Insurance claim repudiation upheld due to specific policy exclusion of spontaneous combustion.

1. The present Revision Petition has been filed by the Petitioner / Opposite Party against order dated 6.3.2013 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (for short “State Commission”) in First Appeal No. 699 of 2012.

2. Complainant had taken a Fire and Floater Special Perils Policy No. 141701/11/09/13/00000205 for a sum insured of Rs. 13 crores from the Opposite Party / Insurance Company, valid for the period 13.1.2010 to 12.1.2011. The Policy covered industrial manufacturing risk for chemical manufacturing (using material with flash point below 32 degree Celsius) and bulk drug manufacturing, stock of raw - materials stored at Insured’s bulk drug manufacturing unit situated at E - 292 Phase - 1 Bhiwadi and godown at SPA - 503, Samtel Zone Bhiwadi Distt. Alwar, Rajasthan. According to the Complainant, on 10.7.2010 when the raw - material was being dispatched from the godown of the company to the manufacturing unit, one Can of Phosphorus Oxy Cloride (POCL 3) which was being loaded in the truck fell and the chemical leaked out. Due to contact of the chemical with moisture in the atmosphere, chemical along with the insured goods got burnt and damaged. The Opposite Party was immediately informed about this incident and they appointed M/s. Protocol Surveyors and Engineers Pvt. Ltd. to assess the loss. The Complainant produced all the necessary documents and filed a claim. The Surveyor estimated the loss at Rs. 27,14,357 and after deducting the salvage value of Rs. 10 lakh, actual loss was arrived at Rs. 17,14,357. The Opposite Party wrongly repudiated the claim of the Complainant and hence Complaint was filed before the District Forum with the following prayer:
“Hence submitting this complaint it is requested that the orders to be passed against the Opposite Party - Insurance Company for payment of Rs. 17,14,357 for loss to the insured goods and Rs. 2,00,000 as compensation and Rs. 25,000 for cost of litigation to the complainant. The complainant is entitled to get this amount with interest from the date of survey report.”

3. The Opposite Party resisted the Complaint on the ground that the District Forum had no right to hear the case as the total loss was Rs. 35,65,133. The Complainant wrote a letter dated 26.10.2010 to the Opposite Party / Insurance Company in which the cause of loss was reported as spontaneous combustion, which was not covered under the Insurance Policy. The Complainant had not taken marine insurance of stock and hence the claim produced by the Complainant was rightly repudiated and there was no deficiency in service on their part. The District Forum after hearing both the Parties and perusing the record, ordered as follows:
“Hence it is ordered that the opposite party - Insurance Company within one month will pay to complainant the claim amount of Rs. 17,14,357 and for mental agony to the complainant Rs. 3,000 will be paid. In this way total amount of Rs. 17,17,357 will be paid. If the said order is not complied within stipulated time period, the Insurance Company will pay interest on said award amount of Rs. 17,17,357 @ 15% from the date of award till payment.”

4. Aggrieved by the order of the District Forum, the Opposite Party / Insurance Company filed Appeal before the State Commission.

5. The State Commission after hearing arguments of both Parties and carefully perusing the entire record and material available did not find any illegality or irregularity in the impugned order dated 19.4.2012 passed by the District Forum and dismissed the Appeal. The Insurance Company was further directed to pay additional amount of Rs. 10,000 as