Saurashtra Chemicals Ltd.(Presently ... vs National Insurance Co. Ltd.

The appellant purchased a standard fire and special perils policy from the respondent National Insurance Company Ltd. thereby insuring the risk of loss/damage to the stock of coal and lignite stored in its factory compound. An additional premium of Rs. 59,200/- was paid by the appellant company so as to cover the risk of loss of the aforesaid stock on account of spontaneous combustion. The appellant was declared a Sick Unit and was accordingly registered under SICA. The factory remained closed from 17.02.2006 to 09.08.2006 and was re-opened on 10.08.2006.

2. After re-opening it was noticed between the period from 11.8.2006 to 20.8.2006 that some amount of stock of coal and lignite has been diminished/destroyed on account of spontaneous combustion, causing loss and damage. Intimation in this regard was sent to the respondent-insurer on 12.09.2006.

3. Pursuant to the claim made, a surveyor was appointed who visited the premises of the appellant on 18.09.2006 and sought certain details, which were provided on 28.11.2006. After carrying out the requisite survey, the surveyor submitted his report on 11.04.2007 assessing total loss to the tune of Rs. 63,43,679/-.

4. The claim lodged by the appellant was however repudiated by the respondent-insurer vide communication dated 27.07.2007 on the ground that since spontaneous combustion did not result into fire thus, loss had not been caused by fire as stipulated in the relevant endorsement with respect to spontaneous combustion of the insurance policy. The appellant was further informed through the letter that unless spontaneous combustion results into fire, there is no liability under the policy.

7. However ground no. (iii) raised by the respondent-insurer in defence to the claim of the appellant found favour with the NCDRC and the complaint was dismissed on the premise that there was breach of conditions incorporated in Clause 6(i) of the General Conditions of Policy. Under Clause 6(i) the intimation of loss and damage was required to be given in writing by way of notice within 15 days of the occurance thereof. It is an admitted case between the parties that intimation of loss/damage was given by the appellant to the respondent- insurer for the first time on 12.09.2006 and a claim for loss for a sum of Rs. 1.4 Crores to 1.5 Crores was made vide letter dated 14.09.2006.

18. In view of the law laid down by the three Judge Bench in the Sonnel Clocks (supra), the argument that by appointing a surveyor the respondent- insurer is estopped from raising the plea of violation of condition prescribing a time limit for intimation/lodging of the claim, has no legs to stand. Thus issue no. (1) is answered accordingly.

24. The NCDRC has failed to take into consideration this aspect of the matter and, therefore, cannot be held to be justified in rejecting the claim of the appellant, on that ground.

25. In view of the aforesaid analysis the appeal stands allowed and the impugned judgment and the order of the NCDRC is set aside. The Respondent- insurer is directed to make payment of Rs. 63,43,679/-, as assessed by the surveyor, to the appellant with interest @ 8% from the date of the filing of the claim of petition till date of payment. The payment, as above, be made within eight weeks from today.

26. There will be no order as to costs.

DECEMBER 13, 2019.