In a ruling that could have wide implications for fire insurance disputes, the Supreme Court on Monday stepped in to revive a long-pending insurance claim of Cement Corporation of India, overturning the National Consumer Commission’s earlier refusal to grant relief. The bench made it clear, in fairly plain words, that once fire damage is established, insurers cannot escape liability by digging into how the fire started-unless the policy itself clearly says so.
Background
The case traces back almost two decades. Cement Corporation of India, a government company, had taken a standard fire and special perils insurance policy from ICICI Lombard for its Mandhar Cement Factory in Chhattisgarh. In the early hours of November 1, 2006, miscreants allegedly entered the premises to steal copper windings. During the attempt, a transformer caught fire, leading to substantial damage.
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The company lodged a claim running into over ₹2 crore. However, ICICI Lombard rejected it, saying the “real cause” of the loss was burglary, which was not covered under the policy. The National Consumer Disputes Redressal Commission agreed with the insurer, holding that theft was the proximate cause and dismissing the complaint in 2015.
Court’s Observations
Hearing the appeal, the Supreme Court took a closer look at the policy wording. The bench noted that “fire” was a specifically covered risk under the insurance contract and that the exclusions listed under the fire clause did not include theft or burglary.
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“The moment it is established that the loss was caused by fire, the reason why the fire occurred becomes immaterial,” the bench observed, unless there is a clear exclusion or allegation that the insured itself caused the fire. The judges pointed out that the insurer’s reliance on the burglary angle stretched the exclusion clauses beyond their plain meaning.
The Court also reminded insurers that exclusion clauses must be read strictly and, where there is ambiguity, the benefit should go to the insured. It added that going endlessly into the “cause of the cause” of a fire would defeat the very purpose of fire insurance.
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Decision
Allowing the appeal, the Supreme Court set aside both the repudiation letter issued by ICICI Lombard and the NCDRC’s 2015 order. The matter has been sent back to the consumer commission to assess the actual loss and decide the claim afresh. The Court directed that the exercise be completed expeditiously, preferably within six months.
Case Title: Cement Corporation of India v. ICICI Lombard General Insurance Company Limited
Case No.: Civil Appeal No. 2052 of 2016
Case Type: Civil Appeal (Insurance / Consumer Dispute)
Decision Date: 16 December 2025
