NEW INDIA ASSURANCE COMPANY LTD . versus M/S. ZUARI INDUSTRIES LTD. & ORS.

Citation: [2009] 13 S.C.R. 1101 · Decided: 01-09-2009 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Dismissed

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Judgment (excerpt)

(2009) 13 (ADDL.) S.C.R. 1101 
.... ,A 
NEW INDIA ASSURANCE COMPANY LTD . 
A 
v. 
M/S. ZUARI INDUSTRIES LTD. & ORS. 
(Civil Appeal No. 4436 of 2004) 
.. 
SEPTEMBER 1, 2009 
B 
[MARKANDEY KAT JU AND ASOK KUMAR 
... 
GANGULY, JJ.] 
• • 
Insurance - Fire insurance policy - Damages - Claim 
for - Short circuit in electric switch board in the factory c 
resulting in flashover producing over currents - Stoppage of 
electric supply - Damage to boiler and other equipments -
Repudiation of claim by·insurance company on the ground 
., 
that damage to boiler not caused by fire - Award of damages 
.,,(_ 
by National Commission - Con-ectness of - Held: Con-ect -:-
D 
°'I 
Flashoverlfire was the proximate cause of damage - Claim 
is maintainable even if the fire was for fraction of a second -
Policy cannot be repudiated on the ground that there was no 
'sustained fire' - More so, there was no intervening agency 
which was an independent source of damage. 
E 
Respondent-complainant took insurance policies 
_. 
including a fire policy from the appellant-insurance 
company in respect of its factory. There was a short 
• 
circuit in the main switch board receiving electricity. It 
resulted in a flashover producing over currents. The entire 
F 
electric supply to the plant stopped and the boiler was 
damaged. Respondent-complainant filed a claim before 
the insurance company. Surveyors submitted the report 
but the appellant rejected the claim. The National 
G 
Commission allowed the claim. Hence, the present 
../::" -+. 
appeal. 
Dismissing the appeal, the Court 
1101 
H 
1102 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R. 
A 
HELD: 1.1 It is admitted that the short circuit in the 
)~ ... 
main switch board caused a flashover. The surveyor MN 
observed that flashover can be defined as a phenomenon 
of a developing fire (or radiant heat source) radiant 
energy at wall and ceili'ng surfaces within a compartment 
,, 
B In the instant case, the paint had burnt due to the said 
r 
flashover. Such high energy levels, would undoubtedly 
have resulted in a fire, causing melting of the panel board. 
The other surveyQr stated that 'fire of such a short 
~ 
duration cannot. be called a 'sustained fire' as 
. ; 
c contemplated under the policy". [Paras 10, ·12 and 13) 
[1106-H; 11 Q7 ·A·G) 
1.2. 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. 
,,. 
D The term 'fire' in clause (1) of the Fire Policy 'C' is not 
)... 
' qualified by the word 'sustained'. The court cannot add 
' ,. 
words to statute or to a document and must read it as it 
is. Hence· repudiation of the policy on the ground that 
there was no 'sustained fire' is not justified. The word 
E used in the fire policy is 'fire' and not 'sustained fire'. 
[Paras 14 and 15] [1107-F-G] 
1.3. A perusal of the exclusion clause (g) of the 
·f-
Insurance Policy shows that the main part of the 
F exclusion clause which protects the insurer from liability 
• 
under the policy covers loss of damage to any electrical 
machinery, apparatus, fixture or fittings including 
wireless sets, television sets, radio and so on which 
themselves are a total loss or a damage or damaged due 
G to short circuiting, arcing, self heating or leakage of 
electricity. However, the proviso to the said clause 
through inclusion of any other machinery, apparatus, 
.t~ 
fixture or fitting being destroyed or damaged by the fire 
which has affected any other appliances such as 
H 
' 
/ 
NEW INDIA ASSURANCE COMPANY LTD. v. ZUARI 1103 
INDUSTRIES LTD. & ORS. 
-,,. 
television sets, radio, etc. or electrical machines or A 
apparatus are clearly included within the scope of the 
Fire Policy for whatever damage or destruction caused 
by the fire. If the proximate cause of the loss or 
destruction to any other including other machines, 
apparatus, fixtures, fittings etc. or part of the electrical 
B 
installation is due to the fire which started in an electrical 
machine or apparatus all such losses because of the fire 
~ 
in other machinery or apparatus is covered by the Policy • 
• • 
[Para 17] [1108-E-H; 1109-A-B] 
1.4. The proximate cause is not the cause which is -c 
nearest in time or place but the active and efficient cause 
that sets in motion a train or chain of events which brings 
about the ultimate result without the intervention of any 
other force working from an independent source. [Para 
D 
-1..

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