AZAD BHARAT TOBACCO FACTORY vs NATIONAL INSURANCE CO. LTD.

THIS is an appeal filed by the Complainant, M/s. Azad Bharat Tobacco Factory (for short the Firm) against the order dated 28th January, 1992 passed by the State Consumer Disputes Redressal Commission, Lucknow, U.P., by which the Complaint filed by the Firm was dismissed.

THE brief facts are that the Firm is engaged in manufacturing tobacco known as ''SAUNDA''. For the security of the business, the Complainant had got insured its building as well as finished and raw material with the Respondent, National Insurance Co. Ltd. (for short the Insurance Company), for a sum of Rs. 20,10,000/-. The insurance policy was valid up to November, 1987. According to the Complainant the stock of tobacco worth about Rs. 3.5 lakhs stored in the godown caught fire and the same was completely destroyed in November, 1987. The Complainant intimated the loss to the Insurance Company and also lodged report in Police Station, Kokori within whose jurisdiction the Firm is carrying on business. The Insurance Company appointed a surveyor. On receipt of the survey report, the Insurance Company repudiated the claim of the Firm on the ground that there was no fire which damaged the stock. Thereupon the complainant filed the complaint before the State Commission assessing the loss at Rs. 3,83,911/-. The Insurance Company took up the plea before the State Commission that the insurance policy only covered damage due to fire and unless there was burning by flames it was not covered under the policy.

THE State Commission after considering the evidence arrived at the following findings : (The quotation is from the English translation of the order filed by the party). "1. It is clear that molasses are an important ingredient in manufacturing Tobacco which ferments and during fermentation generates energy which can burn the manufactured Tobacco. 2. It was also found that in the report dated 30.11.1987 which was lodged at Police Station, Kokori, exact time of alleged fire was not mentioned, It was also mentioned that the proprietors of the Company got knowledge about the said fire from the Chaukidar. 3. The Complainant could not place any such facts before the State Commission which could disclose as to whether the fire was caused due to short-circuit of electricity or due to any type of flames of fire or any other type of fire which caused this incident. The Complainant while putting his case before the State Commission could not confirm exactly that how and when fire was caused and what was its nature and description.

The State Commission finds that it has not been established that any fire took place and that the damage to the stored tobacco was due to any external fire. The loss to stored tobacco was due to use of as a result due to internal combustion during its process. 4. To a question by the State Commission the Complainant informed that no fire Brigade was called where the fire of alleged Tobacco had taken place.

THE Complainant could not specifically inform the State Commission that the stored tobacco in question was since how long kept in store and since when the same was not checked by proprietors and was not reshuffled. State Commissioner perused the fire policy in question and found that damage which is caused by fire (which include fire by explosion) is only covered under the policy. This policy does not cover loss due to energy generated during process due to internal combustion in stored tobacco.

THE Opposite Party argued that the meaning of fire in the insurance policy is fire due to flames in emergent (akasmik) circumstances and unless there is burning it is not covered under the policy. State Commission agrees with this submission." The State Commission accordingly dismissed the complaint. Aggrieved by the Order of the State Commission, the Complainant has filed the present complaint. 5. After hearing the counsel for the parties, we are of the opinion that the present appeal has no force. The Insurance Company has filed the report of the surveyor. The surveyor after visiting the spot recorded his findings and those are as follows : "1. We could not locate any point, from where the fire had sparked or the place, where it had terminated. There was no short circuiting of Electric Wire, nor there was any candle, lamp, lantern and the like, which could have caused any ignition. 2. No fire brigade was necessary to be requisitioned, nor there was any trace of fire having been extinguished, only a day earlier, by indigenous means, of water, buckets, sand, dust etc. 3. No case of any big or small fire was reported in local papers, nor neighbours, and no employee knew anything about this. An F.I.R. was lodged on 29.11.1987 (Encl. to recognition of loss, by Income Tax Authorities). 4. The incident, which according to Insured, was of fire : (a) Did not emit any smoke; (b) Did not spread to any place, nor scorched anything, wooden doors, or any other things lying in the godown, were neither charred nor burnt; (c) No wall, door or ceiling became smoky, nor any charcoal or ash, was generated; (d) Time of its start, or termination was not known."

After going through the findings recorded by the State Commission and the spot inspection report of the Surveyor, we find that the Complainant has failed to prove that the loss occurred on account of fire. Prerequisite of fire is flames. Surprisingly the Complainant has nowhere alleged that at any point of time flames or smoke was noticed in the godown or emanating from it. No fire brigade was called to extinguish the fire nor there is any allegation that the alleged fire was extinguished by employees of the Firm.

IT is not disputed that loss or damage due to natural heating or spontaneous combustion or by its undergoing any heating, or drying process are not covered under the insurance policy, photocopy of which has been filed on the record. It appears that entire stock of tobacco was left on the floor of the godown to undergo natural seasoning in the last week of May, 1987 and was to be taken out for packing into containers in November, 1987. At that time it was noticed by the Complainant that the mixture of tobacco had become very hard and was of no use for them. It also appears that the godown had remained unchecked and nobody noticed the gradual hardening of the mixture as is clear from the report of the Surveyor. 7. In the light of the above mentioned facts, the Insurance Company was justified in repudiating the claim as the loss in question was not covered under the policy. 8. For the foregoing reasons, we dismiss the present appeal with costs which we assess at Rs. 1,000/-.