IN THE  SUPREME COURT OF INDIA                 CIVIL  APPELLATE  JURISDICTION

                                     CIVIL APPEAL NO. 6892 OF 2008   

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

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