ORIENTAL INSURANCE CO. LTD. THROUGH ITS DIVISIONAL MANAGER, DIVISIONAL OFFICE NO.2, KALIDAS CHAMBERS MR.DINBHAI TOWER LAL DARWAJA AHEMBDABAD GUJARAT Vs. REMIK TRADING CO. LTD. THROUGH ITS MANAGING DIRECTOR PRAFUL NIVAS, PANCHAVATI, ELLISBRIDGE AHEMBDABAD GUJARAT

JUDGEMENT

(1.) Aggrieved by the order, dated 29.12.2010 in Complaint No.7 of 2008 on the file of State Consumer Disputes Redressal Commission, Gujarat, Ahmedabad (for short the State Commission ), the Opposite Party Insurance Company preferred this Appeal under Sec. 19 of the Consumer Protection Act, 1986 (for short the State Commission ). The brief facts as set out in the Complaint are that the Complainant Company dealing in chemicals and dyes had obtained a Standard Fire and Perils policy from the Insurance Company covering the period from 06.02.2006 to 05.02.2007 for an insured amount of Rs. 1,30,00,000.00 for the stocks at various godowns. The Complainant Company had insured the chemical stored in godown No.80 where a fire broke out in the intervening night of 01.06.2006/02.06.2006 at about 11 p.m. due to electric short circuit resulting in rise of temperature in the said godown thereby causing damage to chemicals and dyes which were stored there. The fire was extinguished by the fire brigade in the afternoon on 02.06.2006. An FIR was lodged and the Complainant averred that they had informed the Insurance Company on 02.06.2006 and also submitted a claim statement in the prescribed format on 28.11.2006 estimating the total net loss at Rs. 28,11,855.00. It is pleaded that M/s A. M. Patel, Surveyors Private Limited, were appointed to assess the loss, but the claim was repudiated vide letter dated 17.01.2007 on the ground that the damage to the material must have taken place due to decomposition process and/or spontaneous combustion with the water without any flame and/or ignition of fire. On 09.02.2007, a request was made to the Opposite Party to review the case but finally the claim was repudiated on 27.06.2007 when the Opposite Party refused to review the case. The Complainant averred that the accidental fire had taken place due to short circuit and not spontaneous combustion which requires temperature upto 80-85 degree centigrade and that the repudiation by the Opposite Party is unjustified.

(2.) The Opposite Party Insurance Company filed the written version admitting the issuance of the policy, the period of coverage and also the sum insured. It is denied that the fire broke out due to short circuit and also that it was put out with the help of a fire brigade. It is admitted that the Complainant had given an intimation to them vide letter, dated 02.06.2006 and that a Surveyor was appointed to assess the loss. It is submitted that the Insurance Company had repudiated the claim vide letter, dated 17.01.2007 and denied that the quantum of loss was admitted in that letter. It is averred that the Complainant is engaged in the business of selling and purchasing chemicals since 1984 and is well conversant with the chemical properties of the chemicals stored in the godown and it is not true that the materials are susceptible to spontaneous combustion only if the temperature reached to 80-85 degree centigrade. It is stated that it is misguiding to rely on the photographs of the site and also the fire brigade report dated 10.07.2006.

(3.) On investigation, the Surveyor found that Mr. Latif, working in the nearby looms factory, had informed the Complainant of the incident and in pursuance of the Complaint, the police conducted panchnama of the incident on 03.06.2006 and also took samples of chemicals and electric wire with a view to analyse the same by FSL. The Complainant submitted the FSL report dated 10.10.2006 to the Insurance Company for two samples mark A and B, which were respectively identified as citric acid and sodium hydrosulphate. It is also reported that the said chemical powders cannot burn by contact of water. The Complainant forwarded the FSL report dated 16.11.2006 for sample mark 3 on the basis of scientific analysis and observation of both the samples FSL concluded that the continuity of electricity found in samples 3/A and 3/B. On the basis of this report, the Surveyor had reached the conclusion that there was no short circuit inside the godown.