New India Assurance Co.Ltd vs Parakh Foods Ltd

New India Assurance Co.Ltd. .. Appellant(s)

Versus

Parakh Food Ltd. .. Respondent(s)

WITH

CIVIL APPEAL NO. 879 OF 2009

O R D E R

By this order we propose to dispose of the aforesaid two

appeals. Civil Appeal No. 6892 of 2008 is filed by the New

India Assurance Co. Ltd. as the appellant, whereas Civil

Appeal No. 879 of 2009 is filed by M/s. Cargil India Pvt. Ltd.

as a cross appeal. Since the facts and the issues involved in

the two appeals are similar, we propose to dispose of both the

appeals by this common judgment and order.

The appeals are filed against the judgment and order

passed by the National Consumer Disputes Redressal Commission,

New Delhi (for short, `the National Commission') in Original

Petition No. 146 of 2003, whereby the National Commission came

to a definite conclusion that the loss suffered by the

respondent (M/s. Cargil India Pvt. Ltd.) had occurred on

account of fire causing damage to the soya bean stock and, therefore, as per terms of the policy, the respondent is

entitled to receive Rs. 1,70,72,876/- which is the amount of

loss assessed by the surveyor by report dated 29.10.2002 along

with the interest @ 9% per annum from 1.1.2003 till the date

of payment. The National Commission also directed for payment

of cost of Rs. 25,000/-. Being aggrieved by the aforesaid

judgment and order, the appellant has filed this appeal

whereas the respondent has filed the appeal seeking

enhancement of the compensation awarded by the National

Commission.

Counsel appearing for the appellant has drawn our

attention to the entire facts of the case in support of his

contention that the soya bean stock was damaged before the

fire had taken place and in that view of the matter the

stipulation in the agreement between the parties does not

entitle the respondent to receive any damage or compensation

for the loss or damage caused to the goods. In support of

the said contention the counsel also relied upon the

endorsement in the agreement between the parties, which reads

as follows:

"In consideration of the payment by the insured to the company of additional premium of Rs. .......the company agrees notwithstanding what is stated in the printed exclusions of this policy to the contrary that the insurance by (items ....) of this policy shall extend to the property insured caused by its own fermentation, natural heating or spontaneous combustion.

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N.B. - The expression `by fire only' in the endorsement above must not be omitted under any circumstances."

Our attention was also drawn to the policy, which is

the subject matter of the claim in the present case. There

is an exclusion clause in the said policy which provides that

the aforesaid insurance policy would not cover loss or damage

to property caused by its own fermentation, natural heating

or spontaneous combustion or by its undergoing any heating or

drying process. However, the respondent herein paid an extra

premium of Rs. 25,000/- due to which the exclusion clause was

relaxed. In other words, because of the payment of the

aforesaid extra premium, the exclusion clause as stated

hereinbefore also became a part of the contract between the

parties and, therefore, the said exclusion clause would not

be treated as excluded terms of contract but would be treated

as an inclusive clause of the contract between the parties.

At the instance of the counsel appearing for the

parties, we have also gone through the findings recorded by

the National Commission. The National Commission on

appreciation of the entire records has come to a definite

finding that there was loss to the respondent on account of

fire causing damage to the soya bean stock and, therefore, in terms of the stipulation in the contract, the respondent is

entitled to the compensation, which was awarded by the

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National Commission. We have considered the evidence on

record and we have no reason to take a different view than

what is taken by the National Commission.

Even when we examine the submission of the counsel of

the appellant to the effect that there was no fire at the

time when the soya bean stock was damaged, even then in terms

of the Full Bench decision of the National Commission, the

appellant would be liable to pay the loss or damage in terms

of the endorsement thereof whereby it was provided that the

policy would extend to include loss or damage even to the

property insured, caused by spontaneous combustion. In other

words, even if there was no loss or damage by fire even then,

for any loss or damage caused to the property insured due to

spontaneous combustion, the respondent would be entitled to

claim damages to the extent it was found to be so damaged.

The aforesaid Full Bench decision of the National Commission

although was challenged in this Court was not interfered with

in the decision in Civil Appeal No. 873 of 2005 titled

Oriental Insurance Co. Ltd. v. M/s. Murli Agro Products Ltd.

disposed of on 13.03.2008. It could not be disputed before us that the present case would also be covered by the

aforesaid decision, so far aforesaid alternative arrangement

is concerned. The NCL has given a report in terms of

the request of the surveyor assessing damage of

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Rs. 1,70,72,876/-, which is the amount awarded. In terms

thereof, we do not find any ground to interfere with the

order passed by the National Commission.

So far as the counter claim is concerned, we have heard

learned counsel appearing for the parties. On going through

records, we find no reason to enhance the compensation, which

is fixed by the National Commission. The aforesaid amount,

which is awarded as damages to the respondent, is based on

the loss assessed by the surveyor. That being the position,

no case for any enhancement is made out by the respondent.

The cross appeal has no merit and is dismissed. The appeal

filed by the Assurance Company also stands dismissed being

devoid of any merit.

We are informed at the bar that the entire amount,

which was awarded by the National Commission, was paid to the

respondent on execution of a bank guarantee. Since we have

now dismissed the appeal of the appellant also, the

respondent stands discharged from the bank guarantee.

The parties will bear their own costs.

.......................J. [ Dr. MUKUNDAKAM SHARMA ]

.......................J. [ R.M. LODHA ]

NEW DELHI, OCTOBER 27, 2009 5