1.      Heard Ms. Shobha Gupta, Advocate, for the appellants and Mr. Amit Kumar Singh, Advocate, for respondents-1 and 2, Mr. Rakesh Kumar, Advocate, for respondent-3 and Ms. Ananya De, Advocate, for respondent-4.

2.      Rajasthan Rajya Vidyut Utpadan Nigam Limited and another (the complainants) have filed above appeal from the order of State Consumer Disputes Redressal Commission, Rajasthan, dated 21.10.2016, dismissing CC/102/2016, filed for insurance claim.

3.      The office has reported that the appeal has been filed with delay of 61 days. The appellants have filed IA/2441/2017, for condoning the delay, in which, reason for delay has been explained. Cause shown, is sufficient. Delay in filing the appeal is condoned.

4.      Rajasthan Rajya Vidyut Utpadan Nigam Limited and The Deputy Chief Engineer (the appellants) (the Insured) filed CC/102/2016, for setting aside the repudiation letter dated 31.03.2014 and 21.04.2016 and directing National Insurance Company Limited (respondents-1 and 2) (the Insurer) to pay Rs.2055489/- and any other relief, which is deemed fit and proper in the facts and circumstances of the case.

5.      The complainants stated that Rajasthan Rajya Vidyut Utpadan Nigam Limited (the Insured) was a government company, registered under the Companies Act, 1956 and generating electricity in State of Rajasthan. The Insured had a Thermal Power Project at Chhabra, district Baran. The Insured obtained “Boiler & Pressure Plant Insurance Policy” No.370800/44/12/5100000041 from National Insurance Company Limited (the Insurer), for the period of 21.11.2012 to 20.11.2013, for a sum insured of Rs.1546500000/- for the said Power Project. The Insured obtained “Standard Fire And Special Perils Policy” No.140600/11/12/11/00000244, from United India Insurance Company Limited (opposite party-4), for the period of 21.11.2012 to 20.11.2013, for a sum insured of Rs.5475000000/- for the said Power Project. An explosion occurred in the Coal Mill 2AB of Unit#2, Chhabra Thermal Power Project on 23.05.2013 at 13:40 hours. Due to explosion, the Coal Mill caught fire and the Unit tripped immediately. The Mill Operator informed the Control Room Engineer, about the explosion, fire and coal dust all around the aforesaid mill. Fire Brigade was called, which extinguished the fire.  The Insured informed the Insurer about the incident and loss. The Insurer appointed Mack Insurance Surveyors & Loss Assessors (P) Ltd., New Delhi, as the surveyor. The surveyor visited the Project on 26.05.2013, inspected the Project, prepared inventory and took photographs. The surveyor asked the Insured for Claim Form and other papers to prove the incident and loss, vide letter dated 28.05.2013. The concerned staff prepared a list of damaged equipment due to blast and assessed the loss of Rs.2055489/- on 25.05.2013. Superintending Engineer, vide letter dated 28.05.2013, asked Assistant Engineer (Mill) to provide a report in respect of explosion. Executive Engineer and Assistant Engineer submitted report dated 22.06.2013. The Insured submitted claim form and supplied all the papers to prove the incident and assess the loss on 08.07.2013 to the surveyor. After survey by the surveyor, restoration work of the power project was started since 28.05.2013 and completed on 08.06.2013. Executive Engineer (Mill) prepared detail report regarding the actual works carried out to restore the power project, showing actual cost of restoration as Rs.2175260/-. The surveyor submitted Final Survey Report dated 12.12.2013, to the Insurer, without supplying its copy to the Insured, observing that the loss fell in policy exclusion clause. Opposite party-2, vide letter dated 05.03.2014, repudiated the claim on the ground that the loss fell in policy exclusion clause as the loss occurred due to fire caused by the explosion, giving one opportunity to make representation against it. The Insured submitted a representation dated 12.03.2014, mentioning that the equipment were damaged due to explosion and not due to fire. Opposite party-2, again vide letter dated 31.03.2014, rejected the representation on the same ground that the loss fell in policy exclusion clause as the loss occurred due to fire caused by the explosion. The Insured, vide representation dated 25.04.2014, requested to re-examine the matter. The Insured gave reminders dated 11.06.2015 and 18.09.2015 but the Insurer did not respond. The Insured submitted claim before United India Insurance Company Limited on 06.04.2016, which was rejected on 21.04.2016 as time barred. Then the complaint was filed, claiming deficiency in service. State Consumer Disputes Redressal Commission, Rajasthan, by dated 21.10.2016, dismissed the complaint in limine.  Hence this appeal has been filed. 

6.      I have considered the arguments of the counsel for the parties and examined the record. Supreme Court in National Insurance Company Limited Vs. Ishwardas Madan Lal, (2007) 4 SCC 105, held that burden of proof lay upon the Insurer to prove that exclusion causes will apply. In Galada Power and Telecommunication Ltd. Vs. United Insurance Company Ltd., (2016) 14 SCC 161 and Saurashtra Chemical Ltd. Vs. National Insurance Company Limited, (2019) 19 SCC 70, held that the ground, other than taken in repudiation letter, cannot be permitted to be raised before the Court.

7.      The “Boiler & Pressure Plant Insurance Policy” provides as follows:-

          “That subject to the terms, exceptions, exclusions, provisions, definitions, warranties and conditions contained herein or endorsed hereon, the Company will at its own option by payment or reinstatement or repair indemnify the Insured against.

1.      Damage (other than by fire) to the Boilers and /or other Pressure Plant described in the Schedule.”

General Exceptions:

The company shall not be liable under this policy in respect of-

Loss damage and/or liability caused by or arising from or in consequences directly or indirectly of Fire (arising from explosion or collapse or any other cause whatsoever) including extinguishment of a fire or clearance of debris and dismantling necessitated thereby, smoke, soot, aggressive substance lightning, theft, collapse of buildings subsidence, landslide, rockslide, water which escapes from water containing apparatus, flood, inundation, storm, tempest, earthquake, volcanic eruption or other Acts of God, impact of land borne, waterborne, or airborne craft or other aerial devices and/or articles dropped therefrom.”

8.      The complainants claim damages of following items: 

Detail of Damage of Mill 2AB equipment on dated 23.05.2013 is as given below:-

In these items only at serial no.7 & 8, Victaulic Couplings with Gasket, Cut Ring Gaskets of Furnace Isolating gates A-I corner are made from rubber and inflammable. Other items are not inflammable. The committee of Executive Engineer and Assistant Engineer submitted following report dated 22.06.2013:-

“On dated 23.05.2013 at 13.40 hrs when Mill 2AB was being taken out from service, suddenly explosion occurred in Mill and unit tripped immediately. On investigating the cause of explosion by going through operational trends of Mill before explosion and at the time of explosion as placed in annexure ‘B’, no such shortcoming observed in process which would have caused explosion in Mill. Both Gravimetric Feeders had been cut off and adequate air flow through Mill was maintained to empty the Mill before shut down.  At the same time suddenly explosion occurred in Mill and unit tripped.  Mill operator informed the control room engineer about explosion like sound and fire & coal dust all around in Mill 2AB.”

9.      The complainants have stated that these items were damaged due to blast. They have not included loss occurred due to fire consequent to blast in this claim. There is no material either before the surveyor or before the Insurer to prove that the blast has occurred due to fire while according to the Engineers who were posted in the Mill has clearly stated that the blast has occurred instantly. In the repudiation letter, the Insurer has submitted that loss took place due to fire caused by explosion is not liable to be accepted inasmuch as the damaged article were not inflammable as such the reason assigned for damage as fire not explosion appears to be incorrect.

10.    It is at the option Insurer to indemnify the loss by payment or reinstatement or repair. The complainant has submitted claim on repair basis. Executive Engineer (Mill) prepared detail report regarding the actual works carried out to restore the power project, showing actual cost of restoration as Rs.2175260/-, which is more than the claim. The complainant has submitted the claim on reinstatement basis. There is nothing on record to say that the equipment can be repaired as such the claim as submitted by the complainant is liable to be accepted subject to excess clause.

11.  Under Regulation 9 of Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002, the Insurer is liable to settle the claim within a period of six months from the date of intimation of the loss.  In the present case, loss occurred on 23.05.2013.  It has been promptly communicated to the Insurer as such the Insurer is liable to settle the loss till December 2013.  After expiry of six months, the Insurer is liable to pay interest 2% above the market rate of interest.                                                 

O R D E R

In the result, the appeal is allowed. The order of the State Consumer Disputes Redressal Commission, Rajasthan dated 21.10.2016 as well as the repudiation letters of respondents-1 and 2 dated 05.03.2014 and 21.04.2016 are set aside. Opposite party-1 is directed to pay the amount of Rs.2055489/- after deducting for excess clause, with interest @9% p.a. from January 2014 till the date of payment.