Insurance claims for damages caused by external terrorist activities were established under applicable policies, justifying full compensation despite defenses based on pilferage allegations.

1 All these appeals have been filed against a common judgment and order dated June 01, 2001 passed by the National Consumer Disputes Redressal Commission ('National Commission' for short) in Original Petition No. 194 of 1994 and companion matters. These appeals are filed under S.23 of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act').

2. To appreciate the controversy raised in the present appeals, few relevant facts may be stated.

3. M/s Krishna Flour and Oil Mills ('Mill' for short) is a partnership firm while M/s Krishna Food and Baking Industry Pvt. Ltd. ('Company' for short) is a company registered under the Companies Act, 1956 as applicable to the State of Jammu & Kashmir. Both the units were located in Nawab Bazar, Srinagar, in the State of Jammu & Kashmir. Both were sister concerns. Rajendra Kumar Sawhney was Chairman of the Company as also main partner of the Mill. The Company was dealing in manufacturing bread, biscuits, cakes and other bakery items. It is the case of the complainants that during the period of disturbances caused by militancy in early nineties of the last century, Mr. Praneet Sawhney, only son of Rajendra Kumar Sawhney was shot dead by the terrorists on March 27, 1990 in his office. Immediately thereafter, operations of both the units were suspended and the complainants had to migrate to Delhi. It was stated that there was 'watch and ward staff' as also some other personnel who looked after the premises and stocks and raw materials lying in the units. It was also stated in the complaints that the complainants were able to transfer records from Srinagar to Delhi.

4. According to the complainants, they had obtained three separate insurance policies from M/s New India Assurance Co. Ltd. ('Insurance Company' for short), the details of which are as under :

5. It was the say of the complainants that in the morning of November 12, 1991, certain terrorists attacked the Company as well as the Mill and set them on fire. Substantial damage had been caused to building, plant, machinery and electricity fittings; the raw materials lying in the units were destroyed stocks which were in both the units were also either destroyed or substantially damaged. In view of the insurance coverage, a demand was made by the complainants to the Insurance Company to get the survey done and to pay the amount of loss sustained by the complainants. The Insurance Company, however, did not do anything in the matter for quite long time. The complainants got the survey done through their surveyors and demanded the amount to which they were entitled to. The Insurance Company, however, did not make payment which constrained the complainants to approach National Commission by filing three complaints being Complaint Nos. 194, 209 and 210 of 1994.

6. The prayer made in the complaints and the demand in respect of policies and sums may be summarized thus :

7. The Insurance Company repudiated the claim of the complainants. At a belated stage, survey had been carried out by the Insurance Company through its Surveyors wherein it was observed that substantial damage had not been caused to building, plant, machinery and electricity fittings and the complainants were not entitled to the amount demanded by them under the said head. The Insurance Company also assessed the damage to the building, plant, machinery and electricity fittings to the extent of Rs.31,373/- and nothing more.

8. With regard to raw materials and stocks, the amount was substantially curtailed by the Insurance Company inter alia on the grounds that the stocks were perishable in nature and had become unfit for human con