An insurance claim can be repudiated if the loss is caused by a peril explicitly excluded in the insurance policy; the burden of proof rests on the insured to demonstrate coverage.

JUDGMENT

AVM JONNALAGADDA RAJENDRA, AVSM VSM

1. The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act , 1986 (for short “the Act”) against the Opposite Party seeking to direct the OP:

a. Direct the respondent to pay an amount of Rs. 2,46,06,000/ to the complainant towards the loss suffered by the complainant due to the fire which took place in the sponge iron in factory premises on 06.06.2017.

b. Direct the respondent to pay interest on the above said amount @ 18% per annum from 06.06.2017 till the date of realization.

c. Direct the respondent to pay damages to the extent of Rs.50,00,000/- for the loss and financial hardship suffered by the complainant as result of being deprived of their money against the loss suffered.

d. Litigation costs amounting to Rs. 3,00,000/-

e. Pass such other and further order as this Hon'ble forum may deem fit in the facts and circumstances of the present case.”

2. Brief facts of the case, as per the Complainant, are that the Complainant is an incorporated company engaged in the manufacture of TMT reinforcing steel rebars at its factory premises situated at Village Kishanpur Kichha, Nainital and is authorized to institute this complaint through its Manager (Liaison) pursuant to a Board Resolution dated 16.01.2018. The Complainant had obtained a Standard Fire and Special Perils Insurance Policy from the Opposite Party (OP) covering various stock-in-trade, including sponge iron, up to a sum insured of ₹10,50,00,000. This policy is valid from 04.08.2016 to 03.08.2017. On the intervening night of 06.06.2017, a sudden and accidental fire broke out in the sponge iron stock of the Complainant lying near the second furnace, resulting in complete destruction of approximately 1200 Metric Tonnes of sponge iron, valued at ₹2,46,06,000. The incident was immediately reported by the Complainant to the OP and a claim was duly lodged, along with all requisite documents, including stock statements, invoices, loss certificates, and incident reports. The surveyor appointed by the OP inspected the site and confirmed the occurrence of fire and the loss suffered.

3. It is the specific contention of the Complainant that despite the loss due to fire is a clearly covered peril under the policy issued by OP and there being no material to establish its exclusion, the OP illegally repudiated the claim on untenable and presumptive ground of natural heating leading to spontaneous combustion, which is neither factually possible nor applicable to the circumstances of the case. The claim repudiation is arbitrary, contrary to the terms of the policy, and violative of settled insurance law, thereby constituting clear deficiency in service and unfair trade practice, rendering the OP liable to indemnify the Complainant for the loss, along with interest, damages, and costs.

4. Upon notice, the complaint was resisted by the OP by filing its written version, wherein the OP contended that the present complaint is frivolous, vexatious, abuse of legal process, filed on misconceived facts and untenable legal grounds, and is therefore liable to be dismissed at the threshold with exemplary costs. The Complainant failed to discharge the primary burd