Cement Corporation of India v. ICICI Lombard (2025): Cause of Fire Immaterial and Strict Construction of Exclusions in Standard Fire Policies

1. Introduction

The judgment in Cement Corporation of India v. ICICI Lombard General Insurance Co. Ltd. is a significant development in Indian insurance law, particularly in the context of Standard Fire and Special Perils Policies. It squarely addresses a recurring dispute: can an insurer deny a fire insurance claim on the ground that the fire was triggered by an event (here, theft/burglary) that is carved out as an exclusion elsewhere in the policy?

The Supreme Court holds that where:

• the peril of fire is expressly insured,
• its own clause does not exclude theft or burglary as a cause, and
• there is no allegation of fraud or wilful act of the insured,

the cause of the fire is immaterial, and the insurer cannot rely on an exclusion relating to theft/burglary in a different peril (RSMD – Riot, Strike, Malicious Damage) to avoid liability for a fire loss.

This case also reiterates and concretises three major principles:

1. In fire insurance, once loss by fire is established, the cause of the fire is generally irrelevant unless expressly excluded or tainted by the insured’s fraud/wilful act.
2. Exclusion clauses must be strictly construed and read consistently with the main purpose of the policy; ambiguity is resolved in favour of the insured.
3. The doctrine of proximate cause cannot be deployed by an insurer to undermine clear coverage of a named peril where its own exclusions do not encompass the asserted antecedent cause.

2. Factual Background and Procedural History

2.1 The insurance arrangement

The appellant, Cement Corporation of India (CCI), a Government company, had floated a tender in June 2005 for a comprehensive insurance cover for its various units and installations. ICICI Lombard emerged as the successful bidder and a centralized insurance contract was executed on 21 July 2006.

For the purposes of this case, the relevant cover was a “Standard Fire and Special Perils Policy (Material Damage)” issued in respect of CCI’s Mandhar Cement Factory in Chhattisgarh. The policy was a “named peril” policy — it covered loss if caused by one of several listed perils (fire, lightning, explosion, RSMD, storm, impact, etc.), subject to specific exclusions attached to each peril and certain general exclusions.

2.2 The incident: theft leading to fire

On the early morning of 1 November 2006, “petty thieves” intruded into CCI’s Mandhar factory. They attempted to steal copper windings and transformer oil from an idle transformer using a blow torch/portable gas cutter. This activity:

• triggered a fire in Transformer No. 24994,
• which then led to a fire incident within the factory premises,
• causing substantial damage to the insured property.

CCI:

• Notified ICICI Lombard immediately through letters dated 1/2.11.2006; and
• Lodged an FIR (No. 106/2006 dated 1.11.2006) with the local police.

2.3 Claim, survey and repudiation

On 30 January 2007, CCI lodged a claim for Rs. 2,20,14,190 towards the loss. ICICI Lombard acknowledged the claim and appointed a surveyor.

The surveyor’s Final Survey Report (12.10.2007) found:

• The transformer in question had been idle (no electrical input/output) for several years.
• There was a history of theft of transformer oil and copper windings at the site.
• The fire was a result of an attempted theft using a blow lamp/gas cutters.

On this basis, the surveyor opined that the insurer’s liability would not attach because the cause of loss fell under Exclusion V(d) of the RSMD clause, relating to burglary/theft.

Relying on this report, ICICI Lombard, by letter dated 4 January 2008, repudiated the claim:

“... the proximate cause of loss was Burglary. Kindly note that this policy is a named peril policy and this peril is not covered under the policy (RSMD Exclusion Clause-D)... accordingly closing the same as 'Nil Liability' case.”

2.4 Proceedings before the NCDRC

CCI filed Consumer Complaint No. 210 of 2009 before the National Consumer Disputes Redressal Commission (NCDRC), seeking Rs. 2,99,39,298.40 with 18% interest.

ICICI Lombard’s defence was:

• The policy was a named peril policy, not an “all risks” policy.
• The proximate cause of the loss was burglary/theft (an excluded peril under RSMD), not fire.
• The insured had not obtained a separate theft/burglary policy.

The NCDRC agreed with the insurer and dismissed the complaint on 16 July 2015. It held that:

• The proximate cause was burglary/theft, which is not covered.
• Reliance was placed on New India Assurance Co. Ltd. v. Zuari Industries Ltd. (2009) 9 SCC 70, for the proposition that proximate cause means the “active and efficient cause” that sets in motion the chain of events leading to the loss.

2.5 Appeal to the Supreme Court

Aggrieved, CCI preferred the present Civil Appeal No. 2052 of 2016 before the Supreme Court, challenging:

• the insurer’s repudiation based on the RSMD/theft exclusion; and
• the NCDRC’s application of proximate cause doctrine to defeat a fire claim where “fire” is a covered peril without such exclusion.

3. Issues Before the Supreme Court

The Supreme Court’s analysis revolves around the following core issues:

1. Coverage issue:
   When a fire causes damage and “fire” is a named insured peril whose clause does not exclude theft, can the insurer deny the claim by saying that:
   • the “proximate cause” was theft or burglary, and
   • theft is excluded under a separate RSMD clause?
2. Role of proximate cause in fire insurance:
   Is the doctrine of proximate cause applicable in such a way that an otherwise covered fire loss can be excluded because the fire was caused by an excluded precursor (theft/burglary)?
3. Construction of exclusion clauses:
   How should specific and general exclusions be interpreted in a standard fire policy, particularly:
   • exclusions within the “Fire” peril itself;
   • general exclusions about theft “during or after” an insured peril; and
   • the RSMD clause’s exclusion relating to theft?

4. Summary of the Judgment

The Supreme Court allows the appeal, holding in essence that:

• The policy explicitly insures loss by fire and specifies only two exclusions under the “Fire” peril:
  • self-heating/fermentation/spontaneous combustion or heating/drying process; and
  • burning by order of a public authority.
  Theft or burglary is not a listed exclusion under “Fire”.
• The cause of the fire (here, theft/burglary by miscreants using a blow torch) becomes immaterial once it is established that:
  • loss was caused by fire; and
  • there is no allegation that the insured instigated the fire or committed fraud.
• Exclusions must be strictly construed. The Rsmd clause’s exclusion relating to theft cannot be imported to defeat a straightforward fire peril claim when the “Fire” peril has its own limited, self-contained exclusions.
• The general exclusion relating to “theft during or after the occurrence of any insured peril” does not extend to theft that precedes the insured peril. The contract is silent on theft preceding fire; this silence cannot be used to deny coverage.
• Consequently, ICICI Lombard’s repudiation was unjustified; the NCDRC erred in upholding it by relying on proximate cause and the RSMD exclusion.
• The Court sets aside:
  • the repudiation letter dated 4.1.2008; and
  • the NCDRC judgment dated 16.7.2015,
  and remits the matter to NCDRC only for assessment of quantum of loss, to be concluded within six months.

5. Detailed Legal Analysis

5.1 Nature of the Standard Fire and Special Perils Policy

The opening clause of the policy is crucial. It provides that:

“… if … the property insured … be destroyed or damaged by any of the perils specified hereunder … the Company shall pay to the insured the value of the property ... or the amount of such damage...”

The “perils specified” include, inter alia:

1. Fire
2. Lightning
3. Explosion/Implosion
4. Aircraft Damage
5. Riot, Strike, Malicious and Damage (RSMD)
6. Storm, cyclone, flood, etc.
7. Impact Damage
8. Subsidence and landslide
9. Bursting/overflowing of water tanks/pipes
10. Missile testing operations
11. Leakage from automatic sprinklers
12. Bush fire

For each peril, the policy sets out specific exclusions. Under the peril “Fire”, the exclusions are confined to:

(a) i) its own fermentation, natural heating or spontaneous combustion;
    ii) its undergoing any heating or drying process;
(b) burning of property insured by order of any Public Authority.

There is no mention of “burglary” or “theft” as an exclusion under “Fire”.

Separately, there are:

• General exclusions, including a clause that excludes loss by theft “during or after” an insured peril (unless covered under RSMD); and
• The RSMD clause, which contains its own exclusionary language regarding burglary/theft in the context of malicious acts.

The Court’s reasoning hinges on keeping these structures distinct and refusing to allow exclusions attached to one peril (RSMD) to erode coverage under another (Fire) when the latter has its own carefully drafted exclusions.

5.2 Why the RSMD/theft exclusion could not defeat a fire claim

The insurer’s core argument was that:

• The proximate cause of loss was burglary/theft by miscreants; and
• Burglary/theft is excluded under Clause V(d) of the RSMD clause and under a general exclusion relating to theft.

The Supreme Court rejects this line of reasoning for several reasons:

1. Textual primacy of the “Fire” peril clause
   The policy says the insurer will indemnify loss if caused by any specified peril, “subject to the conditions and exclusions contained herein”. When it comes to “Fire”, the policy sets out a narrow, exhaustive list of what is not covered. Theft/burglary is conspicuously absent from that list.
   
   The Court therefore holds that:

   “Once it is not disputed that the loss is caused by fire, then the cause igniting the fire becomes immaterial. The insurer cannot refuse to indemnify the damage caused by fire … on the ground that the proximate cause of fire was burglary/theft … particularly when no such exclusion is provided in the specified peril ‘Fire’.”

2. Scope of the general exclusion on theft
   The general exclusion states that loss by theft during or after the occurrence of an insured peril is excluded (save to the extent RSMD cover may apply). The policy is silent about theft that precedes the insured peril and merely causes or triggers it.
   
   The Court emphasises this silence:

   “… the policy is silent on the aspect of whether the burglary/theft which precedes the insured peril is excluded or not.”

   Under principles of strict construction of exclusions, this silence cannot be stretched to cover antecedent theft.
3. Non-exportability of RSMD exclusion to “Fire” peril
   The burglary/theft exclusion relied upon is located within the RSMD clause, which is a separate named peril. The Court holds that:

   “… the exclusion provided under the RSMD clause would not oust the liability of the insurer when the loss or damage is attributable to the peril of fire which has its independent exclusions.”

   In short, each peril is to be treated with its own self-contained exclusions unless the policy clearly provides for cross-application.

5.3 The principle that cause of fire is generally immaterial

The Court reinforces a well-established, but often overlooked, principle of fire insurance: once loss is shown to be caused by fire, the cause of that fire is usually irrelevant, unless:

• it falls within a specific exclusion; or
• the fire was deliberately caused by the insured (fraud/wilful act).

The Court draws heavily from academic writing and earlier judgments:

(a) Avtar Singh’s “Law of Insurance”

Quoting Avtar Singh, the judgment recalls the observation (via Byles J and Lord Bacon) that law does not concern itself with an infinite regress of causes:

“It were infinite for the law to judge the causes of causes, and their impulsions one of another, therefore it contenteth itself with the immediate cause…”

In the context of fire insurance, this translates to focusing on the fact of fire, not endlessly tracing its deeper causes, so long as the fire is within the scope of the policy.

(b) Sri Balaji Traders v. United India Insurance Co. Ltd. (Madras HC, 2005)

The Court cites with approval the Madras High Court’s decision in Sri Balaji Traders (later affirmed by the Supreme Court), where a fire in a godown damaged stock. The Court there held:

• The cause of fire is immaterial once it is established that loss was due to fire covered under the policy;
• Negligence (even of the insured or its servants) in causing the fire does not exempt the insurer;
• The cause of fire becomes relevant only when there is a plea that the fire was caused by the fraud or wilful misconduct of the insured.

The present Bench reproduces significant extracts from Balaji Traders and Avtar Singh to underline that fire insurance is designed to protect against the consequences of fire, including those arising from negligence.

(c) ORION CONMERX PVT. LTD. v. NATIONAL INSURANCE CO. LTD. (2025)

The Court then relies on its own recent decision in ORION CONMERX PVT. LTD. v. NATIONAL INSURANCE CO. LTD., where it distilled the core principles governing fire insurance:

1. There must be an actual fire.
2. Something must be on fire that ought not to have been on fire.
3. The fire must be accidental in the sense that it is a happening occurring unexpectedly or by chance, i.e., not a deliberate act of the insured.

If these requisites are satisfied, any loss attributable to the fire is covered, and:

“... once it is established that the loss is due to fire and there is no allegation/finding of fraud or that the Insured is the instigator of the fire, the cause of fire is immaterial…”

The present case fits precisely within this framework:

• There was an actual fire.
• The transformer and factory equipment were on fire when they ought not to have been.
• There is no suggestion that CCI instigated the fire; it was caused by miscreants.

Thus, the antecedent theft is legally irrelevant to coverage.

5.4 Proximate cause and Zuari Industries: why the doctrine did not help the insurer here

ICICI Lombard and the NCDRC had invoked the classic doctrine of proximate cause relying on New India Assurance Co. Ltd. v. Zuari Industries Ltd. (2009) 9 SCC 70, where the Supreme Court defined proximate cause as:

“the active and efficient cause that sets in motion a train or chain of events which brings about the ultimate result without the intervention of any other force working from an independent source.”

On that basis, they argued:

• The theft/burglary was the “active and efficient” cause.
• Fire was only a consequence of this excluded peril.
• Hence, the loss is not recoverable under the policy.

The Supreme Court does not reject the doctrine of proximate cause per se; rather, it confines its operation in the specific context of fire insurance with clear peril-based exclusions.

The Court’s approach can be summarised as:

1. Step 1: Identify the peril directly causing loss.
   Here, the immediate and direct cause of loss to the insured property was fire.
2. Step 2: Check whether that peril is a named peril and whether it is excluded.
   Fire is a named peril. Under its own exclusions, this fire is not excluded.
3. Step 3: If the directly operative peril is covered and not excluded, antecedent causes become immaterial, unless the policy expressly insists on tracing the cause further or there is fraud/misconduct by the insured.

In other words, proximate cause is used to bridge policy wording to factual causation, not to override clear contractual coverage. Once “fire” is established as the peril causing loss, and its clause carries no theft exclusion, the chain need not (and should not) be extended backwards to an excluded antecedent like theft, unless the policy clearly says so.

Thus, Zuari Industries remains good law on proximate cause, but it cannot be extended to allow insurers to:

• relabel a fire loss as a theft loss; or
• import exclusions from other perils,

where the policy itself does not support that manoeuvre.

5.5 Strict construction and “reading down” of exclusion clauses

A substantial part of the judgment is devoted to reiterating the rules for interpreting exclusion clauses in insurance contracts, drawing on:

• Texco Marketing Pvt. Ltd. v. Tata AIG General Insurance Co. Ltd. (2023) 1 SCC 428; and
• Shivram Chandra Jagarnath Cold Storage v. New India Assurance Co. Ltd. (2022) 4 SCC 539, which in turn relies on B.V. Nagaraju, Skandia, etc.

The principles reiterated include:

1. Exclusion clauses cannot defeat the main purpose of the contract
   Using the “main purpose rule”, the Court emphasises that exclusion clauses must be read in light of the primary objective of the contract. For a fire policy, the main purpose is to indemnify loss by fire. An exclusion that effectively nullifies this core purpose, without clear and unambiguous language, must be read down.
2. Strict construction of exclusions
   Exceptions in an insurance policy are to be construed strictly, because they describe what is carved out of coverage:

   “The exceptions to an insurance policy must be construed strictly since they reflect the agreement between the parties with respect to the losses that are covered by the insurance policy. Any departure from this principle is possible only if the terms of the policy are ambiguous or unclear.”

   Ambiguity or multiple plausible interpretations are resolved in favour of the insured (contra proferentem).
3. Reading down wide exclusions
   If an exclusion is too broad and undermines the essence of the policy (e.g., excluding almost every risk the insured might reasonably expect to be covered), courts may “read down” the clause so that it does not “cross swords with the main purpose”.
4. No cross-application of exclusions without clear wording
   A clause attached to RSMD cannot be allowed to destroy the coverage under the “Fire” peril clause unless the policy explicitly provides that exclusions under one peril also govern losses under another.

Applying these principles, the Court concludes that the theft-related exclusion in RSMD and the general exclusion on theft “during or after” an insured peril cannot be used to strip away coverage for a loss squarely attributable to the peril of fire.

5.6 Treatment of theft/burglary as a preceding event

The insurer had tried to characterise theft/burglary as:

• the proximate cause (active and efficient cause); or
• at the very least, a concurrent proximate cause,

and thus relied on the theft-related exclusions.

The Court responds in two ways:

1. Conceptual separation of loss from theft vs. loss from fire
   The claim was for damage caused by fire, not for the value of stolen property. The physical destruction (e.g., of the transformer) was due to fire.
2. Preceding theft vs. theft “during or after” the peril
   The policy text specifically addresses theft occurring “during or after” an insured peril (e.g., looting of premises during a riot or during the confusion of a fire). It does not say that if theft precedes and causes fire, the fire loss is excluded.
   
   Under Indian contract law principles, especially in insurance:
   • exclusions have to be clear and specific; and
   • courts will not fill gaps in favour of the insurer.

Therefore, the Court treats the theft simply as a factual antecedent that triggered a covered peril (fire), but not as the legally relevant cause for coverage purposes. The loss remains a “loss by fire”.

5.7 Uberrima fides (utmost good faith) and insured’s misconduct

The doctrine of uberrima fides — that insurance is a contract of utmost good faith — is acknowledged. However, the Court is clear that:

• this doctrine does not authorise the insurer to repudiate claims on tenuous grounds where the insured has not been guilty of fraud, misrepresentation or wilful misconduct;
• the cause of fire becomes crucial only where it appears that allowing the insured to claim would itself be a fraud on the insurer, e.g., where the fire is deliberately caused by the insured or with their connivance.

In the present case:

• there was no plea that CCI had orchestrated the fire;
• no allegation of misrepresentation or non-disclosure affecting the risk;
• the thieves were “petty miscreants”, external to the insured.

Therefore, the doctrine of good faith supports, rather than undermines, CCI’s position; the insurer, not the insured, is seen as attempting to unjustifiably avoid its contractual obligation.

6. Precedents and Authorities Cited

6.1 Avtar Singh’s “Law of Insurance”

The Court draws from Avtar Singh’s commentary to highlight that, in fire insurance, the law:

• concerns itself with the immediate cause (fire), not deeper chains of causation;
• recognises that negligence (even of the insured) in causing the fire does not preclude recovery.

6.2 Sri Balaji Traders v. United India Insurance Co. Ltd. (2005) (Madras HC)

Key propositions endorsed:

• Once loss by fire within the meaning of the policy is proved, the cause of fire is generally immaterial.
• The only exception: where fire is caused by the wilful act or fraud of the insured.
• The insurer cannot repudiate a claim merely because the insured cannot prove the cause of fire, unless it pleads and proves fraud/wilful misconduct.

6.3 ORION CONMERX PVT. LTD. v. NATIONAL INSURANCE CO. LTD. (2025 SCC OnLine 2309)

This recent Supreme Court decision distilled fundamental principles of fire insurance and emphasised:

• fire must involve actual ignition of something that ought not to burn;
• the fire must be accidental (not instigated by the insured);
• once those conditions are met, and absent insured’s fraud, the cause of fire is immaterial.

Cement Corporation of India directly applies and reinforces this Orion Conmerx line of reasoning.

6.4 New India Assurance Co. Ltd. v. Mudit Roadways (2024) 3 SCC 193

This judgment, cited in Orion Conmerx and now in this case, reiterates that:

“the precise cause of a fire … remains immaterial, provided the claimant is not the instigator of the fire.”

This general principle is carried forward and operationalised in the present judgment.

6.5 New India Assurance Co. Ltd. v. Zuari Industries Ltd. (2009) 9 SCC 70

Though relied on by NCDRC for defining “proximate cause”, the present judgment effectively confines Zuari to its role of stating the general test of “active and efficient cause”, while making clear that:

• the doctrine cannot override explicit coverage for a named peril like fire; and
• it cannot justify reading in exclusions not textually attached to that peril.

6.6 Texco Marketing Pvt. Ltd. v. Tata AIG General Insurance Co. Ltd. (2023) 1 SCC 428

This case is used to restate the law that:

• exclusion clauses must be read on the touchstone of the main object of the contract;
• an exclusion that nullifies the basic protection cannot stand in the absence of crystal-clear language;
• wide or inconsistent exclusions may be read down.

6.7 Shivram Chandra Jagarnath Cold Storage v. New India Assurance Co. Ltd. (2022) 4 SCC 539

Shivram Chandra summarises prior jurisprudence, including:

• Oriental Insurance v. Samayanallur PACB; and
• Sangrur Sales Corporation v. United India Insurance Co. Ltd.,

to reaffirm that:

• policy terms must be construed in their ordinary meaning;
• exceptions are strictly construed;
• if two constructions are possible, the one favourable to the insured is to be adopted.

6.8 B.V. Nagaraju v. Oriental Insurance Co. Ltd. (1996) 4 SCC 647

Cited via Texco and Shivram Chandra, this decision famously read down an exclusion in a motor policy (regarding number of passengers) where breach was not causally linked to the accident, holding that:

• not every departure from policy conditions justifies repudiation;
• the exclusion clause should not be allowed to “snipe successfully” at the main purpose of the contract.

6.9 Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan (1987) 2 SCC 654

Referred to in B.V. Nagaraju and adopted here, Skandia laid the foundation for:

• the “main purpose rule” in construing exclusion clauses; and
• the preference for interpretations that protect accident victims/insureds over those that preserve insurer profitability when both interpretations are plausible.

7. Simplifying the Key Legal Concepts

7.1 Fire insurance and “loss by fire”

A fire insurance policy is an agreement where the insurer promises to compensate the insured if the insured property is damaged or destroyed by fire, within the policy period, subject to the policy’s terms and exclusions.

In simple terms:

• There must be an actual ignition, not just heating or charring.
• Something must burn which is not meant to be burning in that way.
• The fire must not be deliberately set by the insured.

7.2 Named peril vs. “all risks” policies

• Named peril policy: Covers only those causes (perils) specifically listed in the policy (e.g., fire, lightning, flood), and only to the extent not excluded.
• All-risks policy: Covers all sudden and accidental physical loss or damage except those specifically excluded. Here, the burden is reversed; the insurer must show that an exclusion applies.

The policy in this case is a named peril policy. The Supreme Court’s decision clarifies that once a named peril such as “fire” is triggered and no relevant exclusion applies to that peril, coverage follows.

7.3 Proximate cause

“Proximate cause” is the legally significant cause of a loss. It is:

• the “active and efficient cause” that starts a chain of events;
• without interruption by an independent external cause.

In insurance, the doctrine is used to match policy wording (“loss caused by X”) with real-world events. However, this case teaches that proximate cause:

• cannot be used to displace clear coverage of a peril when that peril’s clause does not exclude the antecedent cause;
• must yield to explicit contractual allocation of risk and exclusions.

7.4 RSMD (Riot, Strike, Malicious and Damage) cover

RSMD is an optional/additional cover (within the Standard Fire and Special Perils structure) that deals with damage resulting from:

• Riots,
• Strikes,
• Malicious acts,
• Vandalism-type damage.

It can include elaborated exclusions (such as for burglary/theft) in that specific context. But, as this judgment clarifies, those RSMD-specific exclusions do not automatically govern claims under the basic “Fire” peril.

7.5 General vs. specific exclusions

• Specific exclusions apply within the clause dealing with a particular peril (e.g., exclusions within the “Fire” peril).
• General exclusions apply across the policy, irrespective of the peril, unless otherwise limited.

Courts typically:

• give effect to specific exclusions where directly applicable; and
• are cautious in extending general exclusions to override specific peril clauses unless the wording clearly compels that result.

7.6 Contra proferentem and reading down

Contra proferentem is a rule that ambiguous contract terms are interpreted against the party that drafted them — in insurance, usually the insurer.

Reading down means interpreting a wide or vague clause narrowly to ensure it does not defeat the main object of the contract or operate in an unreasonable manner.

This case is a clear example of both principles in practice:

• ambiguity about “preceding theft” vs. “theft during or after” is resolved in favour of the insured;
• the theft-related exclusion in RSMD is read down so it does not nullify coverage for pure fire losses.

7.7 Uberrima fides (utmost good faith)

Insurance contracts require both parties — especially the insured — to act with utmost good faith. The insured must disclose material facts; the insurer must not take unfair advantage of technicalities to escape liability.

In this case:

• CCI did not conceal any material facts; nor did it instigate the fire.
• The Court implicitly treats ICICI Lombard’s repudiation as inconsistent with the spirit of good faith because it unduly strains wording to deny a straightforward fire claim.

8. Impact of the Judgment

8.1 On fire insurance claims involving theft-triggered fires

This judgment will have considerable precedential value for cases where:

• thieves or vandals accidentally cause a fire while attempting theft; or
• some negligent act associated with a non-covered peril triggers a fire.

In such scenarios, insureds can rely on this decision to argue that:

• their claim is for loss by fire, not for theft or burglary;
• fire is a named peril with its own exclusive list of exclusions;
• unless the policy clearly says otherwise, the cause of fire (e.g., theft) is irrelevant.

8.2 On policy drafting and underwriting

Insurers may now:

• revisit their Standard Fire and Special Perils policy wording;
• decide whether they wish to:
  • expressly exclude fire caused by theft/burglary (which may be controversial and raise regulatory/market issues); or
  • price the risk appropriately, recognising that such fires are now firmly within coverage unless excluded.

If insurers wish to avoid liability in such circumstances, they will have to draft clear, specific exclusionary language, which courts will scrutinise closely for consistency with the main purpose of the policy.

8.3 On consumer fora and insurance litigation

The judgment is a clear signal to consumer fora (District, State Commissions, and the NCDRC) that:

• they must scrutinise repudiations rigorously, especially where surveyor’s reports emphasise antecedent causes without fully engaging with the policy structure;
• they should apply principles from Orion Conmerx, Mudit Roadways, Texco Marketing, and Shivram Chandra consistently.

It may lead to:

• fewer instances of claims being rejected solely based on proximate cause arguments when the direct peril is covered; and
• more frequent remands for assessment of quantum instead of outright dismissal of consumer complaints.

8.4 On the doctrinal status of proximate cause

The decision does not abolish or sideline the doctrine of proximate cause, but it carefully re-situates it:

• proximate cause remains a tool for connecting loss to covered perils;
• however, where the immediate peril causing loss is a named peril (here, fire) and no relevant exclusion applies, courts will not extend the causal inquiry backwards to antecedent excluded events (like theft) to defeat coverage.

This refined stance brings Indian law more in line with modern approaches that are cautious about overusing proximate cause to deny coverage where the insured risk plainly materialised.

8.5 On public sector and industrial risk management

For large industrial enterprises, especially public sector undertakings:

• this judgment provides greater predictability regarding coverage in fire incidents involving criminal or negligent third-party acts; and
• supports the value of standard fire policies as meaningful financial safeguards for critical infrastructure.

9. Critical Appraisal

From a doctrinal perspective, the judgment is:

• Coherent with past case law: It harmonises Avtar Singh’s commentary, Balaji Traders, Orion Conmerx, Mudit Roadways, Texco Marketing, and Shivram Chandra into a clear, unified line of authority.
• Protective of insureds: It guards against insurers using remote causation theories and broad exclusions to deny evidently legitimate fire claims.
• Clear in its contractual analysis: The Court carefully separates perils and their respective exclusions, respecting the policy’s internal structure and the expectations it creates.

Potential areas of debate could include:

• Insurer’s risk assessment: Insurers may argue that they priced the fire peril assuming that fires directly caused by theft/burglary would not be covered unless theft cover was purchased separately. The Court’s view, however, is that such assumptions must be reflected clearly in the policy wording, not left to underwriting intention.
• Concurrent causes: Future disputes might arise where loss is simultaneously caused by fire and by another non-covered event in more complex ways. This case deals with a relatively straightforward chain (theft → fire → loss) and does not exhaustively address more intricate concurrency scenarios.

Overall, the judgment strongly tilts the balance towards insureds in the domain of fire insurance, but does so by relying on orthodox interpretive principles and the explicit policy wording, rather than any radical re-making of the law.

10. Conclusion

Cement Corporation of India v. ICICI Lombard crystallises and advances a vital principle in Indian insurance law:

Where a Standard Fire and Special Perils Policy insures loss by fire and the “Fire” clause does not exclude theft/burglary as a cause, the insurer cannot avoid liability for a fire loss on the ground that the fire was triggered by theft/burglary, even if theft is excluded under RSMD or general exclusions referring to theft during or after the peril. Once a covered fire occurs (absent insured’s fraud or wilful act), the cause of that fire is immaterial.

The case also reiterates that:

• exclusion clauses must be interpreted strictly and harmoniously with the policy’s main purpose;
• ambiguities are resolved in favour of the insured; and
• proximate cause cannot be used to undo clear coverage of a named peril that has its own limited exclusions.

By setting aside the repudiation and remanding the matter for assessment of quantum, the Supreme Court underscores that insurance contracts — particularly fire policies protecting major industrial installations — must function as reliable instruments of risk transfer, not as traps of technicality.