Insurance company cannot repudiate fire claim based on negligence allegations after essential rooftop repairs

SC dismissed insurance company's appeal against warehouse fire claim. Insurer wrongfully repudiated claim based on negligence allegations and risk increase from rooftop repairs. Court held insurer cannot introduce new grounds for repudiation beyond original letter. Fire occurred within insured premises at Survey No. 9/3. Essential rooftop repairs to prevent water leakage did not constitute risk-increasing alteration. Multiple reports suggested electrical short-circuit as cause, not negligence. Surveyor's report was inconclusive. Court applied principle that precise fire cause is immaterial if insured did not instigate it. Customs duty component to be paid directly to Customs Department while other claim amounts awarded to insured.

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Issues Involved:
1. Whether the Complainant's Warehouse located at Survey No. 9 Hissa 3 (9/3) Village Veshvi, Tal-Uran, District - Raigad was insured by the Opposite Party.
2. What was the cause of the fire incident that occurred on 14.03.2018Rs.
3. Whether the insurance policy's Clause 3 was applicable due to alteration and increased risk.
4. Whether the insurance company can introduce new grounds for repudiation beyond those mentioned in the repudiation letter.
5. Whether the insured is entitled to claim customs duty as part of the insurance claim.
6. Whether the surveyor's report is binding and conclusive.
7. Whether the insurance company wrongfully repudiated the claim.

Summary:

1. Insured Premises:
The NCDRC ruled that the insurance policy covered the complainant's warehouse at Survey No. 9/3. The Leave & License Agreement, policy documents, and various communications from customs, police, fire, and electricity departments confirmed that the insured premises were indeed located at Survey No. 9/3.

2. Cause of Fire:
The NCDRC found that the cause of the fire was more likely due to an electrical short circuit rather than negligence during welding work. Multiple reports from various agencies, including the Electrical Inspector and Jawaharlal Nehru Port Trust, supported this conclusion. The significant time gap between the welding work and the fire further weakened the negligence theory.

3. Alteration and Increased Risk:
The NCDRC held that the roof repair work did not significantly increase the risk, making Clause 3 of the insurance policy inapplicable. Essential repair work on the rooftop to prevent water leakage could not be reasonably construed as an alteration increasing the risk of loss or damage.

4. Grounds for Repudiation:
The Supreme Court reiterated that the insurance company cannot introduce new grounds for repudiation during the hearing if they were not included in the repudiation letter. This principle was upheld in previous cases like Galada Power and Telecommunication Ltd. vs. United India Insurance Co. Ltd.

5. Customs Duty:
The insurance claim included a customs duty amount of Rs. 2,13,00,061.01. The court found that the insured, being a custodian and not an importer, was not entitled to remission under Sections 22 and 23 of the Customs Act, 1962. The customs duty component should be directly remitted to the Customs Department to avoid unjust enrichment.

6. Surveyor's Report:
The court held that the surveyor's report is not sacrosanct and can be departed from if contrary evidence is presented. The surveyor's report in this case was found to be inconclusive and not binding.

7. Wrongful Repudiation:
The court concluded that the insurance company wrongfully repudiated the claim. The fire was found to have occurred within the insured warehouse, and the cause was attributed to an electrical short circuit, not negligence. The NCDRC's decision favoring the insured was upheld.

Conclusion:
The appeal of the Insurance Company was dismissed. The customs duty component of the claim should be discharged directly to the Customs Department. All other legal consequences will follow on upholding the claim of the insured against the appellants. The parties were ordered to bear their own costs.

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