Parsvnath Buildwell Private Limited vs Naveen Ahuja

A. P. Sahi, President Member

These are cross appeals filed by the Insurance Company and the complainant, a private limited company that runs a Jute processing unit and factory Eastern Jute Mill, Ali Hyder Road, Titagarh, North 24 Parganas, West Bengal. The challenge raised is to the order of the State Consumer Disputes Redressal Commission, West Bengal, Kolkata (hereinafter referred to as “the State Commission”) dated 15.06.2016, whereby the claim filed by the complainant seeking full indemnity under the insurance cover for the loss suffered in a fire in the factory has been partly allowed, to the tune of Rs.22,90,542/- as against the entire claim of Rs.65,82,600/- along with other ancillary benefits.

The facts have been stated in detail in the impugned order but in order to briefly give a prelude, it would be apt to briefly sketch the background in which the claim was made.

The admitted facts are that the risk of the factory and the goods kept therein were secured including the building, stocks, plants and machinery under a policy of the National Insurance Company Limited. The duration whereof was from 17th August, 2011 to 16th August, 2012. The fire broke out at 11:35 a.m. in the morning hours of 29th October, 2011 about which information was sent to the Police Station, the Fire Brigade as well as the Insurance Company. The Fire Brigade was able to douse the fire by late night on the same day.

The process of survey was undertaken by the Insurance Company through its spot surveyor Mr. Sujan Santra who visited the premises on 3rd November, 2011 which fact has been disputed by the learned counsel for the complainant. However, there is a joint inspection which was conducted in the presence of the officials of the complainant company on 4th November, 2011 and then a meeting was held on 8th November, 2011. Preliminary loss report was prepared and is stated to have been submitted. The Fire Brigade issued a certificate on 26th December, 2011 and the police also certified the occurrence of the fire on 25th January, 2012. The Insurance Company appointed a second surveyor M/s. Aastha Insuvision Pvt. Ltd. that submitted its final survey report on 18th June, 2012. Communications were exchanged between the parties including the surveyor, whereafter the claim was repudiated vide letter dated 4th January 2013 invoking the exclusionary clause of spontaneous combustion.

It is in this background that the claim was examined by the State Commission which ultimately came to the conclusion that the assessment of loss made by the first surveyor as well as the conclusion made by the final surveyor indicated a loss and that the reason given for repudiation is not a valid proposition.

It was also held that the cause of spontaneous combustion was found to be not proved by the Insurance Company and therefore was unacceptable. Ultimately, the final survey report was accepted as valid and a sum of Rs.22,95,542/- together with compensation was awarded.

At the outset, it may be noted that there are two appeals filed against the same impugned order one by the complainant seeking enhancement namely First Appeal No.  933 of 2016 and the other by the Insurance Company for setting aside the impugned  order being First Appeal No. 991 of 2016. Both the appeals have been heard simultaneously, where learned counsel for the parties have advanced their submissions.

Learned counsel for the complainant contends that the loss was proved and therefore the entire claim ought to have been allowed, hence the quantum claimed should be paid to the complainant as it was clearly covered under the policy. Insurance Company, however, disputed this claim and urged that under the terms of the policy such a loss caused due to spontaneous combustion is specifically excluded and therefore the finding of the State Commission that it is not a valid proposition is incorrect. The parties are bound by the terms of the contract and consequently the inference drawn by the State Commission is incorrect. It is also submitted that the insurance policy was on record and it was proved beyond doubt that on account of the violation of the method of stocking by the complainant and the stacking of the bales too closely without maintaining the appropriate distance between them resulted in spontaneous combustion. It is therefore submitted that the repudiation dated 4th  January, 2013 is founded on correct grounds. The State Commission should not have by any inferential logic stretched the relief beyond the exclusionary clause of the policy document. It is further submitted that there was nothing on record to evidence or contradict the fact of spontaneous combustion. To the contrary the claimant has chronicled its grievances urging that the fire had occurred due to an electric short circuit that emanated from outside the premises. It is further submitted by the complainant’s counsel that jute fiber is not amenable to any such spontaneous combustion theory and the fact of the matter is that the spontaneous cause of fire could not be substantiated by the insurance surveyor.

Having heard learned counsel for the parties there is no dispute that there was a policy in existence under which a claim relating to loss on account of fire was covered. However, the exclusionary clause on which reliance is being placed by the Insurance Company deserves to be noticed. The same is extracted herein under:-

“l. Fire

Excluding destruction or damage caused to the property insured by:

i) its won fermentation, natural heating or spontaneous combustion.

ii) Its undergoing any heating or drying process.

burning of property insured by order of any Public Authority.”

The fire occurred during day time at 11:35 a.m. on 29th October, 2011. The complainant took a stand that the fire occurred due to an electrical short circuit from the outside wiring of a 220 volt line that was laid for outside lighting. However, the information sent to the Insurance Company addressed through the Senior Divisional Manager does not indicate the cause of fire but the claim form filled up by the complainant in the column meant for indicating the cause of fire mentions that it occurred due to an electrical short circuit.

The information that was lodged with the Police Station on 29th October, 2011 was certified through the general diary entry of Police Station, Titagarh dated 29th  October, 2011 through a letter of the officer in charge of the Police Station issued on 25th January, 2012 which is extracted herein under:-

“To

The Chief Personnel Manager

Sunbeam Vanijya Pvt. Ltd.

Titagarh

Ref: Your letter dt. 23.01.2012

Sir,

In reference to your letter dt. 23.01. 121 am to state that on 20.10.11 at about 11.35 hrs a devastating fire took place at your Jute Godown, on receipt of the information myself along with officers and force immediately had been to the spot and found that the jute Bales Godowm no.19 was caught fire, almost 9 fire tender had come to the site and started to extinguish the devastating fire. Huge quantity of jute bales which were kept in the raid go down no 19 become badly damaged due to the fire. None was injured in the said incident and the cause of fire could not be ascertained. The fire came under control in the night at about 21.45 hrs.

This refers to Titagarh P.S. G.D.E. No. 1955 dt. 29.10.11.

This is for your kind information

Yours sincerely

Sd/-

Subhasish Chowdhury

IC Titagarh P.S

Barrackpore Police Commissionerate”

A perusal of the said general diary entry also indicates that the fire did take place and 9 fire  fighters had arrived at the site to extinguish the same but the cause of fire could not be ascertained.

The fire fighting department, Government of West Bengal through the Divisional Officer, West Bengal Fire Services tendered information under Section 8 (1) of the West Bengal Fire Services Act, 1950 on 26th December, 2011 where while certifying the incident of fire and the extent of damage reiterated that the cause of fire could not be ascertained. The same is extracted herein under:-

“West Bengal Form No. 393 Z (27)

Government of West Bengal

Office of the Division Offices D Division W.B.F.S

Memo No FSD/47/11

Dated Kolkata the 20/12/11

To

The Presidency Magistrate/ Magistrate

24 Paraganas (N)

Barasat

Sir,

Subject:- Information as to the origin and cause of fire:

Under Section 8(1) of the West Bengal Fire Services Act, 1950 I submitted below the particulars for your information and necessary action.

Yours faithfully

Sd/-

Senior Officer

Divisional Officer

D Division W.B.F.S

Fire at Sunbeam Vanijya Pvt Ltd. (within compound of Eastern Manufacturing Co. Ltd.)

Date 29/10/2011 Time 11:45 AM.

Locality with Police Station Titagarh.

4 Owner of the premises Eastern Manufacturing Co. Ltd.

Tenant of Premises Sunbeam Vanijya Pvt. Ltd.

Cause of Fire Could Not be ascertained.

Short Description of buildings and other property destroyed and damaged by Fire and water-  A Godown measuring approx. 2000 sq.ft Area, pucca walling, RCC roofing  fully loaded with jute bales & finished jute  were ……….. in fire. Fire brigade worked with three jets for w/t. All the materials damaged & destroyed due to fire & water.”

The Insurance Company contends that Mr. Sujan Santra was immediately asked to carry out a survey and assess the loss and damage as reported by the complainant. According to the Insurance Company a preliminary loss report dated 3rd November, 2011 was submitted indicating the inspection of the site on 29th October, 2011, 31st October, 2011 and 2nd November, 2011. In the survey inspection and verification report at column no. 14, the following observations have been made:-

“14. SURVEY, INSPECTION & VERIFICATION

a) On the first day visit ie on dt. 29 10 2011 at 04:00 PM the undersigned has observed that fire AL-27 fighting personnel has fighting against the fire to extinguish the same. The fire has broke out at the wall side of the stack of Raw Jute as such that has spread inside the stack through the wall The Earth Excavator Machine (JCB) has hired by the Jute Mill authority as advised by the Fire Brigade to evacuated the damaged stock from the affected Godown to avoid further spreading of fire. However the fire brigade has spreading water inside the Godown over the Raw Jute bales which were not in contact with the fire to avoid further spreading A part of the CGI covered roof of the Godown was broken by the fire brigade personnel to pass out the smoke of the fire, which are spreading inside the Godown The damaged Jute bales were taken out by the JCB & gathered on the open space inside the complex in loose condition.

b) On the second day Visit i.e. on dt. 31.10.2011 the undersigned further visited the spot & observed that a huge no of damaged/burnt Jute bales were taken out from the Godown & spread over the open space inside the Jute Mill complex. Water that has used for fire fighting has accumulated inside the affected Godown up to the height of 8-10 inches. It was observed that until the accumulated water has completely drain out from the Godown the segregation work will not started. However the undersigned has advised the insured's representative Sri SK, Nag. GM (Commercial) to start the segregation work as early as possible Mr. Nag has expressed his inability to start the segregation work before the undersigned without getting permission from their Head Office. Moreover they have no other spare Godown / open space in where the segregated jute can dump. However the undersigned has contacted Sri P. K. Somani, posted at their HO to insist him for carry out the segregation work as early as possible However the undersigned has physically counted the bales after the loss has occurred. It was found from the Stock Register that total no. Bales stack in the affected Godown No. 19 at the time of fire is 1,908 Bales. Out of the above 1.908 bales, 979 nos. of bales got affected due to fire, which are lying inside the Jute Mill complex in loose condition & the rest 929 hales which are not affected" directly by fire, but some of the bales are affected by water due to fire fighting operation by fire brigade.”

The pleadings are to the effect that a joint inspection was carried out on 4th November, 2011 in the presence of Mr. S.K. Nag the General Manager (Commercial) and Mr. Sujan Santra, surveyor. This joint inspection report is extracted herein under:

“Joint Inspection Report

Insured:                   M/s Sunbeam Vanjya Pvt. Ltd.

Address :Lessee :  M/s. Eastern Manufacturing Co. Ltd.

Ali Hyder Road, Titagarh,

Distt 24 Parganas (N), Kolkata-700110

The Jute Bales which were stacked in Godown No. 19 are caught by fire on dt 29/10/2011 at 11:35 A.M.

Joint inspection done in the presence of Mr. S.K. Nag, General Manager (Commercial) & Mr. Arun Kr. Singh, President Work of the above concern and findings are given below;-

Total no. of bales kept in Godown No. 19-  1,908 bales.

Total no. bales found as fire affected - 998 bales (Approx.)

Total no. of bales found as water damaged full & partial not ascertained till dt. 04/11/2011

The surveyor has advised the insured with a request to keep the damaged items inside the Jute Mill premises for further course of action as is where basis.”

The Insurance Company appointed another surveyor for carrying out the final survey namely M/s. Aastha Insuvision Pvt. Ltd., who visited the premises on 8th November, 2011 and on subsequent dates and after having received documents from the complainant submitted its survey report dated 18th June, 2012. The said survey report extensively makes observations concluding that the fire originating source was the left side lower corner of the godown due to spontaneous combustion. It further observed that due to improper stacking by means of keeping no space from the inner walls of the godown, the bales stacked were touching the wall which resulted in absence of proper ventilation and lack of oxygen leading to spontaneous combustion. It was also observed that the loss was aggravated as obstruction of ventilation and insufficient air oxygen being the caused increased the humidity and temperature that cause the temperature of jute bales to reach to a hot spot and the fire also spread to the nearby bales. Thus the fire occurred due to spontaneous combustion and the loss was aggravated on account of improper stacking and insufficient space as a result whereof aggravation of 30% had occurred which deserves to be deducted from the assessment. The final surveyor concluded that since the insured had violated the warranty clauses therefore the question of liability is left to the sole discretion of the insurer and the net loss was assessed at Rs.22,45,918.71 that has been made the basis for awarding damages by the State Commission.

The Insurance Company vide letter dated 4th January, 2013 repudiated the entire claim on the ground that the loss was caused due to spontaneous combustion and therefore the liability is not admissible. Hence the claim stands repudiated. The communication dated 4th January, 2013 is reproduced herein under:-

“Ref.: 100700/Fire Cl/tkb

WITHOUT PREJUDICE

Dated: 04/01/2013

To

Sunbeam Vanijya Pvt. Ltd.,

21A, Shakespeare Sarani,

Kolkata-700017,

Ref.:  Claim No: 100700/11/12/1390000039;

Under Policy No. 100700/11/11/3300000145

At your Jute Mill premises situated at: M/s. Eastern Mfg. Co. Ltd., Ali Hyder Road, Titagarh, N 24-Pgns PIN-243188.

This has reference to your Claims A/c Fire at your premises on 29/10/2011.

On scrutinization of the Claim and the cause of Loss, the competent Authority has decided to repudiate the Claim on the following grounds:

It was observed by both the Surveyors about the cause of Lost as "Spontaneous Combustion”, is the effect of Violation of Warranty Clauses, which was attached to and forming part of the captioned Policy.

2) The Warranties were "Special Warranties” imposed on the said Policy, held by you, for the risk of Fire, and therefore the same forms a Special Conditions thereto.

Thus keeping in view of the above, the captioned Claim stands repudiated.

Regards

Sd/-

TAPAN KR. BHOWMIK

Sr Divisional Manager

Division VII, Kolkata

cc to: National Insurance Co. Ltd., CRO 1, for their kind information and record.”

Thus, there are broadly two issues on which a contest has been put forth by the learned counsel for both the sides. The first is regarding the cause of fire and its assessment by the surveyor and acceptance in the repudiation letter. The second is that in the event the loss is due to fire covered under the policy, other than the causes that exclude liability, then whether the calculation of the quantum deserves to be revisited.

The first issue therefore deserves to be dealt with regarding the cause of the fire. The complainant setup the cause as an electrical short circuit that may have emanated from the outside wiring of the building inside the premises/godown and may have lit the jute bales. This claim could not be established by any evidence by the complainant. The Police report, the Fire Fighting report and the other evidence nowhere indicate that the fire was caused due to electrical short circuit, rather they record that the cause could not be ascertained. It has been stated in the surveyor’s report that there is no wiring or electrical equipment inside the godown so as to infer the cause of fire due to an electrical short circuit. The nature of the flames and the directions which have been indicated also did not hint towards any such spark of electricity having travelled inside the godown. Consequently, the assertion in the claim form by the complainant regarding electrical short circuit could not be established.

The question now is as to whether the fire had been caused due to spontaneous combustion. Before entering into the facts of the present case it would be apt to refer to the phrase spontaneous combustion as understood in the legal parlance of insurance claims. For this a reference may be had to the order of this Commission in the case “M/s. Roshan Lal Oil Mills Ltd. Vs. M/s. United India Insurance Company Limited reported in I (1992) CPJ 293 (NC)”. In that case vegetable oil seeds were stored in a Silo of 1510 tons capacity. The silo as well as the raw material were insured under the fire insurance policy. The seeds stored in the silo allegedly caught fire due to spontaneous combustion causing damage to the stocks. The claim was repudiated by the Insurance Company on the ground that there was no evidence of fire and the damage was due to spontaneous combustion which was excluded under the policy hence the claim was repudiated. The insurer also pleaded that no complaint had been made to the fire fighting department and there was also no damage to the structure by the fire. While examining the issue so raised the Commission referred to the scientific literature on combustion and recorded as under:-

“9. In scientific literature combustion is defined as under:

“The burning of any substance, whether it be gaseous, liquid, or soild. In combustion, a fuel is oxidized, evolving heat and often light……”

“The combustion of solids such as coal and wood occurs in stages. First, volatile matter is driven out of the solid by thermal decomposition of the fuel and burns in the air. At usual combustion temperatures, the burning of the hot, solid residue is controlled by the rate at which oxygen of the air diffuses to its surface....” (Mc-Graw Hill Encyclopaedia of Science & Technology, New York. Vol. 3, 1982).

Another test defines combustion as under:

“The term combustion signifies the process of burning associated generally with fire, flame, the generation of heat, and certain products of reaction.”

(Encyclopaedia Dictionary of Physics; Chief Editor Thewlis, Pergamon Press, Oxford, 1961).

In this context the definition of spontaneous combustion is also relevant:

Spontaneous Combustion: “This occurs when certain materials are stored in bulk. The oxidizing action of microorganisms often produces the initial heat.” “As the temperature increases, the air trapped in the material takes over the oxidation process, liberating more heat. Because the heat cannot be dissipated to the surroundings, the temperature of the material rises still more and the rate of oxidation increases. Eventually the material reaches an ignition point and bursts into flame.”

(Mc-Graw Hill Encyclopaedia or Science and Technology, New York, Vol. 3,1982).

In the other text ‘Spontaneous combustion’ has been defined as under:

“Slow chemical reactions between the oxidant and fuel or its impurities may locally build up enough heat due to the presence of a thermally non-conductive medium to spontaneously start the combustion.”

At this stage we may also extract the meaning given to the expression ‘Fire’ in Collins English Dictionary “The state of Combustion in which inflammable material burns, producing heat, flames and often smoke.”

This would indicate that fire develops only at a particular point in the combustion process. In fact, the fire or flame is produced only when the point of auto ignition is reached. It is, therefore, evident that the term ‘Spontaneous combustion’ in the complainant’s report of 3rd August, 1990 cannot be construed to imply that there was no fire.”

The Bench also found that high temperature below the ignition point can also cause oxidation and chemical changes leading to thermal degradation. On the facts of that case it was held that the terms of the policy therein did not state clearly and directly so as to exclude any damage by spontaneous combustion at the pre ignition stage that is combustion without fire. The claim was therefore allowed after assessing the loss and the damage suffered therein.

In the instant case to counter the aforesaid contention the complainant had categorically brought forth two documents that were pleaded before the State Commission one was an expert opinion from Mr. Ajoy Maity, Chartered Engineer who vide his certification dated 9th February, 2013 opined that jute is a natural fiber and therefore it does not have any explosive material so as to cause spontaneous combustion the same is extracted herein under:-

“AJOY MAITY

(Chartered Engineer)

B.Sc. Jute Tech. (Cal), A.M.I.E. (0), DIS (Cal)

Dated 19.02.2013

Ajoy Maity, a senior jute Technologist and Chartered Engineer, hereby confirmed from my 10 years experience in the capacity of Chief Executive/President/General manager and qualification that jute is a natural Fibre and there is no possibility of any explosive remain in Raw Jute whatsoever.

It is further being placed on record that while stacking, storing, handling and processing of Jute Fiber there is no question of Spontaneous Combustion/Fire

(AJOY MAITY)

Jute Technologist and Chartered Engineer”

This document was clearly pleaded in para 17 of the complaint, which has nowhere been denied in the written version filed by the Insurance Company before the State Commission. Not only that, the said fact was pleaded by way of evidence by the complainant in paragraph 19 of the evidence affidavit to the same effect. This also has not been contradicted in the affidavit of evidence filed by the opposite party/ Insurance Company which is also on record. A specific query was also raised by the complainant in the questionnaire on this document which was captioned as Annexure P through question number 22. The reply given by the Insurance Company to this question is as follows:-

“ Answer to question No. 22  The opinion made by the Ajoy Maity, Chartered Engineer dated 19.02.2013 the Opposite Parties have no knowledge about the said opinion it seems to arbitrary and biased.”

A perusal of the aforesaid fact clearly indicates that the same even though not denied in the affidavits was sought to be vaguely rebutted in the evidence by the Insurance Company as noted above.

The complainant therefore did submit an expert report which was followed by a supporting letter from Jute Balers Association, Kolkata dated 22nd November, 2014, which is extracted herein under:

“The Jute Balers Association, Kolkata answered to the queries asked by the Appellant on 22.11.2014 regarding the spontaneous combustion. According to Jute Balers Association about Spontaneous Combustion.

“Raw Jute and Raw Jute Bales being soft in nature which carries moisture and due to moisture content it carries, there is absolutely no possibility of spontaneous combustion.

Raw Jute were stored for 3 or more years cannot have any chance of spontaneous combustion.

India produces almost 90 Lacs Bales of Raw Jute each of 180 Kgs, and consumed in 55 Jutes Mills or more. Raw jute is imported and exported through all the modes of transport through truck, ship, railway and never there is any occurrence of fire due to spontaneous combustion.

...........during the loading and unloading and after being kept in a pucca godown there is absolutely no chance of spontaneous combustion unless there are sparks arising out of electrical short-circuit or someone ansent-mindly throws some cigarette ends, Bin etc. Raw Jute and Raw Jute Bales very soft in nature and therefore bails are staked one after another the storing height goes to 10 to 16 feet. There is every possibility that the Raw Jute and Jute Bates which are at the bottom will try to expand due to pressure from the top, Raw Jute and Jute Bales are not hard articles. Therefore, if Raw Jute and Jute Bales which stacked one on another, then expansion of such stack by couple of inches on all sides are common phenomenon.”

The aforesaid evidence does not find any discussion in the order of the State Commission.

Learned counsel for the complainant has also relied on a literature of insurance topics which is dated 24th  May, 2013 and is an article available on the internet. The said article is extracted herein under:-

“Fire Hazards of Jute Godowns

May 24, 2013 Jute  0 Comment

In case of godowns containing baled raw jute, an aggravating factor is the burning characteristic of the material. Godown fires are most stubborn and difficult to extinguish. When an outbreak occurs in a jute godown, fire spreads over the surface of the bales with great rapidity, at the same time working its may between the bales until the whole mass is involved. The losses arising out of fires in Jute Godowns are enormous and it is much more than the fire losses in the manufacturing departments. fire occurring in the jute godowns, also burrows within the bales and after travelling through interstices of the stacks continue to burn merrily in isolated pockets where extinguishing water jets or sprays cannot readily reach. Jute fibre has also a tendency to shed water and rapidly dry up during a fire. It is, therefore, not unusual to find water soaked fibres re-igniting after a few minutes. Because of these features it usually takes hours to extinguish a jute godown fire and in the process thousands of gallons of water have to be used.

The fact that jute emits a dense and acrid smoke while burning which constitute a major hazard and great handicap in fighting a fire in a jute godown.

Another important hazard of jute godown fire is due to characteristic property of jute in absorbing large volumes of water, and the consequent swelling accompanied with it. Fully soaked jute absorbs more than its own weight of water. The swelling pressure in case of pucca bales may be as high as 4,600 pounds per square feet. In the past, this has brought down 20 inches thick brick walls where bales were stacked either against the walls or with very little clearance therefrom. In case of piles of kutcha bales, the swelling has resulted in collapse of high stacks.

A remarkable feature in case of jute godown fires has been the discovery of the outbreak in many cases, after some hours the godown being closed or locked. This at a time led to a general belief that external source of ignition could not have been the cause. It was thought that these fires were caused by spontaneous combustion. However, research conducted in India and abroad have proved that jute is not susceptible to spontaneous combustion unless it is contaminated with oil, grease and similar substances. In fact, however, uncontaminated, jute is not liable to ignite spontaneously. Tests have proved conclusively that a temperature of about 482*F is necessary before combustion will take place, but the maximum temperature generated by the self healing of uncontaminated jute in bulk never exceeds 158°F. Since most of the godowns do not use artificial lighting, the largest caruse of fire in godowns is believed to be due to careless disposal of smoking material, if not arisen out of malicious causes. The prohibition of smoking has long been the rule within the jute mill premises, but inevitably some surreptious smoking has always taken place. This is a matter of good management and discipline, but "no smoking" is a difficult rule to enforce at all times.”

Though the said article did not form part of the pleadings yet it has been advanced at the time of argument which obviously has been disputed by the learned counsel for the Insurance Company as being neither admissible nor of any probative value.

The contention of the learned counsel for the complainant also is that the final survey report while proceeding to infer spontaneous combustion completely omitted mentioning the fact that the godown was open, the incident happened during day time when workers were coming in and out of the godown and therefore there was no lack of air circulation or deficiency in oxygen as a result whereof the fire could have ignited. What appears from the report of the surveyor that there is no indication of any material scientific, expert or otherwise to demonstrate that there was a rising level of temperature to such an extent so as to cause fire due to stacking of the bales. There ought to have been some assessment or indication that the level of heat or temperature due to such stacking occurs to cross the minimum ignition point so as to clinchingly conclude the cause as spontaneous combustion. The order in the case of M/s. Roshan Lal Oil Mills  (Supra) clearly indicates that such information is desirable so as to conclude and ascertain as to whether the damage was caused after the heat generated had reached the point of ignition. In the case of M/s. Roshan Lal Oil Mills  (Supra) it was the seeds stored in a silo that was alleged to have been damaged at the pre-ignition stage. The contentions were answered in the light of the distinction between combustion and spontaneous combustion on the facts of that case, where the thermal temperature was found sufficient to cause damage at the pre ignition stage that was held to be covered under the definition of fire and not on account of spontaneous combustion.

In the instant case when there was no material to establish the cause of fire due to electrical short circuit then if the surveyor and the Insurance Company were inferring spontaneous combustion as the cause of fire, it was incumbent upon the Insurance Company to have come up with evidence scientific or otherwise to established that no other cause was decipherable except spontaneous combustion on account of alleged faulty stacking of the jute bales. In the opinion of this Commission the burden squarely lay on the Insurance Company to have rebutted the stand of the complainant who had taken this specific plea with the aid of some material whatever worth it was. The expert opinion relied on by the complainant could have been dislodged by demonstrating that the stacking of bales had ignited the fire and was therefore spontaneous combustion.

The State Commission also did not undertake this exercise and drew a conclusion without dwelling into any further by simply recording as follows:-

“Decision with reasons

Point Nos. 3 to 6

All these points are taken up together as they are inter-connected and for brevity in discussion.

Ld. Advocate for the Complainant has submitted that this is a case of fire, in which the godown  goods  have been gutted on 29.10.2011 at about 11.35  in the morning, and the same has been informed to the Titagarh P.S. and also the OPs  on the same date, and a claim form was lodged with  the OPs claiming Rs.65,82,600/-. But, the claim has been repudiated by the OPs on the ground that Spontaneous Combustion has the effect of violation of warranty clause. In order to prove its case, the Complainant took the opinion of an expert, Mr. Ajoy Maity, Chartered Engineer and Jute Technologist, who opined that jute is a natural fibre and there is no possibility for any explosive to remain in raw jute whatsoever and no question of spontaneous combustion / fire, which is not controverted. The OPs in an illegal manner and to deprive the Complainant from its legitimate claim has repudiated the claim on untenable and baseless ground. Initially, Mr. Sujan Santra made an on-the-spot survey and assessed the loss at Rs.28,70,652/- and  finally Astha Insuvision Pvt. Ltd. was appointed by the OPs, who assessed the loss at Rs.22,90,542/-. He has referred to some decisions of the Hon’ble National Commission reported in I (2003) CPJ 33 (NC), and 2015 (1) CPR 509 (NC) and 2012 (1) CPR 242 (NC) regarding proprietary in the appointment of a second Surveyor. He also referred to a decision of this Commission in CC/09/2010.

Ld. Advocate for the OPs has submitted that there has been no coverage for Spontaneous Combustion. There has been no explanation of the fire as broken out in the godown.  In respect of two surveys, Mr. Sujan Santra was appointed as preliminary surveyor and M/s. Astha Insuvision Pvt. Ltd. was appointed as final surveyor, which is permissible, and no dispute has been raised by the Complainant in this regard in their petition of complaint. But, it has rather been mentioned that one joint inspection was conducted by the officials of the Complainant and the said Surveyor on 04.11.2011. Both the surveyors found the cause of loss due to Spontaneous Combustion. The Insurance Company has rightly rejected the claim of the Complainant on that ground  and repudiated it. So, the case of the complainant can not stand on its leg. He has referred to one decision of the Hon’ble Supreme Court Reported in III (2009) CPJ 90 (SC) and some decisions of the Hon’ble National Commission reported in IV (2012) CPJ 148 (NC), II (1013) CPJ 122 (NC) and I (2014) CPJ 332 (NC), and IV (2012) CPJ  159 (NC). He has also referred to one decision of this Commission in FA /27 /2013.

The case of Spontaneous Combustion is not a valid proposition and can not be taken as granted on its face value only for the reason that no additional premium was paid or coverage was given to the Complainant in that behalf. It is rather an imaginary proposition. The Surveyors were not produced nor their reports proved by them. It can not be said that the godown of the complainant was a Combustion Chamber. It is based merely on assumption, presumption, surmise and conjecture. It may be a case of electrical short circuit also. In any way of the matter, the concept of Spontaneous Combustion is not applicable and proved in this case by any valid and / or scientific process and / or expert opinion.

Accordingly, the Complainant will be entitled for indemnification from the OPs regarding the fire loss as insured with them. In this respect the report of the second surveyor, who is the final Surveyor is taken to be the base for the award, which is Rs.22, 90,542/-. Thus, all these points are disposed of in favour of the Complainant.

Hence ordered,

that the complaint be and the same is allowed on contest against the OPs with a cost of Rs. 5,000/-. The OPs are directed to pay a sum of Rs.22, 90,542/- and a compensation of Rs.25, 000/- to the Complainant within a period of 30 days from this date of this order. In default thereof, the OPs will have to pay an interest of  9% p.a. over the awarded amount of Rs.22, 90,542/- till payment.”

The State Commission categorized it as an imaginary proposition which does not appear to be correct in the sense that it is a scientific proposition but the State Commission was certainly right to the extent that it was not proved as neither the surveyors were produced nor their reports were proved by them by any scientific process.

Having arrived at that conclusion, the issue is that can this still lead to any firm conclusion as to the cause of the fire. It is obvious that the cause of fire was not known or ascertained either by the police or by the fire brigade authorities. The surveyor appointed by the Insurance Company drew an inference which clearly appears to be on its own assessment of the nature of the stacking of the bales that is not supported by any further evidence that such stacking could have caused fire. There were neither any parallels of such incidents available by way of proof to assume a probability of the jute bales catching fire by spontaneous combustion. The complainants had ushered in a couple of documents as discussed above to challenge this stand of the surveyors report and the conclusion in the repudiation letter. The State Commission also came to this conclusion that there was lack of expert or scientific evidence on the part of the Insurance Company and it is for this reason that the State Commission had partly allowed the claim.

In the opinion of this Commission this issue therefore needs to be resolved by allowing the parties to lead evidence and file such material that may be helpful in arriving at a firm conclusion about spontaneous combustion being the cause of fire in the present case. Unless this is firmly established that spontaneous combustion had occurred on account of the alleged faulty stacking of the bales, the claim could not have been repudiated by the Insurance Company as admittedly, the loss and damage had been caused due to fire. In the event it is ultimately found that the stand of the Insurance Company or the fire having been caused by spontaneous combustion is not correct or proved, then in that event the quantum of compensation will have to be determined after assessing the evidence on record. The State Commission has found a middle path in accepting the partial claim while it has not believed that theory of spontaneous combustion as setup by the Insurance Company. If that was so, then the State Commission ought to have proceeded further to assess the quantum, keeping in view the contentions raised by the complainant vis a vis the existence of the quantity of the jute bales that were either lost in fire or damaged on account of fire fighting efforts.

The report of the surveyor on aggravation would also have effect on the defense taken by the complainant with regard to stacking but at the same time the complainant will also have to establish that the stacking was safe and was otherwise not congested keeping in view the air available and other factors which have been mentioned in the final survey report.

Consequently, for all the reasons above, since the evidence on the issue of the cause of fire is lacking and the surveyors report does not seem to be supported by any scientific or cogent evidence nor was it proved by the production of the surveyor to establish the same, the pleadings and evidence on record therefore did not suffice on this count. The State Commission ought to have called upon the parties to adduce evidence on this count in order to believe the stand or otherwise taken by the Insurance Company. The question of compensation would also be dependent as observed on such a finding to be recorded.

Consequently, in order to arrive at a conclusion of invoking of the repudiation clause by the Insurance Company or its rejection on the basis of evidence deserves to be appropriately reassessed for which it would be necessary to remand the matter back to the State Commission to decide the matter afresh in the light of the observations made herein above, just as C. S. Lewis one of the most famous writers of the 20th Century wrote that at times “the circular path was the perfect length for any problem.”

It would also be desirable that the decision is concluded expeditiously within a reasonable time so as to put the matter to rest.

Accordingly both the appeals are allowed and the impugned order dated 15th  June, 2016 is set aside with a request to the State Commission to dispose off the Complaint expeditiously preferably within six months.

From the record it appears that these appeals were entertained and an interim order was passed on 10th November, 2016 in First Appeal No. 991 of 2016 filed by the Insurance Company which is to the following effect:-

“Heard the learned counsel for the appellant. In the cross appeal filed by the respondent, notice has already been issued and the matter fixed for hearing on 1.12.2016.

In the present case also, issue notice to the respondent.  Learned counsel for the respondent accepts notice. Copy of the paper book be supplied to him by the Registry.

List the matter for further hearing on 1.12.2016 alongwith cross appeal no.933/2016.

The operation of the impugned order is stayed subject to deposit of 50% of the amount awarded by the State Commission within three weeks with this Commission, which shall be kept in the shape of an FDR.”

The deposit made under the said interim order before this Commission shall be remitted back to the State Commission for being kept in deposit in the shape of an FDR till the final disposal of the complaint. The release or refund of the amount would be dependent on the outcome of the decision on the complaint. With the aforesaid directions both the appeals stand disposed off.