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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Anup K. Thakur, Presiding Member
M/s. P.P. Agro Industries – Complainant
versus
National Insurance Co. Ltd. and Ors. – Opp. Parties
Consumer Case No.198 of 2012
Decided on 18.3.2021
Consumer Protection Act, 1986 – Section 11 : [Consumer Protection Act, 2019 – Section 58] – Insurance Claim – Loss by fire – Scope – A fire broke in factory premises of complainant – Damage caused to building plant and machinery – As per surveyor report the proximate cause of loss was spontaneous combustion – Whether the cause of fire which caused loss to the insured’s property due to spontaneous combustion ? – Whether the loss to the stocks of “toor dal” due to this five was covered by the insurance policy regardless of cause of fire ? – As per policy clause, any damage caused due to spontaneous combustion in which visible fire has not occurred, would be covered by insurance policy only if an additional cover by paying extra premium had been taken for spontaneous combustion – This however cannot be taken to mean that damage caused due to fire per se would stand excluded of the origin of such fire lay in spontaneous combustion – Origin of fire would be quite immaterial so long as the factum of fire was not in dispute and the factum of damage and loss of property was established – Opposite party directed to pay Rs. 78,93,263/- as the net loss assessed by surveyor along with simple interest @ 9% p.a. – Further direction issued.
Held: Having heard the learned counsels and carefully perused the record, I am of the considered view that the insurance claim filed by the complainant and the loss to stocks of “Toor Dal” as assessed by the surveyor deserves to be allowed, and that the OP insurance company has committed an error in appreciation of the terms and condition of the insurance policy in not allowing this claim. Reasons for this view follow.
Admitted facts not being in dispute, clearly, this complaint is mainly about two issues: (i) was the cause of fire which caused loss to the insured’s property (buildings, plant & machinery, stocks), due to spontaneous combustion?; (ii) whether the loss to the stocks of “toor dal” due to this fire was covered by the insurance policy regardless of the cause of fire? The latter is the more important issue for disposal of this consumer complaint.
It is useful at this stage to have a very close look at the relevant policy provisions.
It is precisely this which has been articulated clearly by the Commission in it’s order in the case of Murli Agro Products Ltd. versus Oriental Insurance Company Ltd. (supra)
A reasonable interpretation of the policy clause under discussion above would be that any damage caused due to spontaneous combustion, in which, visible fire has not occurred, would be covered by insurance only if an additional cover by paying extra premium had been taken for spontaneous combustion. This however cannot be taken to mean that damage caused due to fire per se would stand excluded if the origin of such fire lay in spontaneous combustion. Origin of Fire would be quite immaterial as long as the factum of Fire was not in dispute and the factum of damage and loss of property was established. Perhaps the only exception to this would be an allegation of arson: however, in the case in hand, there is no such allegation. In view of the discussion, this consumer complaint is allowed (Paras 16 to 21)
Result: Complaint Allowed.
ORDER
Anup K. Thakur, Presiding Member.—The complainant, M/s. P.P. Agro Industries, is a proprietorship firm registered as a small scale industry in Maharashtra engaged in the manufacture and sale of pulses. It began production in 1999. The nature of its business is to purchase raw material, “Toor”, from various markets in Maharashtra and Gujarat etc. and sell the finished product, “Toor Dal”, in the local market and nearby states. It has a factory located in its own building at C-19, MIDC, Latur, Maharashtra.
2. The complainant had taken an insurance policy for the period, 8.7.2009 to 7.7.2010, for a sum insured of Rs. 2.57 crore; this was renewed with effect from 8.7.2010 to midnight of 7.7.2011 for an enhanced sum insured of Rs. 5 crore (policy no. 271401/11/10/3100000951 dated 8.7.2010 at Annexure C-3). The breakup of the sum insured was as follows: Building - Rs.37,00,000/-, plant/machinery and accessories - Rs.40,00,000/-, stock and stock in process- Rs.4,23,00,000/-.
3. A fire broke out around 2.30 a.m. on 18.4.2011 in the factory premises. Police Station, Tehsil office, Food Inspector, Electrical Inspector and the Financial Authority i.e. Janata Sahakari Bank, Pune, Latur were all intimated as was the office of OP3- Branch Manager, National Insurance Company, Latur. Fire was brought under control by the fire brigade who submitted their report (Annexure – C-4). Police authority drew up panchnama on 19.4.2011. So did the tehsil authority and the damage reported was estimated to be Rs.2.03 crore. FIR, statements, panchnama, are at Annexure-C-5. Heavy losses were suffered by the complainant firm as submitted in Annexure-C-6. A claim for Rs.1,98,54,102/- was submitted to the opposite party (OP hereafter).
4. OP appointed M/s. J.C. Bhansali & Co. Surveyor & Loss Assessor, Pune who visited the complainant on 20.04.2011. Documents sought were supplied by the complainant on 5.5.2011. The cause of fire was described as “due to short circuit or dust explosion” in the claim form initially submitted. It is alleged in the complaint that the surveyor, Shri J.C. Bhansali, in collusion with the Branch Manager, Latur, OP3, had told the representatives of the complainant to insert “spontaneous combustion” in place of “dust explosion”, in the claim form. Ultimately, on 22.2.2012, OP informed the complainant that loss assessed on account of damage to the building was Rs.93,263/-, to plant and machinery, Rs.3,00,000/-; as for the insurance claim pertaining to stock, OP held that it was not covered under the policy for the reason that the proximate cause of loss was spontaneous combustion. This consumer complaint is in respect of this part of the claim, seeking the following reliefs:
“A. Hold that the Respondents are guilty of the deficiency of service and unfair trade practice and have thereby violated the relevant provisions of the Consumer Protection Act, 1986;
B. To pay a sum of Rs.1,98,54,102/- on account of damages and compensation/loss of properties.
C. To pay a sum of Rs.50,00,000/- on account of mental agony and harassment.
D. To pay a sum of Rs.5,00,000/- on account of litigation expenses.
E. To pay a sum of Rs.1,00,00,000/- on account of business losses, loss of goodwill due to delay in settlement of claims.
F. To pay a sum of Rs.50,00,000/- (Rupees fifty lakhs only) to the Complainant on account of loss and suffering suffered by the Complainant due to shutting down of total business of the Complainant permanently which was only due to the nonpayment by the respondents.
G. To pay the interest @ 18% on the compensation w.e.f. the date of fire i.e. 18.4.2011 till the date of actual payment / realization / damages.
H. Any other relief/reliefs to which the Hon’ble Commission deem fit and proper in the present facts and circumstances of the case may also be granted in favour of the complainant and against the respondent company.
5. OPs resisted through a written version. It was argued that there was no cause of action to
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