The complainant, M/s. P.P. Agro Industries, is a proprietorship firm registered as a small scale industry in Maharashtra engaged in the manufacture and sale of pulses. It began production in 1999. The nature of its business is to purchase raw material, "Toor", from various markets in Maharashtra and Gujarat etc. and sell the finished product, "Toor Dal", in the local market and nearby states. It has a factory located in its own building at C-19, MIDC, Latur, Maharashtra.2. The complainant had taken an insurance policy for the period, 8.7.2009 to 7.7.2010, for a sum insured of Rs. 2.57 crore; this was renewed with effect from 8.7.2010 to midnight of 7.7.2011 for an enhanced sum insured of Rs. 5 crore (policy no. 271401/11/10/3100000951 dated 8.7.2010 at Annexure C-3). The breakup of the sum insured was as follows: Building - Rs.37,00,000/-, plant/machinery and accessories - Rs.40,00,000/-, stock and stock in process- Rs.4,23,00,000/-.3. A fire broke out around 2.30 a.m. on 18.4.2011 in the factory premises. Police Station, Tehsil office, Food Inspector, Electrical Inspector and the Financial Authority i.e. Janata Sahakari Bank, Pune, Latur were all intimated as was the office of OP3- Branch Manager, National Insurance Company, Latur. Fire was brought under control by the fire brigade who submitted their report (Annexure C-4). Police authority drew up panchnama on 19.4.2011. So did the tehsil authority and the damage reported was estimated to be Rs.2.03 crore. FIR, statements, panchnama, are at Annexure-C-5. Heavy losses were suffered by the complainant firm as submitted in Annexure-C-6. A claim for Rs.1,98,54,102/- was submitted to the opposite party (OP hereafter).4. Op appointed M/s. J.C. Bhansali & Co. Surveyor & Loss Assessor, Pune who visited the complainant on 20.04.2011. Documents sought were supplied by the complainant on 5.5.2011. The cause of fire was described as "due to short circuit or dust explosion" in the claim form initially submitted. It is alleged in the complaint that the surveyor, Shri J.C. Bhansali, in collusion with the Branch Manager, Latur, OP3, had told the representatives of the complainant to insert "spontaneous combustion" in place of "dust explosion", in the claim form. Ultimately, on 22.2.2012, OP informed the complainant that loss assessed on account of damage to the building was Rs.93,263/-, to plant and machinery, Rs.3,00,000/-; as for the insurance claim pertaining to stock, OP held that it was not covered under the policy for the reason that the proximate cause of loss was spontaneous combustion. This consumer complaint is in respect of this part of the claim, seeking the following reliefs:"A. Hold that the Respondents are guilty of the deficiency of service and unfair trade practice and have thereby violated the relevant provisions of the Consumer Protection Act, 1986;B. To pay a sum of Rs.1,98,54,102/- on account of damages and compensation/loss of properties.C. To pay a sum of Rs.50,00,000/- on account of mental agony and harassment.D. To pay a sum of Rs.5,00,000/- on account of litigation expenses.E. To pay a sum of Rs.1,00,00,000/- on account of business losses, loss of goodwill due to delay in settlement of claims.F. To pay a sum of Rs.50,00,000/- (Rupees fifty lakhs only) to the Complainant on account of loss and suffering suffered by the Complainant due to shutting down of total business of the Complainant permanently which was only due to the nonpayment by the respondents.G. To pay the interest @ 18% on the compensation w.e.f. the date of fire i.e. 18.4.2011 till the date of actual payment / realization / damages.H. Any other relief/reliefs to which the Hon'bleCommission deem fit and proper in the present facts and circumstances of the case may also be granted in favour of the complainant and against the respondent company.5. Ops resisted through a written version. It was argued that there was no cause of action to file the complaint under Consumer Protection Act, 1986 as there was no deficiency in service or delay in settlement of the claim by the OPs; that the claim was examined and decided per the insurance cover, its terms and conditions and the recommendation of the independent licensed surveyor. The claim had been approved for Rs.3,93,263/- in respect of building and plant & machinery. It had however been rejected qua loss of stock of "dal" on account of the cause of fire being "spontaneous combustion" which was excluded in the Fire and Special Peril Policy. The complainant had not opted for "add on cover to also cover the incidents of spontaneous combustion". It was stated that in the claim form itself, the cause of loss had been stated to be "due to short circuit or dust spontaneous combustion". Electrical short circuit per report of the electrical surveyor obtained by the OP had been ruled out. The argument therefore was that short circuit having been ruled out, and the cause of loss having been given as spontaneous combustion by the complainant itself, it was clear that the complainant had not been able to substantiate any other cause of loss. As such, the rejection of the claim towards loss of stocks as per policy was justified.6. Rejoinder to the written version and affidavits of evidence by both the parties were filed. Oral arguments of the counsels for the parties were heard on 18.02.2021.7. Learned Senior Advocate for the complainant drew attention to the claim form first submitted to the OP by the complainant to point out that in this, it had been clearly indicated in the relevant column that the cause of fire was "due to short circuit or dust explosion" (page 99 of part 1). Subsequently, upon request by the surveyor, the complainant was made to alter this to "due to short circuit or dust - spontaneous combustion" (page 123 of part 1). He then drew attention to the final survey report dated 11.11.2011 (Annexure-R6), where under "Summary of Loss", the surveyor had estimated the same to be Rs.78,93,263/-. This comprised loss against stock at Rs.75,00,000/-, against machinery at Rs.3,00,000/-, against building at Rs.93,963/-, and firefighting expenses of Rs.9301/-, adjusted for policy excess of Rs.10,000/-.He submitted that the complainant had accepted this estimated loss; however, the OP vide letter dated 22.2.2012 offered only Rs.3,93,263/- against loss for building, plant and machinery, explaining that as per the survey report, the proximate cause of loss was spontaneous combustion and the policy did not cover that peril.8. Flowing from above, the learned Senior Counsel made the following points:(i) if it is the case that the proximate cause of loss being spontaneous combustion meant that loss of stock was not covered under the policy, then there would have been no occasion for the OP to have allowed loss for damage to building and plant and machinery as well.(ii) clause (I) of the Standard Fire and Special Perils Policy reads as: "Fire" Excluding destruction or damage caused to the property insured by (a) (i) its own fermentation, naturally heating or spontaneous combustion...". A plain reading of this would reveal that damage by fire and loss sustained due to this fire could not be avoided by the OP even if the cause of fire was spontaneous compensation. Therefore, even if it is conceded that the cause of fire was spontaneous compensation, the OP cannot escape it's liability. This is so because ultimately, the loss was due to fire. In support, he invoked a decision of the five member Bench of the National Commission in the case of Murli Agro Products Ltd. versus Oriental Insurance Company Ltd. in OP No.253 of 1999 dated 10.12.2004 wherein it had been held that whether the cause of fire was spontaneous combustion or not was irrelevant as long as there was a fire. He however also submitted that the survey report had not categorically found that fire was due to spontaneous compensation. His argument was that even if this had been the case, the OP was still liable.(iii) He drew attention to letter dated 22.12.2011 (Annexure - R8): in response to a query of the OP about the exact cause of loss after checking from the State Electricity Board as to whether during the night of the fire incident, electrical supply inside the factory shed was on or off, the surveyor has replied "we can try to ascertain". So, the surveyor had not given a finding but only an assurance that he would try. Counsel's argument was that clearly the OP was unwilling to accept the findings of the final survey report and was raising queries probably with a view to ultimately arriving at a decision to repudiate the claim. He further argued that as to the cause of fire, it has been also observed by the surveyor in its report that sample sent for lab analysis to Sri Venkatesh Food Laboratory had revealed no presence of petroleum products; as such, any possibility of the fire having been caused due to this reason was also not established. Yet, the fact was that there was a fire. So, the argument that if there was a fire which had caused a loss, the cause of fire itself was not so important and that the loss would have to be indemnified under the insurance policy.9. Learned counsel for the OPs submitted that the decision of National Commission in the case of Murli Agro Products Ltd. versus Oriental Insurance Company Ltd., (2005) 1 CPJ 1 (NC) (supra) had taken into account two other decisions of the National commission viz. Saraya Sugar Mills Ltd. Vs. United India Insurance Co. Ltd., (1996) 2 CPJ 6 (NC) and Roshan Lal Oil Mills Ltd. Vs. Oriental Insurance Company Ltd., (2005) 1 CPJ 1 (NC). He pointed out that in each of these judgments, it was the case that the complainant had taken additional insurance cover for spontaneous combustion; however, in the matter in hand, no additional cover had been taken. This therefore was a distinguishing factor. In these cases, he pointed out, if the argument of the learned counsel for the complainant that fire was what would decide the admissibility of the insurance claim is accepted, then there would not have been any need to have taken any additional cover for spontaneous combustion. Therefore, he argued, since additional cover for spontaneous combustion had not been taken in the instant case, the citations referred to by the counsel for the complainant did not support the case of the complainant.10. Learned Counsel for OP then also drew attention to Clause (1) of the Standard Fire and Special Perils Policy (page 289), reading out the same again, to argue that it clearly stated that what was covered was "Fire" but excluding destruction or damage caused to the property insured by "its own fermentation, naturally heating or spontaneous combustion". He stated that nothing could be clearer than this which has to be taken to mean that fire due to spontaneous combustion is not covered under the policy, in view of the fact that additional cover for this has not been taken by the complainant. Admittedly, additional cover for spontaneous combustion was neither asked for by the complainant nor given by the OP.11. He then drew specific attention to the two claim forms on record filed by the complainant after the incident, at pages 99 and 123 of the paper book (also referred to by the counsel for the complainant). He submitted that the first claim was on 5.5.2011 and the second on 2.6.2011. Pointing out that none of these claim forms had any date mentioned under the claimant's signatures, he submitted that OP admitted receiving the second claim form of 2.6.2011 only. What this means is that the reason for the fire stated to be "due to short circuit or dust explosion" stated in the first claim form was not received by the OP; what was received was the second claim form in which the reason for fire has been stated to be "due to short circuit dust - spontaneous combustion". He further pointed out that there is some visible overwriting and deletion in the second claim form No.2. While there is nothing to show that this correction was at the surveyor's behest as argued by the counsel for the complainant, it did show that the complainant did make the correction to include spontaneous combustion as a possible cause of fire. And what this meant therefore was that the complainant itself admitted that the cause of fire may have been spontaneous combustion. In other words, as far as OP is concerned, the cause of fire was spontaneous combustion and this was not covered in the insurance policy. On this valid basis, the claim was repudiated on 22.2.2012. Prior to repudiation, learned counsel pointed out to a letter dated 16.02.2012 of the complainant to the Manager, National Insurance Company Limited, Latur: this mentioned that complainant had received information that OP was citing spontaneous combustion as the reason for declining the insurance claim. Learned counsel argued that in this letter, it could have been mentioned by the complainant that the change in the reason for fire from "short circuit and dust explosion" to "short circuit and spontaneous combustion", was at the behest of the surveyor. It was not. Therefore, to take the plea of the surveyor's inference in the claim form now served little purpose.12. The next leg of the OP's counsel's argument was that notwithstanding that the complainant had itself cited spontaneous combustion as a possible cause of fire, the cause of fire still had to be determined viz. dust explosion, electrical short circuit or spontaneous combustion? He argued that it has been explained clearly in the OP's synopsis of arguments as to why a dust explosion could not have been the cause of fire. Further, report of the electrical engineer (page 54 and 55, part-1) has clearly reached the conclusion that "however, wire board was not burnt at the spot and as is circumstantial evidence are not available at the spot, so it cannot be fairly said that short circuit has taken place on that stocks". Since, argued the counsel, the cause of fire was neither dust explosion nor spontaneous combustion, OP accepted that it must have been spontaneous combustion. He drew attention to the electrical survey report dated 2.5.2011 to show that the surveyor had concluded that the fire was not due to short circuit. Thus, argued the learned counsel, it did appear that the OP justifiably did not allow the claim against loss of stocks : since spontaneous combustion was mentioned as the cause of fire in the claim form of the complainant and as both dust explosion and short-circuit had been ruled out, the reason for fire had to be spontaneous combustion. Drawing attention to general condition no. 6 of the insurance policy, sub clause (a) and (b) thereof, he argued that this provides that the insured should submit a claim in writing for the loss or damage as well as provide information on any matter determining the liability. Since the complainant had himself mentioned spontaneous combustion, the counsel submitted, in fact it was not even necessary for the surveyor to have had gone beyond this while making it's report.13. Coming to the survey report, learned counsel, referring to the discussion therein on "Cause of Fire", submitted that the surveyor has concluded that cause of fire was not due to short circuit and that as per the insured complainant, the cause of fire could be spontaneous combustion, and that in the relevant policy, spontaneous combustion add on cover is not opted for, and hence, cause of fire is by a peril not covered under the policy. Counsel further submitted that on this final survey report, the OP had sought clarifications as a good, conscientious insurance company should. Vide letter dated 22.12.2011, surveyor had responded to the queries of the OP in a detailed manner. In this response, to the query on the observation that the State Electricity Board report was unusual as it had neither accepted nor denied the loss due to electrical short circuit and therefore whether the surveyor could check from the board as to whether during that night, electrical supply inside the factory shed was on or off, the surveyor had stated in his reply that "we can try to ascertain". This did not mean, as had been argued earlier by the counsel for the complainant, that the surveyor had not reached the conclusion that the cause of fire was spontaneous combustion. OP had sent another query to the surveyor who vide reply dated 6.2.2012 had again clarified the cause of fire and had gone on to further point out that the oil content in the dust/dal & other storage conditions viz. hot climatic condition, existence of humidity, lack of ventilation in the place of origin of fire, on the day of loss (on 18.4.2011), would have definitely caused spontaneous combustion. Learned counsel for the OP submitted that it was only after obtaining all these clarifications from the surveyor that the OP finally part-repudiated the claim vide its letter dated 22.2.2012 stating therein that the policy did not cover the peril of "spontaneous combustion" and that hence, the assessment of loss was only Rs.3,93,263/-, comprising Rs.93,263/- towards building and Rs.3,00,000/- for damage to plant and machinery. Learned counsel submitted that it would be clear that this part repudiation by the OP was done responsibly and with due application of mind.14. Learned counsel for the OP further submitted that to the argument that if the loss on account of fire due to spontaneous combustion was not covered in the policy, why was the OP permitting loss to building and plant and machinery, the answer was simple viz. that which is affected by spontaneous combustion has been disallowed and that which was affected by fire only has been allowed.15. Learned Senior Counsel for the complainant made a rebuttal. He argued that in the judgment in the case of Murli Agro Products Ltd. versus Oriental Insurance Company Ltd. (supra), it has been clearly held that if the damage to the property is because of "fire, for any reason", there is insurance coverage. So, even assuming that the fire was due to spontaneous combustion, the claim for damage to stocks was admissible just as for damage to building and plant and machinery. However, it is also his argument that it has not been found by the surveyor that the cause of fire was indeed spontaneous combustion, the same being only an inference after excluding other causes such as short circuit. Finally, he argued that the Tariff Advisory Committee, the insurance sector's own body who advise on tariffs, has clearly held that "dal" was not a substance prone to spontaneous combustion. This also explains why the complainant had not asked for an add on cover for spontaneous combustion.16. Having heard the learned counsels and carefully perused the record, I am of the considered view that the insurance claim filed by the complainant and the loss to stocks of "Toor Dal" as assessed by the surveyor deserves to be allowed, and that the OP insurance company has committed an error in appreciation of the terms and condition of the insurance policy in not allowing this claim. Reasons for this view follow.17. Admitted facts not being in dispute, clearly, this complaint is mainly about two issues: (i) was the cause of fire which caused loss to the insured's property (buildings, plant & machinery, stocks),due to spontaneous combustion?; (ii) whether the loss to the stocks of "toor dal" due to this fire was covered by the insurance policy regardless of the cause of fire? The latter is the more important issue for disposal of this consumer complaint.18. It is useful at this stage to have a very close look at the relevant policy provisions. Clause (I) of the policy, mentioned and relied upon by both the learned counsels during their arguments, reads as below:I "Fire Excluding destruction or damage caused to the property insured byi) its own fermentation, natural heating or spontaneous combustionii) its undergoing any heating or drying process."**********A plain reading of the policy reveals that what has been unambiguously insured is damage to the insured property on the happening of its destruction or damage by any of the perils specified in the policy, the first of which has been reproduced ad verbatim above viz. I. FIRE. It is clear that any damage or loss to the property by the occurrence of FIRE is liable to be the subject of lawful claim of insurance. What is meant by the sentence in the policy starting with "Excluding " is precisely what it says viz. if there is destruction or d
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amage by its own fermentation, natural(ly) heating or spontaneous combustion, then this would not be covered under the policy. This cannot be construed to mean that destruction to property by happening of a fire, understood as fire in common parlance, visible, obvious to the naked eye, would stand excluded because the cause of fire was found to be spontaneous combustion.19. It is precisely this which has been articulated clearly by the Commission in it's order in the case of Murli Agro Products Ltd. versus Oriental Insurance Company Ltd.(supra), para 13 (a) thereof, which reads as below:"13. For the reasons stated hereinafter we are not inclined to take any different view:(a) Firstly, undisputedly, if the damage to the property is because of the 'fire, for any reason', there is insurance coverage. The exclusion clause does not provide that loss or damage caused by fire on account of spontaneous combustion is excluded. Reading the term as it is, it can be held that what is excluded is loss or damage caused by spontaneous combustion which may or may not cause fire or flame.20. A reasonable interpretation of the policy clause under discussion above would be that any damage caused due to spontaneous combustion, in which, visible fire has not occurred, would be covered by insurance only if an additional cover by paying extra premium had been taken for spontaneous combustion. This however cannot be taken to mean that damage caused due to fire per se would stand excluded if the origin of such fire lay in spontaneous combustion. Origin of Fire would be quite immaterial as long as the factum of Fire was not in dispute and the factum of damage and loss of property was established. Perhaps the only exception to this would be an allegation of arson: however, in the case in hand, there is no such allegation.21. In view of the discussion, this consumer complaint is allowed with the following directions:(i) OP shall pay Rs.78,93,263/-, the net loss assessed by the surveyor, along with simple interest of 9% p.a. from the date of repudiation of the claim till the date of payment;(ii) This order shall be carried out within three months of date of its receipt.22. In the facts of the case, there shall be no order as to costs which parties may themselves bear.