1.      Heard Mr. Ashok Kumar Gupta, Sr. Advocate, assisted by Mr. Kapil Raghav, Advocate, for the complainant and Mr. P.K. Seth, Advocate, for the opposite party. 

2.      National Aluminium Company Limited (the Insured) has filed this complaint for directing M/s. Reliance General Insurance Company Ltd. (the Insurer) to pay (i) Rs.66952229/- with interest @24% per annum w.e.f. 15.07.2006 till its realization, under Policy No. 15-21-11-00741-06 (ii) cost of litigation and (iii) any other relief which may deemed fit and proper in the circumstances of the case.   

3.      The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-

(a) National Aluminium Company Limited (the Insured) was incorporated in the year 1981, as a public sector enterprise of Government of India, under Ministry of Mines. It has its mining and alumina refining facilities in district Koraput, Orissa and also established an aluminium smelting, casting and power generation unit, in district Angul, Orissa, commissioned during 1985-87. It is Asia’s largest integrated aluminium complex. National Aluminium Company Limited has emerged to be a star performer in production and export of alumina and aluminium and more significantly in propelling a self-sustained growth. Due to its sterling performance, it has bagged various awards.

 (b)    Aluminium Smelter Plant, Angul has production capacity of 345000 tonnes per year. In aluminium smelting process, huge electricity is required. National Aluminium Company Limited established a 960 MW Captive Power Plant, at Angul, for the supply of electricity to Aluminium Smelter Plant. From Captive Power Plant, 220 KV, AC current is supplied to smelter sub-station, where it is converted into DC current, by means of high current capacity rectifier banks. DC current is fed from smelter sub-station to Potlines (series of pots), where the aluminium is produced by electrolyses. There are three Potlines, each of production capacity of 115000 tones per year. Each Poline is fed DC current by means of four rectifier groups. Each rectifier is associated with relevant equipment, like transformers, DC switches, rectifier bank, circuit breakers etc. There are 24 rectifier groups in the sub-station.

(c) M/s. Reliance General Insurance Company Ltd. (for short the Insurer) is an insurance company, engaged in the business of providing insurance services of different nature. The Insured, vide NIT dated 17.03.2006, invited tenders for Standard Fire and Special Peril Policy, of the smelter plant, for a period of one year. The Insured accepted tender of the Insurer and paid Rs.20799691/- towards premium of the insurance, through cheque dated 28.04.2006, which was accepted on 01.05.2006 and the Insurer issued Standard Fire and Special Peril Policy i.e. Policy No.15-21-11-00741-06, for the period of 01.05.2006 to 30.04.2007, sum insured of Rs.19880660000/-, covering risk of Building, Plant & Machineries, a list of different machineries and its sum assured is attached with the policy. As per list, 220 KV sub-stations complete was insured for Rs.717370000/-. After charging extra premium of Rs.186847/- on 09.05.2006, Sum Insured was increased to Rs20063253000/-, vide Endorsement No.55-001-06.

(d)  On 20.05.2006 at 20:00 hours, heavy rainfall accompanied with lightning lashed started in the area of the smelter plant. At 20:20 hours, Potline-2, Group-3, tripped on ‘RC protection operated’ and other three groups of Potline-2 tripped on ‘DC overload’ along with heavy sound of explosion. This resulted in interruption of DC current to Potline-2. The shift persons, manning the sub-station went to the site and found that fire and smokes were coming out of the rectifier room of group-3, R-2 side. The building of rectifier was also damaged. The shift people immediately disconnected the power supply from source and reported the incident of fire to CISF Fire wing, who came on the spot immediately with fire tender and extinguished the fire. The damaged rectifier group was isolated with its group and other rectifiers of the group were energized to resume full current to the Potline at 20:45 hours.

(e)  The Insured informed the Insurer about the incident and the consequential damage on telephone on 21.05.2006. The Insured submitted his provisional claim for Rs.473- lacs and requested for appointment of the surveyor through letter dated 22/23.05.2006. The Insurer appointed A.K. Govil & Associates, Cuttack, on 21.05.2006, for survey of the incident and assessment of the loss. The Surveyor inspected the damaged plant on 22.05.2006 and 23.05.2006. The Surveyor demanded the papers for assessment of the loss, vide letters dated 05.06.2006, 14.06.2006 and 03.07.2006. The Insured submitted claim for Rs.66952229/ on 15.07.2006, along with calculation sheet the documents in support of it.  

(f) The Insured deputed AREVA T & D, France, the manufacturer company, for inspection of the damaged rectifier. Experts Mr. Thierry Harlaut and Mr. Guy Le Fur of AREVA T & D, inspected the site, examined damaged rectifier and other parts on 28.06.2006 and 29.06.2006 and submitted their report dated 25.07.2006, in which, vide paragraph-6 Possible Causes of the Fault was determined as “The lightning strike was possible at the time of failure, because there was heavy rainfall with thunder storm and lightning since several minutes. After considering three phenomenons, they recorded their definite opinion that the origin of such increase of potential can only be a lightning strike (i) either on one or two AC links, between transformers or (ii) over head earth wires. They submitted reports in respect of all the damaged equipment also.

(g) The Insured, also appointed an expert Mr. B. Garnaik, Executive Chief Engineer, O.S.E.B., who along with his team of engineers also examined the damaged rectifier in presence of the Surveyor and submitted his report dated 28.09.2006, mentioning, therein, that “The cause of failure might be due to very steep direct lightning stroke on the overhead bus connected to the transformer. The knee-voltage and the related frequency spectrum might be such that it was not possible for the lightning protection system to bypass/divert it to earth through the earth mat sufficiently early. This very small time delay would have been sufficient to develop excessive heat & fire and the consequent damages that followed.”

(h) The Surveyor then submitted his final report dated 15.12.2006, mentioning cause of loss, as submitted in the report dated 28.09.2006 of Mr. B. Garnaik. He assessed Adjusted loss to Rs.12425905/-. But in the recommendations, he has mentioned that loss was caused either due to lightning or due to power frequency over voltage/switching transit over voltage, falling in General Exclusion No.-7. Claim of loss of buildings of Rs.30000/- was payable.

(i)      The Insurer, then, appointed Mehta And Padamsey Private Limited, Mumbai, who after examining the papers submitted his report dated 19.02.2007, concurring with the opinion of the Surveyor in his report dated 15.12.2006. The Insured vide letter dated 27.04.2007, repudiated the claim of the Insured, on the ground that the rectifier bank with diodes were damaged only due to arcing/sparking & tremendous energy generated in the form of heat and not due to actual fire, which fell in General Exclusion No.-7. The Insured gave a representations dated 22.05.2007 and 05.11.2007, for reconsideration of the matter. The Insurer referred the representations to the Surveyor, for his opinion. Thereafter, vide email dated 05.01.2008, reaffirmed the repudiation letter dated 27.04.2007. This complaint was filed on 25.04.2008, on the allegations that the claim was wrongly repudiated applying General Exclusion No.-7, although the damages was caused due to lightning which was an insured peril. Therefore there was deficiency in service.

4.      The insurer had filed its written reply on 04.11.2008, in which, the material facts were not denied. It has been stated in the written reply that after receipt of the information, regarding the damages, the Insurer appointed A.K. Govil & Associates, Cuttack, for survey of the incident and assess the loss. The Surveyor, with due consultation with the Insurer sought opinion of Mr. B. Garnaik, Chief Executive Engineer, in respect of cause of loss. Mr. B. Garnaik and his associates engineers, after examination of the damaged rectifier, in his report dated 28.09.2006, concluded that the failure of the rectifier was either caused due to lightning or due to power frequency, over voltage or switch transcendent over voltage. The Surveyor, A.K. Govil & Associates, after taking clarification of the Insured, in his report 15.12.2006, concluded that the claim was not payable as the cause of loss was falling within General Exclusion Clause No. 7. The Insurer then took opinion of another qualified and experienced surveyor M/s. Mehta And Padamsey Pvt. Ltd. Mumbai, who also after examining the entire record, in his report dated 19.02.2007, concurred with the opinion of the Surveyor. Therefore the claim was repudiated, vide letter dated 27.04.2007. There was no deficiency in service on the part of the Insurer. The complicated questions of the facts are involved, in the complaint, which cannot be decided by this Commission, as held by Supreme Court in Synco Industries Vs. State Bank of Bikaner, (2002) 2 SCC 1.         

5.      The Insured filed his rejoinder reply on 12.03.2009 in which the material facts contrary to the complaint have been denied and the facts stated in the complaint were reiterated.

6.      The Insured filed Affidavit of Evidence of Arun Kanta Nayak, Senior Manager (Electrical). The Insurer filed Affidavit of Evidence of Rajan Kumar Sinha. Both the parties have filed documentary evidence and written arguments. This Commission, vide order dated 22.11.2017, directed the Insured to file a copy of Departmental Inquiry Report. In compliance of this order, the Insured filed the Report dated 25.07.2006, of the experts of AREVA T & D, France. Mr. K.K. Satapathy, DGM (Materials), Smelter Plant, Angul was present on 15.12.2021, at the time of hearing. He informed that no other departmental inquiry was held. Apart from of this report, there was other departmental report.

7.      I have considered the arguments of the counsel for the parties and examined the record. The Consumer Protection Act, 1986 (hereinafter referred to as the Act) was enacted with object to provide for better protection of the interests of the consumers and for that purpose, consumer council and other authorities for settlement of consumer disputes have been established. Section 13 (4) confers same powers for trial of the dispute upon the authorities under the Act, which are vested in Civil Court under Code of Civil Procedure, 1908, while trying a suit in respect of (i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath, (ii) the discovery and production of any document or other material object producible as evidence, (iii) the reception of evidence on affidavits, (iv) the requisitioning of the report of the concerned analysis or test the appropriate laboratory or from other relevant source, (v) issuing of any commission for the examination of any witness and (vi) any other matter which may be prescribed. Although under the Act, the jurisdiction of the authorities is limited to consumer complaint, but while deciding such complaint no limit has been fixed for adjudicatory power. The authorities are conferred jurisdiction to decide the issue of “unfair trade practice” which has been defined under Section 2 (r) of the Act. This definition is similar to the definition of “fraud” as given under Section 17 of Indian Contract Act, 1872. From these provisions it is clear that this Commission can hold a full trail as held by civil court or adopt summary procedure for decision of any complaint. In the present case, none of the parties has demanded for full trial as held by civil court and both the parties have adduced their oral evidence in the shape of affidavit and documentary evidence. None of them sought for cross examination of the deponents of the affidavit or for summoning of any other witness. A Bench of three Judges of Supreme Court in Dr. J.J. Merchant Vs. Shrinath Chaturvedi, (2002) 6 SCC 635, (paragraph-7) held that the object and purpose of the Act is to render simple, inexpensive and speedy remedy to the consumer with complaint against defective goods and deficient services, it being a benevolent piece of legislation, intended to protect a large body of consumer from exploitation. Consumer Forum is an alternate Forum, established under the Act, to discharge the function of Civil Court. The argument that the complicated question of fact cannot be decided by the Forum, has been specifically rejected (In paragraph-12). Similar view has been taken in Amar Jwala Paper Mills Vs. State Bank of India, (1998) 8 SCC 387, CCI Chambers Coop. Hsg. Society Ltd. Development Credit Bank Ltd. (2003) 7 SCC 233. This view has been reaffirmed by three Judges Bench of Supreme Court, in IFFCO TOKIYO General Insurance Company Ltd. Vs. Pearl Beverages Ltd., 2021 SCC OnLine SC 309.

8.      The incident of fire and consequent loss has not been denied. The Insurer, in the repudiation letter dated 27.04.2007, took the ground that fire was caused due to power frequency over voltage/ switching transient over voltage. Hence General Exclusion Clause-7 was applicable, as mentioned by the Surveyor, in his report dated 15.12.2006 and concurred by another surveyor, Mehta And Padamsey Private Limited in his report dated 19.02.2007. 

9.      The Surveyor found himself as unable to determine the cause of fire. Then the Insurer, in consultation with the Surveyor, appointed Mr. B. Garnaik, Executive Chief Engineer, O.S.E.B., to determine the cause of fire, who along with his team of engineers examined the damaged rectifier in presence of the Surveyor and submitted his report dated 28.09.2006, mentioning, therein, that “the cause of failure might be due to very steep direct lightning stroke on the overhead bus connected to the transformer. The knee-voltage and the related frequency spectrum might be such that it was not possible for the lightning protection system to bypass/divert it to earth through the earth mat, in sufficiently early. This very small time delay would have been sufficient to develop excessive heat & fire and the consequent damages that followed.”

10.    After the report of Mr. B. Garnaik, Executive Chief Engineer, dated 28.09.2006, the Surveyor sought for an opinion from the Insured. In response of it, Deputy Manager (Mat.), in his letter dated 30.11.2006, has mentioned that there were two possible reasons for the fire, i.e. (a) The over voltage could have been due to power frequency over voltage/switching transient over voltage, which could have operated the RC protection circuit and had ruptured the capacitor, which might have caused fire. (b) Due to passage of lightning surge through the RC protection circuit might have ruptured capacitor and subsequent fire could have taken place. In last, he has mentioned that with the above technical analysis and consideration, we do accept the views given by technical expert. This letter merely gives various contingencies for the fire. Mr. B. Garnaik, Executive Chief Engineer, before submitting his report dated 28.09.2006, ascertained from the Metrological Department that on 20.05.2006 at 20:20 hours, there was heavy rain accompanied with severe frequent lightning in the locality of the plant. There was no justification for the Surveyors to ignore the expert report and based their findings on one contingency ignoring the other contingency, mentioned in the letter dated 30.11.2006.

11.    The Surveyor has drawn adverse inference for the reason that departmental inquiry report has not been supplied to him. In fact, there was no departmental inquiry, rather; the Insured deputed AREVA T & D, France, the manufacturer company, for inspection of the damaged rectifier. Experts Mr. Thierry Harlaut and Mr. Guy Le Fur of AREVA T & D, inspected the site, examined damaged rectifier and other parts on 28.06.2006 and 29.06.2006 and submitted their report dated 25.07.2006, in which, vide paragraph-6, Possible Causes of the Fault was determined as “The lightning strike was possible at the time of failure, because there was heavy rainfall with thunder storm and lightning since several minutes. After considering three phenomenons, they recorded their definite opinion that the origin of such increase of potential can only be a lightning strike (i) either on one or two AC links, between transformers or (ii) over head earth wires. They submitted report in respect of other damaged equipment also.

12.    The Insured has filed photographs of Aerial View of the Rectifier Transformer and Rectifier Bank as Annexure-C-3 and C-4 to the complaint. In paragraph-2 of the complaint, diagram of the system has been given. These facts are not disputed in written reply. According to the diagram, electricity supply comes from Captive Power Plant to Regulatory Transformer, which steps down 220 KV voltage to 93 KV voltage. Then it is supplied to Rectifier Transformer, which further steps down 93 KV voltage to 930 V and this rectifier transformer supply the electricity to Rectifier Bank-A and Rectifier Bank-B. From these photographs, it is proved that Regulatory Transformer was installed on other side of road/rail, from where overhead lines are connected with Rectifier Transformer. It is stated that thunder lightning fell on the overhead lines, due to which voltage frequency was increased in damaged rectifier, which resulted in fire. This contingency has been accepted by two different groups of technical experts in their reports. If there had been voltage fluctuation from 960 MW Captive Power Plant, then other rectifier connected with it might have also been affected. In such circumstances, the cause of fire as mentioned in the reports of the Surveyors and in repudiation letter is not liable to be accepted. The view taken by the team of experts that the fire was caused due to lightning, is liable to be accepted. Fire & Lightning are insured perils.  In view of the aforesaid discussions, it is held that the cause of fire was lightning, which was an insured peril and General Exception clause-7, is not attracted. Repudiation of the claim was illegal. 

13.    The counsel for the Insured relied upon the judgment of this Commission, in United India Insurance Co. Ltd. Vs. Ram Prasad Agarwal, 1993 CPC 692, held that fire caused due to failure of the electronic board of servo stabilizer to control electrical serge, is covered under insured peril.  Judgment of Supreme Court in New India Assurance Company Ltd. Vs. Zuari Industries Ltd., (2009) 9 SCC 70,  held that the chain of event that the fire of efficient and active cause of the damage. Had the fire not occurred the damage was also would not have occurred and there was no intervening agency which was an independent source of the damage. Hence claim is covered under the peril of fire.  The judgement of Guhati High Court in Oriental Insurance Company Ltd. Vs. Silk Point, AIR 2014, Gau, 73 in which the fire was caused due to explosion of bomb.  The argument of Insurance Company that it was due to terrorist activities which is not insured peril.  The High Court found that the cause of fire is immaterial since the loss was caused due to fire as such the claim was liable to be settled. 

14.    Under the policy, the claim is liable to be reimburse on reinstatement or replacement basis. The Surveyor, in his report dated 15.12.2006, applied 72% depreciation on entire head of loss and assessed the Adjusted Loss to Rs.12425905/-, as the machineries and building were 18 years old,  which is liable to be reimbursed. Regulation 9 of The Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002 directs the Surveyors to submit their Survey Report within 30 days and in any case within 45 days, from the date of his appointment. The Insurer has been directed to make settlement within 30 days of receipt of Surveyor’s report. Regulation 9 (6) provides as follows:-

Regulation-9(6). Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within seven days from the date of acceptance of the offer of by the insured. In case of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2 per cent, above the bank rate prevalent at the beginning of the financial year, in which the claim is reviewed by it.

O R D E R

In view of the aforesaid discussions, the complaint is partly allowed. The Insurer is directed to reimburse the claim of the Insured for Rs.12425905/- along with interest @ 10% per annum from, February, 2006 till the date of payment, within a period of two months, from the date of receiving copy of this judgment.