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8. The Respondent filed their written submissions before the NCDRC inter alia stating that the theft which took place on the premises in the factory preceded the fire, and thus, the incident of theft was the proximate cause of damage. Since theft was not a named peril in the policy, the Respondent was not liable to reimburse the damage claim of the Appellant.

9. The NCDRC vide the impugned judgment dismissed the complaint on grounds that the proximate cause of the loss to the Appellant was burglary and the insurance policy taken by the Appellant did not cover the loss on account of theft/ burglary. Therefore, the Respondent is not liable to compensate the loss to the Appellant. While arriving at this conclusion, the NCDRC has placed reliance on the judgment of this Court in New India Insurance Company Limited Vs. Zuari Industries Limited & Others (2009) 9 SCC 70, holding that the proximate cause means “active and efficient cause” and not merely the event closest in time.

12. It is thus submitted that the cause of damage in the instant case was fire. The damage was caused by the ensuing fire itself, and not by theft/ burglary. Since the policy does not list any further caveat or exclusion regarding the cause of a fire, the insurer cannot repudiate the claim by citing theft/ burglary as the proximate cause. The cause of the fire becomes irrelevant in the absence of a specific exclusion.

13. It is further submitted that the test of proximate cause is applied to see whether the loss was due to a specified peril. However, in the present case, the damage was due to an insured peril, i.e., fire which does not categorize theft/ burglary as an exclusion. The test of proximate cause becomes irrelevant in the instant case as the damage results from separate perils and the one causing the loss (fire) is expressly covered and not excluded.

15. Per contra, learned counsel for the Respondent submitted that the policy is a “named peril” policy as opposed to a general all- risks policy and the policy contained a specific exclusion under Clause V(d) which excluded loss from “Burglary, housebreaking, theft…….. in any malicious act.”. Further, the policy also excluded loss by theft during or after the occurrence of any insured peril except as provided under the RSMD cover.

16. It is argued that the cause of the fire is undisputed that it originated from an attempted theft/burglary where miscreants used blow lamps or portable gas cutters to steal copper windings from a transformer. The cause of fire was also confirmed by the Fire Department Report and the Final Survey Report. Thus, the proximate cause of loss is burglary and not fire. The Appellant chose not to take a separate theft policy for its factory and therefore, on the said basis, their claim was repudiated.

“…1. Fire:

Excluding destruction or damage caused to the property insured by

(a) i) its own fermentation, natural heating or spontaneous combustion.

ii) its undergoing any heating or drying process.

(b) Burning of property insured by order of any Public Authority…” From the above, it is clear that burglary/theft are not included in the exclusion given in the specified peril “Fire.” The opening part of the policy specifically says that the insurance company will indemnify the loss by any of the perils specified in the policy. Once it is not disputed that the loss is caused by fire, then the cause igniting the fire becomes immaterial. The insurer cannot refuse to indemnify the damage caused by fire, which is a specified peril, on the ground that the proximate cause of fire was burglary/theft (which is excluded under the RSMD clause), particularly when no such exclusion is provided in the specified peril “Fire”. Further, if we look into the general exclusion in the policy, loss by theft is excluded during or after the occurrence of the insured peril except as provided under the RSMD clause. Nonetheless, the policy is silent on the aspect of whether the burglary/ theft which precedes the insured peril is excluded or not.