Insurance policy covering spontaneous combustion does not require visible flames to establish liability.

ORDER

PER SUBHASH CHANDRA

1. This complaint filed under Section 21 of the Consumer Protection Act, 1986 (in short, the “Act”) alleges deficiency in service by the Opposite Parties in repudiating the claim under a fire insurance policy.

2. Upon notice, Opposite Parties contested the complaint by way of written version. Complainant thereafter filed its rejoinder. Parties filed their evidence by way of affidavit. Short synopses of arguments were also filed by both the parties. We have heard the learned counsel for the parties and carefully considered the material on record and submissions made.

3. The facts of the case, in brief, are that the Complainant is a limited liability agro based manufacturing company producing soya DOC (Meal), Soya Refined Oil, High Protein Soya Flour, Soya Lecithin, Boiled Soap etc., and engaged in the export of such products. Complainant obtained an All Risk Marine Cargo Open Policy for export of Indian Rapeseed Meal and other allied commodities covering Marine FOB risk from anywhere in India to Kandla/ Gandhidham with storage cover of 42 days at the port. The company exported some stock of the insured material to Iran and the balance stock of 6335.823 MT was stored in the godown in Kandla. On account of delay in shipment, the complainant requested for Fire Floater Policy with Earthquake and Spontaneous Combustion covered for this stock on 27.08.2014 in respect of rapeseed oil valued at Rs.10,50,00,000/- in its godown. Based on pre-insurance inspection by its surveyor (M/s A L Ratola) and their report dated 30.08.2014. The opposite party issued a Fire Floater Insurance Policy dated 02.09.2014 after collecting premium of Rs.40,252/- on 28.08.2014. The said policy was valid between 28.08.2014 to 27.11.2014. On 16.09.2014, at the request of the Complainant, the Opposite Party issued an endorsement to also include coverage for India Yellow Corn (Maize).

4. A fire incident was reported in the insured premises of the godown in RA Corporation, Gandhidham on 22.09.2014. Police and fire brigade were informed as was the insurance company. The Opposite Party deputed M/s Bhimani and Co., Ahmedabad to assess the loss on 24.09.2014. Documents were provided by the complainant on 30.12.2014 and 11.02.2015. The surveyor invited tenders for disposal of damaged stocks and advised the Complainant to sell to M/s Apurva Agro Products, Indore, Madhya Pradesh on 05.12.2014 based upon the bid received. 1376.500 MT damaged stock was accordingly disposed for Rs.37,16,550/- Cost of Rs.35,656/- towards calling of tender and Rs.3,34,412/- towards the fire fighting and loss minimisation has been claimed by the Complainant in its claim for Rs.1,80,83,874/-.

5. Despite follow up on 19.06.2015, 22.07.2015, 04.08.2015 and 08.09.2015 by e-mail and several personal/telephonic approaches, the claim was not settled as per the IRDA (Protection of Policy Holder’s Interests) Regulation 2002 within 30 days of receipt of the surveyor’s report. However, on 11.09.2015, the Opposite Party repudiated the claim and denied its liability on the ground that the documents submitted by the Complainant did not reveal that there was a fire, therefore, the loss of stock was caused by self-heating and not by fire. Alleging deficiency in service on account of denial of the claim, the Complainant is before us with the following prayer praying that Opposite Party be directed to pay it:

(i) A sum of Rs.1,80,83,874/- being the amount of loss suffered by the complainant as a result of the said fire to the insured’s stock;

(ii) Interest @ 15% per annum on the said amount of Rs.1,80,83,874/- (in terms of IRDA Regulations) from 2