. 98,46,732/- on account of loss suffered by it on account of loss of stock of goods insured with the respondent;

(b) To award compensation of a sum of Rs. 25,00,000/- on account of pain and suffering suffered by the appellant on account of deficient service provided by the respondent company;

(c) Award of sum of Rs. 11,81,608/- being interest @ 18% from the date of the claim till the filing of the petition;

(d) Award further interests @ 18% pendent lite on amounts specified in Clause (a) and (b);

(e) Award cost of Rs. 1,00,000/- to the complainant;

The complaint was resisted by the Insurer on three main grounds:-

(i) No claim was payable under the terms and conditions on which policy was issued inasmuch as destruction or damage, if any, caused to the property by fire on account of its own fermentation, natural heating or spontaneous combustion or undergoing natural heating or drying process is not covered.

(ii) Since the factory remained closed from 17.02.2006 to 09.08.2006, the insurance cover ceased to operate in view of the condition no. 3 of the policy which provides that unless the insured has obtained the prior sanction of the company in this regard, the insurance would cease to operate as regards the property affected :

(a) if the trade or manufacture carried on be altered or if the nature of occupation of or other circumstances affecting the building insured or containing the property insured be changed in such a way as to increase the risk of loss or damage.

(b) if the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30 days.

(iii) Intimation of claim was sent with considerable delay of over a month thereby violating condition no. 6(i) of the General Conditions of Policy.

6. Insofar as ground nos. (i) and (ii) are concerned, the same were not accepted by NCDRC and were decided against the respondent-insurer. The said two grounds (i) and (ii) are not in issue before us in this appeal as such we need not enter into the same.

7. Howeve