DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW

FINAL PROJECT
SUBJECT- INSURANCE LAW

PROXIMATE CAUSE
SUBMITTED TO :

MS. APARNA SINGH

Lecturer of Insurance Law
SUBMITTED BY:
Yogita Kumar

8th SEMESTER, 4th YEAR

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................. 2
1.1 Words sufficient to displace rule ...................................................................................... 2
1.2 Where there are more than one proximate cause .............................................................. 2
1.3 Rules for determining proximate cause ............................................................................ 3
1.4 Accident cases .................................................................................................................. 3
1.5 Fire cases .......................................................................................................................... 3
1.6 War risks cases ................................................................................................................. 4
1.7 Consequential loss insurance ............................................................................................ 4
1.8 Research Methodology ..................................................................................................... 4
1.9 Research Plan ................................................................................................................... 4
2. INVENTA CHEMICALS LTD. v UNITED INDIA INSURANCE CO. LTD .................... 5
3. NEW INDIA ASSURANCE COMPANY LTD. v ANDHRA FISHERMEN CENTRAL
CO-OPERATIVE SOCIETY LTD ............................................................................................ 7
4. DILIP KUMAR GHOSH v NEW INDIA ASSURANCE CO. LTD .................................... 8
5. NIYATI MAJUMDAR v NATIONAL INSURANCE CO ................................................... 9
6. ORIENTAL INSURANCE CO. LTD. v MITRA AND GHOSH PUBLISHERS (PVT.)
LTD .......................................................................................................................................... 10
7. PATEL SHANABHAI DARUBHAI AND CO V THE ORIENTAL INSURANCE CO.
LTD .......................................................................................................................................... 11
8. PRIYA BLUE INDUSTRIES LTD. v NEW INDIA ASSURANCE CO. LTD ................. 12
9. USHA INTERNATIONAL LTD. v UNITED INDIA ASSURANCE CO. LTD ............... 13
CONCLUSION ........................................................................................................................ 15
BIBLIOGRAPHY

1. INTRODUCTION

The most crucial element of an insurance contract is the determination of the risk
involved. It is the basis of any type of insurance contract. Determination of risk is important
for the insurer to make an advantageous estimate of the premium, this can be done only if the
insurer knows the nature and degree of the likely risk. For the insured, it is important that he
knows the exact extent of his cover so as to avoid unnecessary double or over insurance.
The concept of proximate cause is important in determination of risk. The rule of
proximity demands that only the proximate cause of a loss must be taken into account. The
word proximate does not mean that the cause has to be the latest or the most recent but
must be direct1, dominant2, or operative and efficient.3
The relevant maxim here is causa proxima non remota spectatur which implies that
even if a loss occurs because of a composite of several causes, one dominant cause should be
singled out where possible.4 Liability of the insurer arises only when the loss has been caused
by a proximate cause understood in the sense mentioned above. If the proximate cause is
mentioned within the perils excepted, no liability can be attributed to the insurer.5
1.1 Words sufficient to displace rule:
Express mention may negate the application of the rule. In Smith v Accident
Insurance,6 where the policy contained the exception of disease following accidental injury,
whether causing death directly or jointly with such accidental injury, death resulting from an
accident fell within the excepted perils though the accident proximately caused the death.
The rule also stands negated where the policy protects losses caused by an insured
peril operating independently and exclusively of all other causes,7 or a peril which is the
direct and sole or immediate cause of the loss.8
1.2 Where there are more than one proximate cause:
In Leyland v Norwich Union,9 it was observed that if there are two causes, one must
be chosen as the proximate cause. The recent trend among the judiciary however is that there
could be simultaneous proximate causes and in such cases, the assured can recover depending
1

Becker, Gray v London Assurance, (1918) AC 101.

Leyland v Norwich Union, (1918) AC 350, per Lord Dunedin at 363.
3
Ibid, per Lord Shaw at 369, 370.
4
Samuel v Dawson, per Scrutton L.J., (1923) 1 KB 584.
5
Wayne Tank Co. v Employers Liability Assurance Corp., (1974) QB 57.
6
(1870) LR 5 Ex. 302.
7
John v Batten, (1930) Ltd. (1969) 1 Llyods Rep. 281.
8
Merchants Marine Insurance v Liverpool Marine Insurance and General Insurance, (1928) 31 Ll. L.R. 45.
9
(1918) AC 350.
2

on whether one of the proximate causes is a peril that has been excluded by the policy.
However, where none of the proximate causes has been excluded by the policy, the assured
can recover where at least one of them is an insured peril.10
1.3 Rules for determining proximate cause:
1. The choice of the proximate cause from a complex set of facts must be made by
applying the standards of the man on the street and not of scientist or metaphysician.11
2. Once the risk operates, damage to the subject-matter resulting from efforts to stop the
casualty from escalating is covered, for the proximate cause of such damage is the
risk insured against.12
3. An accident causing the loss must be distinguished from one that merely facilitates
the loss.13
4. Liability of the insurer will be decided subject to the following test: is it a fear of
something that will happen in the future or has the peril already happened and is it so
imminent that it is immediately necessary to avert the danger by action?14
5. In a situation of novus actus interveniens, which means a new intervening act, unless
human interference was with the purpose of minimizing the loss, such interference is
considered to be the proximate cause.15
6. Where damage resulting from human action precedes natural causes that increase the
loss, the chain of causation is broken and the insurer is not liable.
1.4 Accident cases:
Courts have liberally interpreted accidents as the proximate cause in favour of the
assured. Where a natural occurrence has led to an accident, the courts have considered the
accident to be a novus actus interveniens and enabled the assured to recover.16
1.5 Fire cases:
Fire insurance cases have followed the pattern exhibited by accident cases. Courts
have interpreted the proximity rule widely. However, a distinction has to be drawn between
the spread of a fire due to natural causes and the intervention of a new and unexpected cause
which makes the fire a fresh fire and therefore breaks the chain of causation.17

Lloyd Instruments v Northern Star Insurance, (1987) 1 Lloyds Rep. 32.

Yorkshire Dale S.S. Co. v Minister of War Transport, (1942) AC 691.
12
Stanley v Western Insurance, (1968) LR 3 Ex 71, 75.
13
Fooks v Smith, (1924) 2 KB 598.
14
Symington v Union Insurance of Canton, (1928) 97 LJKB 646.
15
Winicofsky v Army & Navy Insurance, (1919) 35 TLR 283.
16
Lawrence v Accident Insurance, (1881) 7 QBD 216.
17
Walker v London & Provincial, (1888) 22 LR Ir. 572.
10
11

1.6 War risks cases:

The existence of a war risk does not imply that the war is the cause of all the
following losses. However, where the assureds property has been destroyed during the
battle, the loss must be considered to be caused by the war.18
1.7 Consequential loss insurance:
Breakdown of some component of the goods of the assured, for example machinery,
may attract the liability of the insurer. Such breakdown must be contrasted with wear and tear
resulting from ordinary use of the appliance.19
1.8 Research Methodology:
The researcher has adopted the doctrinal form of research in this paper. Primary and
secondary hard copy sources of information have been used from the NALSAR Law Library.
The above category of material consists mainly of books on international taxation. Also,
secondary soft copy sources of information have been used from online databases such as
Westlaw and Hein Online.
1.9 Research Plan:
The first part of this project is in the form of introduction as outlined above. The
second part deals with cases from 1990-2010 on proximate cause. The last part is in the form
of conclusion.

18
19

Curtis v Matthews, (1918) 1 KB 825.

Burts and Harvey v Vulcan & General Ins. Co., (1966) 1 Llyods Rep. 161.

2. INVENTA CHEMICALS LTD. v UNITED INDIA INSURANCE CO. LTD.20

Facts:
The complainant took a fire policy for an amount of Rs. 3,14,11,022/- for the period
30.3.1991 to 29.3.1992 for stocks, stock-in-process, stock of raw-material and other contents.
He took another fire policy on 24.4.1991 for an amount of Rs. 66,10,000/- covering the
period 25.4.1991 to 24.4.1992 for building, factory sheds, store room-cum-office building,
machinery and accessories. On 29th March, 1992, fire broke out in the factory premises of
the complainant for which intimation was given to the Fire Brigade and on the next day, 30th
March, 1992, the Insurance Company was informed.
Contentions of the Insurance Company:
The following contentions were raised by the insurance company: first, as the
complainant has accepted Rs. 12,23,547/- in full and final settlement of its claim, this
complaint requires to be dismissed; and second, , rejection of the claim with regard to NR-25
and NR-26 was justified because loss in respect of the goods under process was not on
account of fire but was on account of disconnection of electricity supply by the complainant.
The insurance company thus contended that the fire has not destroyed or damaged the stock
which was in the process. It was destroyed because machine could not be operated because of
fire and thereby material was damaged.
Judgment:
The National Disputes Redressal Commission noted that the object of taking
insurance policy is frustrated if the assured is not reimbursed for the loss suffered in case of
risk covered by the insurance within a reasonable time. In the present case, the fire broke out
on 29.3.1992, intimation of the same was given to the Insurance Company on 30.3.1992, and
the Surveyor was appointed on 1.4.1992. Thereafter, for months together, even the
undisputed amount as assessed by the Surveyor was not released. In some cases, because of
the delay in settling the claim, insured are placed in financial hardship and on occasions they
might even be required to close their business.
Citing the concept of coercive bargaining, the Commission observed that the Courts
will not enforce and will strike down an unfair and unreasonable contract or an unfair or
unreasonable clause in a contract entered into between the parties who are not equal in
bargaining power. Applying the principle of purposive interpretation for the purpose of

20

II (2004) CPJ 45 (NC), in the National Consumer Disputes Redressal Commission, New Delhi.

giving full effect to the intent of the parties who had entered into the contract, the
Commission noted that Reactors 25 and 26 were not burnt or damaged because of the fire.
But, at the same time, because of the fire electric supply was required to be disconnected so
that fire may not spread in the premises where R-25 and R-26 are located. Once there is fire
in the premises it would be irrational to suggest that electricity supply should be continued, so
that fire may spread in the other premises. If electricity supply is disconnected because of the
fire, then fire is the proximate cause for damaging or destroying the stock which was in
process in R-25 and R-26. Cause for damage was fire.
In this case, the connection between the fire and the loss is so close that the relation of
cause and effect is established. The loss could not have happened but for fire. The Insurance
Company was thus directed to pay the loss as assessed by the Surveyors for the stock-inprocess in Reactors 25 and 26 amounting to Rs. 13,36,859/-. Interest at the rate of 12% was
also awarded because the complainant was required to pay much higher rate of interest to the
Bank.

3. NEW INDIA ASSURANCE COMPANY LTD. v ANDHRA FISHERMEN

CENTRAL CO-OPERATIVE SOCIETY LTD.21

Facts:
On 27.3.1979, when the Respondents boat was returning from Astrangi, it was sunk
in the sea at Chintapallibasti due to fortuitous incursion of sea water into the Boat through
stern tube as a result of the accidental breakage of propeller shaft. The respondent/plaintiff
filed a suit for recovery of Rs. 1,79,687 towards the compensation amount payable under
Marine Hull Policy. The fortuitous incursion of sea water into the boat which caused the
sinking of the boat is one of the perils of the sea covering the Marine Hull Policy. Therefore,
the plaintiff prayed that the suit may be decreed for an amount of Rs. 1,15,000/-covered
under the Hull Policy with interest at 12 1/2% p. a.
Contention of the insurance company:
The counsel for the insurance company contended that the respondent was aware that
there is a manufacturing defect in the propeller shaft and that is why the plaintiff did not file
the suit immediately after the repudiation of the claim. The learned Counsel further
contended that the respondent had not furnished any evidence to establish that the breaking of
the propeller shaft was in consequence of accident.
The learned Counsel further contended that the insurance company was liable only if
there was an accident or a peril attributable to the conditions of weather in the sea or an
accident of navigation which resulted in the loss. The insurance company also contended that
the policy clearly specifies that the insurance claim will cover the total loss (actual or
constructive) of the vessel including total loss directly caused by bursting of boilers, breakage
of shafts or any latent defect in the machinery or hull.
Judgment:
The court held that particularly when the boat was given a certificate of seaworthiness
by the insurance company, the contention of the insurance company that the risk will not fall
under the expression of maritime perils within the meaning of Marine Insurance Act, 1963
could not be accepted. The appeal was held to be devoid of merit and was dismissed.

21

AIR 2003 AP 231.

4. DILIP KUMAR GHOSH v NEW INDIA ASSURANCE CO. LTD.22

Facts:
The petitioner firm exports products like surgical dressings, medical bandages,
absorbent cotton wool and various other types of cotton products required in medical
profession for surgical purpose to foreign countries. The petitioner also insured the goods
with the respondent. The goods were shipped to Port Beira, Malwai but due to internal
disputes of the shipping company, the goods could not reach their destination. The State Bank
of India pursued legal action against the company and a receiver was appointed by the
Calcutta High Court. On further enquiry the petitioner came to know that the said vessel
returned to Port Bombay and was abandoned at the mid-sea by its crew members.
Due to the delay, the goods became unusable since fungus and tetanus grew up over
the said goods. According to the petitioner, he offered to sell the same to the said foreign
buyer, but the buyer refused to accept the same as the said cargo was not usable for medical
purpose and was further contaminated. Since the materials were manufactured by the
petitioner according to foreign Government's specification, the same could not be sold out in
India as per Drug Rules.
Contention of the insurance company:
The insurance company repudiated the claim of the petitioner on the following
grounds:
1. the proximate cause of loss was delay
2. the damage was caused due to the inherent vice
3. the loss was due to bad packing

Judgment:
The court observed that the petitioner had made all efforts regarding the shipment of
the goods. There was also no delay on the part of the petitioner. The court also noted that the
damage caused to the cargo was not because of the delay on the part of the petitioner but
because the ship was abandoned by the crew which came within the purview of all risks. The
respondent company therefore could not repudiate the petitioners claim.

22

AIR 1990 Cal 303.

Regarding the contention of the insurance company that the cargo suffered inherent
vice, the court noted that there was no evidence to support this contention. The insurance
company was directed to pay the amount agreed upon in the policy.

5. NIYATI MAJUMDAR v NATIONAL INSURANCE CO.23

Facts:
Manik Majumder was coming to his place of posting at Takma Charra from his house
in the said vehicle i.e., Commander Zeep bearing No. TR-03-2119 and at that time some
extremists tried to stop the vehicle. On seeing the extremists, the driver of the vehicle had
taken high speed and failed to control the vehicle. Consequently, the vehicle dashed. The
appellants filed an application under Section 166 of the Motor Vehicles Act, 1988 before the
Motor Accident Claims Tribunal for granting compensation to the appellants for the death of
Manik Majumder.
Issue:
The issue in the present case was whether the deceased Manik Majumder died due to
an accident on 2.7.1997 arising out of use of the motor vehicle insured with the respondent.
Judgment:
A conjoint reading of the various sub-sections of Section 163A of the Motor Vehicle
Act, 1988 shows that a victim or his heirs are entitled to claim from the owner or the
insurance company a compensation for death or permanent disablement suffered due to
accident arising out of the use of the motor vehicle. They do not have to prove wrongful act
or neglect or default of anyone.
Based on the facts, the court arrived at the conclusion that the High Court erred in
concluding that the death of the deceased was not caused by an accident involving the use of
a motor vehicle.
The court thus noted that the proximate cause of the accident of the offending vehicle
was due to driving the offending vehicle at high speed by the driver. The firing to the vehicle
by the extremists was incidental to the motor accident. The suit was remanded back to the
Tribunal with the direction to obtain evidence if necessary on the question of amount of

23

2007 (2) GLT 983.

compensation payable to the claim (appellants) and then pass any appropriate order so as to
enable the claimant (appellants) to receive the compensation.

6. ORIENTAL INSURANCE CO. LTD. v MITRA AND GHOSH PUBLISHERS

(PVT.) LTD.24

Facts:
A Book Fair is held in Calcutta annually called the "Calcutta Book Fair". The plaintiff
was allotted a stall by the Guild in the Book Fair in order to exhibit and sell its books. The
plaintiff took out a Fire Insurance Policy from the defendant insurance company. Under the
Policy, the stock printed books to be exhibited and sold through the said stall of the plaintiff
at Calcutta Book Fair was insured for a sum of Rs. 6.00.000/- and further insurance was taken
for Rs. 60,000/.
The requisite premium for the said policy of insurance was duly paid by the plaintiff.
The stall of the plaintiff including its stock of books were destroyed and damaged by the said
fire or by water used in effort to extinguish the said fire.
Contention of the insurance company:
The insurance company refused to entertain the plaintiffs claim on the ground that
according to the report of the surveyor appointed by the insurance company, no loss had
occurred to the plaintiff due to the fire. Any loss caused to his goods was therefore beyond
the purview of the Fire Policy. The insurance company was also of the opinion that the cause
of the loss to the plaintiff was the looting and plundering of the books by some miscreants
while the authorities were busy extinguishing the fire at the Book Fair.
Judgment:
The court noted that no evidence had been adduced by the appellant to show that the
plaintiff had removed their books to a safe place in good condition and had therefore made a
fictitious claim. On the contrary, the evidence showed that at the instance of the fire brigade,
all the books were thrown away from the stalls and water was sprinkled all over the stalls to
prevent further spread of the fire.
The issue therefore was whether within the terms of the policy taken by the plaintiff,
it is entitled to get compensation when the actual burning of the books had not been proved
but it had been established that due to the bona fide action of the fire brigade in extinguishing

24

AIR 2009 Cal 268.

10

the fire caught at the roof of the stall in question, the books were thrown away and lost in the
process.
The court was therefore called upon to decide if the fire was the proximate cause of
destruction and the consequent loss of the plaintiff. The court cited the following passage
from Halsburys Laws of England:

Losses may be sustained through attempts to check the progress of the

fire/property may be destroyed by water used to extinguish the flames or
building may be blown up by the fire brigade for the purpose of preventing the
fire from spreading. Other losses may be sustained in attempts to save property
from fire; the property may be destroyed or damaged in course of removal. In
all these cases, though the property is not burned, the loss is proximately caused
by fire. Losses by theft during a fire must also be regarded as proximately
caused by fire.
In its decision, the court held that all that was required to be proved was that fire was the
proximate cause of the damage. The insurance company had failed to produce any evidence
for its defence that the loss had been caused due to theft occurring during or after the fire.
The insurance company therefore could not refuse to pay the policy amount to the plaintiff.

7. PATEL SHANABHAI DARUBHAI AND CO V THE ORIENTAL INSURANCE

CO. LTD.25
Facts:
The petition relates to a transaction of import of 188.613 tons of pigeon peas from a
seller in Singapore, but this consignment was actually loaded in Myanmar and was being
shipped to India. The petitioner is a partnership firm engaged as a grain merchant. The
complainant claimed interest in the consignment due to a High Sea transaction between the
original purchaser and the complainant. According to the Complainant, despite execution of
the Average Bond by him and several other consignees relating to the cargo in Hold No. 2,
the ship owner could not discharge the consignment due to the problem of stability of the
vessel till 10.07.1998. In this background, M/s. RPMV filed a claim on 17.8.1998 with the
OP-Insurance Company for the total value of the consignment under the policy.

25

National Consumer Disputes Redressal Commission, New Delhi, Original Petition No. 136 of 2001, Decided
on 14.1.2011.

11

The Complainant claims to have submitted all necessary documents to settle the claim
under the policy. The Surveyor responded stating that they had drawn the samples from and
sought instructions to forward the samples for testing. Subsequently, the Complainant wrote
to the Opposite Party seeking their advice of the latter on the question of incurring
expenditure on an operation to salvage stocks, mentioning that if no reply were received
within seven days, the Complainant would presume that the Opposite Party was not interested
in salvage operation.
Contentions:
According to the Complainant, the loss proximately caused due to fire/or non delivery
are both insured perils. The delay and financial default of the vessel owners did not play a
dominate role in the loss and cannot be considered to be a proximate cause of loss and
therefore the claim under the insurance cover has been wrongly rejected.
The Respondent repudiated the claim as the alleged loss to this cargo was due to
ingress of water and due to delay and resultant spontaneous combustion.
Judgment:
The court noted that the conclusion of the Respondent regarding delay, after arrival in
Mumbai, being the proximate cause, was unsustainable in view of the Murray - Fenton
Report filed by the Respondents themselves. The court held that the Respondent had not been
able to establish the ground for repudiation of the claim. The claim had been repudiated
unjustly. Accordingly, the complaint was allowed. The OP/Oriental Insurance Co. was
directed to pay the Complainant the value of the lost consignment.
8. PRIYA BLUE INDUSTRIES LTD. v NEW INDIA ASSURANCE CO. LTD.26

Facts:
The complainant was a company engaged in ship breaking and scrap dealers. They
filed this complaint alleging deficiency in service on the part of the insurance company in
unjustifiably repudiating their claim despite the clear terms of the policy. The complainant
had taken a marine insurance policy for hull and machinery for the vessel Valoo Arun
which was on its funeral voyage.
Contentions:

26

III (2005) CPJ 94 (NC).

12

The petitioners contended that when the vessel had started its voyage, it was damaged
because of rough weather and could not be beached at the specified place. There was total
loss and the insurance company was informed accordingly. But even after repeated letters,
the insurance company did not respond.
The Surveyors Report showed that the proximate and dominant cause of the vessels
total loss was stranding on the rocky shoal prior to arriving at the destination. The stranding
was accidental and a fortuitous in nature and was proximately caused by an insured peril.
Judgment:
The court noted that despite the aforesaid three survey reports the claim was
repudiated by the Insurance Company. The complainant could not bring the vessel to the
destined point because of the sea peril because it was impossible for him to refloat the vessel.
The assured was, therefore, permanently and irretrievably deprived of the possession and
control over it. this amounted to total loss. Further, the position would not be changed even
on receipt of the salvage value by selling the vessel on as-is-where-is-basis.
Considering the duties of the insured and the insurer, the court noted that
undoubtedly, the insured was required to act as a prudent uninsured would act. However, that
would not mean that the insured should enter the sea water and break the vessel. The
Complainant had taken insurance policy for covering a short distance to see that it is broken
at the site assigned for that purpose and not in the sea water.
The complaint was allowed and the insurance company was directed to pay a sum of
Rs. 13,69,00,000/- with interest at 9% per annum.and costs of Rs. 25,000/9. USHA INTERNATIONAL LTD. v UNITED INDIA ASSURANCE CO. LTD.27

Facts:
The Petitioner is engaged in the business of manufacturing and marketing of
consumer merchandise such as electric fans, coolers, sewing machines, pump sets, diesel
engines, piston rings, fuel injection, generators. It has a large number of godowns to store
such goods. The Petitioner obtained an insurance cover to take care of the risks of a variety of
nature. The insurance was not limited to the risk of fire, riotous and terrorist acts, malicious
damage and damages caused to the premises and properties due to theft, burglary or housebreaking.

27

AIR 2005 Del 424.

13

Issue:
The issue in the present case was whether a theft committed consequent to damage to
a godown occasioned by a cyclone is covered by the Fire `C' Policy and/or the Burglary and
House Breaking Insurance Policy. The Insurance Company refused to make payment on the
grounds that the theft was a sequel to the cyclone. The Insurance Company thus refused to
acknowledge its liability on the ground that the theft was not preceded by a forcible and
violent entry to the godown/warehouse.
Judgment:
The court observed that it was not disputed that the looting followed the riots in the
present case. The only issue that the court had been called to adjudge was whether the
proximate cause for the looting should be taken into account. If loss arose on account of
looting in a riot where the riot peril itself is an insured peril, there should not be any difficulty
in meeting the claim under the policy. The act that causes the loss must fall within the
definition in the policy. The definition in criminal law should not be given relevance for these
purposes. Once a party has agreed to a particular definition, he is bound by it and the
definition of criminal law will be of no avail.
The court noted that from the above, it was of the opinion that theft should have been
preceded with force or violence as per the terms of insurance policy. The insurer therefore
had to establish that theft or burglary took place preceding the force. Otherwise, the insurance
company could validly reject the claim of the insurer.
The court also observed that the terms of the policy as laid down by the insurance
company should be suitably amended by the insurance company to facilitate the claims made
by the claimants. The definition in the present case was so stringent that it gave rise to a
difficult situation for the common man to understand. The definition of the word burglary
should be given a meaning which is closer to the realities of life which the common man can
understand.
In the final analysis, the court held that the petitioners were liable to be indemnified
by the Petitioner against theft under the Fire Policy. The writ petition was allowed and the
respondents were directed to pay the Petitioner the sum of Rs. 1,38,936/- together with
interest thereon at the rate of 5%.

14

CONCLUSION

Proving that the loss was caused by a proximate cause is an essential requirement
before the assured can make a claim under the insurance policy. The general trend among the
judiciary has been to interpret the term proximate cause as widely as is possible within the
ambit of the terms and conditions of the policy agreed upon, so as to allow the insured
enough room to make his claim. Such an approach ensures that the assured does not suffer
from his position of a low bargaining power.
This project has analysed cases from 1990-2010 which involve the question of
proximate cause and whether the assured was entitled to make a claim under the policy.
Courts have adopted similar liberal approach but in some cases have disallowed the assureds
claim. To reiterate, the following are the important principles that emerge from the above
cases: The act that causes the loss must fall within the definition in the policy. The definition
in criminal law should not be given relevance for these purposes. Once a party has agreed to a
particular definition, he is bound by it and the definition of criminal law will be of no avail.
Losses may be sustained through attempts to check the progress of the fire/property
may be destroyed by water used to extinguish the flames or building may be blown up by the
fire brigade for the purpose of preventing the fire from spreading.
Further, the insurance company cannot deny a claim when it has itself given a
certificate of seaworthiness to the insureds vessel or to his goods. One cannot take advantage
of ones own wrong.

15

BIBLIOGRAPHY

BOOKS:

M N Srinivasan, PRINICPLES OF INSURANCE LAW, 8th ed. 2006, Wadhwa Law

Publishers.

Robert Merkin, COLINVAUXS LAW OF INSURANCE, 8th ed. 2009, Thomas

Sweet & Maxwell.

Tom Baker, INSURANCE LAW AND POLICY, 2008, Aspen Publishers.

WEBSITES:

http://illinoislawreview.org/article/discrimination-statutes-the-common-law-andproximate-cause/

http://www.courtstreetlaw.com/articles/legal-malpractice-articles/proximatecause-and-attorney-malpractice.html

http://www.law.cornell.edu/wex/proximate_cause

http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202568491017&Pro
ximate_Cause_Threshold_Injury_and_Scope_of_Duty_Take_Center_Court&slr
eturn=20130310011658

http://www.txinjuryblog.com/2009/09/articles/legal-news/what-is-proximatecause/

http://attylaserna.blogspot.in/2010/04/proximate-cause-vs-contributory.html

iv