SAURASHTRA CHEMICALS LTD Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) The complainant company had taken a standard fire and special perils policy from the opposite party, National Insurance Co. Ltd., thereby insuring the risk of loss/damage to the stock of coal and lignite lying in its factory compound. The complainant paid an additional premium to the opposite party so as to include the risk of loss of the aforesaid stock on account inter alia of spontaneous combustion. The factory of the complainant company was closed for the period from 17-02-2006 to 09-08-2006 on account of the workers having been retrenched. When the plant was reopened on 10-08-2006 it was noticed by the employees of the complainant that some stock of coal and ignite had got diminished/destroyed by spontaneous combustion. An intimation in this regard was sent to the insurance company on 12-09-2006. This is also the case of the complainant that all requisite precautions including water sprinkling was regularly done during the period the plant remained closed. On the request made by the complainant, M/s. Mehta & Padamsey Pvt. Ltd. were appointed as surveyors who visited the complainant on 18-09-2006 and sought certain details. The requisite documents were submitted to the surveyor on 28-11-2006. The claim lodged by the complainant company, however, was rejected by the insurance company on 27-07-2007 on the ground that the loss had not been caused by fire only. Being aggrieved from rejection of its claim the complainant is before this Commission with the following prayer:

(2.) The complaint has been resisted by the insurance company primarily on the ground that no claim was payable under the terms & conditions on which the policy was issued. It is stated in the reply that destruction or damage caused to the property by fire on account of its own fermentation, natural heating or spontaneous combustion or undergoing natural heating or drying process is not covered. In the instant case the spontaneous combustion/heating had not resulted into fire within the meaning of the policy. Thus, the stand taken by the insurance company is that there was no evidence of any actual ignition/fire on account of spontaneous combustion and, therefore, the claim was not covered under the policy. It is also stated in the reply that intimation of the claim was sent after considerable delay of over a month, thereby violating condition No.6(1) of the policy. It is also claimed that since the factory remained closed from 17-02-2006 to 09-08-2006, the insurance cover ceased to attach as provided in condition No.(3) of the policy. Their contention is that had precautions been taken there would be no question of the stock being damaged due to spontaneous combustion, self-heating, etc..

(3.) This is also claimed by the opposite party that the policy having been taken for a commercial purpose the complainant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.