In a detailed ruling that could quietly reshape how fire insurance disputes are read, the Supreme Court on Monday stepped in to revive Cement Corporation of India’s long-stalled claim against ICICI Lombard. Sitting through the hearing, it was clear the Bench was less impressed by technical exclusions and more concerned with the basic promise of a fire insurance policy - protection when fire actually breaks out.
Background
The case traces back almost two decades. Cement Corporation of India, a government company, had taken a Standard Fire and Special Perils Policy for its Mandhar cement factory in Chhattisgarh. In the early hours of 1 November 2006, miscreants allegedly entered the premises to steal copper windings. Things went wrong. A transformer caught fire, flames spread, and the damage ran into crores.
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The company lodged a claim of over ₹2.2 crore. ICICI Lombard, relying on the surveyor’s report, turned it down. The insurer said the “real cause” was burglary - a risk not covered under the policy. The National Consumer Disputes Redressal Commission agreed with this logic and dismissed the complaint, pushing Cement Corporation to the Supreme Court.
Court’s Observations
The Bench, led by Justice Vijay Bishnoi, unpacked the policy wording line by line. It noted that “fire” is a named peril under the policy and its exclusions are specifically listed. Theft or burglary does not find a place there.
“The loss admittedly occurred due to fire,” the Court observed, adding that once fire damage is established, “the reason by which the fire took place becomes irrelevant,” unless the policy clearly excludes it.
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The judges were blunt about overusing the idea of “proximate cause.” They recalled settled law that courts should not chase an endless chain of causes. As the Bench put it, ordinary people buy fire insurance to guard against fire loss, not to debate how the spark started.
Importantly, there was no allegation that Cement Corporation itself had caused or staged the fire. In such situations, exclusion clauses must be read strictly and, where there is doubt, in favour of the insured. The Commission, the Court felt, had stretched the burglary exclusion far beyond what the policy text allowed.
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Decision
Allowing the appeal, the Supreme Court set aside both the insurer’s repudiation letter dated 4 January 2008 and the NCDRC’s 2015 order. The matter has now been sent back to the Consumer Commission to assess the actual loss and decide the claim afresh, preferably within six months.
Case Title: Cement Corporation of India vs. 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
