Calcutta High Court
M/S. Sip Shing Tannery & Ors vs The New India Assurance Co. Ltd. & Anr on 30 November, 2017
Author: Debangsu Basak
Bench: Debangsu Basak
ORDER SHEET
WP No. 710 of 2013
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
M/s. SIP SHING TANNERY & ORS.
VERSUS
THE NEW INDIA ASSURANCE CO. LTD. & ANR.
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
Date : 30th November, 2017.
Appearance:
Mr. Bikash Ranjan Bhattacharjee, Sr. Adv.
Mr. Amit Chatterjee, Adv.
Ms. Trina Banerjee, Adv.
For the petitioners.
Mr. Soumendra Nath Ganguli, Adv.
Ms. Tanushree Dasgupta, Adv.
For the respondents.
Mr. T.M. Siddiqui, Adv.
Mr. Nilatpal Chatterjee, Adv.
For the State.
The Court :- A notice of repudiation dated November 16, 2012, issued by an insurance company, is under challenge in the present writ petition.
Learned Senior Advocate for the petitioners submits that, the first petitioner is a partnership firm. It had taken out a standard fire insurance company policy in respect of a business of carrying on finished leather products at a premises in Tangra. Such business premises was inundated by a fire happening at 8 a.m. on October 23, 2008. The fire devastated the plant, machinery, building and stock at such business premises. The petitioners lodged 2 a claim with the insurance company. The Surveyor inspected the damage caused and submitted a survey report. He refers to the survey report in details and submits that, the Surveyor finds that, the petitioners were carrying on producing finished leather goods. There is no whisper of a tannery business being carried on in the surveyor's report. He refers to the impugned letter of repudiation and submits that the foundational basis of the repudiation by the insurance company is wrong. The insurance company proceeds on the basis as if the business carried on by the petitioners at Tangra was banned by virtue of a judgment and order of the Hon'ble Supreme Court of India rendered in WP No. 3727 of 1985 (M.C. Mehta-Versus-Union of India). Moreover, the petitioners are alleged to have suppressed material fact and to have come with unclean hands so far as the insurance policy is concerned. The repudiation being bad, the same is required to be set aside. The insurance company should reconsider the entire claim.
Learned Senior Advocate for the petitioners draws the attention of the Court to the order of closure issued by the Pollution Control Board. He submits that, the same does not affect the carriage of business of finished leather goods at the subject premises. Tannery operation is prohibited. The petitioners were not doing any tannery business. The survey report does not establish that, the petitioners were carrying on any tannery business. On the contrary it speaks of finished leather goods being available. There is no requirement of any fact to be reassessed by the Writ Court. The materials made available on record can be read, understood and inferred to adjudicate the claim of the petitioners. The repudiation being improperly premised, the same should be set aside. The insurance company should be directed to revisit the claim of the petitioners. 3
Learned Advocate appearing for the Insurance Company submits that, the claim of the petitioners is disputed. There are disputed questions of fact involved and that the Writ Court should not intervene in such a scenario. In support of such contentions, he relies upon an unreported decision of the Court rendered in WP No. 1135 of 2015 with WP No. 1137 of 2015 (Dhansar Engineering Co. Pvt. Ltd. & Anr.-Versus-The New India Assurance Company Ltd. & Ors.). He submits that, such judgement and order dated September 8, 2016 was challenged in appeal and that, the appeal was dismissed without any interference. He relies upon (1997) 1 SCC 156 (State of M.P. & Ors.-Versus- M.V. Vyavsaya & Co. ) and submits that, where disputed questions of facts are involved, the Court should not intervene under Article 226 of the Constitution of India. He refers to the forensic report and submits that, the forensic authorities found the petitioners to stack raw hides and chemicals which are required for the processing of raw hides into finished leather goods. This particular type of business was actually prohibited by the Hon'ble Supreme Court of India. He refers to the correspondence exchanged between the Insurance Company and the Pollution Control Board and submits that, upon an enquiry as to whether the petitioners had the consent to operate on the fateful day, the Pollution Control Board informed the insurance company that, the petitioners did not have the requisite consent to operate under the pollution control norms.
Learned Advocate appearing for the State submits that, the petitioners did not have the requisite consent to operate on October 23, 2008 when the fire accident happened.
4
In reply, learned Senior Advocate for the petitioners submits that, the Writ Court is not denuded of its jurisdiction simply on the ground of disputed questions of facts. It is only when the Writ Court finds that, further oral evidence is required to adjudicate the disputes, then in its discretion, the Court can decided not to exercise jurisdiction under Article 226 of the Constitution of India. In the facts of the present case, the petitioners were carrying on business of manufacturing leather goods out of finished leather products. The same does not required a consent to operate under the pollution control norms. He relies upon the norms of the Pollution Control Board in this regard. He submits that, such a kind of business is not classified in any of the categories of the Pollution Control Board, which requires to consent to operate from the Pollution Control Board.
I have considered the rival contentions of the parties and the materials made available on record.
Admittedly, the petitioners had a policy of fire insurance with the insurance company. The petitioners suffered a fire accident at its Tangra premises on October 23, 2008 at about 8 a.m. A Surveyor was appointed by the Insurance Company. The Surveyor had submitted his report. The Surveyor's report speaks of the fire continuing for about three days. It had assessed the damages in its report.
The insurance company by the impugned writing dated November 16, 2012 repudiated the contract of insurance principally on two counts. One of the grounds is that, the petitioners were operating its business in violation of an order of Hon'ble Supreme Court of India. The petitioners did not have requisite permission to operate a tannery at Tangra at the material point of time. The other 5 ground is that, the petitioners had suppressed such vital information from the Insurance Company and that, a contract of insurance requires the insured to act with utmost good faith. In the facts of the present case, the petitioners as the insured not having acted in utmost good faith by suppressing such material facts from the insurance company, the contract of insurance stands vitiated and, therefore, the repudiation of such contract.
It is admitted at the Bar that, the Hon'ble Supreme Court in M.C. Mehta (supra) had directed that, no tannery business would be carried out at Tangra from a specified period. The accident admittedly happened subsequent to such cut off date. The issue is whether the petitioners carried on the business of tannery as contemplated by the order of the Hon'ble Supreme Court in M.C. Mehta (supra) or not. In the facts of this case, there is a report of the Survey of the forensic authorities. The forensic authorities find that, there are raw hides as also chemicals required for the process of raw hide into finished leather at the premises on the fateful day. It opines that, an electric spark may have caused the chemicals used for the purpose of processing raw hides into finished leather to ignite and, therefore, cause the accident. There is, therefore, materials available to establish that, the petitioners were not carrying on the business of converting finished leather goods into leather products only. It was also having facilities, arrangements and materials for the purpose of converting and processing raw hide into finished leather with the user of chemicals. This kind of business was not permissible in view of M.C. Mehta (supra). The insurance company takes such fact into account while repudiating the contract of insurance. This 6 consideration of the insurance company cannot be said to irregular requiring an interference by a Writ Court.
The records made available to Court demonstrate that the petitioners did not have the requisite consent to operate from the Pollution Control Board on the date of the fire accident. The claim that, the petitioners were not carrying on a tannery business to come within the purview of the pollution control norm cannot be accepted in view of the report of the forensic authorities.
In Dhansar Engineering Co. Pvt. Ltd (supra) the Court considering a contract of insurance in the facts of that case found that, disputed questions of law and facts were involved and, therefore, chose not to interfere under Article 226 of the Constitution of India. M.V. Vyavsaya & Co. (supra) is of the view that, a Court exercising jurisdiction under Article 226 of the Constitution of India need not pass interim order when there are disputed questions of facts involved.
In the facts of the present case, I do not find any irregularity or infirmity in the decision of the Insurance Company in repudiating the contract for insurance.
WP No. 710 of 2013 is dismissed. No order as to costs.
(DEBANGSU BASAK, J.) snn/sn.