National Consumer Disputes Redressal
Sanwara Agro Oils Ltd. vs New India Assurance Co. Ltd. & 2 Ors. on 15 October, 2025
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
JUDGMENT PRONOUNCED ON: | £710/2025
CONSUMER CASE NO. 1214 OF 2016
M/s Sanwaria Agro Oils Ltd., through the Director Shri Abhishek Agrawal, Regd. Office :
E-1/1, Arera Colony, Bhopal-462016 (MP).
BRANCH OFFICE
304-Midas, Sahara Plaza Complex, J.B. Nagar, Near Kohinoor Hotel, Andheri-Kurla
Road, Chakala, Andheri (East), Mumbai - 400059. Complainant
Versus
(1) The New India Assurance Co. Ltd., through its General Manager, Regd. & H.O.:
Building No. 87, M.G. Road, Fort, Mumbai-400001.
(2) The New India Assurance Co. Ltd. through the Centralized Claims Hub Incharge,
Regional Office, 2nd Floor, 3rd Block, Arera Hills, Jail Road, Bhopal-462011 (MP)
(3) The New India Assurance Co. Ltd., Through the Divisional Manager, Divisional
Office No. Bhopal (MP) Opposite Parties
CONSUMER CASE NO. 2117 OF 2016
M/s Sanwaria Agro Oils Ltd., through the Director Shri Abhishek Agrawal, Regd. Office :
E-1/1, Arera Colony, Bhopal-462016 (MP).
BRANCH OFFICE
304-Midas, Sahara Plaza Complex, J.B. Nagar, Near Kohinoor Hotel, Andheri-Kurla
Road, Chakala, Andheri (East), Mumbai - 400059. Complainant
Versus
(1) The New India Assurance Co. Ltd., through its General Manager, Regd. & H.O.:
Building No. 87, M.G. Road, Fort, Mumbai - 400001.
(2) The New India Assurance Co. Ltd. through the Centralized Claims Hub Incharge,
Regional Office, 2nd Floor, 3rd Block, Arera Hills, Jail Road, Bhopal-462011 (MP)
(3) The New India Assurance Co. Ltd., Through the Divisional Manager, Divisional
Office No. Bhopal (MP) Opposite Parties
BEFORE:
HON'BLE MR. JUSTICE A.P SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
For the Complainant Mr. Rajul Srivastav, Advocate (VC)
For the Opposite Parties Mr. JPN Shahi, Mr. Shekhar Prakash, Advocates
ORDER
PER HON'BLE MR. BHARATKUMAR PANDYA. MEMBER
1. Heard Mr. Rajul Srivastav, Advocate for the Complainant through Video Conferencing and Mr. JPN Shahi, Advocate for Insurance Company Opposite Parties.
Page 1 of 59!-
1.2. These consumer complaints arises from the act of opposite parties in repudiating two insurance claims and thereby allegedly amounting to gross deficiency in service and negligence on the part of the opposite parties. CC No. 1214 of 2016 is in 1 respect of a claim for spontaneous combustion, intimated to the insurer on 26.02.2014, I of soybean under two policies for insured's risk location at Mandideep, one policy ending with number 0324 for sum assured of Rs.45 crores, not having any coverage under "spontaneous combustion' endorsement, and another one ending with number 0373 for sum assured of Rs.40 crores, having the coverage also under 'spontaneous combustion' endorsement, both for the period from 21.12.2013 to 20.12.2014. On the other hand, CC No. 2117 of 2017 is for loss in the stocks of soyameal (De-oiled cake) due to "spontaneous combustion", intimated to the insurer on 21.02.2014, allegedly covered under three floating policies covering the risk at various godowns at Gandhidham, Gujarat, one policy ending with 0006 for a sum assured of Rs. 10 crores for the period from 13.07.2013 to 12.07.2014, another policy ending with 0012 for a sum assured of Rs.30 crores for the period from 16.12.2013 to 15.12.2014 and third policy ending with 0008 for a sum assured of Rs.20 crores for the period from 21.12.2013 to 20.12.2014. With regard to policy 0008, the add-on coverage for "spontaneous combustion' was obtained by the complainant at the very time of obtaining the policy in December-2013. However, the endorsement for such coverage for "spontaneous combustion' with regard to balance two policies (for total of Rs. 40 crores) was subsequently applied/proposed by the insured on 03.02.2014, for which premia were realised on 12.02.2014 and coverage was granted by the insurer with 15 days' waiting period, thus effective from 27.02.2014. All other material facts of both the cases are though slightly different but parallel, and for the sake of convenience, we firstly narrate the facts of the case in C.C. No. 1214 of 2016 as under:
2. The Complainant is engaged in the manufacturing and trading of soya crude oil, refined oil. de-oiled cake etc. from agriculture product of soyabean at factory at Mandideep, and in order to secure the said stocks of raw-material, finished goods, goods in process and other inputs and by-products at Mandideep, the complainant got the stock insured under standard fire and special perils policies (SFSP) from the opposite party insurer for the period from 21.12.2013 to 20.12.2014 for a total sum Page 2 of 59 assured of Rs.40 Crores with add-on cover for "spontaneous combustion". Similarly, another Policy for coverage of solvent extraction which included the stock of soyabean seed, soya crude oil, refined oil in overhead storage tanks, barrels, drums, PVC, jars, polythene pouches, lecithin in tanks, barrels, hexane, diesel in underground tanks, barrels, husk, baggage, jute/gunny/PP bags, packing material of all descriptions, stores and spares etc. all sort of agro waste, agro based fuel/coal, stock of raw material and SIP and finished goods including stocks in silos and all other material related to insured covering the risk to the tune of Rs.45 Crores was obtained for the period 21.11.2013 to 20.11.2014. Thus, the total sum assured of both the aforesaid Policies was Rs.85 crores, but the coverage for the peril of " fire due to spontaneous combustion' was only to the extent of Rs. 40 crores (similarly, for stocks of soyameal etc at Gandhidham godowns, three separate policies were obtained, which form subject matter of CC/2117).
As per the intimation given to the insurer oh 26.02.2014 and as averred in the complaint in para-5, on 24.02.2014, "while uploading the soyabean from silos, it was discovered that stock of approximately 1000 MT of soyabean stored in silos at Plot No. 53-A, 53-B & 55, Sector-A, Industrial Area, Mandideep, District Raisen had got damaged due to spontaneous combustion". The estimated loss was revised to 2000 MT on the same day. Surveyor, M/s. A.M. Patel ISLA (P) Ltd. was appointed by the OP insurer who visited the site on 05.03.2014 when he also took some photographs. On 08.03.2014, he informed the complainant to segregate the damaged and undamaged stocks from the affected quantity and also demanded various documents from the complainant. On 05.05.2014, an e-mail was sent to the surveyor intimating that the process of segregation was complete and further that it was discovered and ascertained that damage is found to of total 31211 bags of damaged soya seeds weighing nearly 2800 MTs. When even after sending around 300 documents to the surveyor at various stages of his survey, surveyor was not completing his survey, he was on 18.08.2014 informed that suitable action would be taken against him for not settling the claim. On the same date, the complainant sought permission from the Surveyor and OP-3 insurer for shifting and/or disposal of the damaged seeds (salvage) but the same was not accorded by the OP insurer, though the Surveyor wrote to the insurer that once a report is submitted, the insured would have freedom to deal with the alleged damaged stock. It appears that, in the meantime, the Page 3 of 59 Surveyors submitted the Final Report to the insurers and informed the same to the insured on 13.08.2014 as per Annexure C-15, being insured's letter dated 23.08.2014. However, on 28.08.2014, complainant also received a letter from the surveyor, vide which it was informed that the Final Survey Report is already submitted. The insured thereafter insisted on the surveyor to explain the reasons for reporting the claim inadmissible as "no claim", and further still asked him (surveyor) only for permission for disposal of the salvage. In response to e-mail dated 03.12.2014 sent to the insurer (Ann C-21, p 89), raising grievance against the Surveyor, the insurer asked for submission of the claim form on the same date by email, which was duly submitted on 11.12.2014 claiming net loss of 2800 MT at Rs. 35230/- pMT which, which after reducing salvage value at Rs. 9000/- pMT, was arrived at by the insured at Rs. 7.34 crores. However, the claim of the complainant was repudiated vide repudiation letter dated 20.02.2015, inter alia, on the grounds of repudiation, inter alia, as "No signs of smoke and no burning was observed coming out from the mass of soyabean inside the closed silo. There was no evidence of any fire and/or combustion found inside and/or outside the closed silo. There was no evidence/effect of fire/smoke/heat on the inside and/or outside the silo and/or godown." Complainant wrote letter to OP-3 insurer regarding taking decision for disposal of salvage. But since no response was received from OP insurer, complainant was left with no other option but to unilaterally sell the salvage to M/s Pushpraj Traders, Itarsi for Rs. 2.511 crores and a communication in this regard along with the proper quotations was sent to OP-2 on 04.03.2015. As per the complainant, though they sustained a loss of 2790 MTs costing Rs.8,98,74,270/-, as the salvage fetched them a sum of Rs.2.511 crores, the actual loss due to the spontaneous combustion was to Rs.6,47,64,270/- and hence, the complainant was entitled to get that amount from the OP insurer. On 10.03.2015, OP-3 intimated the complainant that the claim has been repudiated. Repudiation Letter dated 20.02.2015 is reproduced herein under:
February 20,2015 M/s Sanwaria Agro Oils Ltd.
E-1/1, Arera Colony BHOPAL-462 016 (MP) Dear Sir, Re : Claim under Policy Nos. 45140011130100000324,45140011130100000373 Page 4 of 59 This has reference to the claim put forth by you for the alleged damages caused to the soyabean in close silo at your Mandideep Factory. We had appointed surveyors, who have submitted their report. After due consideration of the survey report/s we find that the claim put forth by you is not entertainable and the same stands repudiated for the following reasons:
It has been found that only the stock of soyabean were found spoiled out in the middle area and was filled up just upto the straight height of the cylindrical portion of the closed silo. There were no signs of smokes and no burning was observed coming out from the mass of soyabean inside the closed silo. There was no evidence of any fire and/or combustion was found inside &/or outside the closed Silo. There was no evidence/effect of Fire/smoke/heat on the inside and/or outside the Silo &/or godown.
It has been also observed that the soyabean stored in the Silo was having high content of moisture, and there was no evidence of any external moisture/water coming in contact with the mass of soyabean.
Thus, it is evident that no any hydrolytic / enzymatic fat cleavage and/or oxidative fat cleavage and/or self heating was found taken place in the claimed mass.
Policy of standard fire and Special Peril extended to include spontaneous combustion in the insured property, covers loss / damage by fire only and it has been found that there was no fire and/or combustion of the soyabean mass. There was no any evidence of ash generation and/or putrefied inside the soyabean mass. Thus, loss, therefore is beyond the insured peril including fire activity causing claimed loss/damage to the mass of soyabean stored in the closed silo.
It has further been observed that you have violated general condition of the policy No.6 (1) (b) by not providing any authenticate required documents like fire brigade report, FIR, police panchnama, etc. in support of your claim for the ignition of fire and/or peril insured under standard fire special peril policy and its endorsement. Further, it has also been observed that you have tried to misrepresent and suppress material fact by not disclosing correct facts to the surveyor as it has been observed that vide your letter dated 21/02/2014 you had intimated the damages to the stocks by natural combustion. However, your email dated 11/03/2014 mentioned fire extinguished by the fire brigade but same was found untrue and was not supported by any other evidence. It has also been observed that you did not disclose the material facts that dated 21/02/2014 spoilage of soyameal in the godown before getting add on cover of spontaneous combustion on 24/02/2014 under the two standard fire and special peril policy. It has been found that you tried to claim exaggerated amount of loss just to get undue advantages of the policy issued, which again is against the terms of the policy.
Since the claim is beyond the scope of the policy, as there was no any evidence of fire and/or combustion of soya-bean in the mass of soyabean stored in the Silo and since you have violated terms of the policy, as stated above, the claim under the aforesaid policies stands repudiated.
Please note that Company reserves its right to add further ground of repudiation if they subsequently come to the knowledge of the company.
3. As pleaded in para 33 of the complaint, the repudiation is wholly unjustified, the policy covers "spontaneous combustion', which is nowhere specified in the policy to be required to be preceded or followed by smoke, flame or fire so as to be eligible as an insured peril, and therefore, the surveyor has committed serious error in interpreting and Page 5 of 59 reading the policy and its conditions. Similarly, the allegation of exaggerated claim is also wrong because a loss of a huge quantity required some time in segregation of the damaged stock and in ascertaining the exact quantity of damaged stock. Also, "It is significant to note that as the fire was already controlled and there was no flames or fire noted on discovery of the loss, no FIR was needed or Police formalities were required because the spontaneous combustion had taken place which did not require any such inquiry." (para 33 of the complaint). For further establishing the claim and the deficiency of the OP-insurer in service, post-repudiation documents at Ann C-32 to C-35, in the nature of PSI letter dated 15.06.2015 certifying "the . loss of soybean seeds due to spontaneous combustion" of 2800-3000 MT, Silo capacity certificate from the fabricator certifying 10000 MT of Soyabean capacity, CA's certificate issued "on the basis of record produced", certifying that "a fire incident was reported at the factory of Sanvaria on 27.02.2014", wherein the loss reported was of 2790 MTs, and that after disposal of the same, the records showed equivalent reduction in stocks, have been relied upon.
The complainant also obtained a report of chemical analysis of "damaged (heated)" and "fresh" soybean samples from M/s Cotecna dated 16.04.2014 and forwarded the same to the Surveyor alongwith its own analysis of the value per MT of loss due to "spontaneous combustion" as evidenced by such reports. Accordingly, as repudiation was wholly unjustified, alleging deficiency in service, the complainant filed the present complaint on 25.07.2016 praying for compensation of Rs.9,57,79,406/- being claim amount plus interest, with pendente lite interest at 18% from the date of the complaint.
4. The opposite party, New India Assurance Co. Ltd., through their written statement filed on 01.12.2017, denied all the allegations made in the complaint. Apart from preliminary objections, as per OP insurer, there is no deficiency in service on their part and the specific and objective repudiation dated 20.02.2015, based on detailed, well-reasoned and unimpeachable Statutory Survey Report obtained u/s 64UM of the Insurance Act, cannot be questioned. It is the categorical finding of the Surveyor that there is no evidence of any combustion or fire or smoke or heat as recorded in para 5 of the Survey Report. Further, the peril insured under the "spontaneous combustion"
endorsement is the "loss due to fire only due to spontaneous combustion", which has been explained in detail in tabular form in the survey report in para 8, highlighting that Page 6 of 59 pre-ignition or pre-combustion damage to or such alleged spoilage of stock is not covered under the policy. Highlighting the surveyor's findings regarding non-substantiation of the loss due to any of the insured perils, misrepresentation to obtain undue benefit, violation of condition 6(b) for non-submission of details/evidence required through letters dated Sth March, 1st June and Sth of July, 2014, and the expert report of M/s Supreme Associates dated 20.04.2014 obtained by the surveyor insurer categorically opining the absence of any "spontaneous combustion", the insurer has opposed the averments in the complaint. The loss, though denied to be admissible, if at all admissible, is stated to be no more than 1124.536 MT of "affected" stock assessable only at Rs. 70,78,409/- after correct application of underinsurance qua and limited to add-on cover. The coverage for "spontaneous combustion" under policy 0324 is categorically denied. Denying the averments that "all details were furnished", it is stated that the police and fire reports and loss and claim substantiation evidence, though repeatedly called, were not at all provided and that the wrong dimensions of the Silo were wrongly furnished to dishonestly take benefit under the policy. It is stated that the surveyor in his Final Survey Report has recorded that as per the Expert opinion dated 20.04.2014 of M/s Supreme Associates, the spoilage of the Soyabean mass at the particular location in the closed Silo may have taken place due to moisture content beyond the optimum limit and/or blockage/inadequate air circulation inside the particular mass of the Soyabeans at particular locations stored in the closed Silo and/or due to increased respiration process in the mass of Soyabeans in the closed Silo, none of which can be termed as any combustion. The surveyor has accordingly concluded that the cause of loss/ damage does not fall within the scope of the Add On cover. The averments about the salvage disposal and claim of loss based thereon and the contents of para 34 onwards of the complaint are denied. Relevant portions/basis of the survey report dated 11.08.2014 are extracted below:
13.0 ADMISSIBILITY OF THE CLAIM This claim is not admissible under the terms & conditions of the Std. Fire & Special Perils Policy extended to include the spontaneous combustion due to following reasons 13.1 General Condition N. 1 for misrepresentation and nondisclosure of material fact The wordings of the said condition are as under:Page 7 of 59
"This policy shall be voidable in the event of misrepresentative, misdescription or non-disclosure of any material particular"
13.1.1 The insured had misrepresented regarding Fire took place inside the Silo In the intimation letter dtd. 21/02/2014, the insured had intimated to their insurers for the damages to the stocks of Soyameal stocks stored in Lily & Jain Godowns due to natural Combustion.
When the insured had understood regarding the coverage in the SFSP Policy with Add on cover to the loss/damages caused only by Fire in the Heaps in which the Fire is ignited, the insured had submitted their email dtd. 11/03/2014 mentioning Fire extinguished by the Firebrigade without any supporting proof. Please refer insured's email dtd. 11/03/2014 attached herewith as an Annex. 0.
This letter is totally controversial to the statement of the eyewitness of the claimed incident Mr. Devendra Sharma (Godown Incharge).
Thus the insured had misrepresented as above only to get the undue benefits under the caption SFSP Policy with endorsements possessed by them.
13.1.2 Exaggerated Claim The insured had misrepresented to claim exaggerated Qty. of Soyabeans as under:
i) Initial Claim:
The insured had claimed for 1000 MT of Soyabeans in the closed Silo vide their intimation letter dtd. 26/02/2014. Please refer Annex.CI This Qty. was found justifiable after inquiry with the Godown Incharge for the taken out stocks of 664 MT in the 8000 jute bags. Our physical verification of the stocks inside the Silo and available storage volume in the closed to store the Soyabeans.
Formore details, please refer Sr. No. 6.0 & 10.4 of this report.
ii) Revised Claim The insured had submitted their revised claim intimation for 2000 MT of Soyabeans in the closed Silo vide their intimation letter dtd. 26/02/2014/ Please refer Annx. C2 Hi) Final Claim:
The insured had again revised their claim after @2.5 months and exaggeratedly claimed for 2840 MT of Soyabeans vide their email dt. 05/05/2014/ Please refer Annx. E1 to E3.
Thus insured had misrepresented and exaggerated their claim only to get the undue benefits under the caption policy.
13.2 General Condition No. 6(i)b) for Non-Compliance The wordings of the same is as under:Page 8 of 59
" The insured shall also at all times at his own expense produce, procure and give to the company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the company as may be reasonably required by or on behalf of the company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with.
The insured had not submitted any authentic/required documents like Fire brigade Report, FIR, Police panchnama, photos, etc. proving the cause of claimed loss/damages in support of their claim.
Please refer our letter dtd. 08/03/2014, 01/06/2014 & 08/07/2014 as Annexures H1 to H6.
13.3 The insured could not prove any insured peril active for the claimed stocks The insured could not prove any insured peril active causing claimed loss/damages during the claimed incident dtd. 24/02/2014 by submitting the justifiable/authentic proofs.
Formore details, please refer Sr. No. 8.0 & 9.0 of this report.
In this circumstances, considering the claimed loss/damages caused due to any uninsured/excluded perils of the SFSP Policy extended to include said Add on Cover, we request insurers to treat this claim as NO CLAIM. Hence Net Payable Loss is NIL.
This Final survey report with respect to insured's claim is issued without prejudice, as per our notification at site, our justification from the details/ documents/explanations submitted by the insured and as per the terms, conditions, exclusions and warranties of the insurance policy (under which insured have claimed) issued to & held by the insured."
5. Conclusion given by M/s Supreme Associates in their Letter/report dated 05.04.2014 is also reproduced below:
Our CONCLUSION Considering the above referred Characteristics of the Soyabeans, Storage of huge mass of Soyabeans in Silo, the construction of the Silo, the inside/outside conditions of the Silo, the oil content in the affected Soyabeans @ 15.86% compared to 17.68% in the fresh sample, no presence of ash contents in the affected sample of Soyabeans, photos showing conditions of the Soyabeans entering inside the Silo and checking the Soyabeans during the claimed incident dtd. 24/03/2014 and again Page 9 of 59 j on dt. 05/03/2014, photos showing the conditions of Soyabeans taken out/coming out from silo, referring the insured's Intimation letter and statement dtd. 05/03/2014 of the insured's Godown Incharge, we herewith conclude that there was no any .
evidence of any type of combustion &/or ignition of Fire taken place inside the mass of Soyabeans stored in the closed Silo.
The oil contents in the affected samples @ 15.86% was found within the limit of 13% to 24% of the fresh Soyabeans. Hence this again proves no any combustion was started in the mass of Soyabeans stored in the closed Silo. The spoilage of Soyabeans at particular outlet gate of the closed silo may be taken place due to moisture contents beyond the limit and/or blockage/inadequate air circulation inside that particular mass of the Soyabeans stored in the Silo &/or due to increased respiration process in the mass of Soyabeans in the Silo. The above opinion in the subject mater is given by us without prejudice, to the best of our knowledge & experience. "
6. As per OP insurer, one of the two policies, being Policy ending with 0324 with the sum insured of Rs.45 crores does not have the Add On Cover for Spontaneous Combustion, thus though total sum assured under two policies is Rs. 85 crores, the SA for the coverage of loss due to fire taking place on account of spontaneous combustion, obtained as an add-on cover under policy 0373 alone, is only Rs. 40 crores. Upon receipt of the intimation with regard to the claim arising under the policy, OP immediately appointed Surveyor who visited the site on 05.03.2014. The Surveyor in his Final Survey Report dated 11.08.2014 (Annexure C-31 at page 115 to 139) recorded that during his survey visit there was no evidence of Fire/Combustion inside or outside the closed Silo. The photographs and the comments besides the photographs in the survey report (filed by the insurer, IA/19541/2018) clearly bring out that there was neither any heat, nor any combustion, nor any fumes nor any fire so as to term the so-called "discovery" of damage or spoilage to the stock of soybean as that caused by any of the insured perils, including that by natural or spontaneous combustion. In any case, the add-on cover obtained by the insured does not cover the loss or damage merely on account of spontaneous combustion, unless such combustion leads to fire and the loss is on account of such fire consequent to spontaneous combustion. As per surveyor, complainant failed to prove any active insured peril including fire active causing damage to the stock of Soyabean. The technical expert opinion obtained by the surveyor additionally confirms the same. Hence the cause of loss does not fall within the scope of the Standard Fire and Special Perils Policy extended to include the Add on cover of Page 10 of 59 spontaneous combustion. As per OP insurer, statements of the complainant were contradictory and aimed at dishonestly claiming the benefit under the policy. When complainant intimated the loss on 21.02.2014 and 26.02.2014, it was informed that loss was due to "natural combustion", but later through email dated 11.03.2014, it was stated that there were flames and fire and the same were controlled from fire extinguishers installed at factory and also that the fire tenders had come. As per the surveyor, this was a clear, categorical and false statement and information provided simply with intent to unduly and dishonestly claim the benefit under the policies for Gandhidham because there is absolutely no evidence of any fire or fumes or any extinguishment of any such fire at either of the places or any visit by any fire-tender or fire officers or any evidence in this behalf. Similarly, for Gandhidham premises and policies, the add-on cover for two policies was applied and obtained knowingly and fraudulently after the damage to or spoilage of the stock was already noticed and thus there was palpable dishonest attempt at obtaining undue benefit. There was also violation of General Condition No. 6(i)b) of the SFSP Policy, because as repeatedly noted by the Surveyor, the requisite fire report or police report and related documents, including photos and videos, supporting the genuineness of the claim and of quantum thereof as claimed, and of alleged "spontaneous combustion", were not provided despite repeated requests. The respective condition is as under:
"The insured shall also at all times at his own expense produce, procure and give to the company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the company as may be reasonably required by or on behalf of the company together with a declaration on oath or in other legal form of the truth of the claim of any matters connected therewith."
7. The surveyor in his final report observed that the complainant did not submit the required authentic documents like Fire brigade report, FIR, Police Panchnama, Photos etc. as repeatedly asked by the surveyor vide letters dated 08.03.2014, 01.06.2014 and 08.07.2014. The Surveyor in his Report has also relied upon the Expert opinion dated 20.04.2014 of M/s Supreme Associates, concluding that the spoilage of the Soyabeans at the particular location in the closed Silo may have taken place due to moisture Page 11 of 59 content beyond the limit &/ or blockage/ inadequate air circulation inside the particular mass of the Soyabeans at particular locations stored in the closed Silo & / or due to increased respiration process in the mass of Soyabeans in the closed Silo. Hence it was concluded in the final survey report dated 20.02.2015 that complainant had not suffered the loss due to Spontaneous Combustion or any other perils covered under the policy and the loss was not covered under the Terms and Conditions of the Standard Fire and Special Perils Policy and the opposite Party had no liability under the policy.
8. Complainant has not filed rejoinder to the reply filed by the OP insurer. However, both the complainant and the OP insurance company filed their respective affidavits of evidence. The insurer has also filed the affidavit of the Surveyor duly supporting the findings in the Survey report and reiterating the same. The insurer filed documents through IA/15941/2018 enclosing therewith the survey report with annexures and correspondence of the surveyor with the insured. No further evidence beyond that filed with the complaint, excepting the affidavit which primarily reiterates the complainant, has been filed by the complainant. The matter was taken up for hearing on 26.11.2024, and the Commission passed the following order:
ORDER These two complaints have been filed questioning the correctness of the Insurance Company's decision to repudiate the claim of the complainant in respect of the loss reported of the stocks of soya bean, the heaps whereof were affected by the moisture and faced destruction on account of spontaneous combustion process. The complainant staked the claim in respect of the coverage under five policies, wherein some of them there were add on covers of spontaneous combustion.
Nonetheless, the main contention is as to whether the loss had occurred on account of such a phenomenon or not and consequently as to whether the said phenomenon was covered under the policy for indemnification. Learned counsel for the complainant has commenced his arguments in CC/2117/2017, which is in respect of three policies where it is alleged that add on coverage had been obtained and endorsements were effective with regard to any loss suffered on account of spontaneous combustion. It was submitted that the loss had occurred on 21.02.2014 and upon due intimation survey was conducted, the report whereof dated 11.08.2014 by the surveyor has been filed on record.
It is urged that the surveyor's report was one sided in the sense that on the one hand it did register the loss of 1300 MT yet on the other hand it reported that there was no evidence of any fire so as to construe the loss on account of any spontaneous combustion as alleged. Survey report therefore declined any recommendation for payment of loss even though the assessment was made and reported to the Insurance Company.
The Insurance Company relying on the said survey report repudiated the claim vide letter dated 20.02.2015 that has given rise to the cause of action for filing of these Page 12 of 59 complaints.
Complaint No. 1214 of 2016 is in respect of policies where there was no add on covers or endorsement regarding coverage for spontaneous combustion. Yet the learned counsel for the complainant submits that the same does not distinguish the said claims also, in as much as, once the fact of spontaneous combustion is established then in that event the standard fire and special perils policy issued stand alone covers the loss as well. Hence the repudiation by the Insurance Company in this case is also unjustified. Learned counsel has relied on the Larger Bench decision in the case of M/s. Murli Aoro Products Ltd, vs M/s. Oriental Insurance Co. Ltd.. 1 12005) CPJ 1 fNC). Learned counsel has also relied on Apex Court Judgment in the case of New India Assurance Co. Ltd. Vs. Parakh Foods Ltd., Civil Appeal No. 6892 of 2008 decided on 27.10.2009 to buttress his submissions.
Learned counsel for the parties have also been made aware of a couple of more pronouncements by this Commission in M/s, Parrvs Sugar Industries Ltd. Vs. United India Insurance Company Ltd., CC/251/2012 decided on 26.04.2024 and M/s. Gavatri Sugars Ltd, l/s. New India Assurance Company Ltd. & Anr. CC/398/2014 decided on 06.02.2024. Learned counsel therefore pray that they may be granted time to go through these decisions and then proceed with the arguments finally on the subject matter as well as on the facts that they wish to rely on the basis of pleadings on record.
As prayed, let the matter be listed on 21.02.2025 at 2 p.m.
9. We have further heard the learned counsels for both the parties and have carefully perused the entire material available on record. It is the contention of Mr. Srivastav on behalf of the complainant that repudiation done by the OP is illegal, arbitrary and wholly unwarranted. Placing reliance on 5 Member decision of this Commission in Murali Agro, it is the fundamental contention that there was no requirement either under the Policy conditions or under law that the spontaneous combustion should precede with or be succeded by smoke or flames/fire and therefore, the grounds of repudiation, as mentioned by the OP insurer in repudiation letter is per se illegal and contrary to the evidence placed on record. Ld. Counsel placed heavy reliance on the decisions referred to in the order dated 26.11.2024 to contend that it has been categorically held therein that the loss occurring due to "spontaneous combustion", even in the absence of fire or fumes, is well within the coverage of add-on endorsement. The principle or ratio of admissibility for indemnification of damage or loss even in the absence of fire is further explained in Parry's Sugar (supra) which decisions together with the decisions relied upon therein, strongly support the case of the complainant. The Policy covered the risk of spontaneous combustion and an additional premium was taken by the OP and thus, the damage suffered was squarely covered as insured perils under the Policy. It is further stated by the complainant that surveyor appointed by the OP grossly erred in Page 13 of 59 appreciating facts and gave a wrong conclusion that there was no loss being caused due to spontaneous combustion. The question of exaggerated claim also does not arise, as the exact quantification of loss sustained due to the said spontaneous combustion in the stocks took some time, as the segregation and measurement of around 2800 MTs of soyabean was not an easy task for them and initially while lodging the claim statement, an approximate loss of 2000 MTs of soyabean in the closed silo was duly informed to the OP, as by that time; the exact loss sustained could not be ascertained due to the nature of the said silo and huge quantity stored therein and when the said silo was emptied, it was eventually discovered that the loss to the soyabean was approximately 2800 MTs and accordingly, conveyed to the OP insurer. All the documents pertaining to the said loss were supplied, and despite having received the said documentary information, the claim was wrongfully recommended as no claim and wrongly repudiated by insurer on flimsy grounds. On the allegation of the OP insurer that FIR was not lodged, it is clarified by the complainant that as the fire was already controlled and there was no flames or fire noted on discovery of the loss, no FIR was needed or Police formalities were required because only the spontaneous combustion had taken place which did not require any such inquiry or reporting. Still, an application was submitted to the Police Station, Mandideep and Chief Officer, Nagar Palika, Gandhidham (Gujarat) on 21.02.2014 regarding the issuance of Fire Incident Report, who in turn, issued Certificates respectively confirming the fact that the loss occurred was due to spontaneous combustion and no offence was prima-facie found to have been committed. It is the averment that they also approached an Independent Chartered Account M/s. Rupa Sekar & Associates, who ascertained the loss so sustained and on perusal of the documents supplied pertaining to the audited accounts of the Company, they assessed the loss/damage suffered by the complainant was 2800 MTs of soyabean. We have been taken through the various email communications filed along with the complaint to contend that all the requisite documents as required by the surveyor including the technical report from Cotectna were provided, on the basis of which, the surveyor has also assessed the loss, though wrongly at a lower-than-actual loss figure, but such assessment itself will negate the allegations in the repudiation letter regarding non-submission of the documents or of informations. Taking us through the Page 14 of 59 reports of Cotectna at page 49, it has been pointed out that it gets established that comprehensive damage and loss to the stock of soyabean was suffered due to spontaneous combustion which reduced the value of the stock by Rs. 26753/- pMT. The same being covered under the policy in view of extra premium for spontaneous combustion received by the insurer, the repudiation is wholly arbitrary and illegal resulting into gross deficiency in service.
10. Per contra, Mr. Shahi submitted that as such, the following multiple grounds are there in the repudiation letter: (i) There were no signs of smokes and no burning was observed coming out from the mass of soyabean inside the closed silo, (ii) There was no evidence of any fire and/or combustion was found inside &/or outside the closed Silo. There was no evidence/effect of Fire/smoke/heat on the inside and/or outside the Silo or godown. (Hi) the soyabean was having high content of moisture, and there was no evidence of any external moisture/water coming in contact with the mass of soyabean
(iv) no evidence of any hydrolytic / enzymatic fat cleavage and/or oxidative fat cleavage and/or self heating was found in the claimed mass, (v) Policy of standard fire and Special Peril extended to include spontaneous combustion in the insured property, covers loss / damage by fire only and it has been found that there was no fire and/or combustion of the soyabean mass. There was no evidence of ash generation and/or putrefied inside the soyabean mass, (vi) Violation of general condition of the policy No. 6 (1) (b) by not providing any authenticate required documents like fire brigade report, FIR, police panchnama, etc. in support of your claim for the ignition of fire and/or peril insured under standard fire special peril policy and its endorsement, (vii) misrepresentation and suppression of material fact by not disclosing correct facts to the surveyor, as vide letter dated 21/02/2014 it was intimated that the damages to the stocks by natural combustion but email dated 11/03/2014 mentioned fire extinguished by the fire brigade but same was found untrue, (viii) Non-disclosure of the material facts that by or from 21/02/2014, spoilage of soyameal in the Gandhidham godowns before getting fresh add on cover of spontaneous combustion on 24/02/2014 under the two standard fire and special peril policies had already started and noticed, (ix) Attempt to claim an exaggerated amount of loss just to get undue advantages of the policy issued, which again is against the terms of the policy. The fundamental objection of the insurer, however, is that there was no Page 15 of 59 visual, physical, chemical or other evidence of fumes/fire, or of natural combustion or even of heating, which in fact the insured's godownkeeper, whose statement was supplied to the surveyor, categorically so stated not at all to be there. And, the insured has not at all even attempted to substantiate the actual operation of the alleged insured peril and the coverage of the alleged damage to the stocks for the alleged insured peril of "spontaneous combustion" in add-on endorsement. Referring to the intimation of loss dated 26.02.2014, it is stated that the intimation itself of the alleged discovery of "comprehensive loss while unloading from Silo due to natural combustion" is the only so-called evidence relied upon by the insured to keep repeating the unsubstantiated claim of "spontaneous combustion". A surveyor was immediately appointed by the OP insurer on receipt of intimation of alleged incident of "discovery of spontaneous combustion", who visited the site on 05.03.2014. As noted by the Surveyor, though insured "discovered" the "comprehensive loss" of nearly 1000 MT, revised on same day to 2000MT, (and then in claim form to 2800 MT), on a single day on 26.02.2024, it took them nearly 1.5 months, even after multiple reminders, to segregate the "damaged" stock and quantify the same, implying clearly how casually, carelessly, imprecisely and exaggeratedly the loss was/has been computed or the whole raising of the claim has been approached and pursued, without there being any heat, combustion, fumes or fire or evidence thereof. The alleged event of spontaneous combustion is "discovered", is "concluded" to be so, and the loss is even "quantified" immediately upon so called discovery, all by the godownkeeper alone, without there being any other contemporaneous evidence including any important internal communication or any scientific analysis report or any laboratory testing report or any credible exercise in identifying the root-cause of and fact of spontaneous combustion, if at all it is so, and even for quantification of the alleged loss. Even if it is accepted that the "spontaneous combustion" was in fact "discovered" at the time as alleged, the "discovery" alone on 26.02.2014 cannot be equated with the "operation of the insured peril" itself on 26.02.2014, which, without admitting, in any case, for an alleged huge loss of as large a quantity as 2800 MT, must have occurred and noticed much, much prior to 26.02.2014. The fact that no further "combustion" or even heating was observed or claimed during next 6-7 months or thereafter, after which, allegedly the damaged stock was sold, would Page 16 of 59 definitely imply that the so called deterioration or damage, if at all, occurred much prior to the discovery thereof on 24.02.2014, suggesting that there is no evidence as to whether and when, if at all, the alleged insured peril operated. Each of the grounds as adopted by the insurer in the repudiation letter is based on failure of the insured in providing requisite credible evidence of any operating of any insured peril, including any positive expert opinion certifying any heat or combustion or the extent and quantum of damage; non-coverage under the endorsement of any loss resulting from mere spontaneous combustion, which admittedly is not by fire consequent to such combustion; dishonest, exaggerated and unsubstantiated claim; and, on the basis of the report of the Surveyor which being an important and statutory piece of evidence, could not have been lightly brushed aside. The allegation in the repudiation letter is that there was no spontaneous combustion. No scientific or technical evidence has been attempted to be brought on record to establish spontaneous combustion as alleged either before the surveyor or even in the complaint. The surveyor during his visit observed that there was no evidence of heat, smoke, combustion or ignition in the silo where the soybean stock was stored. Even though the complainant had from the beginning obtained add-on cover for spontaneous combustion for one of the policies, not only there is not even any trace or evidence of any natural/spontaneous combustion, and even if it were there, the loss/damage caused by "Fire only" could have been covered under the policy or considered by the OP; and mere pre-ignition or pre-fire loss/damage or deterioration in quality is not at all included in or covered under the add-on endorsement which also otherwise stands expressly and unambiguously excluded from the coverage under the policy. It is the observation, based on a report of M/s Supreme, of the surveyor that spoilage of the soybean at the particular location in the closed silo may have taken place due to moisture content or inadequate air circulation or due to increased respiration process in the mass of soybean in the closed silo, and not due to any combustion. It is further contended by the OP insurer that the complainant failed to provide authentic documents like fire brigade report, FIR, police panchnama, photos/videos SFL report etc. in spite of repeatedly being asked by them. The insured has dishonestly obtained the add-on cover in two of the three Gandhidham policies after being aware of the spoilage and after realising that simple discovery or Page 17 of 59 mere fact of bad or damaged quality of stock would not qualify under the policy without obtaining add on cover of spontaneous combustion. The two back-to-back independent "discoveries", of the so-called combustion by two different employees/godown incharge, merely on subjective assessment or apprehension without any scientific basis and without any visible or identifiable objective basis or reason, or of any physical external indicator, at two different and distant locations, in two different commodities, so also immediately noticed to have caused huge loss/damage of mammoth total 3500 MTs, itself is highly unusual and unconvincing implying that the cause and the damaged or deteriorated stock was noticed much earlier and the cause of damage is later and conveniently on 21st and 26th February attempted to be attributed to the peril of spontaneous combustion so as to gain undue and dishonest advantage. The mere intimation of alleged mere subjective discovery of "damage due to natural combustion"
cannot be equated with evidence of occurrence of combustion or operation of insured peril on that day. It is reiterated by the OP insurer that they repudiated the claim of the complainant with a detailed and reasoned letter dated 20.02.2015, after due consideration of the documents on record and that the surveyor also, after due verification and detailed observation, concluded in his Final Survey Report that the claim does not fall under the terms and conditions of the policy of insurance.
11. With regard to the Gandhidham claim pertaining to CC/2117/2016, the facts and contentions, though run parallel to those already stated above, there are important differences which, for the sake of completeness, may be noted here. First is the date of "discovery" of spontaneous combustion on 21/02/2012 which is only 5 days before the "discovery" at Mandideep, but that "discovery" was by two third-party godown-keepers. Second, the alleged damaged stock is not soyabean but is a different byproduct viz. soyameal. Third, as noted by the Surveyor, the add-on coverage was initially obtained in only one of the three policies for Sum Assured (SA) of Rs. 20 crores, while the proposal for add-on cover of "spontaneous combustion", duly assisted by an insurance broker, in the balance two policies for total SA of Rs. 40 crores was made on 03.02.2014 and the premium for the same was accepted only on 12th February with 15 days' waiting period. Fourth, the stock of soyameal which allegedly was discovered to have suffered "spontaneous combustion" at Gandhidham was stored not in one but in two different Page 18 of 59 third party godowns of two different warehouses namely at Godown Jain and Godown Lily, wherein simultaneously, the spontaneous combustion was "discovered" by two different third party godownkeepers on the same day. Fifth, the senior officer of the insured informed the Surveyor vide mail dated 11/03/2014 that even the flames and fire were observed, the fire was extinguished by internal fire extinguishers and that fire brigade was called who put off the fire, for which no evidence was produced by the insured and which information was later established to be totally false by the Surveyor, which thereafter has been later attempted to be established in communications subsequent to repudiation, through some certificate from Chief Officer, Gandhidham Municipality without any certificate or report from Fire Officer, which evidence is denied by the insurer. Sixth, the discovery of existence of "spontaneous combustion", the estimated quantum of soymeal affected and damaged by such combustion, the extent of damage in such affected stock to the extent of more than 95%, all such vital dimensions of claim are stated to be "as informed by or as estimated subjectively" by the third party CHA (agent/godown owner) of the insured and by no responsible officer of the insured. There is no scientific or technical evidence or opinion or any laboratory report certifying the occurrence of the event of spontaneous combustion or the extent of consequent spoilage or damage or the damaged quantity or the extent of deterioration, furnished by the complainant to the surveyor or placed on record in this complaint.
12. After hearing the parties and after perusal of the records, we may firstly note the common and evident facts about alleged two events or the alleged operation of perils which occurred at two different locations at Mandideep, MP and at Gandhidham, Gujarat, for which different sets of policies were obtained by the insured. The commonality is that one after the other, the intimations of the discovery of the occurrence of the spontaneous combustion were given by the corporate complainant through email sent, as apparent from respective page no. 40 and 45 of the files, through its authorized Officer, intimating that "the stock stored in Silos (at Mandideep, approximate 1000 MT, CC/1214/2016, Page no. 40) and at godowns (at Gandhidham, approximate 1500 MT, CC/2117/2016 at page no. 44) got damaged due to "natural combustion". Notably, the emails of such intimation appears to have been sent for both the events at different places, by one Mr. Pradeep Gupta to their broker Page 19 of 59 ([email protected]) with copy marked to one Anil Vish having email ID at [email protected] respectively on 21.02.2014 followed up by forwarding the copies of subject policies on 26.02.2014. In both the complaints, it has been categorically mentioned that the events were respectively "discovered" on 24.02.2014 and 21.02.2014, "while uploading from silos" more or less at the same time, at Mandideep and Gandhidham, and "comprehensive loss" was suffered. We note categorically that no particular details or description as to, how exactly the "comprehensive loss" was detected and discovered and by whom, and thereafter, what steps were taken by which officers of the insured, and what laboratory tests, if any, were conducted, to conclude, firstly, that what is "discovered" is actually "spontaneous" or "natural combustion" so as to be claimed for indemnification under the policies and secondly, how even the estimated quantity of 1000 MT (revised to 2000MT) and 1500 MT as mentioned in the respective intimations, were so estimated and by which scientific or estimation methods, were communicated along with or after the intimations were sent. Similarly, there is absolutely no material on record in both the claims, allegedly relied and referred to by the complainant, either in the intimation given to the insurer or in the material provided to the surveyor, or even in the complaint filed, or in the evidence affidavit, to establish how exactly a corporate entity, having its own hierarchy and departments, including an in-house laboratory, came to the conclusion that the "discovery of spontaneous combustion on 24.02.2014 resulting into comprehensive loss of 1000MT" is in fact such an event and has in fact resulted in such loss, and that the insured peril of "spontaneous combustion" has thus operated. Even the complaint does not elaborate in the respective para 5 of the complaint as to how and when objectively and on the basis of what physical or chemical or scientific evidence, the alleged "comprehensive loss" and the initial estimated quantity thereof were "discovered". The complaints are equally unnecessarily vague with regard to the coverage under the policies obtained. For Mandideep location, paras 3 and 4 of the complaint referred to the coverage under two policies ending with 0373 and 0324 obtained respectively on 21.12.2013 and 21.11.2013 for respective total sum assured of Rs.40 and Rs.45 crores totalling to Rs.85 crores. As intimation sent by the insured rightly and categorically raises the claim only under policy 0373 wherein, admittedly, the cover obtained was inclusive of "spontaneous combustion"Page 20 of 59
for Sum Assured of only Rs. 40 crores, (page no. 32), the complaint unnecessarily and confusingly mixed up the claim to be under both the policies when the alleged peril was covered under only one of the policies for SA of only Rs.40 crores. Other policy 0324 for Rs.45 crores did not have at the time of issuance or thereafter such coverage for spontaneous combustion under risk code 1007 (page 37). Similarly, with regard to Gandhidham location CC/2117/2016, the details of policies in para 2 to 4 of the complaint though refers to the coverage under three different policies (012, 008, 006) for total sum assured of Rs.60 crores, it also cleverly avoids disclosing the fact that only one out of these three policies (i.e. 008) obtained for sum assured of Rs.20 crores on 21.12.2013 had an add-on cover of endorsement 7 for avoiding exclusion of the risk of damage by way of its own fermentation, natural heating or spontaneous combustion or its undergoing any heating or drying process, while other two policies for SA of Rs. 40 crores had no such add-on cover to begin with. It also positively avoided disclosing the fact that the request for mid-term endorsement for obtaining the additional cover for "spontaneous combustion" was made through broker with regard to policy 0006 and 0012 as late or as early as on 04.02.2014 responded to by the insurer on 06.02.2014 with offer/quote with conditionalities as detailed in para 4 of the reply of the insurer, and that the premium was received by the insurer on 13.02.2014 on which date the requested endorsements were issued specifying therein the commencement of "combustion risk with 15 days waiting period from the date of collection of premium", implying coverage only from 27.02.2014. As a matter of fact, the complainant along with the complaint enclosed "the copies of policies as annexure C1 to C3 at pages 25 to 42 which in fact is a collection disjointed and mixed up copies of various policies including the alleged endorsements without specifying when the add on covers were applied for and obtained. It is only from the reply filed by the OP insurer as corroborated by the surveyor's report at page 89 and 90 that it becomes clear that endorsement for add on covers for policy 0012 for Rs.30 crores and policy 0006 for Rs.10 crores had an add on cover issued and obtained only on 13.02.2014 which were to be effective from 27.02.2014 as per the reply filed by the insurer, after which no rejoinders were filed by the complainant.
Page 21 of 5913. Now we firstly deal with the Mandideep Claim for alleged soybean damage/loss. We firstly examine the finding of the Surveyor and the basis in the repudiation letter that:
"There were no signs of smokes and no burning was observed coming out from the mass of soyabean inside the closed silo. There was no evidence of any fire and/or combustion was found inside &/or outside the closed Silo. There was no evidence/effect of Fire/smoke/heat on the inside and/or outside the Silo &/or godown. It has been also observed that the soyabean stored in the Silo was having high content of moisture, and there was no evidence of any external moisture/water coming in contact with the mass of soyabean. Thus, it is evident that no any hydrolytic / enzymatic fat cleavage and/or oxidative fat cleavage and/or self heating was found taken place in the claimed mass.
13.1 The findings and objections are crystal clear, more so when seen in light of the detailed observations of the Surveyor in his report. As per the surveyor as borrowed in the repudiation letter, there is no evidence of any heat, combustion, smoke, fumes, flames or fire as physically noticed by the surveyor during his visits at site or so substantiated by the insured through any other mode including any photos or videos or any expert report or even any contemporaneous internal report or internal communications or such communication to police/fire or police panchnama or any Forensic report. Thus, in effect, as per the insurer, there is no evidence placed on record by the insured to establish the operation of the alleged insured peril of "loss due to fire"
or that due to "natural or spontaneous combustion". There is no evidence of any basis even of likelihood of external moisture coming in contact with soybean mass to infer any self-heating or fat-clevage. After the first site visit, the surveyor asked for various details and asked the insured to segregate the damaged stock. The insured took nearly 1.5 months to segregate the alleged damaged stock from undamaged stock, which was merely and strictly on the basis of subjective satisfaction, unsupported by any technical report supporting such identification, as intimated to the Surveyor on 17.04.2014, after two reminders and about 50 days of "discovery" on 26th February. The said mail dated 05.05.2014 reported not the weight of the alleged damaged stock but "number of bags"
at 31211. It appears that in the meantime, the insured, possibly on instruction from the Surveyor, arbitrarily and unilaterally took two unsealed samples, which process is undocumented, and sent for chemical analysis, which are mentioned by M/s Cotecna in its chemical analysis report dated 16.04.2014 (pg 49,50) as of "fresh soya" and "soya heated", which alone provides a disguised semblance of minimal science-based and Page 22 of 59 evidence-based approach of the insured in substantiating its claim, which also, as we discuss below, is wholly insufficient and self-serving. Vide e-mail dated 05.05.2014 (pg
51), the insured further intimated that "out of 10000MT of total stock in silo, we saved and processed about 7610 MT, and balance 2840 MT of damaged seed is lying with us in 31211 bags", without disclosing any basis of claim of 10000MT in the Silo or of 7610MT processed. The mail further attempts to explain, again without any rigorous scientific or even objective or responsible basis, that the chemical analysis report of these two samples of soyaseeds, as provided by M/s Cotecna, would lead to the conclusion that the loss suffered by the insured due to "damage" would be Rs. 26,753/-
per MT which would justify insured's acceptance of salvage at Rs. 11,000/- per MT and would also establish the loss itself as also quantum thereof as also the "discovery" being rightly that of spontaneous combustion. We cannot help but noting the fundamental and palpable flaw in this analysis and the e-mail communication which though has not been so objected to or put to critical evaluation by the Surveyor or insurer in that fashion. Obviously, the report per se without the disclosure of content of reference made by the insured to M/s Cotecna, particularly in light of no disclosure about how and wherefrom and by whom the samples were drawn, cannot be attached much significance, more so when the report itself says that the report is restricted only to the items tested and that the samples were not drawn by Cotecna. Further, the report neither discloses nor provides any clue or scientific basis to come to the conclusion that the sample of "soya heated" was so because of any particular reason or due to having undergone any natural combustion. It simply tests and provides report on the chemical composition of the arbitrary "samples" as provided. Most importantly, the report does not even attempt to certify that the sample of "soya heated" has undergone any "natural combustion", or when it has so undergone or that the "fresh soya" represents the average general quality of soybeans in the unaffected stock of the insured. Thus, the analysis reports of a single sample each of "soya heated" and "fresh soya" allegedly drawn from or claimed to be so drawn unilaterally and arbitrarily by the insured cannot be made basis for applying the results to 31211 bags or to conclude that 31211 bags or any of them as allegedly so segregated, are all represented, or represented so uniformly, by the "soya heated"
sample. Ideally, the insured should have been responsible, cautious and transparent in Page 23 of 59 drawing samples (and documenting such sampling) at least from 1-2% of bags i.e. about 700 bags of so-called affected and unaffected bags, drawn randomly in presence of the surveyor or of Cotecna, which would only have perhaps provided some rational and scientific basis for estimate of extent of deterioration in the deteriorated stock, which also, ipso facto could not have established the "natural combustion" to be the reason for deterioration unless such certification from expert or Cotecna was asked for and obtained. We may also note that even as per the reports of such limited significance if any, the difference in the values in the parameters of oil content, moisture content and crude protein content between the two samples are only marginal. The FFA content is substantially high in the sample of "soya heated", but there is no technical report or academic or scientific literature placed before surveyor/insurer or before us, to explain or support the interpretation of these results as adopted vaguely and casually by the insured in the mail dated 05.05.2014. Be that as it may, the self-drawn inference/ calculation of measure of deterioration in the value of affected stock casually and superfluously without any expert opinion in this behalf arrived at in the e-mail is also, we note, based on lot many unsupported and unexplained assumptions to laboriously reach at the figure of Rs. 26,753/- pMT to be the damage per MT (pg. 51-52). The assumptions are (i) The results of arbitrarily supplied alleged samples can be universally applied to arrive at per MT loss for damaged stocks, (ii) The single sample differences in as many as 31211 bags subjectively so segregated are representative for exact differences to calculate the damage (iii) the difference in oil content of mere 1.82%, is significant so as to compute loss/damage on that basis (iv) The rate of loss of oil can be taken at Rs.65/kg (v) with regard to loss due to FFA% difference, without any reason or basis explained or supported by any technical literature, firstly factor of 1.5 and then dilution in value at 74.32% loss and quantification thereof at Rs. 3770 pMT can be arrived at. All assumptions in these calculations appear to be ad hoc and arbitrary and remain unexplained and unsupported, (v) similarly, the statements like "damaged soybean deoiled cake we receive Rs. 20/kg as against Rs. 40/kg" and that "we get 84 kg of de-oiled cake" are too general and without any supporting evidence and basis to arrive at huge figure of Rs.1680/quintal of loss, accounting for nearly 60% of computed loss of Rs.26753/MT (vi) The HLV loss is claimed/computed to be Rs. 4000/MT without Page 24 of 59 explaining and substantiating the basis of adoption of Rs. 40/kg. While the surveyor has not put these queries or doubts about the report from Cotecna or about sampling method or about the unsupported artificial computation of hypothetical loss per quintal as arrived at by the insured, the casualness and persistent ad-hoc manner in which the insured pursued the claim-processing before surveyor is amply evident from this. Most fundamental fact is that the unilateral Cotecna report also does not certify that there is any "natural combustion" seen in the sample of "soya heated". What we conclude therefore, is that not only in the intimation, but even during the Survey process, the insured positively and voluntarily avoided to substantiate its claim including establishing "combustion" and the quantity of stock having suffered such "combustion", with any cogent and scientific material despite the surveyor having asked multiple times "to substantiate and establish the claim". The Corporate insured should have been careful, cautious and transparent enough to photograph and videograph each event, particularly that of subjective process of identification and segregation of alleged damaged goods, but even after specific suggestion of the Surveyor to furnish photos or videos if any as early as in March 2014, no such evidence has been ensured or furnished. 13.2 The Surveyor, on the other hand, though accepted impliedly the samples to be representative of the whole of the damaged and undamaged stocks for quantification and assessment, he responded also by seeking detailed clarification on various points including "any other document to support the claim" on 01.06.2014, which appears responded to on 06.06.2014 by the complainant. The surveyor again wrote on 08.07.2014, which the complainant claims to have responded to on 25.07.2014 in his letter dated 15.08.2014 (pg 69). Then the insured informed about shifting of "affected stock" and Silo measurements etc. The Final Survey report was submitted on 20.08.2014. After learning that the Surveyor has recommended the claim to be "No claim", inter alia on the ground of non-supply of requisite documents like police report, fire report, etc, the insured wrote back to the the Surveyor on 05.09.2014 (pg 83) by stating that "we have given you police report stating that the loss took place due to spontaneous combustion the commodity is susceptible to damage because of its inherent nature.... We have paid extra premium for obtaining the coverage for damage to the property against the inherent vice of spontaneous combustion....the agricultural Page 25 of 59 produce deteriorated due to inefficiency on your part..the salvage is still lying at our godown...". On 19.09.2014, the insured requested for re-inspection/evaluation and intimated to undertake "salvage disposal" and informed its intention to sell the salvage by obtaining fresh quotations, which, after follow up on 29.12.2014 and 04.03.2015, it finally did on 04.03.2015 by selling the alleged damaged stocks or "salvage" to one M/s Pushpraj Traders, Itarsi for Rs.2.51 crore.
13.3 Turning to the exercise of "segregation", while it took nearly 50 days for the insured to carry out the exercise of emptying the Silo and for bagging the damaged stock, the "undamaged stock" was already, in the meantime, used in the processing in the factory as intimated on 05.05.2014. However, on 03.12.2014, the complainant had also written to the General Manager of the insurer regarding the salvage and the neglect of the surveyor about the same due to which the stock has "further deteriorated".
Further, the insured informed that "we have submitted all the relevant documents relating to stocks our damaged stocks claim will be further substantiated by the weighment of salvage proceeds..... It is beyond our understanding that how the surveyor can conclude a claim without taking inventory of the damaged stocks" (page 89-90). Along with the complaint, the complainant has annexed at page 106 the letter dated 04.03.2015 addressed to claim hub of the insurer informing about the disposal of salvage to M/s Pushpraj Traders along with the invoice numbers and the quantity details at page 108 to 110. On page 140 to 142, the letter received from Police Station Incharge dated 15.06.2015 stating that the visit on 03.03.2014 had revealed that spontaneous combustion in the silo had resulted into bad smell accompanied with smoke. At page 141 the certificate of silo dimensions from the manufacturer M/s Fowler Westrup (India) Pvt. Ltd. dated 29.02.2016 has been enclosed and on page 142 the certificate of the CA M/s Rupa Sekar & Associates dated 14.01.2016 regarding the stock as on 26.02.2014, stock "reported to be lost on account of fire incident on 27.02.2014", and the stock left after the incident, "on the basis of record produced".
13.4 In the The survey report dated 11.08.2014 (annexure C31 at page 115), the extract whereof has been reproduced supra, Para 4 has been devoted to the details of occurrence. The statement of godown incharge Devender Sharma has been referred to as per which, the soyabeans were found in hot condition during taking out from the Page 26 of 59 centre window of the silo on 24.02.2014 whereafter he had opened all windows and checked the stocks. The godown incharge had entered into the silo and seen some partially blackened soyabeans at some locations. In para 5 it is categorically observed that during inspection on 05.03.2014, the stock of soyabean was found spoiled in the middle area of the Silo and that no smoke or burning or bad smell were observed from the mass of soyabean. No evidence of fire or combustion or smoke was found inside or outside the silo and it was informed by Mr. Devender that total soyabean stock inside the closed silo was approximately 8000 MTs. Para 5.3 categorically also notes that on the day of the visit, approximately 8000 bags of spoiled soyabean weighing about 640 MTs were already segregated and kept separately in godown. As per para 5.5, during the visit by the surveyor, no evidence of fire/smoke/heat inside or outside the surface of the closed silo or any damage consequent thereto in silo or godown was noticed. 34 photographs were also taken. In para 6, after ascertaining the maximum capacity of the silo at 8284 MTs, and after accepting the version of the insured about the quantity already used in production and balance quantity to have been damaged, the surveyor has arrived at the "yellow soyabean seeds" quantity at 1124.536 MTs but without so having been spoilt by combustion or fire. No further chemical analysis reports or photographs or videography or internal reports have been kept, obtained or supplied to the Surveyor, though he has asked to produce "such material as relied upon, including photographs, videos etc, to establish the claim" multiple times. Thus, even the segregation is claimed to have been purely on visual and subjective basis without any objective or verifiable and sound scientific basis or scientific reports despite there being an inhouse laboratory, the surveyor, after submission of the report, distanced himself, and so intimated to both the insured and the insurer, from the "salvage" disposal process after submitting his survey report on 11.08.2014. Surprisingly, the insured has, even while disposing of the "salvage" has neither taken any trouble or precaution to hold any public auction itself, nor even obtained any technical or scientific report of the fact or measure of the "damage" or photographed/videographed the despatch. Thus, in a nut-shell, the whole process and every step therein of "discovering" the damage and attributing the same to "natural combustion", intimating the loss to the insurer, raising of the claim, segregation of the 'damaged" stock and quantification thereof, and finally the Page 27 of 59 'salvage disposal', all have proceeded in a grossly subjective and non-transparent fashion without there being any contemporaneous other corroborative evidence or technical or chemical analysis reports to substantiate subjective unilateral conclusions. The only statement supplied by the insured to the Surveyor is also not that of any executive from quality control or laboratory but of the godown-keeper, who stated that the partial blackening or discoloration of the soybean was observed in the "middle gala"
of the Silo and such stocks were also stated to be "hot" or "heated", though thereafter, when for nearly 50 days the process of segregation continued, again subjectively, wherein substantial portion of total stock of silo was segregated and used in processing also and balance only was considered "damaged" and was bagged during which period also, the damaged stock even in the Silo or that in the bags, is not further contended or established to have got damaged, deteriorated or heated. Neither any further samples got tested chemically nor such a subjective ad-hoc process of identifying and segregating damaged stock even got photographed or videographed, nor it is made known as to which experts, internal or external, did this job of identification and segregation. However, it appears, on the basis of such subjective satisfaction of the godownkeeper, that only around 600 bags were already separated by the godownkeeper at the time when the Surveyor visited the site on 05.03.2014, and and it is observed by the Surveyor that there were no signs of heat, combustion, smoke, fumes, flames or fire either in the already bagged stock or even in the Silo. The Surveyor and the insured's employee both entered the Silo and took photographs also and still even inside the Silo, no sign of any heat or combustion, fire or smoke were noticed by the Surveyor who in fact found the stock in Silo to be completely cold (para 4.1.5 and notes thereunder, para 5.1 of report). The Surveyor, on the basis of communications and evidence as produced including lack and absence of such requisite evidence, and on the basis of his own visit and photographs, further analysed the information and evidence in para 7 and para 9, more particularly para 9.4 onwards, before coming to the conclusion that there is no combustion or heat observed by him either in the Silo or in the bagged partially blackened soybean, and that no positive evidence was adduced by the insured to establish any combustion or fire despite letters/emails dated Sth March, 1st June and Sth July 2014 calling upon the insured to Page 28 of 59 furnish the same including photos/videos. The surveyor though has mentioned that some mass at some spots inside the Silo showed discoloured/yellow or black mass of seeds, there was no evidence of any heat or combustion. Similarly, the Surveyor had also attempted to randomly verify the so-called damaged stock in bags by drawing, visually verifying and photographing the seeds so drawn, and it is reported that many such samples were neither discoloured nor hot, nor showed any signs of past heating or combustion. Such damaged stocks have subsequently, after repudiation, on 04.03.2015, been sold without any public auction and privately, to M/s Pushpraj Traders who also have accepted the huge alleged "damaged stock" allegedly of 2800MTs for nearly Rs. 2.5 crores, merely on visual examination without any chemical analysis reports. With regard to quantity of such "damaged" stock, while the insured claimed firstly 1000 MT finally raised to nearly 2800MT based on the claimed capacity of the Silo at 10000MT, and the quantum already claimed used in processing at nearly 7200MTs. While the Surveyor has disputed the quantum of damaged stock by disputing the stated Silo capacity of 10000MT, or that such quantum was there in the Silo, and even the employee of the insured had stated the capacity to be only nearly 8000MT (para 5.2), the surveyor still quantified the damaged stock at 1124.536MT, applied the valuation of such damaged stock at Rs. 15000 pMT on the basis of a privately obtained quotation supplied by the insured and arrived at the loss of Rs. 1,83,88,806/-, subsequently revised to Rs. 1,67,24,619/- with allocation to subject policy 0373 at Rs. 78,70,409/- by applying underinsurance of 9.05% (i.e. 85/93.45). As rightly submitted by the insurer in reply to the complaint and by Mr. Shahi during hearing, the correct calculation of assessment has to be exclusively under policy 0373 which alone has alleged add-on cover, under which the claim could be raised if at all the claim is considered payable, after applying under insurance at 40/93.45. This method would yield the correct assessable amount at Rs. 71,58,745/- (167.24*40/93.46).
13.5 Thus, the only material evidence primarily relied upon by the insured to establish its claim of event (discovery thereof) of natural or spontaneous combustion and the quantum of damage consequent thereto before the Surveyor are (i) intimation dated 26.02.2014 based on visual estimation and opinion or conclusion of the godownkeeper
(ii) Cotecna chemical analysis Report (iii) The self-made visual, subjective Page 29 of 59 undocumented and unrecorded segregation of 31211 bags of 2800MT of damaged seeds (iv) intimation dated 06.05.2014 about such quantity of damaged seeds and (vi) The "salvage disposal" in March-2015, quantity matching with 2800MT, with despatch details, which though is subsequent to preparation of survey report. The photographs and videos if any were called for right from the letter dated 08.03.2014 by the surveyor, but no such evidence even for subsequent segregation process could be supplied.
Similarly, the Surveyor asked for specific details as to how long the stock in the Silo is stored to which it was replied, without specifying the period, "right from the beginning". It appears an established position that there is no fire or smoke and only case/event claimed by the insured is of "natural or spontaneous combustion", which was later also referred to as "inherent vice" in mail 05.09.2014, which though is after the preparation of survey report and after intimation that the claim of the complainant has been made "No claim". The letter dated 06.07.2014, (page 61-62) calling upon the insured for specific details/evidence including of purchases etc and purchase bills dated 24.02.2014, though claimed to have been responded to in the complaint, the copy thereof has not been filed, and instead, the copy of the protest letter dated 15.08.2014 (which date is after submission of the survey report dated 11.08.2014) having reference therein of such response, only is filed. The surveyor has come to a clear finding, as recorded after due analysis and reasoning in para 7 and 9 of the report, that there is no heating, combustion, smoke, fumes or fire seen in the soybean, and that the soybean has good storage life at moisture content below 8%, there is no possibility of hydrolytic or enzymatic fat cleavage and that heating is not possible even through natural respiration process, and such process cannot be called combustion at all. Mere blackening of the seeds might have happened due to inadequate airing system or any other uninsured peril but is not the consequence of any combustion or fire or any natural cause. 13.6 Faced with such objective and detailed findings of the Surveyor, the complaint describes the pre and post-survey report communications in paras 1-21 in the complaint and further in para 24 that the claim form as asked for by the insurer was submitted on 11.12.2014 claiming net loss of Rs. 7.34 crores for damaged stock of 2800 MTs but the repudiation letter dated 20.02.2015 was received much later thereafter on 10.03.2015 after the intimation of intent for disposal of the salvage was allegedly sent on 29.12.2014 Page 30 of 59 to the insurer (to General Manager) and the intimation dated 04.03.2015 of the actual disposal with enclosures is stated to have been evidenced by way of annexure C-26 being an intimation to the claims Hub Manager of the insurer with regard to such disposal of salvage (But Annexure C-24 and C-26 referred therein is neither an e-mail, nor does it have proof of despatch nor has it enclosed what the alleged letter describes). Paras 33 onwards of the complaint are devoted to plead or argue as to how the "spontaneous combustion" without any flame or fumes or smoke is covered under the policy read with endorsement, and to justify the quantity of loss as claimed based on the Silo Capacity and the salvage disposal quantity, without categorically challenging and substantiating, any particular findings of the Surveyor with regard to absence of any insured peril or of any combustion or of absence of any credible evidence furnished by the insured in this behalf. Similarly, without categorically and meaningfully disputing the finding of exaggerated claim, and disputing the far lesser quantity of damaged goods taken by the surveyor for assessment purpose, and without positively establishing the quantity claimed, the complaint in para 33 onwards refers to post-repudiation evidence of silo capacity certificate and police "communication" dated 15.06.2015 to establish the "loss caused by natural combustion to be 2800MTs" and the CA's certificate of loss which not only wrongly records the cause of loss to be "fire" but also categorically records that the certificate is based on "records produced by the insured".
14. Thus, the only way in which the complainant has tried to dispute the findings of the surveyor is by insisting in the complaint that the event which resulted into alleged damage or discolouration or blackening of the soybean stock is that of spontaneous combustion. Excepting the statement dated 05.03.2014 of the godown keeper Shri Devender Sharma, wherein he has mentioned that "while taking out the stock from the silo on 24.02.2014, the hot stocks started coming out from the middle/central window which was black in color and which was also accompanied by smoke though there was no fire or chingaari", and perhaps the report of M/s Cotecna if stretched, there is no < other evidence relied upon by the complainant even in the complaint to establish the event of natural combustion despite adverse findings in the survey report. The surveyor, as a matter of fact, has categorically observed, inter alia, in para 5 of his report that during his visit on 05.03.2014, though the soybean stocks were found spoiled out, no Page 31 of 59 any smoke or bad smell was observed from the mass of soybean and also no evidence of fire or combustion was noticed. The total soybean stocks in the silo was stated by the godown keeper to be approximately 8000 MTs of which 8000 bags weighing approximately 640 MTs were already identified as spoiled soybean after the "incident". The surveyor along with the godownkeeper entered the closed silo and it is the categorical finding of the surveyor that no signs whatsoever of any fire or heat or smoke or of damage consequent thereto were noticed either in the silo or in the godowns where those 8000 bags of the alleged damaged stocks were kept. The photographs were taken on the same day which have been annexed along with the survey report (insurer's affidavit dated 17.10.2018), which though do not show the blackening or otherwise of the soya stock (because the photographs are b/w and not colored),.the comments of the surveyor alongside those photographs reveals the following, (i) there is no physical damage, heat, smoke, smell, etc. to silo seen anywhere either in/outside the silo or on the walls thereof from outside or inside, (ii) some soybean stock in the photo have been described as "slightly spoiled" coming out from the silo, implying that even in the spoiled or discolored soybean, there is varied degree of damage, (iii) the photo on page 51-52 records that though there is blackening in the soybean, there is absolutely no heat, burning or smoke inside the silo. The top photo on page 53 categorically shows, as per the comment of the surveyor, that the spoiled stock was neither hot nor had any ash generation nor the bags of the spoiled soybean as stored showed any such physical or obvious signs, (iv) The photographs on page 57 and 58 shows that some of the random samples observed from the bags of allegedly affected stocks are not at all affected. The complaint does not address any of such issues raised by the surveyor in the survey report and incorporated by the insurer in the repudiation letter. The surveyor in letters dated 01.06.2014 in para 8 and on 08.07.2014 in para 5 categorically asked for any evidence to "further establish and support the claim". Before that, on 29.03.2014 and as early as on 08.03.2014, the surveyor had categorically asked for any photo, video or movie, if taken, to be submitted to support the claim. Despite this, not only such past photo or video were not provided, but even subsequently thereafter particularly the process of identification, segregation and storage of alleged damaged stocks were also neither photographed nor videographed. Therefore, essentially there is no corroboration Page 32 of 59 or contemporaneous record of any nature, whatsoever, which appear to have been even attempted to be documented or provided despite categorical requisitioning by the surveyor. Such exclusively subjective claim of "discovery" of any natural combustion seen in conjunction with positive withholding or avoiding of the best possible contemporaneous evidence in the form of supporting laboratory reports or internal correspondence or videos or photos of segregation process, etc. has, in our considered opinion, rightly been found by the surveyor to be lacking in supporting evidence to establish the insured peril of spontaneous or natural combustion. As a matter of fact, in our opinion, to succeed in establishing the operation of the peril of natural combustion, at the minimum, it needs to be positively and responsibly established by the insured that
(a) the goods suffering natural combustion arrived at the insured site in sound condition,
(b) which is the objective event or demonstrable and evidenced physical manifestation of the trigger leading to enquire/investigate the facts of natural or spontaneous combustion so as to proceed to conclude it to be so, (c) what is the process of coming to the internal conclusion, including the internal communications, before the raising of the claim and demonstration as to how scientifically, on the basis of laboratory or other such reports, the physical manifestation of the event triggering such investigation can be concluded to be the outcome of natural combustion and not otherwise, (d) how scientifically and on what physical or chemical yardstick, when the circumstances so require, the damaged goods can be segregated from the undamaged goods and how the damage and quantity of damaged stocks can scientifically be measured and has been so measured. While it is true that in the present case, though the surveyor more than once asked for "requisite evidence to establish the claim", he has not categorically asked for any particular laboratory tests results or particular documents for establishing such operation of insured peril, however still, we are of the considered opinion that the onus of the insured to establish the operation of the insured peril and of establishing the extent of loss/damage suffered is fundamental and is independent of whether and what documents or records or reports are asked by the surveyor. The insured is not entitled, without explaining and establishing the insured peril and the loss, to simply intimate to the insurer its subjective conclusion of the loss having been suffered and merely wait for the queries from the surveyor. Even in the complaint filed after repudiation, we see no Page 33 of 59 positive evidence of any spontaneous combustion or even of any deterioration in the quality of the soya stocks resulting from any such insured peril. The evidence at page number 140-144 (annexure C32 to C35), in our opinion, are mere frustrated, belated, frivolous and unreliable attempts to provide some semblance of support to contend that some spontaneous combustion took place and some loss was suffered. In our opinion, not the police authority but a scientific laboratory report can only establish, in the facts of the present case, the occurrence or otherwise of any spontaneous combustion. Even otherwise, the alleged SHO letter dated 15.06.2015 referring therein to the Aagjani Kram (Fire Reference No.?) 2/14 does not seem to have been informed to the surveyor and the tenor of the said letter does not also indicate that it was issued in the ordinary course. Similarly, the certificate of the Chartered Accountant obtained after about two years from the alleged event and about one year from the repudiation, which manifestly is relying only on the "documents as produced" wrongly also mentioning "a fire incident on 27.02.2014", can also serve no purpose, particularly in the absence of any other contemporaneous evidence, in establishing the quantum of damage/loss or that the damage is due to operation of insured peril of spontaneous combustion. The insured, to begin with, even before sending the intimation is bound to have or is expected to have carried out necessary laboratory tests particularly so because there is an inhouse laboratory which, in any case, is meant to test the composition of the incoming stock. Similarly, there would be sizeable internal communications regarding such huge event which allegedly involved loss of nearly Rs.9 crores, which is not produced is positively withheld. There is no reason also for the insured not to have obtained multiple samples of the alleged damaged stocks and having sent the same to a reputed laboratory so as to obtain the certification about the extent of damage suffered in such samples and the certification that the same is in fact due to spontaneous combustion. We also find no valid reason for the insured to not itself have insisted for such scientific basis and an internal technical inquiry into the reasons thereof before arriving at the subjective conclusion of occurrence of natural combustion, and also in not duly documenting and recording the segregation process which lasted for nearly 50 days. We also find no plausible reason for the insured not to have photographed or videographed the whole process of identifying and segregating the damaged stock. We also find no cogent Page 34 of 59 reason for the insured even to have casually and unilaterally disposed of the damaged stocks to a private party without public notice and public auction and without proper quantification of the extent of damage and proper grading of the allegedly damaged stocks through proper technical analysis and report. For all these reasons, we hold that the surveyor has rightly concluded that there was no credible evidence of any heat or any combustion or any smoke, fumes or fire so as to validity constitute the insured peril of natural combustion. On the contrary, there is enough indication of failure of the insured in ensuring that the best evidence as available is produced before the surveyor or that the transparent attempts have been made to obtain such best evidence by way of either appropriate reference to scientific laboratories for testing and by relying on scientific literature or expert opinion or even photographs or videos to establish the occurrence of spontaneous combustion and the segregation process thereafter. The reports from Cotecna, as already discussed, merely provides the chemical analysis of an arbitrary single sample which also does not specify or establish that the "soya heated"
sample represents the consequence of any natural combustion. On the contrary, the physical examination/visit and observation thereon by the surveyor coupled with the technical report from M/s Supreme Associates, who in turn have duly considered the Cotecna report, has opined that there was no any evidence of any type of combustion and/or ignition in the mass of soybean inside the closed silo, which in fact might have occurred due to increased respiration, and further, that oil content even in such single sample of the "damaged" soybean was within the normal range of 13 to 24%. Even in the complaint, no expert opinion or literature contradicting the report or opinion of the Surveyor or of M/s Supreme Associates has been filed. Therefore, we agree with the surveyor and the insurer in their finding of absence of evidence for establishing spontaneous combustion and any quantum of damage consequent thereto. We find this ground of repudiation to be well-founded and find no reason to interfere.
15. We, at this stage, also consider it appropriate to observe that the principle of utmost good faith is fundamental to the contracts of insurance. The conduct of the parties from the time of making proposal till the time of claim settlement is to be compliant with observance thereof. As a first step, the insured, while intimating the occurrence and operation of the insured peril, is expected to be reasonably responsible Page 35 of 59 and transparent and as much precise and exhaustive in describing the event of occurrence as the circumstances permit. In this background, the "discoveries" of "natural combustion", one after the other at two different locations, for two different items of soybean and soyameal, by three different set of people itself, though not so referred to by the insurer or surveyor, but still is itself a circumstance which is relevant. Equally relevant is the fact that the "discoveries" occurred during the relatively cold month of February, one in closed Silo and other two in two godowns presumably storing loose soymeal in heaps, when ambient temperature is nowhere stated by the insured to be unexpectedly high. Other relevant fact is also that the insured is a corporate entity with admitted stocks of nearly Rs. 200 crores (at Mandideep and Gandhidham), implying thereby turnover in excess of Rs. 1000 crore p.a., thus also implying that there are well-established departments and procedures for decision making and quality control, which admittedly also has in-house laboratory wherein chemical tests for inward material are stated to be carried out on regular basis. The insured admittedly has also assistance form insurance broker through whom the intimations for both the claims were given to the insurer whereafter the Surveyor was appointed who has proceeded to examine and assess the loss for both the claims. The intimation dated 26.02.2014 at page 41 while claims the loss to be due to "natural combustion", does not disclose any physical or scientific objective basis for its conclusion about the damage being there, or about the same being due to "natural combustion" or about the likely reason why or under what circumstances at all "natural combustion" should have occurred. In our considered opinion, a large corporate entity like the insured, before coming to such conclusion about the nature and quantity of damage due to as fluid and as subjective the event as "natural combustion" would and should have evaluated the same scientifically after the subjective suspicion of and information thereof by the floor-level persons were transmitted through the hierarchy in the insured entity comprising inter alia, quality control, commercial and finance and risk management departments. No such reference to any chemical or technical reports, internal or independent, or even internal communications have been forming part of the intimation given to the insurer or so intimated thereafter at any stage to the surveyor or in the complaint. Similarly, we fail to understand how could the alleged "damage" to stocks in Silo allegedly having 10000MT Page 36 of 59 (8000MT as per surveyor^ could be even estimated firstly at 1000MT and then immediately revised on the same day to be 2000MT, has also not been evidenced to be based on any serious and responsible objective basis, analysis or report. So, while assessing the conclusion of the surveyor, we have to start with the premise that to begin with, the insured itself has been wholly irresponsible and wholly subjective about the intimation and documenting or evidencing the occurrence of the alleged insured peril of "natural combustion", cause thereof and the alleged quantity of damage/loss as claimed, all the three of which, in our opinion, remained wholly unsubstantiated. This conduct manifests lack of responsible objectivity and transparency in pursuing and establishing the claim on the part of the insured. For all these reasons also, we find no ground and no reason to find fault with the objections as raised in the repudiation letter duly supported by the well-reasoned and detailed findings and observations of the Surveyor.
16. Now we take a brief note also of the quantum of loss as claimed by the insured and as assessed by the surveyor and the evidence on record in that behalf. While doing so, we firstly note that one of the contentions raised by Mr. Srivastav to the effect that once the assessment of loss is made by the surveyor, the very fact of such assessment would ipso facto imply and establish the twin facts, namely, that the insured has succeeded in duly establishing the occurrence of the insured peril and secondly that at the minimum, the quantum of loss as assessed in any case is also established. We are not at all impressed by this contention. First, it is settled by now that the survey report is not the final word either for the insurer while settling the claim or for us in a complaint, though at the same time, his report cannot be lightly brushed aside being an expert statutory report and cannot also be subjected to forensic examination. Second, the surveyor is statutorily bound to arrive at the quantum of loss, notwithstanding the failure of the insured in producing requisite and exhaustive credible evidence in this behalf. However, when such assessment is stated and evidenced to be "without prejudice" and when he has also arrived at an overall satisfaction that the claim gives rise to no liability on the part of the insurer in view of the overall circumstances narrated by him, certainly such constrained assessment in itself cannot lead to any such conclusion contrary to his express observation that the spontaneous combustion is not established nor in itself can establish the quantum of loss as assessed. Also, the Page 37 of 59 surveyor's report cannot be read piecemeal but has to be read as a whole and even the assessment, therefore, particularly when the recommendation for "no liability" is also a part of the report, has to be seen in the light of the evidences, including the insufficiency thereof, placed before him in this behalf. It is seen that the intimation of 1000 MTs of estimated loss dated 26.02.2014 was revised on the same day to 2000 MTs which, vide . letter dated 05.05.2014, was further revised upward to a claim of 2840 MTs by email dated 05.05.2014 (page 51) by stating that "total quantity as on date of loss (in the silo) was 10,000 MTs. We saved and processed about 7160 MTs and remaining 2840 MTs of damages seeds is lying with us in 31211 bags". The same email attempted to demonstrate and quantify the deterioration in the quality and consequent reduction in the inherent value of the damaged seeds which, as per the insured comes to Rs.26,753/- per MT. On the basis of which also "we may retain the salvage at Rs. 11 per kg." was also communicated in the same email. Further, on the basis of annexures L1 to L5 to the survey report (page 94 to 98 of insurer's documents dated 17.10.2018), the surveyor has dealt with such quantification in para 6 and para 10.4 of his report. It is the first observation that the claimed quantity was not justifiable. The total capacity of and quantity of the stock of the Silo has also been discussed by the surveyor in para 10.4. The surveyor has stated that on the first day of visit the godown keeper has informed that only around 8000 MTs of soybean was stored in the silo out of which 640 MTs of damaged goods were already taken out and packed in 8000 jute bags, which were also photographed by the Surveyor with remarks that all bags do not have the damaged stocks. It is also noted by the surveyor after entering into the silo along with the godown keeper that the height of the stock of soybean therein is only upto the cylindrical height of the silo and not beyond that in the conical section. The surveyor had asked for the sketch of the silo with the measurements of the dimensions which was provided with wrong dimensions on the first day of visit on 05.03.2014. Thereafter, the corrected sketch of the silo measurement was provided as late as on 20.07.2014 (page 94-95 of insurer's documents) along with the letter dated 25.07.2014 by the insured. The difference in the height of silo as depicted through these two drawings is nearly 8 mts (correctly stated 21.6 mtrs. as against the wrongly stated height of 30 mtrs). The surveyor therefore notes, after noting the cylindrical and conical volumes of the silo, in Page 38 of 59 para 10.4.2, that the maximum of 8284.536 MTs of soybean can be stored in the silo upto cylindrical height on the basis of density as per ANSI literature to be 772 kg./cm (page 98). After accepting, though without any credible evidence filed by the insured in that behalf, that the full capacity of silo of 8284.536 MTs was utilized in storing the soybeans as on the date of the discovery as on the date of discovery, and also after accepting, again without any credible evidence, that 7160 MTs as stated by the insured, and no more, was already utilized for processing, and also after accepting that the balance was therefore the damaged stock, all as per the unsubstantiated version of the insured, the surveyor has also come to the conclusion that the quantity of damaged stock is 1124.536 MTs and not 2800 MT as claimed. The surveyor has also stated in the report that the claim of damage of 2840 MTs is excessive and unjustified. We in this behalf note that the total quantity in Silo has also been attempted to be arrived at by the insured on the basis of volume-capacity of the Silo rather than providing the best evidence of contemporaneous daily quantity records of feeding for storage into and off-loading from the Silo, which method/data, though has been accepted by the Surveyor without any verification, is still a mere gross estimate method and can certainly not be equated with any record-based responsible and transparent methodology. Similarly, we note that during the currency of the survey and as intimated to the surveyor, the weight of the allegedly damaged soya stock was not physically arrived at by the insured and the intimation dated 05.05.2014 was also based on the estimated quantification on the parameters of total volume/capacity of silo and alleged quantity already utilized, without any evidence of such availability and such utilization also, as per mere statement without any substantiation. Though such grossly inadequate methodology of quantification as adopted by the insured is accepted unquestioningly by the surveyor, albeit with lower volume and capacity of the silo, and therefore not so further disputed by the insurer in the repudiation letter, we cannot help but find such preference by and insistence of the insured for only such estimated and grossly subjective method to quantify and claim the loss, even when the weighment and testing/chemical analysis of bagged soya stock could easily have been undertaken by it, regardless of such requisitioning from the surveyor, so as to make the claimed insured peril, claimed quantity and claimed value of loss/deterioration therein stand on scientific, Page 39 of 59 well-substantiated and objective footing, to be withholding of the best evidence, and of grossness, casualness and subjectivity in pursuing the claim on behalf of the insured. The insured has claimed to have communicated to the insurer on 04.03.2015 regarding the disposal of the salvage. The alleged weighment and the despatch to M/s Pushraj Traders is tabulated on page no. 108-110 which appears to be annexure to the said letter dated 04.03.2015. However, not only the insurer has denied the said letter and the annexure thereto, but even the letter on the face of it does not refer to any enclosures of the nature as on page 108-110. Earlier to that, in the letter dated 29.12.2014, (after the submission of the survey report) however, it has been informed to the insurer and stated by the insured that the quotation for salvage has been received for Rs.9/kg for soyaseed and Rs.0.5/kg for soyameal and that the weighment shall be taken at the time of despatch which shall be produced along with invoices and that if required any witness/persons be appointed to supervise the process. In any case, such disposal and such despatch which is now attempted to show 2790 MTs of damaged goods in 32747 bags sold as salvage to M/s Pushpraj Traders, was not before the surveyor and was undertaken after the submission of the survey report and thus the weight/quantum of the alleged damaged stock was never specifically arrived at or supplied to the surveyor. Even the corroborative and contemporaneous evidence of the further deterioration so as to bring down the value from Rs. 15000/- pMT (which was also arbitrary) to Rs. 9000/- pMT, including the scientific test-reports or internal reports or videography of despatch or independent evidence of the quantity, or at least the evidence of exercise of maximising the realisation of salvage value through independent public notice and public auction, are also not undertaken or provided in the complaint. There is thus no credible evidence of even the quantum of loss or damage suffered placed on record of this complaint by the insured. In our opinion, the insured only continued exhibiting the casual, non-scientific and non-specific methods in pursuing the claim and in withholding the best and credible evidence to support various dimensions of its claim, including that of the quantum of damage as claimed even while and after filing the complaint. It thus additionally is our opinion that the requisite documents and evidence were not only not provided to the surveyor, there is no credible further evidence relied upon in the complaint to support the quantum of damaged stock. Similarly, it is a matter of record Page 40 of 59 that merely on visual examination of the quality and quantum of "damaged stocks", one M/s Baradi Trading Co. had already offered the purchase at Rs.15,000/- per MT vide quotation dated 24.03.2014 (page 119 of insurer's documents). As against this, the alleged disposal of salvage has been offered to another single party M/s Pushpraj Traders without any public notice of auction and inviting quotations and without any reference to even M/s Baradi Trading Co., which also, in our opinion, makes such post-repudiation disposal of the alleged salvage, even if corroborated by other contemporaneous evidence like receipt of consideration through bank, which also is not so attempted by the insured, to be of lacking in any reliable evidentiary value for supporting the quantity and the value of the damaged goods. In that context, we also find the allegation of the insurer in the repudiation letter of violation of condition 6 of the policy not to be baseless or unsustainable. The complainant is also thus rightly found by the surveyor to have claimed unreasonably and baselessly excessive and unjustified quantum and amount of damage. Though we believe that true measure of damage, if any, in the circumstances of the case, could have been arrived at only on the basis of such evidence and particularly an expert opinion about the extent and measure of damage, followed by grading of and sale of the salvage in the open market through public auction after due public notice thereof, we in the circumstances, do not find any flaw in the salvage value of Rs. 1,68,68,040/- and net assessed loss (subject to under insurance and subsequent correspondence between the insurer and the surveyor to be discussed below) at Rs. 1,83,88,806/- as arrived at by the surveyor in para 12 of his report, though at the same time holding that such assessment does not advance the cause of the insured in establishing the spontaneous combustion itself. However, in para 12, the surveyor has taken the under insurance at nil. It appears that the insurer has written a mail to the surveyor on 23.12.2014 which has been responded to by the surveyor on the same date (page 128 of the insurer's documents) assigning the assessable loss under the two policies. The fact is that though the overall sum assured is Rs.95.30 crores for stocks (page 117), the add-on cover for spontaneous combustion is obtained only for policy 0373 for sum assured of Rs.40 crores. Therefore, though there is no evidence of any spontaneous combustion, it has rightly been submitted by Mr. Shahi that even if the claim is payable and the loss as assessed by the surveyor is to Page 41 of 59 be indemnified, it cannot be overlooked that the assessed loss shall be subject to sizeable underinsurance in as much as against the total stock found at Rs.93,45,62,903/-, the stock covered for the particular insured peril of spontaneous combustion, which if at all has operated as claimed, is only to be extent of Rs.40 crores. Thus, the underinsurance shall indeed be applicable in the ratio of 40/93.45 and therefore, indemnifiable eligible loss, in any case, shall be to the extent of only Rs.78,70,593/- as stated in para 29 of the reply filed by the insurer (no rejoinder by the complainant). We also, however, are of the opinion at the same time that there is no objective and credible evidence on record before the surveyor for establishing that 10,000 MT seed were there in the silo and that from which only 7160MT and no more utilised in processing, particularly when it has been also noted by the surveyor that many bags of the segregated stock were also found to be of undamaged and non-blackened or non-discoloured seeds.
17. Mr. Srivastav has urged that very blackening of and damage and deterioration of the stock has been accepted by the surveyor and he has also quantified the loss and it is illegal and illogical for him to contradict himself in observing that the claim is not payable on the ground that no insured peril operated. The insured followed the instructions as given by the surveyor from time to time, and therefore, no adverse view could have been taken with regard to occurrence of insured peril of spontaneous combustion. At the first instance, the surveyor directed for segregating the stock of the damaged soybean from that of the undamaged which was accomplished as was communicated on 17.04.2014 and the intimation of which was given on 05.05.2014 as per which the damaged stock of 2840 MTs was identified. The very noting of the surveyor and the very fact that the undamaged stock was utilized and the damaged stock was segregated which was noted by the surveyor himself to be discolored and blackened when the stock of damaged goods was also found to be hot, which was also certified to be substantially so damaged by M/s Cotecna and diminished in value by Rs.26,753/- per MT as was intimated in the same mail, establishes beyond any doubt that the stock had suffered natural combustion which only can cause the damage in the absence of any external factor causing such damage established by the surveyor. The surveyor's conclusion is not only without basis but is primarily of the fact that there is no Page 42 of 59 visible fire or fumes or smoke, and further, that the insured peril of fire itself has not operated. The surveyor's endeavour has been to deny the claim on the ground that there was no "fire" as visible through flame or smoke, and also that the mere spontaneous combustion is not covered even if the add-on cover of spontaneous combustion is obtained. Placing reliance on Murli Agro Products Ltd. Vs. Oriental Insurance Co. Ltd. I (2005) CPJ 1 (NC), and the Roshanlal Oil Mills referred to and relied upon therein, Mr. Srivastava emphasized that the law by now is settled that when the add-on cover for natural combustion has been obtained by paying the additional premium, the damage consequent to such natural or spontaneous combustion cannot be denied by the insurer on the ground that the visible fire is not seen or that there was no heating or smoke or by flimsily opining that there was no natural combustion. The damage to and the discoloration of the goods ipso facto is the evidence of the occurrence of natural combustion which cannot be denied on the ground of absence of evidence and particularly on the ground of absence of fire report or FIR, both of which were not considered necessary or required by the insured as there was no suspicion of any wrong doing by anyone or of extinguishment of any fire. Mr. Srivastava categorically pointed out the following from the reported decision of Murli Agro:
In any case, if it was intended to cover only loss or damage by fire, there is no question of taking additional premium, because the first part of the policy itself provides that it gives coverage by loss or damage by fire.
20. Further, it makes it clear that there is insurance coverage in case of damage caused by its own fermentation, natural heating or spontaneous combustion.
21. Therefore, this condition apart from fire covers damage caused by the aforesaid three causes. In the report submitted by the surveyor, he has quoted the opinion given by National Chemical Laboratory (Council of Scientific and Industrial Research), which, inter alia, provides that the damage was caused by natural heating. The relevant part of the report is as under:
"Now after careful consideration of weather conditions on March 17, 1997 at 12.30 p.m. it is concluded the main cause of damage is temperature due to the sun which burn the soya seed contained in Galvanized Iron Corrugated (GIC) silo. Due to high temperature at day time the soya material must have absorbed heat and transferred towards central portion. Thus creating high temperature at the middle portion of silo which could burn the volatile oil content of soya seeds.
After considering all the data on damaged seeds and fresh seeds it is the rise in temperature of silo which has damaged the seeds which have turned black with loss in oil content".
22. Further, it is settled law that contract of insurance is based upon good faith. It is the duty of the insurers and their agents to disclose all material facts within their knowledge since obligation of good faith applies to them equally with the assured [(Re. M/s. United India Insurance Co. Ltd. v. M.K.J. Corporation, III (1996) CPJ 8 Page 43 of 59 (SC)=(1996) 6 SCC 428)]. If the insurance coverage was not extended even by taking additional premium for the damage caused by spontaneous combustion/natural heating which may not result in fire, it ought to have been clearly stated.
23. Secondly, if the contract is vague, benefit should be given to the insured. The exclusion term of the insurance policy must be read down so as to serve the main purpose of the policy that is to indemnify the damage caused due to fire [(B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd.) II (1996) CPJ 28 (SC)=(1996) 4 SCC 648)].
18. It is thus emphasized that the settled law is that when a spontaneous combustion add-on cover is obtained, the damage due to its own fermentation, natural heating and spontaneous combustion are covered without there being any external manifestation of the incident by way of fire or smoke or heat or such other means and that the damage to the stock itself would suffice to establish the entitlement to the indemnification. Further, pointing out this Commission's decision in M/s Parrys Sugar Industries Ltd. Vs. United India Insurance Co. Ltd. in CC NO. 251 of 2012 dated 26.04.2024, it has been submitted that relying on Murli Agro (supra), this Commission took note of the decision in United India Assurance Co. Ltd. Vs. Taj Sugar Works & Anr. II (2002) CPJ 43 (NC) and went on to observe that the spontaneous combustion itself is a form of fire and that even when there is no add-on endorsement of spontaneous combustion obtained by the insured and even in absence of any visible evidence of any fire, fume or heat, still the damage consequent to natural combustion shall be an indemnifiable loss under the fire and special perils policy. Learned counsel also drew our attention to Supreme Court decision in New India Assurance Co. Ltd. Vs. Parakh Food Ltd. MANU/SC/1931/2009 to further buttress the argument by pointing out that the decision of this Commission in Murli Agro has been noted therein with approval in para
6. Therefore, the facts of the complainant's case are squarely covered by the decision cited supra and the conclusion by both the surveyor and the insurer are bereft of any merits and therefore the claim of the complainant is illegally and wrongly repudiated by the insurer resulting into clear-cut deficiency in service.
19. On the other hand, Mr. Shahi, on this contention, has maintained that there is no credible, scientific and objective evidence placed on record either of any combustion or heating or of any damage/loss consequent to such combustion, or of heating, smoke, fumes or fire and therefore, none of the decisions relied upon, on the facts of the present case, apply. Bringing out other distinguishing facts, it has further been emphasized that in Murli Agro, the very fact that the natural combustion was established on record was Page 44 of 59 not at all in dispute, absence of which is, as such, the fundamental objection of the insurer in the present case. The fact of damage or deterioration and the quantum of affected stock due to such natural combustion was also not in dispute in that case. The occurrence and operation of the insured peril of natural combustion or natural heating in Murli Agro, was, as a matter of fact, also not a mere subjective satisfaction of the insured but was duly and objectively evidenced by the scientific report from a reputed National Chemical Laboratory which certified (i) that the Silo temperature increased due to day-time high temperature (ii) that the deterioration in stock is due to natural heating or natural combustion. No such technical report certifying the cause or event of natural combustion is obtained by the insured in the present case. There is no possibility also of "high day-time temperature" during the cold month of February and no such evidence is also on record in the present case. Similarly, in Parrys Sugar, the spontaneous combustion and auto-ignition was again not mere subjective and internal conclusion of the insured but was indisputably, evidently and palpably visible by overflown and solidified damaged stock of molasses as noted by the surveyor in his physical observations of the premises as reproduced by the Commission in the said order, so much so, that the solidified molasses needed to be removed by cutting open the Silo. In other words, the operation of insured peril of spontaneous combustion or heating was not only not in doubt, additionally, the insured had also obtained the scientific report from Nijlingappa Sugar Institute, Belgaum certifying the molasses having undergone spontaneous combustion. The facts in the present case are entirely different wherein neither any irrefutable physical evidence has been produced or noted by the surveyor nor any laboratory or scientific certification of natural combustion or of the alleged damaged quantity has been relied upon or placed on record by the complainant. Even in Roshanlal Oil Mills Ltd. Vs. United India Insurance Co. Ltd. I (1992) CPJ 293 (NC), referred to in Murli Agro and Parrys Sugars, the operation of the peril of spontaneous combustion stood well-established and was even so recorded by the surveyors. As such, such spontaneous combustion and consequent damage in Roshan Lal Oil Mills was so certified by highly placed experts namely, Prof. M.M; Chakraborty, Chairman, Research Council, Central Food Technology and Research Institute and also of Project Director, Haryana Agricultural University. No such expert report is obtained or placed on Page 45 of 59 record in the present case by the complainant. In Gayatri Sugars Ltd. also the surveyor himself had observed during his visit to the site that the molasses had overflown from the tank and the decomposed and solidified molasses was found all around the tank spread in 2 to 3 acres of land around the molasses tank. Thus, the damage, which occurred in the month of May was indisputably on account of spontaneous combustion which was not only observed but also so noted by the surveyor in his survey report. However, after noting that the molasses stock was not opted by the insured in the add-on cover for spontaneous combustion, this Commission also came to the conclusion that such evident loss evidently due to spontaneous combustion is also not indemnifiable under the normal fire policy without add-on cover of spontaneous combustion. Thus, all the decisions relied upon by the insured (except Gayatri Sugars Ltd.) proceed to hold that when the add-on cover for spontaneous combustion is obtained by paying extra premium, the loss consequent to spontaneous combustion is indemnifiable even without there being actual fire manifested through flames or smoke. But in all these cases, the existence or operation of spontaneous combustion was not only not in doubt but was positively and diligently established by the insured as certified scientifically by recognized experts and laboratories and was also so noted by the surveyor. In the present case, the surveyor has observed that there is no spontaneous combustion and also there is absolutely no technical or scientific or expert evidence or credible physical evidence establishing such spontaneous combustion, and therefore, these cases relied upon by the complainant cannot come to the aid of the insured. After carefully going through all the decisions as referred to by the learned counsels, and in light of what we have already found as a matter of fact, there is indeed no credible and technical evidence or any expert opinion certifying the occurrence of spontaneous combustion or self-heating in the soya seeds as claimed by the complainant, and therefore, we agree with Mr. Shahi that these decisions have no applicability in the facts of the present case. As such, the report of M/s Supreme Associates, which has duly considered the Cotecna sample analysis reports, has categorically opined that the whatever damage or deterioration in the stock is neither due to any heat or any combustion or any fat-clevage but merely due to higher moisture-content, No evidence contradicting such report or even any scientific literature pointing out the error in the Page 46 of 59 opinion of M/s Supreme Associates has been brought on record in the complaint. Therefore also we agree with Mr. Shahi, that these decisions, in the facts of the present case, cannot come to the assistance of the complainant.
19.1 Reiterating the observations of the surveyor that under standard fire policy no indemnification of any loss or damage caused without or in absence of any fire or flame is provided or is available or can be inferred from the policy wording, Mr. Shahi additionally explained that the basic cover of "fire" under the standard fire policy expressly and categorically excludes damage due to such fire as has arisen from self-heating or natural combustion of the goods or commodity insured. The add-on cover through endorsement such as obtained by the insured in policy 0373, merely relaxes and removes such exclusion without any added cover for any peril including that of natural combustion. Consequently, after obtaining the add-on cover, the damage due to fire even when such fire has arisen from natural heating or natural combustion of such insured commodity or goods' would still remain covered, which risk and damage is otherwise excluded under standard fire policy. In other words, the fundamental peril covered under the standard fire policy is always that of "fire", which is distinct and different from mere "heating" or "mere spontaneous combustion" which itself independently is never covered under standard fire policy, with or without such add-on cover. What the add-on cover therefore and thus provides is simply removing the exclusion of "fire arising from natural or spontaneous combustion". The add-on endorsement does not provide for covering the peril of spontaneous combustion, but it merely deletes/removes the exclusion of damage due to fire arising from spontaneous combustion, without diluting or loosening in any way the insured peril itself which continues to be "damage due to fire only" and clearly and certainly not any pre-fire or pre-ignition stage including spontaneous combustion per se. "The damage due to fire when such fire is due to spontaneous combustion" is covered after the add-on cover which otherwise is by the exclusion clause is expressly excluded from coverage under any standard fire policy. After obtaining add-on cover, such "damage due to fire due to spontaneous combustion" becomes indemnifiable. This can easily be gathered from the joint reading of the coverage and exclusion clauses in the standard fire policy wherein there is absolutely no ambiguity:
Page 47 of 59"FIRE POLICY "C"
In consideration of the Insured named in the schedule hereto having paid to the premium mentioned in the said schedule, THE COMPANY AGREES (subject to the Conditions and Exclusions contained herein or endorsed or otherwise expressed hereon), that if after payment of the premium the property insured described in the sale schedule or any part of such Property, be destroyed or damaged by--
1. Fire 2
6. Provided that EXCLUSIONS This insurance does not cover--
(a)
(b)
(c) Loss or damage to property occasioned by its own fermentation, natural heating or spontaneous combustion or by its undergoing any heating or drying process.
0) Add-on Cover:
"SPONTANEOUS COMBUSTION: On of the payment by the Insured to the Company of additional premium of Rs the Company agrees notwithstanding what is stated in the printed Exclusions of this policy, that the policy shall extend to include loss or damage by fire only of or to the property insured caused by its own fermentation, natural heating or spontaneous combustion."
N.B.: The expression 'by fire only' in the endorsement above must not be omitted under any circumstances."
19.2 Thus, with add-on cover as obtained by the insured for policy 0373, the coverage clause would read as it is without the exclusion (c). Therefore it is incumbent on the insured to establish the fire and cause of fire and damage due to such fire for claiming indemnification under the policy notwithstanding the add-on cover. Such fire is not and cannot be held equivalent of combustion, particularly when the coverage for such damage even due to fire consequent thereto stands expressly and unambiguously otherwise excluded. The coverage clause categorically requires that to be eligible for indemnification under the add-on cover also the insured is required to establish fire Page 48 of 59 proper as different from heating or combustion. Insurer, having provided add-on cover, would be debarred only from raising the plea that such damage due to fire is excluded because the fire arose from any natural combustion or heating, but the insured would still not be entitled to claim indemnification when admittedly there is no fire. The insured in the present case has failed in establishing either fire or spontaneous combustion through appropriate technical reports or through fire or police reports as mentioned in the repudiation letter. There is no evidence of or even averment of damage by fire proper as manifested through flames and smoke and as distinguished from mere spontaneous combustion (which also is unestablished). Pointing out that in Roshan Lal Mills, this Commission had found in para 18, as a matter of fact, that the policy add-on cover note specifying the insured peril and indemnifiable loss to be "by fire only" was not incorporated in the policy as placed on record. It was also recorded in the said order that in response to the repeated questioning by the Commission, the counsel for the insurance company could not explain the value or benefit in obtaining the add-on cover if the existence of fire itself was necessary for successfully claiming indemnification under the add-on cover. However, in the present case, the existence of "damage caused by fire only" requirement in the add-on cover as placed on record cannot at all be disputed, and has not been disputed, being expressly so provided in the policy add-on endorsement. The contention of the complainant is only that the "by fire only"
requirement is no longer valid. Surveyor in his report has in detail also explained the additional benefit available to the insured in para 8 of report by way of a table as so explained. The survey report as also the repudiation letter, apart from the ground of non-existence of any spontaneous combustion, also raises the ground that even if damage on account of spontaneous combustion is accepted, then also no benefit is available to the insured unless the damage "on account of fire only arising from spontaneous combustion" is simultaneously and additionally established. In other words, despite the add-on cover, damage due to fire is a requisite pre-condition for indemnification. No such evidence is placed on record and therefore also the repudiation is justified. Replying to this contention, Mr. Srivastav has re-emphasized that the requirement of any "fire", manifested through flames or smoke, has long been held and concluded to be not the requirement of add-on cover of spontaneous combustion Page 49 of 59 combustion and the issue is not at all res Integra. Murli Agro and Parrys Sugar and M/s New India Assurance Co. Ltd. Vs. Parakh Food Ltd. clearly cover the issue in favour of the complainant. We have carefully considered the submission made on behalf of both the parties with regard to requirement of evident and explicit fire in the cause of damage qua the add-on cover of spontaneous combustion. We have gone through the decisions cited at the bar as also those referred to or relied upon therein. While Mr. Srivastav is right that the matter is no more res Integra and that the issue is, apart from by Roshan Lal Oil, Mural! Agro, and Parrys Sugar, indirectly also concluded in favour of the insured by the decision of the Supreme Court in M/s New India Assurance Co. Ltd. Vs. Parakh Food Ltd., still we do find some merit also in the contention as raised by Mr. Shahi, though the issue is wholly irrelevant for the present proceedings in as much as we have already factually found that the alleged damage to soybean stock is due to neither fire nor even any spontaneous combustion because no such technical report has been placed on record. We agree with Mr. Shahi that at least the plain reading of the policy coverage clause, exclusion clause and the endorsement together do lead to the meaning of the endorsement as canvassed by him, meaning that the "damage due to fire only" appears to continue to be an unambiguous requirement for indemnification even after obtaining add-on cover. Mr. Shahi is also right that the 1992 decision of Roshan Lal Oil did in fact note and relied on the fact, first, that there 'was no policy document on record evidencing the condition of "fire only" requirement in add-on cover as pleaded by the insurer therein and, second, that the insurance company could not explain the additional benefit of add-on cover if damage due only to fire proper is still a requisite pre-condition even after paying premium for add-on cover. When this aspect was considered afresh in III (2008) CPJ 137 (NC) after setting aside by the Supreme Court, as rightly submitted by Mr. Shahi, these particular critical factual aspect was not recorded or considered, at all, and this Commission, after drawing support from Murli Agro, which itself had relied on inter alia the 1992 set aside decision in Roshan Lal Oil after such set aside, proceeded to hold that unless the "fire" proper is considered unnecessary to be additionally a necessary event, or unless spontaneous combustion itself is considered a mere manifestation of such "fire" proper, there is absolutely no benefit of the additional cover of spontaneous combustion even after payment of Page 50 of 59 additional premium, and therefore, "fire" proper, and the damage due to such fire, cannot and should not be considered a necessary even for indemnification, when add-on cover of spontaneous combustion has been obtained by the insured by paying extra premium. In other words, the absence of any additional benefit despite payment of extra premium is the primary reason why despite express requirement in the policy/add-on cover the "
damage due to fire proper" was held not a pre-condition. The surveyor, however, in the present case, has explained and demonstrated the extra benefit of the add-on cover as explained by Mr. Shahi. Mr. Shahi has drawn our attention to the survey report wherein such positive "additional benefit" is discussed and demonstrated, which we may reproduced:
ti 7.0 The meaning of insured Peril Fire under SFSP Policy with Add on Cover The said Policy SFSP is extended' to include spontaneous combustion i.e. extended to include the loss/damages by Fire caused through the spontaneous combustion in the insured stock/ property only.
7.1 Any type of Fire losses are excluded under the SFSP Policy to the insured stock/property in which In which Fire is ignited due to spontaneous combustion i.e. the SFSP Policy without this Add on Cover does not cover the loss/damages to the insured property/heap by Fire caused through the spontaneous combustion took place in that same property/heap.
7.2 Add on Cover The wordings of the ADD on Cover of Spontaneous Cdmbustlon are as under;
----- the policy shall extend to include loss or damages by Fire only of or to the property Insured caused by it's own fermentation, natural heating or spontaneous combustion"
"Note: The expression by Fire only in the endorsement above must not be omitted under any circumstances."
Thus there is a meaning of Add on Cover to pay an extra premium to include the "Loss/damages by Fire only caused by it's own fermentation, natural heating or spontaneous combustion to the property insured."
The above Add on Cover of the policy contract is again clarified by putting the words "by Fire only" in the note below the same.
Thus the loss/damages caused by Fire only are to be considered i.e. pre-ignition loss./darnages is not included even though the Fire is ignited in the same heap.
DIFFERENCE IN SFSP & ADD ON COVER FOR ADMISSIBILITY OF THE CLAIM
Description/Location of SFSP ADD ON COVER
loss_________________
Pre-ignition Not Admissible as excluded\No, as only the loss/damages
loss/damages to the peril due to only the Fire Is admissible
same heap in which Fire in the heap in which Fire ignited
ignited through through the spontaneous
Page 51 of 59
spontaneous combustion combustion
(not admissible as no any
ignition of Fire in the claimed
stocks)____________________
Post-ignition Not admissible (Exclusion). Yes. Admissible as the
loss/damages to the Fire Damages caused to loss/damages caused due to Fire
heap by Fire ignited the insured properties in ignited through spontaneous
through spontaneous which Fire ignited through combustion in the same heap Is
combustion in the same spontaneous combustion is covered,
heap/mass _______ excluded.
Loss/damages took placelAdmissible under peril Fire Admissible due to spreading of Fire to the other heap/properties.
Thus the wording of the SFSP Policy and this Add on Cover are very clear and also simple to understand as shown in above table for admissibility of the claim.
Note: Thus no any pre-ignition loss/damages is covered in the same insured heap/property in which the Fire is ignited through the spontaneous combustion under the SFSP policy with or without Add On Cover.
19.3 Be that as it may, though we find some merit in Mr. Shahi's submissions, and we also agree that the the surveyor has in fact demonstrated as tabulated above the true import and real benefit of add-on cover of spontaneous combustion, the in-built policy requirement for "damage due to fire only" as distinguished from the "damage due to spontaneous or natural combustion", and also shown the additional benefit inherent in the add-on cover of spontaneous combustion which benefit certainly does not appear to us to be illusory, we still consider it unnecessary to further discuss the issue in view of the fact that even the spontaneous combustion itself, in the present case, remained unestablished on record and equally there is also no evidence of any fire proper or smoke or combustion or heating also on record too. Therefore, as discussed earlier, none of the decisions relied upon by Mr. Srivastava, on facts, are otherwise also applicable. Therefore, whether damage due to spontaneous combustion itself, without any fire at all, is covered under the add-on cover or not, is not required to be presently considered by us in light of what has been submitted and insisted by the parties.
20. For the aforesaid cumulative reasons, we conclude that there is no evidence of any damage due to spontaneous combustion. There is no credible and scientific evidence of any damage due to any heat, smoke, fumes of fire. We find that the survey report and recommendation therein are based on sound, credible and cogent Page 52 of 59 foundations of reason and logic and are neither arbitrary nor baseless. Such survey report and recommendations therein have not been meaningfully dispelled in the complaint by producing any credible evidence so as to persuade us to dislodge the findings therein. As such, each ground in the repudiation letter, standing on the strength of such sound survey report, is found by us to be well-supported and based on objective material and conclusions. Such survey report and such repudiation cannot be lightly brushed aside in the absence of strong and compelling reasons and supporting evidence in the complaint. The complaint fails in bringing on record any such compulsive basis or evidence for us to interfere with the repudiation letter. Hence, the complaint, which seeks to claim indemnification without having established the operation of any alleged insured peril of spontaneous combustion or fire, or even the quantum of the damage or basis of measure of such indemnifiable damage, if any, is bereft of any merits. There is no deficiency in service on the part of the insurer. Hence the complaint fails.
21. Now we very briefly state the reasons as to why we equally find no merits also in the parallel complaint for such indemnification for stocks of soyameal at Gandhidham godowns in Complaint No. 2117/2016. The fundamental facts are same and similar some distinguishing facts and features between the two claims have already been noted in para 11. The stocks were in the custody of two godownkeepers for godowns at Jain Godown and Jolly Godown, and, it appears the "spontaneous combustion" was "discovered" simultaneously at both the godowns on 21.02.2014. There are three main grounds (repudiation letter on pg 80 of file) of repudiation in the repudiation letter. The first is that the spontaneous combustion or any heat or smoke or fire is not established on record. The second is that there is no evidence of fire, flame or smoke and without such "damage due to fire only", no claim is validly indemnifiable under the policy. The third is the non-furnishing of any fire report or police report or FSL report or any technical or scientific laboratory report establishing the damage to stock due to spontaneous combustion or fire. The fourth is that the two endorsements of add-on cover of spontaneous combustion in two policies having total SA of Rs. 40 crores was obtained on 24.02.2014 after having knowledge of the damage to the stock on 21.02.2014 which knowledge was suppressed at the time of getting the add-on cover thus establishing the Page 53 of 59 dishonest intent of the insured and desire to obtain undue benefit under the policies, violating the principle of utmost good faith. In any case, the endorsement would be effective only from 15 days from the date of premium realisation, i.e. from 27.02.2014, and hence the benefit under the endorsement is not available to the insured under the two such endorsements for SA of Rs. 40 crores because the "spontaneous combustion", if at all, "occurred" on 21.02.2014 which event is before the commencement of endorsement on 27.02.2014. Lastly, though the fire never took place and though the occurrence of the fire was never intimated or informed to the insured, suddenly on 11.03.2014, only after realising that even the endorsements of "spontaneous combustion" even with the alleged event of spontaneous combustion, would not make the alleged damage or loss indemnifiable without there being "such damage due to fire only", the insured merely and falsely to obtain undue benefit, misrepresented through e-mail dated 11.03.2014 that "fire had taken place which was extinguished with the help of inhouse fire extinguishers", which statement was established to be false. Such false information so as to obtain dishonest gains is further misrepresentation and is violation of policy condition of good faith.The statement of godownkeepers as provided to surveyor, and some observations of the surveyor and of the technical expert Mr. Darji do mention, as recorded in the survey report, that the stock was seen "hot" and some "smoke was coming out", and "some smell was there" and it was advised by the surveyor for the stocks "to be cooled down", which was so achieved by "merely spreading on the floor", there is absolutely no independent, objective and scientific evidence or any laboratory report or any expert opinion what-so-ever furnished either to the surveyor or placed before us to establish that whether at all, and if yes, to what extent, and to what quantity of the stocks of soyameal, the damage "due to spontaneous combustion" occurred, and how such damage is relatable to or consequenced by the alleged unestablished event of "spontaneous or natural combustion". In the intimation dated 21.02.2014, the estimated quantity damaged was stated to be 1500MT without disclosing any basis of such estimated quantity or of conclusion of natural combustion. On visit by the surveyor on 28.02.2014, the godownkeeper stated the damage to stocks estimated at 1300MTs. There seems to be an admitted position that fire and flames were neither seen nor the alleged damage to stocks is the consequence of such fire nor any Page 54 of 59 * proper evidence of intimation to fire brigade or to police is disclosed to the surveyor, (the subsequent certificate of Chief Officer of the Gandhidham Municipality, without any corresponding fire officer's report, annexed to the complaint, in our opinion, is self-serving and not reliable as evidence of any fire or quantum of damage on account of such fire, particularly for reason of being belated and not issued by proper authority and also for not disclosing the basis or source-material), nor any evidence or traces or effect of any smoke, fumes, flames or fire was noted by the surveyor. There is no indication also how suddenly the alleged stock of 1300 MT in various different heaps in two different godowns started "natural combustion" and how simultaneously the same was "discovered" in all such heaps in two different godowns. The whole process of raising the claim and pursuing the claim is based entirely on subjective assessment and conclusion of "natural combustion" and "1500MT (1300MT) of damaged stock" as "informed by CHA", without any objective material or methodology relied upon either before the surveyor or even in the complaint before us. In both the Mandideep as also Gandhidham claim, the surveyor asked, curiously enough, the insured to quote the "salvage rate", which the insured did quote, on 24.03.2014, but merely on the basis of ad hoc quotations from one M/s Baradi Trading Co and Srinathji Agro Industries (pg. 55-56) without any demonstrated effort to establish the same to be the best rates or to establish that the same is based on scientific evaluation of the extent of damage. The insured did ask more than once to the surveyor and then to the insurer, both before as also after 11.08.2014 (the date of survey report) about disposal of the salvage. But after obtaining such quotations and quoting the salvage rate on that basis to the surveyor, there is no further intimation, information, laboratory reports or demonstrated effort for scientific, transparent, responsible and objective substantiation so as to conclude (a) the existence of the phenomenon of natural combustion (and fire), (b) the extent of deterioration, and value reduction, if any, in the "damaged" stocks, (c) the quantification and valuation of such alleged damage. After the preparation of the survey report, the insured has, on 12.09.2014 and 19.09.2014 written to the surveyor, inter alia regarding salvage disposal and further that "if no response is received within 5 days, we will sell the salvage by procuring fresh quotations" and on 24.12.2014 to the General Manager and on 04.03.2015 to the Manager, Claims Hub, informing them that they have started Page 55 of 59 J .'i the process of disposal of salvage and "have obtained quotations for Rs.9/per kg for soyaseeds and Rs.0.5/per kg for soyameal". Thereafter, such stock of soyameal has been sold to M/s Vishwas Agri Exports (Guj) Pvt. Ltd. the despatch of which is claimed in the complaint to be evidenced by the list of weighbridge receipts enclosed at page 74 to 78. Such salvage value for 1500MTs of "damaged" soyameal is stated to be Rs.7,49,045/- for the original stated cost of Rs.5.46 crores. The surveyor has dealt with the assessment in para 11 of his report. Firstly he has noted that godown incharge has informed the loss/damage of soyameal stock of only 1300 MTs. However, the insured has put a claim bill of 1500 MTs and claimed average cost of Rs.36,400/- per MT but the surveyor has adopted the rate of Rs.36,250/- as per "the last purchase invoice" though the earlier invoices for rates between Rs.34,200/- to Rs.35,400/- per MT were also provided by the insured. There is no other information or details or evidence brought on record by the insured either before the surveyor or in the complaint to substantiate either the cost rates or the quantity of the alleged damaged goods or the market value of the deteriorated/damaged goods and quantity thereof. As discussed earlier, no objective or scientific report or even internal communication or any other corroborative evidence in this behalf has been brought on record. Neither the salvage has been disposed through any public auction after any public notice nor even the process of identification and segregation of any damaged goods and alleged disposal thereof has been documented or videographed or otherwise corroborated. No information is available on records regarding which individuals or officers of the insured have attended to this task of identification and segregation of damaged goods. Thus, the only evidence relied upon by the insured for raising such claim of Rs.5.46 crores is (a) the intimation of the loss wherein "estimate" of the quantity of the damaged goods given on 21.02.2014, and then, value of the same given to surveyor at Rs. 5.46 crore and (b) the salvage value as allegedly billed or realized by way of sale to M/s Vishwas Agri Exports (Guj) Pvt. Ltd at Rs. 7.49 lacs. As in CO 1214 of 2016 discussed in detail, there is absolutely no evidence barring the subjective satisfaction that too of the CHA M/s Shakti Clearing Agency (and not of any officer of the insured) that the damage to the stock is due to "spontaneous combustion". Even as late as on 04.07.2014, in response to specific queries of the surveyor dated 10.05.2014 (page 59-60), the insured intimated to the surveyor that Page 56 of 59 "exact quantity of damaged material: as on date of loss 5536 MTs and 4263 MTs of DOC was stored at Lilly and Jain Godown respectively. Out of that around 1500 MTs got affected. As clarified to you, we have not taken weight of affected goods. However, based on our CHA opinion, quantity would be around 1450 to 1550 MTs". Thus, there is no credible evidence even attempted by the insured with regard to the event and the quantum of loss. Apart from this, it is a categorical finding, duly substantiated vide email of the insured dated 11.03.2014 that wrong information about the occurrence of flames and extinguishment of such fire "from our own fire extinguishers installed at factory (at Mandideep) and that (with regard to) our goods lying at our agent godown at Gandhidham, we are trying to get details from CHA. But we have come to know that fire brigade had been called at Gandhidham and fire was extinguished by fire brigade only". Such wrong statement is contrary to the first intimation provided by the insured and is also contrary to any such first information provided by the respective godownkeepers whose statement were obtained by the surveyor at both the sites and as noted in the survey report. Surveyor has found such belated and unsubstantiated intimation of fire to be wrongly made merely with dishonest intent of getting undue advantage under the policy. It is also noted by the Surveyor in para 5 of his report that the contemporaneous manual day-to-day stock records of insured's stocks at godowns maintained by CHA godownkeepers were denied to the Surveyor by them on such specific instructions of the insured's officers.
21.1 We may reiterate and note additionally, as also discussed supra, that mere assessment of loss by the surveyor does not and cannot amount to establishing by the insured either of the event of natural combustion or fire or the acceptance of such event or quantum of loss by the surveyor. The surveyor, in his assessment para, has accepted the "damaged quantity" of 1300MT as stated by the godownkeeper and the cost rate of 36250/- as per the last purchase bill and accordingly assessed the loss. However, though such assessment in para 9 to 11 of the survey report is also merely on the basis of mere subjective and unfounded claims of the insured, the surveyor has still overlooked the fact that even the add-on cover of "spontaneous combustion" is obtained by the insured and valid not to the extent of Rs. 60 crores as on 21.02.2014 but merely to the extent of Rs. 20 crores. Therefore, the underinsurance factor of assessments Page 57 of 59 would be, as mentioned in para 21 of the reply of the insurer, 16.07%, implying that even if everything subjectively claimed by the insured is accepted wholly, the eligible indemnification would be only to the extent of Rs.51,42,533/-. There cannot be any dispute nor is there any rejoinder affidavit on record to dispute such modulation of the assessment made by the surveyor.
22. After minutely perusing the entire survey report, the repudiation letter and the averments in the complaint and the evidence relied upon by the complainant, and in view of the additional adverse facts and circumstances discussed above, we have no hesitation in reiterating our findings and conclusions as arrived in complaint CC/1214/2016 for Mandideep claim to the effect that there is absolutely no credible and reliable evidence at all, scientific or othen/vise, relied upon by the the complainant before the surveyor (or before us) for responsibly, diligently and transparently raising and pursuing the claim before the Surveyor, in this claim of loss due to natural combustion in soymeal stock at Gandhidham too. There is palpable effort by insured to proceed merely on subjective and gross methodology of identification and quantification of cause and quantum of loss and in relying merely on self-serving, inaccurate and unsupported communications to the Surveyor to seek indemnification for alleged "damaged stock" worth Rs. 5.46 crores. Except the subjective satisfaction and "opinion of the CHA", there is no positive scientific laboratory report regarding the event or the extent of loss. There is categorical dishonest misrepresentation of occurrence of "fire" and extinguishment thereof by fire tenders which misrepresentation is established on record as the same was not only contrary to the observation of the surveyor and the statement of the Godownkeeper but could also not be established through cogent evidence of any reporting to or report of fire officer; and Municipality Chief Officer's certificate does not, in the circumstances, inspire any confidence as the same is not appearing to be in ordinary course and is also not founded on any corroborative material or disclosed information. The allegation of dishonestly obtaining the add-on cover on 24.02.2014 after being aware of the alleged damage/deterioration of the insured goods on 21.02.2014 has also been not successfully repelled in the complaint before us. Similarly, CA's certificate is self-serving and cannot be any substitute for rigorous scientific analysis laboratory reports certifying the event of "spontaneous combustion"
Page 58 of 59and the extent of deterioration or damage in the quality/content of the stock as claimed. Also, claim of more than 98% in value reduction in soymeal stock, "discovered"
subjectively to be due to such subjective an alleged event/peril as spontaneous combustion, without any such concrete evidence of any chemical analysis reports and without any trustworthy, documented and responsible segregation or quantification methodology, has, in our opinion, rightly been repudiated on the grounds as mentioned in the repudiation letter, including that of misrepresentation on double counts of dishonestly obtaining the add-on covers for two policies on 24.02.2024 and wrong/dishonest claim of "fire" dated 11.03.2014, unestablished insured perils of spontaneous combustion or fire, exaggeration of and failure in due substantiation of claim amount including the quantity claimed damaged, and of not submitting, or rather ensuring non-submission, of the vital documents including the manual stock records of the CHA. Thus this complaint too deserves to be dismissed in view of our inability to find any error or illegality, on facts, in the repudiation letter.
23. In the result, both the complaints, CC/1214/2016 and 2117/2016 are dismissed.
Sd/-
( A.P. SAHI, J.) PRESIDENT Sd/-
( BHARATKUMAR PANDYA) MEMBER aj/ Page 59 of 59