NEW INDIA ASSURANCE COMPANY LTD. Vs. ZUARI INDUSTRIES LTD. AND OTHERS
IN THE SUPREME COURT OF INDIA
Case No: Civil Appeal No. 4436 of 2004
Decided on: 1st September 2009
Coram:
Counsel of Appellant: Ms. Meenakshi Midha for Pranab Kumar Mullick
Counsel of Respondents: K. K. Venugopal, Senior Advocate with Sanjeev K. Kapoor, Vishal
Gupta for M. A. Chinnasamy and Animesh Sinha for B. K. Satija
Introduction:
The Hon'ble Supreme Court has held that the duration of the fire is not relevant. As long as there is a fire which caused the damage the claim is maintainable, even if the fire is for a fraction of a second.
Facts of the Case:
The complainant (the respondent in this appeal) had taken insurance policies from the appellant on 1-4-1998 in respect of its factory situated in Jauhri Nagar Goa. One policy was a fire policy and the other was a consequential loss due to fire policy. On 8-1-1999 at about 3.20 p.m. there was a short-circuiting in the main switchboard installed in the sub-station receiving electricity from the State Electricity Board, which resulted in a flashover producing over currents. The flashover and over currents generated excessive heat. The paint on the panel board was charred by this excessive heat producing smoke and soot and the partition of the adjoining feeder developed a hole. The smoke/soot along with the ionized air travelled to the generator compartment where also there was short circuiting and the generator power also tripped. As a result, the entire electric supply to the plant stopped and due to the stoppage of electric supply, the supply of water/steam to the waste heat boiler by the flue gases at high temperature continued to be fed into the boiler, which resulted in damage to the boiler. It is evident from the chain of events that the fire was the efficient and active cause of the damage. Had the fire not occurred, the damage also would not have occurred and there was no intervening agency which was an independent source of the damage. Hence, the conclusion of the surveyors that the fire was not the cause of damage to the machinery of the claimant cannot be agreed with.
The Insurance Company repudiated the claim of the respondent under ‘Fire Policy’ on the ground that there was short-circuit in the main switchboard which caused a flashover and there was no sustained fire.
The National Commission allowed the claim of the respondent and hence this appeal.
Issue:
Whether the flashover and fire was the proximate cause of the damage in question.
Judgment:
Hon’ble Mr. Justice Markandey Katju Observed:
"The Hon'ble Supreme Court has held that the duration of the fire is not relevant. As long as there is a fire which caused the damage the claim is maintainable, even if the fire is for a fraction of a second."
Conclusion:
Hence, Court not agree with the conclusion of the surveyors that the fire was not the cause of the damage to the machinery of the claimant and gave correct judgment.
