National Consumer Disputes Redressal
The New India Assurance Co. Ltd. vs Taj Sugar Works And Anr. on 13 August, 2001
ORDER
D.P. Wadhwa J. (President)
1. Insurance Company is appellant before us. It is aggrieved by the order dated 4.2.2000 of the Uttar Pradesh State Consumer Disputes Redressal Commission. By the impugned order State Commission allowed the complaint of the first respondent-complainant and ordered that the Insurance Co. shall pay a sum of Rs. 5,65,718.73 under the insurance policy taken by the complainant and this amount was also to carry interest @ 18% per annum from 1.8.1995 till the date of payment. There was no order as to costs. The order was directed to be complied with within two months from its date.
2. Second respondent before us is the Punjab National Bank who was second opposite party before the State Commission.
3. Complainant has sugar factory in District Bijnore under the name Taj Sugar Factory which was insured for a sum of Rs. 20.00 lakhs. Insurance policy also covered the stock of sugarcane, 'rab', sheera etc. for which extra premium had been paid.
4. During the subsistence of the insurance policy between the night of 2/3.4.1995 it was noticed that smoke was coming out of two tanks of 'rab'. In fact, 'rab' was burning and smoke and bubbles were coming out. Attempt was made to extinguish fire but it failed. 3000 qunitals of 'rab' was got burnt. An FIR was lodged and information was also sent to the fire department. Claim was made before the appellant, the insurer. Complainant alleged that it had suffered a loss of Rs. 11,26,000/-. However, on 19.6.1995 a letter was received by the complainant from the surveyor telling him that 'rab' is inflammable and, therefore, no claim could be given for the same. Complainant challenged this denial of claim by filing a complaint in the State Commission. It was the case of the Appellant that fire policy "C" was taken and it did not cover the risk for losses to the stock due to spontaneous combustion and nor any premium was paid for the purpose. Insurance Company said that this conclusion that the loss of 'rab' was on account of spontaneous combustion was reached on the basis of smoke and bubbles coming out of the 'rab'. Second surveyor appointed by the petitioner referred the mater to the Hindustan Testing & Research laboratory (India), Sahibabad which gave the report that 'rab' was burnt due to spontaneous combustion. Nevertheless, surveyor had assessed the net loss of Rs. 5,63,718.73 but this of course was not payable as fire was alleged to break out due to spontaneous combustion not covered under the insurance policy. The question which was before the State Commission and is also before us is whether the complainant is entitled to claim of damages for loss suffered on account of loss of 3000 quintals of 'rab' stored in the tanks. State Commission records that according to the parties the damage was done due to spontaneous combustion of 'rab'. The issue is if the 'spontaneous combustion' is covered under the definition of 'fire'. If it falls within the term 'fire' premium for spontaneous combustion could not be payable. State Commission noticed the judgments of National Commissions in the cases of Saraya Sugar Mills Limited v. United India Insurance Company Limited II (1996) CPJ 6 (NC) and Roshan Lal Oil Mills Ltd. v. United India Insurance Company Ltd. I(1992)CPJ 293 (NC) and came to the conclusion that 'spontaneous combustion' is covered under the definition of word 'fire'. Once having reached this conclusion, the State Commission, therefore, decreed the claim of the complainant. It relied on the report of the second surveyor in decreeing the amount.
5. Our attention has been drawn to the decision of the Supreme Court in the case of United India Insurance Co. Ltd. and Ors. v. Roshan Lal Oil Mills Ltd. and Ors. - (2000) 10 SCC 19. This is one of the two cases decided by the National Commission and against that order appeal was filed in the Supreme Court. Matter was remanded to this Commission as it was held by the Supreme Court that the report of the surveyor which was given under Section 64-UM(2) of the Insurance Act, 1938 was not considered by the National Commission which report had repudiated the claim of the insured. It was argued before the Supreme Court that the report under Section 64-UM(2) of the Insurance Act, was statutorily required and could not be brushed aside without any reference to it. Supreme Court said that the National Commission was not justified in awarding the insurance amount without adverting itself to the contents of the surveyor report. It was also contended before Supreme Court that 'spontaneous combustion' was not equivalent to 'fire'. Supreme Court, however, did not say anything if 'spontaneous combustion' was or was not equivalent to 'fire'. Since this Commission has already taken the view that 'spontaneous combustion' falls within the definition of fire, view taken by the State Commission is correct. We may also notice that the petitioner did not file the original insurance policy and what was filed before us was a proforma of the fire policy 'C' of which we do not consider to take any notice. Accordingly, the appeal fails and it is dismissed.