Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCDRC) 243

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
A.P Sahi, President, Bharatkumar Pandya, Member
M/s Lokmangal Sugar Ethanol & Co-Generation Industries Ltd. – Appellant
Versus
M/s Oriental Insurance Co. Ltd. – Respondent
CONSUMER COMPLAINT NO, 113 OF 2014

Advocates:
For the Appellants/Petitioners: Mr. Prashant Kenjale
For the Respondents: Mr. P.K. Seth, Ms. Alana Mohammed, Ms. Kanchan Sharma

The court affirmed that damage to the turbine was predominantly due to mechanical breakdown and not covered under the fire insurance policy, emphasizing the importance of evidence in establishing proximate cause.

Headnote:(A) Consumer Protection Act - Sections on deficiency in service and unfair trade practices - Claim for indemnification under fire insurance policy - The complainant alleged wrongful rejection of fire-related claim by insurer, contending bias of surveyor and lack of justification for damage assessment, asserting fire was proximate cause of turbine damage. (Paras 1, 2, 3, 8, 19)

(B) Survey - Role and responsibilities of surveyor - Insurer properly relied on independent surveyor's detailed report to assess damage and determine coverage under policy. A fair assessment was based on the nature of damages discovered, distinguishing between fire and mechanical breakdown. (Paras 2, 4, 9, 18)

(C) Proximate Cause - Court analyzed whether fire was proximate cause for the mechanical failure of the turbine; found lack of sufficient evidence to establish chain of causation between fire and turbine damage under standard fire policy. (Paras 8, 17)

Facts of the case:
The complaint arose from the denial of a substantial insurance claim following a fire that damaged a manufacturing facility and its turbine. The insurer approved a limited claim amount, citing mechanical failure as the cause of damage, contrary to the complainant's assertions. (Paras 1 and 2)

Findings of Court:
The court found that the insurer acted within its rights to deny the claim for turbine damage as it established that the loss was due to mechanical breakdown, which was not covered under the fire policy, confirming the validity of the surveyor's report. The respondent was directed to pay the admissible claim amount with interest. (Paras 19)

Issues: Whether the claim for turbine damage, alleged to be caused by fire, constitutes a valid cause under the insurance policy for coverage and the validity of the surveyor's findings.

Ratio Decidendi: The surveyor's findings were upheld as he provided a comprehensive analysis, establishing that the turbine's damage was primarily due to mechanical breakdown rather than fire. The necessary evidentiary burden was not met by the complainant to link the damage directly to fire.

Result: The complaint allowed in part, with a directive to the insurer for payment of approved claim amount plus interest.

JUDGEMENT

PER HON'BLE MR. BHARATKUMAR PANDYA, MEMBER

1.BA Heard Mr. Prashant Kenjale, Advocate for the Complainant and Mr. P.K. Seth, Advocate, for Opposite Party. The present consumer complaint arises out of alleged deficiency in service and unfair trade practices with regard to an insurance claim allegedly committed by M/s Oriental Insurance Company Limited (hereinafter “OP”). The Complainant had taken a Standard Fire and Special Perils Insurance Policy from the OP Oriental Insurance Company Limited for a sum insured of ?324.39 crores covering Stock, Plant, Fire Basic Cover and Earth Quake Cover for the period from 28.07.2011 to 18.07.2012. On 21.04.2012, a major fire broke out in the Complainant’s plant premises. As per the Complainant, the fire originated in the cable trench below the control panel, which spread and severely damaged the control room, cables, panels, and related accessories. As a result of this incident, substantial damage also occurred to the turbine machinery and other components of the Triveni Turbine Generator/T.G. set (15 MW capacity) installed at the plant. The incident was immediately reported to the Respondent, and a preliminary survey was conducted by the surveyor Mr. Sudhir Chawan who subsequently submitted his preliminary report on 01.04.2013. The Respondent appointed Mr. Pradeep Tambe as the final surveyor to conduct a detailed assessment of the loss who submitted his report on 03.09.2013. The Complainant submits that from the very beginning, the surveyor displayed a biased and adamant approach, insisting without any proof that the turbine loss was a machinery breakdown loss which is not attributable to fire. Despite repeated clarifications and submissions of technical reports by the Complainant’s consultants, the surveyor refused to accept the fact that the damage to the Triveni TG set was caused by the fire and also the theory of proximate cause of damage in any case being the fire incident which necessitated the impulsive but careful action of the Engineer Mr. Gaikwad in switching off the Turbines for preventing major damage and consequent catastrophic loss after the fire was noticed by him in the cable-trench. In a joint meeting attended by representatives of the Complainant, Respondent, and the surveyor on 24.05.2013 and 27.05.2013, the surveyor even admitted his error in wrongly applying the Reinstatement Value (RIV) Clause, but continued to deny turbine damage as fire-related. The Complainant, sensing the bias of the surveyor, orally requested the Respondent to appoint an independent surveyor, but such request was outrightly denied. Consequently, the Complainant addressed a detailed letter dated 18.06.2013 to the Deputy General Manager of the Respondent, highlighting the unfair approach of the surveyor and requesting corrective action.

2. A joint meeting was held at the Pune Regional Office of the Respondent on 02.07.2013, wherein it was decided that the surveyor would again visit the Complainant’s plant at Bhandarkawthe along with the Complainant’s consultants. In pursuance of this, the surveyor visited the site on 16.08.2013 and conducted a series of irrelevant tests on the turbine components. Relying upon such tests, he reached the misguided conclusion that the turbine suffered no fire-related damage, and the entire loss to the turbine was due to a mechanical breakdown. He reiterated his earlier stance and vide his letter dated 16.08.2013 rejected the substantial part of the claim relating to turbine damage. The Complainant immediately protested and vide letter dated 22.08.2013 once again requested the Deputy General Manager to consider the doctrine of proximate cause, which clearly require the surveyor to reason that the fire indeed was the principal and operative cause of damage. However, no corrective steps were taken by the Respondent to either replace the biased surveyor or to rectify the faulty methodology adopted. Thereafter, the surveyor submitted his final report dated 30.09.2013