Quick Summary: Cement Corporation of India faced a setback when thieves accidentally started a fire during a break-in. Their insurance claim was initially turned down, but the Supreme Court has now decided to take another look at the situation.
On November 1, 2006, a break-in at the Mandhar Cement Factory in Chhattisgarh turned into a disaster. Thieves using blow torches accidentally set a transformer on fire. This incident led to significant damage, and the Cement Corporation of India quickly filed a claim with ICICI Lombard General Insurance.
ICICI Lombard General Insurance turned down the claim on January 4, 2008. They argued that the policy did not cover losses caused by theft, which they considered the main reason for the fire. This was based on the exclusion clause for Riots, Strike, Malicious, and Damage (RSMD).
Quote from Rejection Letter:
"The main cause of loss was Burglary... this risk is not covered under the policy (RSMD Exclusion Clause-D)."
Unhappy with this decision, the Cement Corporation of India filed a complaint with the National Consumer Disputes Redressal Commission (NCDRC) in 2009. They demanded compensation of over Rs. 2.99 crore, arguing that the fire, not the theft, was the main cause of the damage.
In 2015, the NCDRC dismissed the complaint, agreeing with ICICI Lombard that the theft was the main cause of the fire. They relied on a previous court ruling that emphasized the importance of the "active and efficient cause."
The Cement Corporation of India appealed to the Supreme Court, which reviewed the case. On December 16, 2025, Justice Vijay Bishnoi and Justice J.K. Maheshwari ruled in favor of the Cement Corporation of India. They stated that since the policy covered fire, the cause of the fire (theft) was irrelevant.
Court's Analysis:
"If the damage is caused by fire, then the reason by which the fire took place becomes irrelevant."
The Supreme Court has sent the case back to the NCDRC to reassess the loss. They expect a decision within six months, potentially turning the tide in favor of the Cement Corporation of India.
