National Consumer Disputes Redressal
S.B. Plywood Private Limited vs United India Insurance Co. Ltd. on 25 July, 2025
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION AT
NEW DELHI
NC/CC/771/2017
S.B. Plywood Private Limited,
Through its Director Mr. Rishi Pal,
Bhawanigarh Road, Samana,
District Patiala, ... Complainant
Versus
United India Insurance Co. Ltd.,
Karnal Road,
Opposite Indira Gandhi College,
Kaithal-136027,
Haryana, ... Opposite Party
BEFORE:
HON'BLE MR. JUSTICE A.P. SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
For the Complainant Mr. Kartikeya Singh, Advocate
Mr. Raktim Gogoi, Advocate
For the Opposite Party Mr. Maibam N. Singh, Advocate
Pronounced on 25th July, 2025
ORDER
PER A.P. SAHL J„ PRESIDENT The Complainant established a Plywood Manufacturing Unit in the year 2007-
08. In relation to the present Complaint suffice would be to point out that for securing the Plant, Machinery and Stocks the Complainant took a Standard Fire and Special Perils Policy for an insured sum of Rs.6.50 Crores from the Opposite Party-
United India Insurance Co. Ltd. (hereinafter referred to as the Insurance Company).
The duration of the policy was from 17.01.2013 to 16.01.2014. Unfortunately, on 16.05.2013 a fire broke out in the early morning hours at about 3.00 a.m. and the Fire Brigade as well as the Police were duly informed. The firefighting tendpfs ! attended to it and doused the fire recording that the supposed reason of fire was a 1 i short-circuit. The Fire Station Samana, Patiala tendered Report No. 168 dated 24.06.2013 recording the same. A Police report was also lodged that stands entered in the General Diary (GD) on 17.05.2013 recording that the site was inspected when the matter was reported to the Police Outpost Gajewas. It was recorded that the fire had taken place due to an electric short-circuit in the Complainant Factory and there was loss of machinery, buildings, raw material and manufactured material reportedly of the value of Rs.3.00 to Rs.4.00 Crores. The GD Entry records that the incident had occurred suddenly and naturally on account of an electric short-circuit. The said Police report also records that no one else has been found to be at fault.
The Surveyor, namely, M/s Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt. Ltd., was appointed by the Insurance Company on an intimation being given on the same day, who visited the spot. According to the ■ i pleadings that are now on record, the Insurance Company seems to have on the same day appointed M/s Truth Labs to investigate the same. The Investigator according to the Insurance Company tendered a Report on 18.10.2013. The Complainant alleges that such a report was neither in the knowledge of the Complainant nor was it shared with them. The Surveyor tendered a Final Report on 25.10.2014 recording that the cause of fire was an electric spark and the loss assessment was made to the tune of Rs. 1,19,28,871/-. This recommendation was without prejudice to the rights of the Insurers to assess the same subject to the terms and conditions of the policy.
It is evident from the Survey Report dated 25.10.2014 that the recommendations had been made without being intimated about the Report dated 18.10.2013 of the Investigator.
2The Insurance Company seems to have dispatched the Investigation Report from the Forensic Agency to the Final Surveyor and the Surveyor responded to the same through his letter dated 06.03.2015 giving his suggestions. It appears that once again the Surveyor revised his opinion and on 05.08.2015 dispatched a letter to the Insurance Company stating therein that since the report of the Investigator confirms that the source of ignition was not accidental, the Insurance Company would not be liable.
However, in between the Insurance Company sent a notice to the Complainant on 11.03.2015 referring to the Investigation Report and calling for an explanation from the Complainant. The Complainant gave a reply on 23.03.2015 where-after they also dispatched clarifications on 14.06.2015 and 30.06.2015.
By this time, as noted above, the Insurance Company had received the second opinion of the Surveyor dated 05.08.2015 and accordingly the Insurance Company repudiated the claim on 05.11.2015.
The Complainant objected to the same through their representation dated 28.07.2016, followed by a reminder on 20.09.2016 but of no avail. Aggrieved, the present complaint was filed on 21.03.2017 alleging deficiency and unfairness in service.
The Insurance Company has filed its written version disputing the entire claim and supporting the repudiation dated 05.11.2015, to which a rejoinder has also been filed, and, the parties having exchanged their evidence affidavits, they have also filed their written arguments.
Learned counsel for the Complainant has urged that the repudiation is unsustainable, inasmuch as the inference that the source of ignition of the fire was 3 not accidental, is erroneous, as there was ample evidence to confirm the probability of the fire having been caused accidentally.
It is also urged that the Investigator's Report dated 18.10.2013 presuming that there was no electrical related failure is based on no evidence and the conclusion that there was no chemical and mechanical related failure is also without any foundation.
Learned counsel submits that the presumption of the possible use of extraneous fire accelerants such as kerosene or diesel is a mere speculation without any such corroborating evidence and without considering the presence of such material being utilized by the Complainant Factory that was given in the explanation.
He submits that finally the conclusion that there was a deliberate act of setting of fire is a preposterous assumption of the Investigator for which there was no material available and therefore is founded on some surmises and conjectures.
Responding to the said submissions, Mr. Maibam N. Singh, learned counsel for the Insurance Company, has urged that the Report of the Investigator is based on a forensic examination of the debris collected, in which the presence of Hydrocarbons were clearly detected, indicating the possibility of fire having been caused on account of possible use of ignitable fire accelerants such as Kerosene or Diesel. It is urged that this possibility cannot be ruled out in the given circumstances where a scientific examination of the debris has yielded a clear result of the presence of Hydrocarbons.
He therefore submits that the Investigator's Report confirms the fact that the fire was not accidental and it is for this reason that when the said Report was sent to the Surveyor, who upon examining the same finally gave his opinion on 05.08.2015 that the fire was not accidental and therefore the claim should be repudiated. The 4 contention is that the Surveyor's Report coupled with the Report of the Investigator leaves no room for doubt that the claim of the loss on the basis of a fire was not an accidental claim and such a risk not having been covered under the policy, it has been rightly repudiated. He further submits that the letter of repudiation dated 05.11.2015 categorically records the consideration of the clarifications given by the Complainant.
Learned counsel for the Complainant contends that unless an act of arson is proved, a definite conclusion of any deliberate act cannot be inferred as held by the Apex Court in the case of New India Assurance Company Limited Vs, Protection Manufacturers Private Limited (2010) 7 SCC 386, He further relies on the judgment of the Apex Court in the case of Canara Bank Vs. United India Insurance Co. Ltd, and Ors. (2020) 3 SCC 455 to support his submissions.
Learned counsel for the Complainant has also tendered written arguments on 20.10.2020 that is on record.
Having heard learned counsel for the parties, it would be appropriate to traverse the facts leading to the contest between the parties before we delve into recording our findings.
At the outset, we may point out that from the Report of the Surveyor dated 25.10.2014 it can be gathered that a Preliminary Survey Report had been tendered on 27.05.2013 but the same is not on record. However, a mention of the same has been made in the Final Survey Report.
In order to ascertain the correct position of facts and to appreciate the controversy in the light of the arguments raised, undisputedly the risk of fire stands 5 covered under the Standard Fire and Special Perils Policy that has been filed along with the Complaint. There is no dispute about the sum insured therein or the terms and conditions of the policy and further the fact that the incident of fire has occurred during the duration of the said policy.
It is also undisputed that prompt intimation was given to the Insurance Company on 16.05.2013 itself. A copy of the mail dispatched to the Insurance Company is on record. It is also not disputed that the Fire Station was intimated and the fire tenders rushed at the spot to douse the fire. This is evident from the Fire Incident Report and a translated copy of the said report dated 24.06.2013 is extracted hereunder:
•ntmE. TI^VNSUVTION FROM PUNJABI TO ENGLISH ; . , Phone No. 01764-22410 2 OFFICE OF FIRE STATIONSAMAXA'(PATIALA) Number 168 . ' Oaccd : 24.06-2013 P1RJS. 1NCIDBNT RJSPOlVr * Certified th tn. on 16.5-2013, the N4.''S S.B. 'Plywood Bhawaxiignrh Ko ad, Sanxarta I>i.S'ti. Patixda caught fire details of whicis is as txodcr:-
1. of Osvtxer : Kisbi Pal
2. Susiness : Plywood - .
3. A) Ncu.-tu. acid telephone : 9Si 59-23222 Number of itxforrnaju B) Time and "Date of : 03.25 Oats 1 <v'O5/i 3 . • info r/ntul Ota- T 'l-rtc cc.pnrti'ixr dree to : 03.26* EXato 145/05/'3 pjacc of incident EX} Time of return at File : 15.4R I>ate 6/5/13 Scaiion G) Approximate time of 03 .00 OaZc I 6.45/13 happ e r;. i ng? F 3 rc/l o cid en t The supposed reason of Short CJircuj.it
5. Esutnaced loss 2,Op,CO;OOG/- (two Croces fis per ttffidavit) I. Buildlixe 2. .N-lachinct-y 3. Stock. 4. Human Loss
6. LSctaiis of snatT.vzcm on SFO $h. Xuldip Sine,h, . . 0/0 Sb flem the place of'inctdcnt Rr.j. '0/0 Sic Rua Sirieb, FIvi. Sh.
Raj winder Sznjjh, FNI Sh_ Ashok Kumar, FM Sb. .Harwioder Scxi^h, FM FlM Sb.
Kamddccp Inr.du,-. FM Sb.. SixOarji* Singh, 13/0 Six. Salv/ant Singh
7. Fire Tender went. on. T'B i 1 B.A . 79$>2 p;osc of incident ■
8. Fire Safety Cc.rcjf:catc YasVXo.
('MOO
9. I-Gxmun Loss (7f cioy) SO. Whether ixusured. or not "Y os/Js'-o 1 I. Ar.y ocitcr details 6 The Police was also duly intimated and the GD Entry No. 27 dated 17.05.2013 is also on record. The translated copy of the same is extracted hereunder:
•fRii it 'T'RANSLATlfOFf FROM PlWAB-I TO 4Riipaj No. 27 RaziEimcha Police Post Gyewas Dated 17.5.2013 _____ - 2 _______ 3 4 I 27 Rishi I'^l son of Shri Reporting of Loss Time of enfly Kt Baniirsi Da» DHetfpr 6130 AM, Lliiit ill thia S.B. Plywood, Private time ihc ifif©iTOant Limited Bhawnigturli fniniiosted in the Road, Baliirflanit t&liumn No. 1 olong 9872SOOG35 »with br. FWi. Pst Pal resident of Sanraiw reported fit Somonn by become prssent at Police Post IM 1 am the owner of SK Plywood Factory. On t&e mid night of ttoted I6J.I3 uttibooi; 3.00 AM our'-iirtddtfB® cmployitd itt ibe factory( Wontied me btt phone Uiat our factory has caught fire which h vary Increasing cotiilwiflusly. On Ibis. I wills toy family toctobers reached die 6tf«y ^mediately where the fire was hjghiy spread over. -We wtdi die lieip of lire CMtinguishitig equipisutot-S and laboured tried to extinguish- lhe nro and when unable to controli Oto itre given fim inftrfflcrtlon to lire bi igadcs Snmana, PwJrda Fire Brigade Comrol .Room Patiala to send Fire Brigade Party which reached from Scunana liter? after some Hmc and infer the vehicles of Fire Brigade fem Patiala, «ajpurat Malcrkotk, ftuipur also reached there, wiro after a great difficulty canfeUol Ute fire abstot m 6-7 twwis. The plot of machinery Olid bwldfag, in which Ute mtttoi&cturcd goods and raw iMerial was lying,, Wme too hot due to fire «nd it was dlffitoilt to ascertain die estimnted of loss by entering therein, tn the evening alter gettkig ctoki,, we 7 ba ocmaliijecl. ft seems that j&w talsen plaee dtsa'to ©tecirto short druwit.-
Duttas shh h-esre is tw> husnm loris. I Irtfiva «ome id give infoimttoo. My rapid: ' be lodged and copy bis OMpplfcd. Signed, Mishl Pal attested Slgftecl^ ' SaMb AS1 Jncfeoraia TP Gtycwas Dated Id.5.13, Potleeta Action. The t | I* * * a • & '• | ' 1 < * - i ' Jidbrnurtlm memWsusd ' i» column' Nol' 3 itlong ^itb Ms odsnprfon became pi'cssM and whatsoever dloimcd, wrMcn, and rend over, who after and actalfidos the saim as tree aad. eeriest glfyacd below s3m> stafiemeui la Jsriglisln,. The 'Gempatdoi't also odHutK'd the slatemem as oowoct. From the, above shraemeist, it is fbuod feat the fco tafeat doe w eleetrk short clrouft in fee S.B. Plywood.Private Ihrdtsd Paow tfering nW boom. Thm was w loss to hwffliftn. life due to cfotwro of fewwy. Deo io fare, there la loss Of inagbincry. bnllding ihect. raw .material and morajfbcttwod mBtedoi, rib«m 3 to 4 cruras os per the ,©f'iho owner of tti& ihcrory. Ehls iin&ldfint aas suddenly and Morally oeewrod do© to eteclsio short droufc and no one ft at IMile and ©ven the Inftmrwmt do not want to Imltata ^roeredings ogalnot any one. By entorin-s fee report rogawlfeg loes. th© taformewd was dtacharfied by supplying thexopy of repon. ' • , ' <1 I- . nWBCOPY • MHC a lX5d3 , r ft . (^cundl seal)' W Gajewiu; I ' (IMUU) A perusal of both these reports would indicate an indication of the probable cause of fire as electric short-circuit.
The Insurance Company appointed M/s Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt. Ltd. as Surveyor on the same day and also simultaneously by the same order dated 16.05.2013 8 undertook to utilize the services of an Investigator, namely, M/s Truth Labs. The said letter dated 16.05.2013 is on record. According to the Insurance Company itself, they received the Forensic Investigation Report from M/s Truth Labs which is dated 18.10.2013 and the same is extracted hereunder:
Confidential / For Restricted Use only Filer No. TLH/nF/014/13 Date: 18" October 2013 EQRENSrC INVESTIGATION REPORT ON THE INCIDENT OF FIRE IN.
M/s S B PLYWOOD PVT, LTD.. SAMANA. PUNJAB '
REFERENCE I
An incident of fire was reported to have occutred in the shed of M/s S B Plywood Pvt Ltd., Samana, Punjab on l<5ttl May 2013 at around 3.00 a.m. The Deputy Manager, Fire & Engg,, United India Insurance Co. Ltd., Head Office,' Chennai requested the Chairman, Truth Labs through an email'datcd 16'" May 2013 to undertake forensic investigations into the cause office.
BRIEF HISTORY AND BACKGROUND M/s S B Plywood Pvt. Ltd., Samana, Punjab, hereinafter referred as SBPPL, located on Samona - Bhawanigarh Road, Samana. Punjab, is engaged in manufacturing of plywood of different grades ' from poplar and eucalyptus wood.
The incident of fire occurred on 16,h May 2013 al around. 3.00 a.rri. in the shed adjoining to the office of SBPPL where manufacturing activities are carried out and In the place the fmished.goods are also stored. Soon after the fire was reported, inhouse efforts were made for dousing the fire with available fine fighting equipments. Meanwhile fire tenders were requisitioned which reached the spot and brought the fire under control.
SCOPE OF THE WORK Forensic investigation of Ute incident of fire to determine (he anise, source, origin and effects of fire.
CONSTITUTION AND VISIT OF THE EXPERT TEAM * i * b ■ In response to the request made by The Deputy Manager, Fire & Engg„ United India Insurance Co. Ltd., Head Office. Chennai, the Chairman, Truth Lobs constituted, a two member expert team (DrrGliauendra Misrn) ,1 Ep. •, Page 1 of IS"
| SirSTT
K.K HASIJA
. Branch-Manager
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Confidential / For Rcstrfcted Use only ' File No. TLll/IimM/13.
Date: 18'^ October 2013 fisting of Dr. Gopelji Misra, Former IGP and Director, Punjab F$L and Dr. Ghnendra Misra Former Dwector Punjab FSL The expert team visited the site of incident (the shed adjoin^ toL office of SBPPL) on 21 May, 2013 and iliade a'detofled inspection, search, identification and colfedlon of all relevant physical Mocumentary.cvidenee and gathered all information relating to ' fire incident. ' B BBSCRJfTION OF THEINC1DENT SITE 6 I. Th. tin tffcw sW „„ toM^ ,nM B c(to Moc|t |oswea t(wtab ' comer-of the premises, Sketch S S Plywood Pyt; Ltd. Settiang Pfa, t k Reer Fir© affected shed Office ' r J i open shed I Front ! i •Q
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0) I 'I wood II ' I stack I i' to I _____ 1 Power, supply unit Main gate (Dr. Glianendra Misra) srwjcs Page 2 of IS K.K. HASIJA 'Vi-rich Manager 10 I Confidential / For Restricted Vse only • *■'N TIIVnMH/U Date;, lb®1 OctoberW3 t * * ( 2, (UgJitoppositcrtsB main gate there was a power supply unit • ' 3 Ahead ofihe power supply there was an open shed on the rw side of the premises. .
4. fa. w . M*" W- *• *• •** * *• SW '*"4 ' siocking the wood.
I® MMtwia fi i!l«i ES®lm rassO ^rasw § 9 Si Fire afictned shed 5 Thenrearieclcd »h=i^sml':feuP'>f'irlck"'i'l'Ia5h=stos3hcetsI<)''f'■ • 6, > fa him fa< wjM »,f« w ta ***• " ' •■" •" * wW°"s . in front (md 3 gates in the rear sulk , ,/
7. Tte.»,'W 23 !4 *"*»• of "'"r'* tal ''• *^Wl1' • , ample Hoi ftirventiiatorsontheroofof the'shod; ' ; , < I, fa (fam stem of fa »of W Mo H Pl«« * "*<••*» *• - l*'"i"8' t iron beams were also found Misted and deformed to heat « I » (Dr, Chaiodra Misra) • Page 3 of IS gTlWf USFW* K.K. HASUA BriHitOan»F 11 Confldchtial / For Restricted Use only File NO. TLW/I1MI4/I3 I Onto; 10^ October 2013 OBSERVATIONS I. The expert team undertook a detailed Inspeetion of the entire .fire affected shod area ■which consisted of sevcrnl machines used for drying, eore drying, glue spreading, hydraulic pressing opertitlons Involved in the manufacturing of fno plywood.. There! wore several composing tables adjacent to the hydraulic press, ! Shtchrlre AfiqMW S 0 Plywood Pvt Ltd, Sainam, Pb. ' Roar i.irwiTTm...... jmnnT,--' ----?=*
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2. On one side of the godown the finished goods were slocked.' « (Dr. phanendra Mlsrti) K.K.HASUA; ■Pardons ' 12 a Confidential / For Restricted U$o only FiEe Na.TUr/HF/014/13 Date: JS'? October 2013 ' . I « 3,' On a minute inspection of the celling and walls of did shed the cfYecis of burning were fou^d ■ ■ ••■■■•, ■ ■• - •• • - \ all over the interior pans of the shed. Tito burnt, semi burnt tad charred wood pieces were found all over the area..
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4. The oleetrical insialhtions. fa distribution boards, driers, core driers. gluc sp^ composing tables, hydraulic machines, burnt film applying machine, film rolls and burnt . metallic cable/ wires, plastic conduit pipes and ply boards wera found damaged due to fire.
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Confidential I For Restricted Use only File No. TLH/IIF/014/13 Date: 18th October 2013
8. The aluminum strands of cables have been found melted and die burnt marks of Insulation .of cable-were observed on the walls indicating prolonged burning effects.
9. Most of the switches, fuses and distribution boards 7 boxes /' cables have been found extensively burnt out except distribution board no, 2 and.its cables.
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Confidential / For Restricted Use only File No. TLH/IIF/Qi4/1J Date: I8rt October 2013 * J r • ill P !y 4 1 ■I Burnt suspended electrical wiring and conduit pipes e> II. KaunsjiuofbumtoutOoxiblflwwwMllbrMiinectuigvariaiseleciriardeviceswenjfouiMl suspended from the roof beams in the shed; • <:■ •S3 fi: JraS , llll 'Ii®w !h aSraRiE ' .'KHWaS "va?^Ri7aBH^^Ea^RnKmBnBflHHQiHKiSKI1'* C£@uSsMKHD^^^S2^HS^ffiHRKHWMwn9nB9ffi 11 WAl Wte'ltohS^iircijfervail^^ ouuidstheslied, • ' ; -
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* Confidential / For Restricted Use only 'FilcNo.TLH/IJF/OU/13 . Date: I8lh October 2013 I INFORMATION GATHERED • ♦ ' f • During the visit, the expert team interacted wiflt the management of SBPPL, Mr, Rishi Pal (Board of Director), Dr. Prcm Pal (Board of Director) and Mr. Ksrtm Gupta and obtained relevant information relating to the unit and the incident of fire as follow's,
1. Mfo S B plywood Pvt.ltd., Samaria, Punjab storied production around January 2011 after completion of construction which Began In 2010.
2. It manufactures plywood of different grades, 4 mm to tf mm, from poplar'end eucalyptus' wood. It Is equipped with electrically operated driers,"core driers, glue spreaders and hydraulic press for different stages ofplywood manufacturing process.
3. Tube lights / compact flowccnt lamps are switched 'ON" round the clock in the shed to ensure safety and security. , . .
. The production work In SQPPL takes plate during 9.00 a.m. to 10.00 pun.
5. to fecilitate fire fighting operations there Is n provision ,of fir? extinguishers, hydrants points for sprinkling of water within the premises in the front and sear* side of the unit, In case of emergency, *
6. When fire occurred around 3.00 a.m. on 16^ May 2013,'strong winds were reported, to have been blowing. The management promptly reached the .site-and-requisitioned fire tenders. Meanwhile efforts were made for dousing the fire with available fire fighting equipments till • the fire lenders reached the site.' >
7. Soon after the arrival of fire tenders they were put into service. Bull dozers were used to make , :■ access into the shed by removing the obstacles. As the fire tenders arrived they were pressed into service to douse the tiro till smoldering fire was also completely brought under control. 81 An fire had occurred in the past about one and a half.year ago, the actual' cause of which wss not ascertained.
9. No manufacturing operation was in the process on the fateful day at the lime,of initiation of fire, (Dr. Ghanendra Misia) 'ep.
Page 11 ofl5
' K.K 'HASIJA
s,vh Manager
A- 19
Confidential/For Restricted Use only J
File No.TLH/IIF/Q14/13
Date: 18w October 2013 :
physical EVIDENCE collected
1. The follows amples of debris eoniMnfj of tatt I SMta( wtd mltrt m ooltaed ta> <H different pleoe, io the'shed,«shot In the tad, «,!!„. fy, of any extraneous fire oceolenmts used for Initiation and ignition of firet; a. Sample 1 from front left comer of (he shed near Power DiMributlon Board No. 3. T b. Sample'll from the |eft side of the shed near Power Distribution Board No. 1. , ' • c. Sample in from the front side of the lshed near Power Distribution Board No, 4.. d. Sample IV from the rear side otthe shed near the Drier Machine. e. Samples V and VA from the rear side of the shed near the Glue Spreader Machine. f. Samples VI and VIA from the from side of the shed near th e Giue Spreader Machine. g. Samples Vll from the front side of the shed near the Hydraulic Press Machine.
2. 'Samples of raw, scml-bumt and finished wood material categorhd as A, B, and C and samples of adhesive glues and finishing liquids used in preparation of plywood were collated ' for control purposes. > ( ' rl RESULTS OF CHEMICAL ANALYSIS 1,. GC-MS analysis conducted on four ftpresmative samples Of burnt debris to analyse the chemical constituents revealed the presence of hydrocarbons hi the range of CIO to CIS j indicating the- possibility of ignitable fire accelerants responsible for'initiation and rapid I, propagation of fire?-™ i , """ ~ I l 6C-MS analysis of two refciwca otih,] salnp|K ustIi |n u, miinfmniri„g adhesives filuen and finiallins liquids rerakd the presence of TO hydrotarltons rallng out Ito »•.
*4 possibility of substrata materials acting as Initiators or propagators of fire or as interference products in the burnt debris collected from various locations. • (Copies of the chemical analysis reports enclosed) i • . (Dr, Ghaneadra Misra) K.K. HASIJA . Page 12 of 15 Branch Manager 20 tf FileNo,TLH/nfi70i4/i3 C«"M«itW/F(lrlUiirfaaH)leM|y Date: M* October 2013 INli'ERENCES:
a XZ c2X«ci<*****''-*!!? • iratHto if »Wy IiuSck the b.
XZi'"nr" ' "y Ot *'" "* c.
d. « no otatai p(W!(, .in |he mmi,rsi,W|)g Ktl^ j " ^'P^^anicaircflcttofejeadlhgtofgriitioftaffira .
Tlw w no oiher natar^reMojwax* m lljhrtj or ■ ■ S- _«« «awtarol b tan toll >y ^nicona to initiate fire nt multiple source, M ■. t (Dr. Ghancnrtm Misra) i ^•K .HASIJA ■ 'wnch (Mnodtfej. *' • Pago 13 of IS 1 t 21 y Confidential f For Restricted Use only FilcNo.TLH/nF/014/n , Date: 18lh October 2013 CONCLUSIONS Based on the thorough and tfadtylh Insjieetlon ofthe incldeniofflrc occurred in the Shed ofMfc S • B Plywood Pvt, Lid. located on Smatta - Blmalilgafh Road, Samana, Punjab on jMap, 2013 4 at about 3:00 followed by fl series offorensic investigations, mtatysls of physical evidence, Il Is conduded (hat the Incident offre was, ' a. not on account of dccirlcd relatedfailures, b. not on account ofchemical au^ machhidefd rduted processfailures,, c. not on account ofnatural or accidentalfactors. ' d The detection of hydrocarbons in the burnt debris collected from multiple sources indicate '• that fire could have bean on account ofpossible use of extranedus'lgnilable fire accelerants such as kerosetic or diesel oil to initiate fire at multipla locations in tile shed leading Io , gencraiion offames and damage oftnachlncry and stocks lying Inside, e. Sudi an act of deliberate setting offit J could hued bean accomplished by someone who was responsible for tha damage without director Indirect Imowledge or hwolvcment of the management.
« (Dr. Clmacudia Misra) . Director''Con.
Truth Lato ,
' Fcrmer Director, Punjab FSL
i" ■
J.
& (Dr. GlianctHlra Misru)
3W WW 1 , Pago J 4 of IS
R.K. HA'SIJA
, Branch MaiWjfcr
22
Conridentiui i For Restricted Use Only File No. TLH/ll.F/(jl4/l3 D&tc: IB1" October 2013 ' DISCLAIMER: ~~--------- ..................... .. ..................... Titit report tr confidential and reilrictetMn nature. The report b btued bated on lhe 'phyticat. documentary andearbal evidence collectedfrom, the mailable cowca tby r Hia expert team Labi ...
L... in tha praceis w of /Oreitiic invcitlgaiioni. The report b bcuedwfthoulprejudice to atyragency Or MMdualforfurther action} ' keeping In view, the otherfacts and circumstances, & « (Dr. Ghancndi'u Misrn) $TOn uwa> Page 15 of IS K.K. HASIJA Prari.'h Mnnacet .
The Surveyor visited the spot on 16.05.2013 and the Investigator had visited on 21.05.2013. The Surveyor after having collected all the information proceeded to submit his Report after making enquiries from the Complainant on 25.10.2014. The same is extracted hereunder:
23Cunningham Lintfeey Intcroattonai Insurance. SurvoyOrs and Loss Assessors Pvt Ltd. Cunninpham (Fenncrty Cunningham Undaay JrVemntlociql Pvl.Ltd.) S'^/iMr, PwwCt'KlHsr, SCO IG-|ii'.rctazti&)na,l jMfil, luflhhru. liigdi OLindsey ■ Tiitpili'a • S! 1S1 4E12!3a fnMnUG r si ifii-isssaw £«rjtes»(rijiss<nJtrM'>i:hjiisfflJ?<lseyn<!l ' United India Insurance Company Limited, Branch Office, Karnid Road, Opp. Indira Gandhi College, Katths1., Huryana. i ■ir$4iYz ' Ou? Refi 23/101/0274UFSR \ Date: as^OctObsflOid ■ FINAL REPORT PREVIOUS REPORTS Immediate Loss Advice Ref: 23/101/02741.4L.A dated 271" May 2013• > .
POLICY TYPE/XO. Standard Fire A. Specials Perils , Policy .Noi 110705/11/I2/U^MGIM|7. pelicy period 17/01/2013 to i^r/aoir Entire Building of A class construction above plinth level Inch boundisry walli alongwilh office - block insured for Rs. 1.80,00,000 on R1V basis. Emire P&M'incL. accessories • s instalied and fitted insured for Rs. iXOMOO on WV basta, , • \ Entire Stocks of plywood, raw material of plywood, semi •-1 ,\ '■ A finished and finished gauds whilst lying storedjn factory ■;l / premises including processing area, insured for Rs. 2,00.08.003 $ (rtfer Poitvy wfrfr Insured description ride Anmiture endwed with survey report} CLAIM NOT-- Please Provide | . X .MSURED Catutra Bank ChliOli Baradari Paliela A/c M/s SB Plywood Pvt.
« ■"
Ltd.
Bhawani Garh Road, Sadtana
Disc. Pstiala. ^ujyab •
4
OCCUPATION Manufacture of ply and block boards
TIME, DAV, DATE OF At about 0380 hrs on I6lh May 2013
LOSS
SITUATION OF LOSS Main Shed inside lhe premises for Manufacturing cum Storage,
Size 380' x 80 fcci. '
J
ROOT CAUSE Fire, due to electrical short circuiting.
NATURE, EXTENT OF I) Stock t Stock of various types like core, veneer, phenol,
XttiSSSSSfflS^ ' ftw®! jWKSttSS'
ii:raKo,721b)ra^«aiS5.MD»l ' '
HflwabM. HWIt- "iac. IWW«> l«a<.Ut»iw«<udV4ni. Murtil- Mi pen P«'»' Ropsr *P» O<ilU11
&»««> u»4*rta>aAr«AAUiaamAf/JU>t«t) * «nT37TT TT573dV793
24
Cohtinussicjn / 2
a
Gunmndiam ® '
©Lindsey
I »
' DAMAGE formaldehyde, film. face, shetleriniJ base' premium, paper
treatment chemical, block board, plyfend Flush Boards etc. in raw, in process and finished stages was found burnt, gutted, wetted, heat and smoke affected and dnmajjed.1
We condwted physical quantlfieaticn of leftover safe stock, specifically relevant cxciiinble commodities to figure out the balance stock less. Further, dimensional measurement of some affected orcas was takeii U: deiermitK volumetric quantum of affected stock that got badly burnt. Physical quiniifiaittoh of visible, burnt damfigcdi stbek was also conducted.
4■ J. i '
2) Plant and mn'dilncry ;• Folio,wing machines found severely burn! with their parts & electricals severely burnt, defonned, twisted, heated, melted and damaged: . '
2.a) Core Dryer Machines lb) Hydraulic Press Machines 2x] Core Dying P teas M ftclti nes , I 2.d) Steel and Aluminium Sheets 2,e) Working Tables and Chopping Machines ■
2.p Coidrol and Electric Panels^ cables, wiring, liglniftg etc.
2.|0 Steam Pipeline with insulnttoivic.
2,h) Similar Machines, accessories and scares irwmltcdflymg inside the shed.
3) Buildinn't-
A A '■j . ACC slteew found severely burnt, item!, eraeked and shutters callapsed, Mcinf Truss of the Roof and Brick Walls. 5.7 RCC Columns of the aft'ected main building sJtcd were fbwnd 'e severely burnt, heated, twisted, misaligned, deformed and damaged, nebessitmisB reconjintetion of affected portion of the mifin shod structure. , , ' « ShTERIM PAYMENT Nil RECOMMENDED . EARLIER RARUER RESERVE Rs. 1,75,00,000 vidi Immediate Loss" Advice Ref:
recommended 2JH0l/D274i/ILA dated 27'*' May 2013 later revised to R$.
s 1,25,00,000 vide emails.
*>• (Icns cite» A < j?A aP fUof. M*3HH> ImibW* (Vox 0MW < K ra* OsVi ■ 1 'DIM ' " ft(t/I F'H S0,C#?i
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■
. K.K. HASUA
'Jrwh
25
Cosiilnuiiilon H
C^itwihdw®
-tndsey
Cross Loss
CROSS ASSESSED, Assessed.
LOSS Stock Miichinci ^laiwisfu. 'US.SS.JSS
IT
~ 4473009 -- 19486981
Net Loss
NCT ASSESSED LOSS
Stock MacWry. BuiSdltUt AsscMied '
ZjOB Tstol-UViM
SETTLEMENT fu («<it of Policy duduttible)
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available
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CflnBnun|ibn/*l ■ Cunniiwham ®"
OLindsey
IXWIVB SUMMARY
As uiidtiWOtl wl withered from ite Ins^d, diirine time ef survey end as fisrilter observed ■ frofti ihc Police rind Fire'Staiion Reports subscqwly provided by" the insured, it la observed (hut m aboisi 0300 on I6"' May 2013, die bisured (owner) goi a telephonic coll from the •. fuciory security gumd about fire Inside the Main SW upon which tire owner with family \ mernbeio proceeded towards the factory, Upon wuehlnft die fiteiory. they olotiswhh labourcra tired faclr heat io control fire usit^ extlngusshcrs and watar however the fire got uncontrolled shortly afterwds. The Ifisured alerted und isiephoned Fire Station, offices of Samona, Patiala and Coatrol Room.
Fire Tender Vehicles reacW Use site of fire within 20-25 minutca of 'being inforrned ad started
- exlingulshtnr, Iterfis®. Subscqucirtly, firs tender veiiides fiotn adjoining Patiala,. Rajpuro, ' • Mfllerkotta and Sangrer also reached the factory and participated in extinguishing the fire in nexi • hours, . ■ , 1 The insured and their workers also klpctl lhe brigade stuff and fire tenders to coatrol the fire scene.
The Police Station was nlso informed of the Incident who inspected, verified the Incidence and issued their DDR.
' ' During survey, ii was observed tlw fire flames end smoke had engoifad a miijor arert of the Main Shed inside Insured's premises that was being used for the mamsfiictiiring of plywood, block boards and flush doors of various types and $l»es besides their storage.
•A oinior part of the Main Sited area suftaed burn and heat damage.
Ii was reported by Imred's representatives, labourers, eye v/ifnenses etc, thru the smoke and flumes kept on growing io intensity very rupidly inside the Sited,, before the 'arrival of Fite Vehicles Le. implying to spreading of fice, Within no (line. It turned massive und hampered the fire figbiing process by the lime fire vdildes reached. ,' Tbc hem1 of fire mid rti&lng flames was so intense (hat nobody could go near rhe Main Shed, ' Thus, access to the shed was difficult for the fire fighters. Thu fire fighting process took approx. fi.7 hmirs lifter which things came under comrol and the fire lenders icturncd.
The wooden remnants kept on smouldering for (text few days and witter wM splintered over it to . iivolil any rctunence.
As par Police and Fire Statioii Reports and discussion with Insured's representatives, eye witnesscs/workrs etc. and, ns per our own verification during tturvsy and later, the cause of fire eppm tc be etorical sJinrt circuiting, - , , ' * ■ J Of<4 A«a^v r 'M-Wtfi IhfliMWl Mjfl, • ii, NfW fftiil x Otl PjapoiMi'S* f^oqoj rtfcf V raniH) !8I' >i,u,i«nip> nwi*,«)»«. Ufai.«(«,i>,K».hli|jMlw».Ai«C»w Uwewfligfei* HWA'l'^IUIM >.tS ....
51W WIW
t* t T » ft. , .
, nav HASUA
Tmnch fonm^r
27
Cor.tssuimfoii / 5 - Cunninpham ® .
©Lindsey
INTRODUCTION
W&re&dved ingu-uciicns ft'Orti your RcgfonaJ Office, Cliitncligarft w aUput l^flO hrs on 16**' May 2013, for survey ni)d lo£5 asscisment of Ose ftbove-memloncd elalm. In cornpl I Knee,* we inirftcdiaiely ciitnblished contuci whh ihc Inaursd and visited afFccted/lnsurcd premises at * CwdJtinttft at about 1700 hrs on same day when we inspected dtc affected premises and \ 'examined damage to stock, machinery and Guildlnai visibly burnt and damaged due to fire that hadoccufrcd in the ifiterveninu night of island l(r May 20M i.e. 1700hrs on Id' Mny20l3, We verified cl reamswees lending io loss and discussed rcfisons pertaining io the cimse of fire with Insured. |
- We suned invest »ry inking of wafts- Mock of all kinds (Primarily lUw Material and finished
- Goods} lying inside the affected and unaffected skc^j wkhln-the same pcmlsea. The physical vcrificaiion of lite Iftventwy Molt few days contlrtuotuil)1. ahw comprising mtr visit? of 17" and IS® May 2013.
• After doltig above stated activities i.e. physical inventory of safe Stock os on date, wc r^ucsted the toured to provide us deituM estimate of repairs of .affected machisery and building, before proceeding ahead with repairs and rest&Ttitron of same. We Mbsct|ucntly visited on 26"' May 2013 io conduct welgjim ent of the beml remnants of cd rc/stocks etc. and .verified few available estimates cf assets.
W« had also visited their premises several times ihercaflcr i.e. I" Jirfie 2013 and 7h June 2013 to(. verify the ostiffitites of repairs for damiigcd assets like P&M, Building ctCj when dismantlement of sasflit! was dorie or in progress, to verify and corrcltnc ttamc with dismantled machinery etc. Besides. w« wished the premises of a miyof machinery repair agency at M/s Woodmac gngifieem., Amritsar On 12 ■ June 2013 and agpin on 16'" htnc 2013 to verify the dismantled and . under repnira machinery.
The Insured's reprcscniarives also visited our cflke several lime? and provided us claint related • • doeumenw. After receipt of the claim suppoftieg documentary evidence Sneluding repair bills.for assets, wc visited the Insured's pretniscs on tr Sepiembjir 2014 to correlate repair bills and . verily rei mimic mens.
nftKliRlGAnK
r.„. ,„«■■/„ REPORI: ' K
• ' The fire was exiiiiguislted by the FirctBrig^le Staifoa. Sartoim who issued 'Fire Report no. 168 tlAicd 24/0(i/20lJ. ' ?' • f On pemnl of fire report, it is mcfitldb.ed.<hiil.around ^25 hrs on 16.05.2013. fire Incident occurred inside M/s SB Flywood Pvt. Ucl^lpwaijLG&rit Road. Somana, Gist. I'atialn^iyab which wns exiistguished by IS48 hrs. Due to lire, loss io stock, machinery and building roof is stated to the tune olif fts. 200 tats.
iXw I « RiftBLUM fli wrf
HrtWhsifH.'ad'tMwMitV'KfirfU'WN'IitffflMtfliiVui V.i'senr-afft)J' h.iU.'Ihns.Rib..mO• M?, w|
K.K.HASIJA
Branch Mnoagcr
28 K.
Ctmiinualipn 16 • Cunningham ®
©Lindsey
o
Cause os'fire is stated as ciee«ica3 short circuit ing.
a POLICE REPORT :
The intident was also reported io the police and as per the O.D-R- no. 27 dated 17/05**2013 issued by Police Chow^i Gajewas. Disli Patiala, above stated circumstances are elaborared/cwrobuTated. Due to fire, loss to stock, machinery and building rcof is stated to the umc of Rs. 30O-4CO lacs i.e, 3-4 Crares. Cause of lire is stated .as accidental due to electrical short circuit i ng. ,.
DESCRIPTION OF RISK PREMISES •■ The premises is surtiiuttded by agricultural loads on its three sides whereas it main gate faces pppr^inh mad that leads to ncsrby Main Bhawani Gath Road. The Premises has a no. cf working sheds with Main Wotking Shed of size 580' x 80 feet. Rest of the sheds are bailer shed, pee ling machine shed. Generator shed. Glue Cattle Shed, Weigh Bridge Room., Seasoning Chamber and Sheds Adjoining the Main Woiking Shed where slocx is stared and processed.
t... . to state wood logs and peeled Similarly, large open spaces inside the premises are uiiiized coms. Premises and Localiml Plan is given below * r 4 rin/i,Ti^rT5Z«rTiF«Ii»Frrwr? "
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E?/;b vu^iaii'Vcssupinirv'W^^s) K..K. IlASIJA
_______________________________________________ '1''jficb franaJN:___________
29
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Ciinrii.n<sham ®
GLindsev
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E^hrnatvi^Ir^^^W Shed D.unwgctl by Fire "
i -KaasaiKfe^ai^S^E^
• I • 4
OBSCRIPTION OF MAIN WORKING SHED AND PROCESS The muttu&cturing of plywid. block beards ml flush doors of various types and slices Is done made the Main Woitt«fi Shed which Involves several proeesyes from dryirijjtjf cores, seninn, "adhesive borxhni;. assehibling ofcofes and blMs.-'steaisi/het pressing, jawing, safidatijj, grading io limsfiing and storage. The Main Shed, is a single cohirmiisieatmg sM with all moehinc? and , •sioragc area in sequence for easy movsffieiii of ik inaierials. The'dispai'cli is done from .the ' storage area ol the Multi Working Shed tfirtxugh. one of the steel rolling sliutiers at unaffected * k JtJ Ljem cJoiitasrc • -snwr swyas t KKHASU a 3 ranch Marta^er 30 Continuation > 8 • . Cunninoham ® ©Lindsey
-25^ n KfiQHHMKBSsaaQIfllMREinCHSBHa^SKMSUflSMSuKauS Main Shed with badly damaged stock, bldg, and machinery gS3>lBg*4> . ' '. ^■"
ssj^i'-jss $ ■ S ! • *i SrT^/SfiSffi rz " i ^v^egWgJS r-^4f3£S£ 3 View of damaged stock of core and Drying machine at one eind of the Sled 'fel'O^Cr A '2'A T^ffar.MOdPin hruw^Ar?* frt±rt:D«h,ftta>mi Ciwiwi.Khii'i AAnrMa* I. hvw Otfti • I'3 Ma |XWAL f&facrMHlh&OXl IXIXfrAiO. JTJBt Mil ««>vaoeMtiwdnfttFJny) • 6'ar<xr Atm4*M< Awm^M •©«*£»•'•' 0**«3*ms«*' e>MrnX> ChaHd|>fl.'bil> < Oum Mb Grdl HyoraM- Hitt> n?M' Jtou* RfUHuCtotoL'Sj«raP Minttao fUror*- Mc«w Swrt' tyiMv.wiAaprfwvftAflMA ?TRffT ffff^ERP _K.K-HASTJA 31 Cmtlftuaii on f 5 Cunninrham ® • i ©Lindsey ■ ©' L r '< ■ w •f.
View of d»m»|ed building jf rw er u re »t one end of ike Sited near Core Orylng MmMiw r 'r to <* asi j a ta> ^wof*»v7^/to&i nffiiibhed Cocdi irtifde thaMMefWoHcMb Shcd<«ontiirii other end) •worai W,nw«lt)«(W»|W. ri»M* ! hil4w«**WfftK«W ?!M£^tgg.lte»"efeg.iC. m-y..^.J. „f®. ifwSHJ Mi I'iwK at* ttaitM MMrAi» MiMWii •lw8Wt> S'sitwiw'' W«M'ewa(Hh< WW< 0***1** anew** Hf*•*»* |>W> <*»•■ *!lrtiM*rt*4MS,r«< tfcirtii Wrft Ik* VUMIlUUMUfeWkMMWWt M** new nrar jnrwa ,$.K. HASIJA • BrWli MRMjer 32 Coniitmllon/1& Gunnincham ® OLindsev ©' i * 5S1 BfllOMlMIBli Vim f»rsteck of vsirfous types tying is cpea autaWe the Malin Worktai' Shed FURTKER ACTION 4 As eluboraied eiidier, during dur subsequent visits, we completed (he inventory of safe stock and ! aha verified extent of dtunage to Biaehlncfy and building. ' ;
We 11I50 discussed the aspect of salvage realisation with inc Insured during such subsequent ' visits who declined to offer for salvage a$ the stock of wood was badly burnt and gutted. However, they were randy to discuss salvage aspt&i for machinery and butlding'and ooepeniacd in this regard.
We discussed a range of issifts and colltxred partiaWbalaisce claim .Supporting documents during several visits at iheir premises at Somann, The Insured's representatives also visited our office and provided u$ claim related documents and sbbmiced clarificaftans related to stock, machinery and building loss.
I After receipt of the claim supporting doeumentary evidence, we remained io cnnjiani touch with ' the Insured who submitted balance of ddCuments/ir/orms(ioffl and fl'l?btB(|cndcd (0 ottr queries and provided clarifications related to thctrchlmed items. > ,.• , ' • • ' ,, PlKMjfeteTV JiiWf »i« liriinNp. s^U*M<iyjMJlj3 ' ttiijecudiuiailti^tff', > -jaK£»-44X„„, jrexboi «nnj»fuir.Htniateir Hrusiraiwi,enure;SisrtMJiir tMW'CusuiwaiHMSiuffl '«"• '■•*.'■ oC'IIUfT Stott ww ■'K.K. HAS5IJA Hfianch. Msitio^r * 33 Conlinwiion /11 Cunninrham ® (□Lindsey • During our several visits to their factory premises at Samtma, we also verified the ^restoratiem're- instaiemcnl in process of several items pertaining to the building and machinery assets, as insured under tkirSFSP Policy. We also physically correlated same with bills submitted on * purchase of new machinery against damaged machinery.
■ The last set pertaining to claim of stock, machincty and building etc. was provided to us sis August 2014, based on which wc proceeded ahead fo finalize this survey report and respective assessmems under the policy.
NATURE and extent of damage I
s
- Frtfowifig insured items were determined affoeted/damaged due to fire t
1) Stuck: Slock of various types like core, verier, phenel, formaldehyde, film W. slwring base premium, paper irealmcnt chemical, block board,^ply and Flush Boards etc, in raw, in proem and finished stages was found burnt,5gutted, wetted, hc£t arid smoke affected and damaged.
We conduc-tcd physical quantification of leftover safe stock, specifically relevant excisable commodiiies to figure out the balance stock loss. Further, dimensiomil measurement of some affected areas was taken to determine volumetric quantum of affected stock that gut badly burnt. Physical quaniification/weigjtmeni of visible, bumt/damaged stock, remnants was also- -
conducted to correlate with balance stock qty., whenever possible. : <■•
j *
2) Plant and machinery > ?
types of machinery .lying insids working sSied got bttnrt, gulled, melted, overheated, r Severat deformed', misaligned, bent and damaged.
Following majcr machines found severely burnt with their parts & electricals severely burnt, deformed, iwisttd, heated, melted and damaged: . ■.' ■
2.a} Core Dryer Machines £.>,Rrsw \"
2,b) Hydraulic Press Machines
2.c) Core Dying Press MacWnes
2.d) Steel and Aluminium Sheets
2.e) Work inp fablesand Chopping Machines , . 2.1) Control and Electric Panels, cables, wiring, lighting
2.g) Steam Pipeline with insulation, etc. 2,h) Similar Machines, accessories and spares installeddying inside the shod. • . . -
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BiuKtiss:MnsAbad. >ww&^-OjnjW:rtwtHwwCtairt",Ciir>!ii$iibaiai.<&naU'»iflams® swrjRisgjsp Mislj. Mftrf • fipp ivdJta. IflaiUctartcaisra. Uurt* ..H HKfcJ. Kuhl. llAS LIA .S«-. ' n^, . M! Bfilrith .. _ Wanar/jr 34 CwinuaHon /12 Cunniiicham ® OLindsey
3) Building ACC sheets found severely burnt, heated, cracked and broken, shutters collapsed, M«al Tiu$s of the Roof and B'rLck Wills, RCC Columns of'the affected main building sM were found • severely Inimi, heated, twisted, misaligned:, (fcfonwd and damaged, necessitating \ • feconsirucuon of affected pciftion of the inain shed structure, Against above claim of die Insured, we have independently dctermii'.ed quantities and extent of damage to bumt/damiigsd items itn alignment of the physical .verification conducted duristg several visits io factory and repairers premises in presence of the Insured.
Please refer respective -issessrnem seciicns foff detaiiied calculations on deiertninaiian of (lie nature and extent qf damage with item-wise quamilies assessed, valuation of loss utrfci respective heads, Photograplis depicting ths damage to Insured prepertia are enclosed.
CA1J$E OF LOSS ! Fire, The insurers deputed a forensic investigation agency M/s Truth Labs, Hyderabad 10 carry OUI forensic investigation and dcicrmtne the root cause of fire.
I They are refiertfit! tn have carried out investigaticn afinsured's factory and submitied their findings in their report, directly to the Insurers. WMIt. foe IhStnCrs may coflclufe foe cause of fire in reference io ihC forensic agency's; report and observations, we are hereby discussing few probable originating, causes of fire, only foe Insurer's record, that were analyzed! by us ai the time of • f , survey;, I) FJecirie sparldug Appears Most ProbabJc, as the affected Shed was found fitted with a lot of elettric wiring/'cablingfloose joints, tilting points, panels, switches, and fittings, . 2) It is leiriit tlint smoking Is banned inside the factory premisej. fiirtjier thf Tactcry was closed during night hours and no labourer was inside the premises at lire tiiinc of occurrence except the guard who was also not inside the manufacturing shed.
J) Employer employee relation was reported healthy. Malicious damage can aceordingiy be ruled out.
4) Spontaneous combustion for wood that was kept under proper ventiSaticn k being railed art. . 5) Fi re from stock undergoing any heating or frying-process is olso ruled out as the factory was closed after day's opfirati tins at about 7 PM of IS111 May 2011. |'£f . . 1 5Sfflx®i&wwsa?• >«»«"
UtirdaNa,f?2AOi'Uldi0iHJ.2OliJ wwsM.owrf'MWMiid>wfwil» ■ hUSSmssw0 cianygKjt-Txa-me^ fecnataaa 'Sjrcra'y aixtuatUMf CM-ruU Cravfotnr ggS<C'^ni!lw>>ffW*1 Mki>.t>a«n> iiW'1 «•<"'»■ «aaMxa«»4.u-ine> uunp i«&i> ki»w , Sult. ' Tf „ ir Ik.k. HA&mA "
Branch Manager 35 ■Coiiiiwion '' Gunniiyhani ©Lindsev As dcscribsd above, we observed that ihe affected Shed was eleciriwtly wiccd and ruled with light! ng, fix lures, mniiy of 1 hetp ^ciualty gel Win Brid heated during fire, Om of ton linving, bursi or ptmcwrcd/shwi eircukedtyjaAcd it jcint, etc. is a strong, probability. \ We. enquired fluiter and gftiheicd tlmi itie Bctory was off and uct-epcratioiial during d«rc of lire, being nishi due Id which the Insured (owner} was also in iheirlwmc uni1 got ■infoimecl of the fire leiephotiiMliy by iliclc security guard: We aKordioftly checked, with the Insured who fcascr.cd that although the fusciory was uiHttpersiilcniiii! at lire time of oeeureence, the power sappiy io ficiBry hnd retnaln-sd In ua-disccmnected s'aie for'lighiing etc, purposes, Tire Insured infoimed (hat there, were several mini pttixls insiniled Inside ihq shed which were procedurally ■*' no'.swindled off as ih® oidrc sreaw lit during night hours for security/safety purpese.
We reviewed above, cross cheeked with tU wopWijwirti and learni that power $upp!y"io factory indeed remains powered during nighl (tours for lighting purptMe. ' Akk-uah ihc Insured ^isied ihni main electric power panels wiierlng to heavy macMacry were swltdtttl off dudng night hours, ysi ws feel that there is also a, possibility of ihclr remlnlag inadvertently in Bn-di§ctjnr.«ci.ed stnic sometimes, priicularty dudng the night of fire, Therefora. the initiation of short ciraiiiingor suiting CQuSd be froraijciiits. leaked/punctured eleeific wilting, cabling or bursting of bulh/iubeiight et.fr. Installed in th® shed adjoining to or ilea/ lite place ofMOtage ofaiccks inside ths. slhiCL Tire.kss appears to have oeeyrred <hre iti electric short etoili o? similar eltcldwil r®qfts, resulting to emissibn of Sparks which would hnvi: fallen on ttocfc of wood etc. lying beneath or stored fr&uby. causing their Ignition A epjp'.ian into names. Tlx lire so started would have spread and engulfed a nres of the entire shad, followed by bumlngand hern damage i<) stocks. • , Vi * ■' ' i lit view of above, it is iwonebly felt ihm pretebls reel cause of fire appear? to bu eteeiftal spnrkingt'shon cireuiima. The root taiae Is evtwuaiiy kft to the obsemifons/wnduoiofl. iiitsdc In the Forensic Report wiili final decisiiin chat Qt the Insurers. > PQ1JCY LIABILITY The root cause wiih'liability'tinder policy is left io the cb&fv.a|ians/tDtous!M made in the 1 Forensic Report Ensd thii nf the hsurer's final declsiotl in thlsiregard, • 4 * SUBROCATIOMRECOVERY The recovery aspect is tell io file under wrltciWSame Is depended ois <he root cause / origin of ■ r',e' ■ ' iw.fiu teXSS!^esi»t««BSBSSSSM^^ Bnineh Manager 36 OreiHUEiiWfi / H Ctiiwindmm @ QLinclscy CH'HW INSWUNCliS' Wc hid jsmiitired ftpm the I wed 6? W Whtt iMWIfi® wvciiria (heir Reeled iwe^nies. Which fe wi prem #* jtcr om ^ndietCnu till dwe.
1INSURKirSHKALCUlM The i usMittl u» ehlm tow wdi wtat cliihn flwufirtiKi ftwlsdiftj, Wit Kild litai flstlr ctehii; assitut dWftlgitJ firopefita io ilw cone ©f lb VXJlMOOb.
•> LOSS ASSESSMIUN'WAOJVSTMW
a) ASSETS I .OSS (BulKng ;nid Mafhlflsrj'i 1} We l»vc c&isl dcred ■totfg.ei fisdi mu wrier IdSuitd hems i,e, iBOnit MrtbiBuy tfttl ssreiinJ mw sewiHcfy -
2) Tha tai ® ««ta ww quamlfial <ffl leiual 4uw efedmecBtesihrmietf (iMfiilly i«d »Md»s4 wrdtn&ly, 3J Rqjiirw er rtpliKcsnftrt wai ciiiftfellihed hem wte. '0 Dimigtd Rttchbtty wri bulldtng hemi Imvc hew mmd I'm merto pre vn 11 Fng filler of regain w replaecinem. or resoniUiKtlCBi, M ^jslttn.blc, liciri to ltt» Cotiwtta Mtei ciiifwdi by ihe limitedh imtaifii irri bl III I# wniri fof «*erri tm whfch *» been aecotdin^ ippfcd In tfie iteimse wsessntsm, n imtri with IM» Wfv»|i <WL
5) Piyrnoi wnn by the IfWiciJ tvMch fcflects eiiiM.Wii>g e§£ilftsi; few truijac vendors howcvei* the iniwrqd Mill ihl w»uri be made on rctefa gf cWm emouni due to fi'mndal eonsitihR Tiler hWiert Wiy state- toIwfe i® teis eitot toiii$ limo ofcltilm ceiiknicntJf warrtito.
4) Tk mawwiw te medc mi rewiritcf value Hit after appliaiHon. of deprceiaiion only fur» jingle nweHnery iifan to wai afimwet thsmfier reiiwd ta nchhcti bill flat vUHdter^jifleti1ijMWpco^to In suppon ctwrie.
7) Wortjnj It feftectKl» per tfetailwl astessKitsu sheets whleii provIdea ter itetivvto basis (idfifUcd4 d Illy iUmmarUdi below.
A.n ffliiLfti^c.ioss.ASssssMm ;
The iwesl wiktelly eatFmatcd ta of Rl. SAjlO'W* OkW j«ta witolicn with ihtir iwWHiiit enttWr* we noted sevenii dlserejwto'Wriilwm efler triikh (he IflMurrJ submtaed wt t nevtad tstinWe of Rs'^SS^l,^). T he ifisurod itooftet lehwed *he& wall, floorIn*, ptaseifag ete.
W Iftsufctf svciMiiiilly provided ua final bilt» of nititcdsl arid, telmur AiiWiMfa§ I® Ri 13.4^3 J? »* recoMmtWtejHlite eoM towmli buiMin^ .
fisvM euimair. teprir liWtfri paymeni ptiMfjwl we lw*e «Mtocd miM Is* HASWA flwdl Mittiw 37 ConiinuiiiiQis/ IS Cunnjndiam ® 0 ULindscv1 j < a dtmged qumrthiss and physical extent of damags and assessed loss to building as under
Gruss Loss Assessed (refer detailed working sheet ciielostd with;
the survey report) \
19.<6?8
.LcssPcprccijlion ............. . . ____ 0
Loss Assessed ____________ . 19,48.698
Less: Salvage/leftover items (see wwking) ___________ S(M63
Net Loss Assessed ____________ ■' 18,98,23.5
Less; Under insuraiicclscc W befbiy) . ■4,117
Adjusted Lfcis . "~ ■ 18,94,1,18
•' UNDER [NSURANCEJBOlLDIiN'G)
The insured didn't piftvidie valuation certificate nf tjieii,' building, In absence of apy ardutwCs vgluatjon, we hve utifecd tecojds from books of sccoumi to work out the valuation wi th under insurance factor, as under; ' RBI Irtstcj SS Gruss RBI OU Escata ted Etoiliiirtin GrtMS Btait IikJvk as ftftiiftli Affteunt Oitfereace .Vear Block Addhim Sale CiM.teR, o» date OH Factor (Rni (Hs.) 30M-
6$ MQ5- 0 0 (i 100 J4BJI0 0 JL 06 • o ■Q 0 0 108 148,80 1.J7- 0 0 i0«-07' 0 0 0 0 117 148.03 1.26 0 0
SOOT-(18__ 0 0 0. 0 Jk 1.20 0 0
M08- 09 .0 0 ■ 0 0 P,? J mgon 1.14 ■o 0 2W-
iQ 0 >6»98S 9 36K0SJ 130.9 i-ia.oo 1.13 4131786 *T»jl 2010.
li._ IZSW30 0 1655368.5 ■ iiii 148.5X1 106 SliJM lOII.
13 1685368.$ 166216... 0 16719901 141.3 l<W • 1.04 IV7373.98 M58 2(31,'.13 ISllW&l 0 0 . WWl I46J0 ^143.06 14)1 0 0
A RtplMCfflf
Tout 16719901 0 Jit Value 180391:4 1319313
IL. ~t7 Ori^pal
Toil I 16719981
RstHOHai *. i>A, r «'<>;>. UnteuK.KWMSrtel *n». PMte • l'. Mswtenk I teCK ISA.
t?a«'Xra4r!Xr^r'l*l>>t. Li-^Ka f'wnMi A+rtMafted Ir«WUM? >214
'fa. m»r<jdu: . ............. ..
............................ - _ Lu-tOft-atwsijiTOT WStRF
6i9M*eb.A*SSlttM* * i
r«yf*illjir Kituil' ViHliMA OfcUkl*ftaLA• PU'.I' R6*|Kf
5>*»>
5>*»> -wma
-wma K.K. HASIJA
Branch M4najS6i(
38
Conti nuaiion 16 Cunninpham ®
©Lindsey
Adytw
Escalation , I319»3 IOMQ%
RcccndilsO
ned Coitas
widute ■ tWjlM. 1
Sum Insured laococoo
(JI Amount 39124
U1% .___ c.n
, A,2) MACHINERY LOSS ASSESSMENT
Gross Loss Assessed (refer ddalkd werkki(> sheet enclosed with sui^ey report] , 7133,647 Less: Depreciation (sec wqrktng) . .. . 25325 Lcsii Assessed ; _________________ • 71,08,222 Less: Sahage/lsftovCT iiems (see wikina) 3J5,18I _ 67,73,041 Net Loss Assessed .
Less; Under Insurance [sae note below) 5,37,087 Adjusted Los£ ______ _ ________ 6235,954 , DEPRECIATION (machinery.) The assessfiteni is made tm market vali-e basis Ler application of deprecislion only for a single machinery item whose estimatc/daim bill was provided ar.a thereafter reinstated but neither repaWreplaccntem hill nor vouchcr/paymetU proof provided in support of same.
)• We have applied 20% depreciation for 2 years of. factory operations, as narrated tn the usseisiiient working shed enclosed with the survey rep&i, 0 UNDER INSURANCE (mchintirv) We have cliliKd 'canitalizRticn records from bonks of accopnts W'Work out the valuation with under insurance factor, as undsr:
u j. d . .'flBt:;-•' R3I ludf K >1 Cr»Si 1ndt> on Ewnltud Eicohllan Opr».iiit BloA a>«n rsiornti Amount Gros Clwlne datt «i ' .... FadW '(ttl,)- (tU) Block AdlllllW Stic YMr W4» ____ .0_ ______ 0_ ___ 0, ___ !L ■ ICO I48.W 1.48 £ 1 _wos ____ 1 0 __ 0. ___ 2. 108 148.00 IJ7 7 £ 0 ____ 0 ■i; Ui o wo? _0 0 FSI Pi(S«?l4i*BJ
--i««; A - HA. I** f w, V.riopOT UiQddni Am a PhiM -l», Slew Dsn! • I id CM IQ'i nSwxtf.'Swir, ^ ntsfeiH Biker teM wwn .
uvw N3. SffiU >;ia w laaaw HMtSri^lTl-Ttn/wr ' iwiSMiijaiaMJistJil a ik. ._ x_ Rx. X an x;...xx -- l\W DI , 1,1 nd trarwwy .■oT-we**'------------------ r _1". -T Soi- vwjiM-WttMsiiwF^w®* rk'A. tlASJJA Branch 3/ia.na^cr 39 ConiiiwhtiM/17 ' Cunnirdmrn ® , CJLuulsey ■A ___ £ 0 m i*?q9 li ___ o_ MW -__ 2, U G m3 ■ las.oa J,Hi ..:... o .... P .aim o J)-' o ____ B, IQH.L'Q an IK _ ,__£ "1 aoiii-i i ___ g. ItifWeoa Wl-H te&0S» Jjnigix I£ ?WMJt KJ 'm, I won I <00 -ma i.0^ mwn im<<;
frl'lSW) 0 ~ ?7Waj Uiio Kl» "W
□mM. 3 j
HoiliiiOfomM
.■VMli?-- iT<«a?
.frii;.lni.l£im ' a^l'«.ij
TragiTFVW
ttolMton 1»
Meftriyj Incut
I Voliit sii tin
.d'-iin_____ imsi-io
Jfyrnfawaiii__
Ul/smot. 2m<tu
Uiu T , .r.PJ
i
Bl STOCKLOSS
We eonducicd physical qwsrtlilicdtidn tf kfiovcf SCtfc steek, apceiliedly felevarn cscfeiWe c<jinfflcjtlu;li$ io figtw out ilw bnliiiicc otccli loos from cseise records, Pw non cxcisMte hefilik iw utSHsed iho itobk leglster Iwwl fnopecly ffiftifflftfnsd ujwl belftg part of the boosts was felled upoii after ilwii&h wrifle min n o f purchase, snics reccnls, The verified qiffiiMcsoriWfii'e being sumtnariseKk as under:4
I FiNIMD N®, Of Uolf rfo, olUn'1 Olnul Uosb djlf.
tiSlfiSM* ' WM
gluliijttio Wol yM W Sift hit
per cWaniit
pniytoi iliimteihsr olaorh
Minaffiah^ iiiiaiWi- iiaio linllj ....
jnm
jtess. 4- avSJW, SHtavia. .-J>»i«>- 4i!5i.W
M
f tftv.
UQM atf.sjfi i>siT.a£oif
IW
.... - !
tMfal IMItiilA. V4(W(SBM pl Ut,?3l<8
f i)M Vcncfit g4j6ii,G jnmif UW.<IJ ffloss.* tarot
ftiit fttK! A 4!«. r W, y twwiAM. FMtfl. II. N»6thi. I >6 (30 V&v J* jrU« Ora^iMWii
<Wp«.i hsuiw iou
Prtiurd* •tt'd.r njw* m i*ur«» ^TKPrr'w«yuii
t*fr
kJc. Hasija
Mnsli aktin^r
40
ConliatutttiOn/ IS. ' Cimninaham ®
i
■ ' ©Lindsey
K
66573 7M26 33!iE» MSfli MJ. tjte.162739
PtennL . . IW~5 iC976 ??o 367.30 14506 ;qai4.at??? t87>.l!j2i3i
WooiTtati) M0 W7 --2. IS ^2 1747 *L_ c 0
771.SS 771,55 392,25 379J JS_ 0
Shucteiin^
Jiasj______ JjlOSS 18OSS 15S* 1W60 ™l 373G0
S.l.r
Saws
wocdiM""
Icltl Lb B.iS i o 3.35 3
"• [f the rates @ 20;.3 audited balaixe sheet v-ns m be (a&en to evaluate closing stock as an date of
loss, then entire stock valuaiion is worked Out as under:
i
FINISHED T1 T=---- j ■
SOODS
No. Of FJnal Rate
C.Stockas Unit NO, of Unit Stock per unit
per placed in taken pul Biving . wight as on Total Valve
previous Since test since the' theNu, qty<of this
COMM._ statement statsment last date of unit each Unit date
_____ 1 2 3 4 s ? 7 8
Plywood 47552.61 SSI 19.33 12967.93 42151.37 42 IS 137 350 14752979.5
rtAW
Material
Cone,, 178456,9 J93557.6 28369.21 165198,4 1G519&4 . • 15 247797£
Face 24361 l.S szima 14933.44 306485.4 306485.4 10 30G4S54
'Twwra11 ■ i --r» --
G6E26 72526 339SS [ 36561 3856? ___462732
Phenol 10876 26976 770 f 26206 26205 101 2646806
wood(qd) _ 600 1947 _____ O| 1947 2947 230.77 449309.19
Ucittqti) 771.55 771.55 39?J5 379.3 379.3 650 24654S
Shutt.bas 16055 13055 195 17860 178E0 100 1786000
S.i.? soooo
Store Spares 1350000
waod^rt)
left) 8.25 8.25 ' 0 8.25 S.23 11128.9 J1813
27379015
The corresponding GP Rai io is deiermirwd as under;
'n'-
■'.iMI?'
S«t10r.cs A. WA.T'Jftur. Ujyipun hatstrial Area. Pinto-il/wSatu. ,t»®4 Pifi:eiyii«8s M.tSJOJ
V *tl ritmvytdK , '
liaTtSuNi,JTJSPwiH)wj9Z3iG2^IJ y«irjwiv»g>«»•ii'fecixrn 1 aJwlfrAvjmi
&,0*«wtHA3Tw-13fcJl> ^er^yp UcJqgjtl»
tti^aU-Mo^ JUjarKdqrtJ'KwCXlrCSrlKtlfcia-ttiflMi 'rta^ir'MSkiik-PUis^rtaifkr ' xl,°*1
Sir-Jf VKulliiiVteilapiLUn-^V^Li y 'jlASUA
, Branch .Mumyrer
41
Continuation/19
Ciinnincham ®
Provisional Trading A/c for the Period ending 15/05,2013 ' Partlceiers T Amoum Partlcvlaro Amount .
Opening Siesk 2flS?323C.ae Sstes 5'341059.00 '
PtlfcflBSCS 4597250.60 Cissirg siwfc
ConeuaKibSe £vj, - 13ft 27370015
te l CO.00
Powur 113220,00
Cnniaga 22220.00
Storage SspeiMss (A£»,flN) 0,00
PatCnj ftOO
Genersicr > 0.ITO
Swiss 755490.32 WJ3MW
MadllTOI? fisw i9SM.te
wastes 1S6557.IM 1127468.32
Qross Ptiffi 1222604.55 I26.MSB13<8
--
totals ___ 7 MmcorijiTT Teiitic SlMWwj
The G? ratios of Itrst two years are giver, os under:
Trading A/c for 2013
Parilcuiais '
Opening SkuK '
Amdynl PafUtarlayp T __ Amount
'1J436747.G0 Safes 0 47417309.00
Puichasas 53688766,86 Closing Sloe? '
ConSWlMBS^ r H3&
WKS0.00
1BS475M0
J^y.ver &a9553,00
Carriage. 333550.00
Saroge Senses {AQM»fl ' 0,00
Purging 0£0
Oaieiw . 43564,00
fodSe ssfistie.oo ' 16.433521987 |
Macltirtsiy R4M 51350.00
Wages 1135340.00 15182359.06
gross Proa .52B2735.12 Jj. 14094483
Toiais 737SaSji9;<IO Totals 73?aaS99.QCi
A Trading A/c for 2012
t
Particulars r'
Opening Sicek\t'
?
E.j Ainocma Particulars Amount
l2723R«tjOO Sales * 65395738.00
Ptondiases '
4972$S92.73 Casing Slcch
Cui:suirw»e 6«p.. 13$. 19436?4?.00
1230638,00
Pcv-er 4427039.00
Cauriags 10S440a01>
Storage; Expenses (AflMl ?i) 0.03
Padihg 11«TO,N
OpnersiM zasso.M
Ercise 4643633.110 . ' 9.741128b |
Meatinery R8M 104090X0
SaKS)
i JcLsLs-
Branch HMiagtif
42
Coni inuflt ion / 20 ' Cunningham ®
V.'ages 1276638200
Ciflas Wt' 1021622927 1S,-4S&1349
ToUls k 35432486.00 Toteto 06432485.30
it is pertinctii io mention thoi valuation ot rates reflected in attditEd balance siteets show gross profn for three periods including as on date of loss. However, wc verified and ascertained that ' 2013 audited balance sheet rates evaluated stock qty, ar market prices for FC eic,; thus higher Ilian casting, Rather than relying on suns, we 'undertook the exercise to evaluate closing stock qiy. cut cosi basis. Thus, wc verified and correlated safe stock inventory with recent pwchase/sak bills and evaluated races net of profit co work out the valuation for fimished goods and purchase cost For raw material; refer Safe inventory valUiiiion' sheet, encliised with the survey report. ; .
Bused on above, ihe value, of toifll slock was worked oui as under:
i
Total value
Rata per unk as on this date _ __
Weight qty, of each unit J
___________ <12151,37 ________________ 214.8078 . 9054441 ■
s6Si~9-a.g_ 9.3149171 15388001
306485.? B.9374D?I__ 2739186
38561 15.1847? 58S538
"7 262'06 ________________ 1M.860B ' 2747981
1»>? ______ _____ 2S2.5427,2_ SOWS
379.3 ________________671,9269 254862,
99.00014
17860 -------------- ------ ----------- 1768143
50000
1350 OOP1
a.2S 11128.37 91813
| TOTAl 20682208
I f we redraw iSte books of acidailU with above stock valuation on cost basis, then cojrcspondiJtg CP Iloilo for the period upto loss is determined as under:
Provisional Trading A/c for the Period endtag.15W5l2013 Partiiculafa _ ' . Amcwint Particular I Amauni 5341058.00' Opcr^ig StorS 20373290,03 Sales Purchaws ■ 4M7260.00 Closing Stack 20161015.71 Cansimabiu cap. • 13% ■ 601B0.09 Rawer i H3320.03 Carriage ?222aoo Sloraga (AOMI.Vt I! w inciting (J co Gcnciaioi o,aj Excise 755430,32 18.433520 17 I '' tAaehiiieiy 9&M - . , IKOI.OJ Hic4 etfcj;___________ A - 7?A. f fiwi, ^#4^<nn<ru«»snJViBa^PJasit . Me* Oel-i ■ 'J# W* Wj^yBV^MsiryJOU Lk-pmife )JSJ8r4iSwOJS440s> «~--yiiVBn4aMflaaiC»L£ag ' fetiJUifrUril.-aict.Kl wsr" - Itjtihn Alnxdiii*. JtaisajffiMBl*.!*'*"®1 «Mi»reiiMSU4<h'Oini'.Ch*4'isS-GsVh>S>»'n Cnwe..-- _... ------- . STRST UrtrwiP* Ml stout' «|>IA Kttt 1 li- KtcN'liMnwCMHitot*, feurtKR kvaju- ni«»T>.' P«W. RtUui Sj'U' 4iagsBr«.Wil9C»wr,wpiiun K.K. HASUA Brnncli Wwa^er 43 A Coniimiaiiort/ 21 CunnWham @ ©Lindsey <C6!?S7J3 1127<I6632 Giosn Pacfil ^iasmai_ ■102.776^992 Totals 539)20? 3Jt_ Tarata 35092073.71 h may jre seen from .above ihnt the toss of Rs, ■6l0&934.ei' is reflected as on date of loss. The 1 • reason is that the insured was found relying on focontetti valuation of their stneka in (heir books \ which whs recognised by tts and ccrrcsted based on which we have redrawn their valuniion/books and accordingly on Saws pattern, worked out their loss on east basis for affected quantities.
Amount
Deseripiioni _ ' . (R$J
Cfosing Stock Value (reftr detailed working shem eaclosbd with JUH>0y ropoi 0 / ___ , 20fl8220« jf .r:gs;JiAfo Stock, refer separate calculation_____________ 76209199 Therefore. Totally Burnt Stock » Entire Closing Beck Stock Less Safe Stock ^?J009 4 IJcaidcs. we have furiher deducted 5% »uributing io iws fiictofs;
I} I® rule cm any error or variation in vril uat ion ar«J quiiiuiftcaiton of sefe inveotary ' ' 2) One to smge damage'obsoksosnee and similar other fticrora.
STOCK ASSESSMENT Based on ibavc. adjusimejit working for slock, is given below; ) Amount Dcseripllon Gross Loss Assessed (Srock}, from above ______ 4473009 Less: Obsdlescence, storag,e damage and simitar other variations arid ftelnrs, io rule om any error or variation m vaiuation'aKd quantification of stock @ 5^ , , 223650 Market value of loss 42493S9 L,egg: Scrap Sfiivftfte of burnt stocks on notional basis 1 49359 Net Loss Assessed (S tock) 4200000 Less: UaderiasiKanee (refer calculation below)______ 0 Adjusted Loss (Stock) 4200000 k«84.6?toiJA. M /* IWt n^tiiUi to*, Phew«r, Kow Dd?l >AJ® «< 2 HtfreftMMfer Mk C^n^l Hft baMWreanw XB ®R3ff» '' 80l« IJte««sp pMf'dii'yiiii&suoiT ■cTrwl U IVitetok AMirtaoai* Atrarj^wjA'*^T TA.
5i!H- VO1 SjjivMlsiasVKniWallin Htanch
H ranch MtUWSW
^anaS6f
44
. 4
Continuation ? 22' Curminp'ham ®
. ' CHuincIsey
OSSOLES^^B (stock) ' . . '
. '=t; i . • *'
We ha.w'ihorOAighiy examined books of aceoutiits &id: moveincnt (ptocuieincni and, conaumRlM^'SJP.ck and found ihni fliwlcn.ccnoe ond slorngc damage arejninor in nature * nllthQiig^ltf^pielly rtiled «bt Therefore, we ktave oossidered swine on notibnall basis in'. cofflbbi.i.i'^tffAWiy error or varUiion In valiimibn end ^Uiintification, of-stock (g) 5% combined and dediiiwd^inttffon coiwelidfiied basis I n'tiHi assessment.
SA^V'AS^t^' • . .
'itf.SSQ/- as scrap sai'Ai^B ofi nattowtf' baste for tadly burnt and guitcd SIQckIhW^'^W iirtwest or offer made by imwed,, being fair and reasonable, te our opinion^ .Sr.,, ... Description, Amount ':WK, '.. A^jssed v BE VW of insured's lotalsiock as on <tet$ O (Rs.) ■aiilfflilatftd _______ ' ^somsos •Icgii: Obsolescence,.silage damage and j'ijnfieir other fiiotors @ 5%.{p?iiivukrii io ,<.'£lt|4vtlttaf ro34.H0 a iitskfe ,■,........ .. ......... MW.
W-g;
fir'
fMall items
«fer ..jZL... Amotmt Its, |
420000GJ
Ad^Eu^nchincr/ // ■
' 6235954
2d^___„ ;L1 >'___________
1E94I18
(iwl of Stock, mnclitocry ajid bi>l:.(dTn.«> 12130072
aEra.cm ■ ■ rmew
i
AddM^nH^sishifting. Rcmovri), Debris Removal ^Wpl''
-paliCTW^ed 123301
'CTV fawi>iffr.n,u<(ii Jn.iin^
feiitthsii} Ahmuts* Av«fg&«d
s>«i. ^■saijiPwtaiw'aimWj'ibrn ■ ' ' ', 'Branch lAana^r
45
/ 2j
i
CkrnninphamOP
OLindsey
124S3273
Total Atliustod L<»fl
_Le?S'exceHs@ $^a*?erjeollcy . ---
622669
Nd Atllugtcd Loss 6otnl of stock, aiiehlnery and ImjWMiiL,-------- - ,8183(1704
Add:. Fiid ExiingdSsitlog charges levied liy iho fire bilgode dep«. OK refiiliftg ^Mita c<c. bdiir. bay minimUMlon chhri^L_ 98167. Sdtldnflat recommencledl vkle this final survey report. 1192887! Wc fKonwftil Jdikiwu of 8s. object to tomefs ftW-iflce of liaWHy, ftsseumcfti woiltlhg awl ns apRlWte as R mw and cowIiiIom of .the polity. iUfe anetstnaw worttlt»8^ *1™ '<*^ ^,Ss steek " mid Miiyei Hufuitiiks. Kutos and Assessment determined in lino with above wwrwtai.. lisa above report (a issued tvltboui prejudice w the dgiils of.H« trtsur^rs. Ths paytncni ohhe ckiirn Is subject to the termii and conditions of die .policy under winch tho claim'has bcert prefcfrot i Yours faithfully.' 1 Anil Ditingra BE BOE P[ISA Director SLA • )4432 Vdid Vp1» 24. i 1.2(1 !6 Hl & * x^...4
" Manti' 46 It appears that the report of the Investigator dated 18.10.2013 was forwarded by the Insurance Company to the Surveyor after IVz years to which a reply was given by them on 06.03.2015. The same is extracted hereunder:
Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt Ltd.
(Furiiicriy taiswn aiCiaiolimlniii Lhitwy InUrMltowUVl U4I Cunninoham ® 'CIN'VMPOUNlHClum . <k, 2" Row. Fottuia ChiMibwa. SCO '0.IT. Pcrato 0W.4M UsrtM. hluw Oljhdsey Toloohono • «1 4M2JN FwsMU « SI 16USSI12S 6 msl: altiufliimogca<mlr>thiFnlhS:«yT«n .
I WITHOUT PREJUDICE ' United India Insurance Company Limited, Branch Office, Kamal Road, Opp. Indira Gandhi College, Kaithal, Haryana.
DearSir/s,
Date: 6,h'Marcli 2015 OurRef:23/10l/02741/LQR
> »
Sub: Claim under Standard Fire & Specials Perils Policy Na 110705/11/12/11/00000417, policy
period 17/01/2013 to 16/01/2014 on account of fire on 16" May 2013; Insured : Canara Bank Chhoti Baradari Patiala A/c M/s SB Plywood Pvt. Ltd., Bhuwari Garit Rood, Santana, Disc Patiala, Punjab • We have reviewed the,forensic agency report (soft copy by email) shared W|th-us by your ofiico following submission of our -fina! survey report Ref: 23/101/02741/FSR dated 25 October 2014. There is a contradiction in the police Daily Diary report and Forensic investigator report. Since Forensic investigator report is based on scientific determination, we place our reliance on the same. ■ " While the Investigator had concluded that firo is deliberately set up by someone, he had further asa&ied that "Such an act of deliberate setting offire could have been aewinpHshed by so'nieone who was responsiblefor the dbmqge without direct or indirect knowledge or Involvement ofthe management. Thus if the management is not involved In the hrson, the investigator's report should be shared with (lie management so that proper proceedings could ba done by the police. Based on the revised'police report, if police finds, this as case of malicious damage, we con then provide our recommendation for the acceptance of liability to the Insurers.
t
, Yours faithfully,
hf St,A7M39
I VAt.tOUPTO |
beboefhsavK
Director ■■•Css .■'nrh ft?anat[sr
Co: United India Insurance Company Limited, DO, Kamal and RO, Cliandijjarii.
47their custody the Report of the Thus, the Insurance Company had in of the Surveyor dated 25.10.2014 and the Investigator dated 18.10.2013 as well as Investigator through the letter dated aforesaid opinion on the Report of the 06.03.2015.
letter to the Complainant On 11.03.2015 the Insurance Company sent a raising queries and sought a clarification which is extracted hereunder:
■"•SSSisri REF: SOO: Ct^AiM;ZO1 Without prejudice • HECD.PO^r M./.S S.B-l,'y"'ol,cl I>v' Gtd., Blmwanigarh Road, Vill.BahmnajSatnnnn ( Patiala ) , R1CG:- Fire Claim No. 1107051113 1J90000U007 Policy No. 11070511121'14653323! Oate of J-oss: 16-5.2013 were noted'--
While processing the dc.the following observations , claim Ims occurred for the i Inrm vou have declared that nonotice that an incident of ,"lnor j. fn the proposal form brought to our t.
aJ half year ugo( "PP££*«" 1 declared in the proposal form.
why «-« ---
■> l„ <M «l»l~ r«r'"' l„vius"««n Kcpor' »>•
accelerants such
was:- *'
on account of electrical related lailures.
failures.
» rtf fi'inirM nr nccidc>xtul factors-
... j.r"™--»-- -
clarification to enable us to proceed lu.
.......-
Thanking you.
Yoirs faithrully.
(CI i M AN AGEV< ) This letter hints at the extraneous cause of fire and makes a reference to the Forensic Investigation Report. The Complainant gave a reply to the same on 23.03.2015 which is extracted hereunder:48
< TIN :03390070934 PAH: AANCS2006G V S.B, flWQOOfc LTD.
, 1 % . 1 VliLpAHMm.SAI^ tPAraLAjPB. ' 1 rrii 1093159-23222? 093725^0635, a3jg|g== iiim'i H ■ ' 1 |,'fl,~1,';'■■|l''Tir,~7 H^ Djicd *> Tg The Qr<jnch Manager ^Uriit^^nmi^^£fe|tedu(} <•<< •' 4^•'l ' ',.
• » 1 «
't
fcifAai WMcJ, Opp. I.G. Oalttigu,. '
fci&al>13S027
I »
Sr, ...
Req:- HroCtaim No. 11070511131 NOty I
Policy No li0705UX2PM6533231
Date aj tesn l^MaylOH
•»
Please rc fer to yevr letter doted 11.03.2015 on the jutject ns given above , '. i * . ' ■' 1} tn your letter you stated that In the prejowl forra of said policy, the claim experience of previous year was not 'rnentW properly as It was written that, incident of ffiinw flro was ' I occurred In the past H jiwoths (bppraK). W« may state that wc have hot given any profit y wim4'at tMwt&fhWhrioe tlie m^of FeMCMLS'ln pretext that, It wps'ierjulrcd by the company duo to (najor daiin In the pcllcy.'Mortover, wa have wt ftilerf In the proposal form with regard to claim wperlenco fo the the Mid column was ioft bJanS thrwsb an overs'jht |T!w copy of the same afons with cottier rolpt Is attached taV your rvferenccl . 1} As per the Intimation to poike, we |iawj gtam the prebablo cause of lass can be due to elearic thoft'clrcirit, but as pefForensk (iwestlgatlon Report the cause of Joss Is ndt uh KCbunt of eiWlral rofated .Wdwes, but Irani debris cdlecte'd from tflffwent ims of thejpr'eMiet Indicating the pailbillty of use el oilttdeous dw ecadwrits, We may add that regarding elasslllMtlon of the debris, we ate explalnijig the reason for it , 4 ,h.-j MfW*- '4'6 ; '/r< • » ,»
3) In our indwtiy' theft Is usage of raw materljk which are phenol (carbolic add); formalin & lubricants liire hydraulic oil. Lei's explain theJsrftroufA.
hfWOOdB'f.Ltfl O/rocfor all Itannss Simject to SAMANA Jiiwsoicf kin ohw 49 TIN- : 0339207093^-
PAN : MNCS2006G g.B, PQWOP W WD'
BtiAWANiGATO-i Road,
. ' Vill Bahmna, Samana (Patiala) pb,
• Cell 098159*23222,098725-00635
fo.Np.
a. Phenol a derivative of benxcncj the bonzenc 1$ ti natural conytliucnt of crude oil Is one ol the most eiemciittify petrochemical. It Is an Important component 6f gasoline. b. Since phenol U an Important consthuent ol the litdiistrlai iW .pmHol used, so II them Is fire, combustion occurs, then the phenol which Is the derivative of benzene will come to Its normal form or eon say Its original fo/m which Is tho component Of psollne. I c. in the main unit, there WM Uifl3C of of pheno| 0 Cwsliiuch(( akef, biJfn!ng spreads In to different locations, fire occurs due to nccldcntal lactois. <f. Hydraulic oil Is used In various machineries ip our Industry such as core dry machh.e, hot i'^'bydrauiicilfts ihbl cfiUlly bf^unli SCO iftft 50 liter and co •Ji'V '>•'> liter respectively, when tho.unlortunotc fire occurred, these machines were (Wed up to Its maximum capacity. These machines eemc under (ire during tho incident and the oil within these machines alio came out ond got spread out hmc £, there. •4} So It's obvious if there Is fire, there win be debris fo'und will be contnlnlne accelerates ol hsoflne producis.
dId,,„,c riteJ byna|h[.iraer <10(1 we once again fcqucs! you to scr.lo ow claimot the curliest.
Yours Inithlully
: T.*,: •* • ' ■ •' IA
This reply also raises objections to the Forensic Investigation Report of the Investigator dated 18.10.2013.
It appears that some more communication ensued between the Complainant and the Insurance Company and the Complainant gave a reply once again by mail explaining the details regarding the presence of Hydrocarbons in the debris as 50 reported in the Forensic Investigation Report. The said mail dated 14.06.2015 is extracted hereunder:
? r s u bjscfc Re; regadMg Instance reply From;
.To-; t sb.ptyrtBOSgW'ehooeofii;
' I
Cc: sbrlsN^re^lffmail.coni;
«• • »
Data! Sunday, 14 June 201511:42 PM '
To : :'
RegionaVDivifiiotial OfSce,
Umted India Insurance Cd. Limited
00 Karnal / RO Chandigarh
, i
Sr, ' ' • ,
R^Hre Claim No 1107051113119000004107 Policy NO H070S1H2P146533231 . - ' ' • Please refer to branch office tettar ttotad 13.03 2015 on the subject as given above wliteh wb already replied data 23.03.2015 but no-respoxisjo from branch efflae after 3 months. As owners we egaift repeat with some more points , r> I) in your branch leltor it stated that In the proposal foran of said policy, the clft&n • experience of previous year w&s not ntaiUlo.ned property as it whs written that btaident of . inino®fireiwsitr&l;burrcd-lft tfe past titnonthsC^ppIroJftji Wctnay slitfe that wiThaVe'EMt. ' r given any Proposal Form at thcdlms. of insurance and it was collected by the branch manager through the agent m ttys month of Fcb-2015 in pretext that, it was required by the company in the office record for settling our major firo claim-. Moreover we have not filled in the proposal form with regard to claim experience in the year 2012 as the said column was left blank through an oversight (Tie copy of the satno along with courier receipt is attached for your reference). We fuel that, it's ths handiwork ewd scitesne of the branch manager to manipulate things ■ ( | duo tofollowfogreaiwi; • . I « 4.
1.1) Why was the proppsd form caked for 17'18 months nftcr the fire toss ? We have call recoius to prove that that branch office officiafaAnnnaijer called, ufj for simC, 1.2) llic regional office should' collect the original proposal form from branch office and submit to any govt forensic dept, who can easily cheek the ago of the handwriting and prove that it wits filled about 3-4 uiohtlis earlier (Feb. 2015) as per requirement of the branch managar. Moreover there must be ' diffc^cc.jjs,^dvdting>/|iM.',ctoimexperieqce.'.aettiou^liipli.njust cfcwl^$ it WHJ'^d by . ' ..
branch uffiuu. Th&DQ/RO may'also submit a vigjlarica comptaint to this regard egainsi the concerned branch nutnugsr or noy other official of the biuftab office wlto must have done such manipulation with a .
malnfwle intention of denying our claim by creating this theoretical technicality 18 months after fire. We didn't do this as there was no need because this was a minor fine incidence and it was a knawn/recorded fuel and we had no need to hide safire from anybody even before fire at the time of policy ' » . .
issue. If proposal form wns needed in brnncli office, file before issuing the poiley, why was u not 1 iikenifoted earlier nnd why after fire a fresh blank proposal form was got filled with incorrect data with litid inlcitiinn so as tQ deny our claim ? So, the vigilance dcpi. should supervise foe whole 51 mutter , . . , , of our file and Investigate handwriting and age with scientifle methods and take punjaangrcruiijnal ' >-slt '
2) As pet the ifittaation to policy, wc have given the portable cause of loss can ba due to electric short-circuit, but as per forensic invcstijarion Rsport the Caus^of toss is not on account rtf electrical related, faitores, but from debris collected from di® rent of the premises indfealbiB tire yjossibility of use of extraneous fire accelerants. We may add ■ ihufragiifdii.igclatsiricationofthc ihut raimrtlhiftcliiisificaiionof the debris, w& are ore cxplahifog fos it.' cxnla.lhiM the reason fas \ J) In our Entlitstry there is usage of raw materiuls which tire jihccial (cufbolic acidl),foffiittlin ' " 1.
& lubricants like hydraulic oil, let+8 explain these gssups.
&) I'liicnol o derivQl I ve o f bcaarnei, lire bewrar b a hotuxul uimstiluent of crude oil to , one of the most elementary petrochemical, It is an hportant component of gasoline,
b) Since Phenol is on important cohslltucnt of the industrial raw material used, so if ' there is lire, comWton occure, then the phenol which is the derivative of benzene will • comeltoWM^idlformbr cdn'sluy k^6r^Wf6rm'^^1iikhd'cbn1|jo^ntof^lihe.
c) In the miito unit, there was uSugo of item of phenol its n constituent, tiflur burntog ■ it spreads jit to different •tociifions. Fire occurs due to accidental factors.
d) Hydraulic Oil is used to various machineries in our Industry such os core dry mirchine, hot press micisir.c and hydraulic lifts that has capacity of around 500 litcr,50 , liter arid 40 liter respectively. When the unfortunate fire accufired, these machines were filled' up to its maximum capacity. 'Ibcsc machines came under fire during the incident and the oil within these machines also came out and got spread out here & there.
4. So it's obvious that if there is fire, there will be debris found will be . , contiiitoug tichclerijms of gwltoa products. Ifs no surprise, iis explolued ttbove. 'this is ttos^ nature of tlie industry. Such itqn Irtos will always find in case of major fire. Then how their prescticc of Siimc wrongly conclude that ths fore wAs non4ccidcntal ?
5. Its forther stated to your branch office hirer that the incidence was not due to electrieal, process failure ond not due to natural er ttoeidetittl fiiilurcs. Plcaw cxplato us why form basis of . sumo, if'ifs iwrwiccideittftl then your branch .office only means to say it was purposefol/delibcratc. Whiq]i. A,wp'l^''Vw',s started#' wpctoaly who any.fldvantftgji iftgtrj foe fire toss like Owner or workers/guard or aiiy outsidcr/conipctitor 'ute. Do you think as owners we took cumfog/profit. from lire fire Loss when:
5.1) As owners^ wo didn't sell the factory after fire. Factory wm new and only about, 2 years old with , • I . .
pending life of about 25-30 more years. So wo owner® bring buck same to before-loss position by spending mottey from our own fund and waiting for claim amount and \yhcn wc were short on money, $o we • took toao from friends and relatives and repair to, hope of claim money will ho given to u$ soon. Without claim amount, we Have suffer double loss as we have to return loan to family friends by selling • .' • our persnniil (tssei in case claim not given to us, So bow or what wo carired front loss ? We didn't do anyllimg.
5.2) Oiir machiites webe almost new before fire but we dhln't replace them after fire loss despite ■ rccotfoubni'JMiciit lirom stippirers.' But twropalrcb fo'i'foadjlnVs (after fire) to pre^tB to loss com! it ton nitlrer than buying ttew models ns ropoirtog was easy and fast and ecoiiomicol and we d idol have 52 ■ ■ . . ../p fund (o buy n&w machinery• Vfc fully ccopcaied with your surveyor despite our dispute with him on ■several occasions for machines when he said go for repair but we wanted to replace to avoid future winning problems. $o we still follow what your Surveyor said. I saved lot of stock, hiding arid • machinery for my own good first and taking claim was Last thing on my mM Pur insurance policy amount . . . . , . .
is Rs. 6,5 crore but toss told by surveyor is i .25 crore, ■
53) Why will! harm my factory and finance by setting non icddetrtai fire if I make claim on « genuine • -
basis and much less than insurance of 6.5 crore and fufly cooperate with surveyor and don't make .any .... \ manigu^ti^®'® harass|qcht puddelay by sfir^ojr- jn^tng btwh.
oHioe, . ' . ' ' 5.4) We spend repair money from our own pocket and already gjveni proof to your surveyor* For cur loss of 2.7$ crore wcluding productron loss, we knowjhat only about 1.25 crore cs given by your surveyor . . . ■ , "
in his loss report, which is on very lower side than my loss uffered so how can I make profit by setting non accident fire, loss? ' ' .
5.5) The average working life of machinery got reduced by fire loss so longterm loss to our factory (in future). So we have to replace machinciysay 1G years later rather than average 20-2,5 years of good , ■ ' working life. So how and what-can we earn by deltberateiy setting this fire toss ? 5.6) We started in 2011 and our huge growth, can be seen fiem books. Wo were linked up with big firms j and names like reliance, century etc, and doing business with them. We had lots of orders for our ■ fin ished goods. Mpst finished goods was fortlmatcly saved from fire so we sold the material but • slowly-*: ' ■• and slowly tost our regular buyers and parties as repair took a lot of time so we not able to supply to them. Due to-fire incidence, our labourers shifted and we could not retain them, buyers and sellers broke off relations with us due to lack of business continuity. There twas production loss and financial crunch. Our factory slowly resumed operations after repairs and we are slruggfeg to get back to ths bld business parameters despite all the difficulties. As owners, why and how can we do this tO1 ottr business by deliberately setting non accidental fire ? • . So as owners we didn't do anything and it was purely accident toss for us, . , 5.7) Regarding, involvement of workers, wc know that there was no worker at the time of fire as the factory operations were closed. Only a guard was there. The Police deptt. after investigatmg us and present guard and eye witnesses/workers to fire control activity, had, issued a police report (DDR) saying toe fire was accidental.
5.8) For involvcmcut of the competitor or any criminal or troublemaker who trespassed in our . factory, , how w&kyipw of saute we are* net police ahd.,we.hav'bjtreknq^edgp ofisa^e • 5.9) We dooT know what's written in the forensic report and who is held responsible for so called non accidental fire ? Kindly gjvc us photocopy if you don't wont to give Us claim amount so we can study same. We also contacted the forensic firm many times after branch, office letter but no reply ftom them i also.
5.li0) tini wv tfonll undcrstmid why forensic report liiddeji from Police by your insurance co. ? The forensic agency should have contacted Police about their findings for govt authorized investigation 53
- * .. .
lheir end as lhe Fo'ace nIso hsv? forerjic The tach oOkc iftcr receiving foryruic itpon Il ihould hive also iniiirasd polkc'ff fM I CRlmt mi « wtay itwsbfe & fre (as few report about iwa-Mciiicnial fe). They M tow asked Police to inks Klh ipM for l^'giig'^Wcta^ ^lh police (is per DDl) rail® iUi ketphig ihcTta&c repoft 8ftd its findings it toil end. Even (lie itayor didn't toft us anything to this Kpl fif'd Ito CW his positbrttailitotpeiidfiitaperiRDA. ................. We onto taw tho tong© wo tfp not toyokd (m owrs) itatly w htatly,, .our eta » pspble under die polky is we hmito.taww few litany people Beven railltas dw Onm btowrdtaeritopolifiy. -
Sir, wc do ift few to go fetegil edon igntofl your co. h It will ctose totjf delay ood«ihidy short of fed end told to sinvlve. We taw we ire noi Involved at tiny level. Wc know seta cxpsJifcnced i• uffiebh of cotany wtasta things toM So pIciK took our eta with mwit wittout mty bh» ta pleara check with taflry experts legating point no. I m pta na $ of fotaic ajyncy nmi lirnnch oflkc to not wild ta KPliMy incorrect Pkiisc ted to our chto M the earliest.
Yoiitoftafell^* *- Imh i-'t; •< i < 8 k Another mail was sent addressed to the Dy. General Manager of the Insurance Company on 30.06.2015, reiterating the said stand, which is extracted hereunder:54
ao^juno.aow ,a TO
The Deputy General Manager ^pftandigarh, t , t Jhg^•Qj^oi^anag^ Kamal;,* : *? L f * ''f • ' 'i • ■'Al' The Sf< branch manager * KaWiaf, , I. ' * United India Insurance Co. Limited ■ ' t Respected Sir, » Req:- Fire Ctelih No 110705.111311800000007 Rp5fc|? No 1107051112P146533231 , t i;t , . Please refer to branch officc'lettor dated 11.03,2015 on tho subject as given obevo which wo already roplled dated 23.03.2015 but there Is no response on that After reviewing lhe malor, we are again repeating and adding some points as under : ,
1) As per the Iniimation to policy, wa have given the portable cause of tgss can be due to , eledrte short^frcull, but as per fcrensle Investigation Report the Cause of loss Is not on . ' the premises Incffcatling the pdSBlbBity of uso of cxt/ancous lire accolcrants,,We may add di at regard Ing classification of Oie debits, we are eitptofnlnrj the rensoh tor 11 » 2} In our ImSustry there Is usage of raw materials which are pheno! (carbolic acid),lormalin ' a Itibrlcanis like hydraulic oil, lot's explain these groups.
* «
a) pmitol a derivative of benzene, (he benzene is a natural ccnslltuenl of eiude oil in . 1**' there is fire, combustion occurs, then Jhe ptenol which is the derivative of benzene will come to ils normal form or can say Ils original form which Is the component of gasoline,
c) In the ream unit, there was usage of Stem of phenol as a constiteont, after burning • • It spreads In to different locations, Fire occura dva to accidental faetofs,
d) Hydraufip oil is used to various inachlhortaa In our Industry such as core dry t-weWno. hoi press madhin&.and hydraulic lifts that has capacity of around 500 liter, 50 lifer and 40 liter respectively' When the unfortunate fire occurred, these machines ware filled up to Its maximurn capacity. JThese macHnos camo under lire during the Incident and the ol within these machines also came out and got spread out here & there.
3} So its obvious that if the re Is lire, there will be debris found will be containing accelerants of gasofine products. It's no surprise, ns oxplainad above, This is the , < nature of (ho industry. Ttien how is lite gresenoe of same can conclude that Ute Ora was rion-acadcfitel'
4) Ito further mentioned In your letter that the inddenoa was not due to clcetoca I, process (allure and not du§ to natural or occidental failures. Hoase explain vs tlje basis of some. If it's nori-accidemal then It only means it was purpcsefuf/delfterM Being deliberate means It was storied by somebody who earned profit or any advantage from the lire tike: Owner or workets/guard or any oyteidotfcompctitar etc, ' Do you think we eamopfofited from the fire when: * ' 4.1) As owners, we didn't sell toe factory after fire. Our machlim were almost new before fire but we (fidn't replaca them alter lire despite recomntefldatioh from the suppl tecs. But we repalfbd (ho machines (attecUrej^f^fous conditfottfraillertlteit, Buying' n&i Mk cooperated with youf HHJfe ' survoyor despite our dispute with hijn on several occasions for several machines when ho said repair bbl wo wanted to replace to avoto future running problems, So we &UII follow what your surveyor said. We' spent money from our own pocket and already given proof to your surveyor. For our toss of 2.75 crore IncSucRng production, we know that only about 1.25 crore Is recommended by your surveyor as we don't have profi! tosspolicy, so which Is on lower side than what we have suffered so how could we gain ? 4.2) The average working life of our machinery has reduced causing fortg term loss (to luture): We may have to replace all machines say 10 years later rather than avaraga years of good working Ke, So how and what can wo gain from this Incidence ?
55i3) We started fewyesis back and dvr growth care bo easily ??^Jroiii bools, Dye to fife Incidence,-ow .tebcufets shffteOfidwcouldhbfrotiinfiienh buyeis endseW^^^iyons^lh^dveto bolt of business qon'jnuity. There was pfdducltbh loss' and finaiW WicK Our factoh' fesuinea borations after repairs and'we are struggling to geibeclt io the oid business papers despite all thadifticuliies/Why would wdddtoistoburbubincjsandtooureejrbs? , "... .44) Regarding (heHottnl dfWO hw h^rkeratthefiiitoDlfifeasthe laGtory dperatioii'S wetodiosed..Only:a guard was Ihere. The Police depH after Ihvesiigafifig us and present guard ahdey® witnesses/lwdfket's to fce conttol acliWy< bed Issued a,police report (DPR) i 4J5) For involveftienl of the cbm pelitor or any criminpl or troublemaker, lw can we kn^r of same as we are hot police? . . • s i 4.6) We don't know whafs written in the forensic report and who fe responsible for so called non a&cidentairire?". . _t . j .
Byiwc lai to understood why is the to'rensicrepcirt being hidden foft Police? It should have beefl submitted to flw IW ty the branch Woe knniedibteiy for further Investigation at (heir end.- The, bianch blfe alter receiving forensic report should have intimated police or filed a'complatritagainst us or anybody respofisible tor fire (as per forensic teporfs findings $ nmcc^ntal fire).They should have asked Police toTake a^hagMus fortodgiftg ialsecotopfdlflt with pOfi^jas perODR) rather than keeping the forensic,report audits findings at their end; Bren thesurveyor didn't toil us anOihOgarrt 'h v ' T' :# ' I 4.7) Weprtly kflow that as tong as W are not involved (as ownersji our ^aim is payable under the policy as we have just learnt from Industry that even maOs damage or aisonis covetedi under the policy, also has a forensic wing whopquld have cross checked same andI further investigated the matter,. We hope that as above mentioned clafil^tlon will satisfy the guefles raised by you in toe letter and we dftdageih reduesfyou to sotdodur claim at tho eartidst
5) We trad alreadypay Interest to our bankers for Rs 1.50 lakhs per ffioftlh for only on pending claim amount from your company from 24-25 months * ' Yours ialthfully e I * i S.B.Plywood Pvt IM I Sarri3na447101 It appears that the Insurance Company in between seems to have again approached the Surveyor who on 05.08.2015 gave another opinion referring to the Report of the Investigator about the source of ignition being not accidental. The said letter dated 05.08.2015 is extracted hereunder:
k A A 56 Cunningham Lhvlscy In tern otlonai Insurance Surveyors mid Loss Assessors Pvt Ltd, (Ir'urmvly litwwti at Cuuiitostaia.Uiidsey bi tcriullsuwi P»L LU.) CN.llWIIMmWClIlJM i" fleer, Pjrtuna CM^an, 9 CO 18-17. GmisU Ueiut, LMW , Cunnmctam @ 11WOI Terejwn ♦ tit 161 <9Mii} Facsimile ♦ 91 tf wojjjjj WITHOUT PREJUDICE * •1 i f ' India Insurance Company Limited, Office, Kamal Road, ja Gandhi College, vyana.
I ti*St i| Date: 5,h August 2015 Our Ref:23/|01/0274l/LOR2 Sub: Claim under Standard Fire & Specials Perils policy No. 110705/11/12/11/00000417, policy period 17/01/2013 to 16/01/2014 on account of fire on.l6'h May 2013; Insured t'canara Bank Chhoti Baradorl Patiala A/c M/s SB plywood Pvt. Ltd., Bhuwanl Garh Road, Sitmana. Dlst. Patiala, Pupjab We take reference of our earlier letter 23/I01/02741/LOR dated 6* Marclf 2015. Subsequently, the investigator confirmed that source of ignition was not accidental Whereas, the policy provides „ coverage against damage/loss caused by an nccldentol lire.
( Thus. Insurer's liability under fire policy should not attach, in our opinion.
Yours faithfully, I All it Dhingni ft 3E BOERISA Director ' I ft Cc: United Indio Insuronce Company Limited, DO, Karnal nnd RO, Chandigarh. ' 1 A 57 The aforesaid opinion only refers to the opinion of the Investigator without recording anything further. On that basis it states that liability should not be construed. The language employed is diplomatically subservient.
It is in this background that the claim was repudiated by the Insurance Company on 05.11.2015 which is extracted hereunder:
k • v**'' J UNITED. INDIA INSURANCE CO. LTD.
BRANCH OFFECE.OPPJ.O.COLLEOE. KAFTHAL-13«O27< t'ARYANA > , PHONB NOS, 01746'-234124.2223*«6 S, Ref . r.o , BOK/2 015 Dated: 5.11.2:015 WITHOUT PREJUOXCS REGD.POST M/S S.B.Plywood Pvt.Ltd VI 1.1 - Behmne, ahawahigarh 'Road. Santana Distt.Patiala Dear Sir, REG:- Claim No. 1 LOT05/11/13/C/100329001 I Policy Ho.. 1107051.11.2P/L4 6533231 • Date of loss: Due to Firo on 16..5.2013 De a r Sir.
Xt is to Inform you that after receiving receiving fire loss intirtiation on 16.5.2013, •the the competent competent authority deputed surveyor M/s Cunningham lindsey international tnsurance Surveyor & ~ ~Loss , Assessors Pvt Ltd.,Ludhiana,sama day. £dr survey and assessment Cf • loss. The surveyor submitted his" report on 24.12.2014. The surveyor assessed the loss of Rs.
1,19,25,671/- subject to insurer's • acceptance of . . liabiilty,assessment working and subject to terms and conditions of insurance policy. T,h® Loss ' was ' thoroughly ' investigated by invsetigator' M/s Truth Labs I Forensic Experts ) . The Invest igator submitted hia report dt. 10 . 10.2<J13 and concluded his investigations for flee loss as under:*
1. Not. on account of electrical related failures.
2.Not on_ account oS chew.tael and mechanical related1 prsccis s JallUres. . & 1 Centd.... 2/"
i. .... --.. Wwsrr
4»rrarr ■smtzeft'r
K.K. I-IASIJA
Wianch Manager
58
Pago... .2
3.Not on eccount of natural or accidental factors. I
4.The detection of hydrocarbons in the burnt debris collected from multiple. sources indicate that fire could have been on account of possible us© of extraneous ignitable fire accelerents such aa\ kerosene or diesel oil to initiate! .fir© at multiple locations . in. . the abed leading to •\ generation of flames.and damagca of machinery and ' stocks lying inside. t
5.Such an act of ' deliberate setting of fire could have been accomplished by someone who was responsible for the damagedafitage without, direct or indirect knowledge or involvement of ' the ' mra nag entent.
!-
The clarifications givan'by ybu to the points raised wOr© toy by investigator were minutely looked into and virc nbt found convincing. J I The surveyor M/s 'Cunninghara Lindsey Intarnational
--------- andandloss Insurance Surveyors 1033aasQasors pvt.Ltd vido Ref. 23/101/02T41Zf..OR2 their letter 7,_?. L. dt. S. B.201S have ' egreed ,w.ith the i recorctrnendaeions of the Inveatigatdr and observed that source of Ignition was not .accid^rtcal, whereas the policy provides < coverage against (damage/ ..lops caused by an' occidental fire.
Therefore insurance liability under fire policy purchased by you ^oes not attach and accordingly the claim**has been'repudiated by the competent outhprity.
Thanking you, 'r Yojre faithfully# ( .hch MANAGER ) wsiT •nwsEraj TRIM copy.
a
K.K. HASIJA ?•
Bianch
The Complainant feeling aggrieved by this act of the Insurance Company objected to the repudiation through their letter dated 28.07.2016 raising their objections on each point which is extracted hereunder:
59' * 0 V' •»n • « • i <1 h c Date: 28/07/2016 "L, M Sw0XM7101> A r<P§7Q5&7298lH To/ Gaffer mtWW The Branch Manager, FiwsS JkTO Wf, , United India Insurance Co. Ltd, , tJW'im. st • Karnal Road, opposite Indira Gandhi Colles ' -- * * .■3to3i)i& <11$! •* > •• ' i » »• Kaithal - 136027;. .
Haiyana The Senior Divisional Managar United India Insurance Co, Ltd.
Divisional office, Kamal Kamal: 132001 (Haryana) The Deputy General Manager i. . United India Insurance Co. Ltd, Regional office, 0 I ♦ 123-124 Sector 17-B Chandigarh. I ft 4
Sub. Your chim RefLl 1T05/11/ 13/e/100329001 . ( 11 i if' , , jt s < Dear sirs,» • • • i « •k •We are in receipt of your repudiation letter under reference no, BOK/201O dated 05/11/2015, and after going through the.contents of the letter, we feel that the claim has* been wrongly recommended for - repudiation by the Branch.office,, seconded by the Divisional office and agreed upon by the Competent Authority by concealment of material fact^ and records on the claim note, therefore, wrongly analyzing the claim file with malicious intent, On going .through the contents of the' ■ 60 . 'SuYvey-report and Investigation report, obtained'through The RTI Act, I 5 ■ . 2005,-and also analyzing the. repudiation, letter, our respectfur j
6 5 I refutations tolhe' wrongfurrejection of the bonafide claim are as under:- ' • !• SURVEY REPORT ' . .
' The surveyor, in their, survey-report 25/10/2014 under heading "Cause'of Loss" have elaborately concluded that the originating . ..Cause of fire was,due; to Electrical sparking, as the most probable cause, as the affected shed was found fitted with a lot of ' '.wiring/cabling/ lighting points, panels, switches and fittings.
The surveyor had ruled out malicious damage.
The surveyor had also stated that power to Supply to factory indeed remained powered during night hours for. lighting., The surveyor in 12^ .para of the' 'CaUse of Fire' .concluded that ' ^initiation" of short circuiting or 'sparking could be from joints, . . leaked/punctured electrical wiring, cabling or bursting of bulb/tube light etc. installed in the shed adjoining to or near the place of storage bi stocks inside the shed. The loss appears to have occurred due to electrical short circuit or .similar other faults, resulting in emission- of • sparks1, which'-woilld have failelbn;stoelk! of .woods etc lying beneath or stored nearby causing their ignition and eruption into flames. The • fire so started would have spread and engulfed a large area of the entire shed, followed by burning and,heat damage to stock.
61The surveyor^ in their wisdom had concluded thht root cause of fire appears to. be '.electrical short -circuiting.
.The surveyor's.,further;submission that the,root cause is eventually^ , left to the observations/conclusion made in the Forensic Report with , * f 4 Tina! decision that of the Insurers, was in complete violation of the IRDA's Surveyor and Loss Assessors Regulations, 2000 Chapter IV "Duties and responsibilities of a surveyor and Loss Assessor • , Point, .13 (viii), which states1 that it :was the duty and responsibility of the surveyor to have commented on the admissibility of the loss as also observance of warranty, conditions under the policy contract.
1 > •( ■ ■ . • 1 ' .
Once the- Surveyor had concluded loss due to 'ignition' of electric .short circuiting leading for fire, the loss is covered by the policy, andt' the surveyors leaving the matter to be decided by underwriters 11 , -
becomes insignificant in light of his conclusion that the fire has took, t place due to electrical short circuiting. Such type of assertions ■ , ' '•1 ■ ' 1 ■ *. '<' ■ ■ aihoUnWiSD' uhderinining his owriTm'din^'' , } U 11 The surveyor had,not cast any doubts on the integrity or moral character • of. the Insured management;. The report does not state ■ • violation of any terms and conditions df the policy. The insurers too ■ ' have not specifically stated in the repudiation letter that under which, policy condition, the claim was found not payable.
622. The Investigator's Rep.or_t± , .
; The- investigator's report had no where stated that the surveyor had wrongly concluded the loss due to--Electrical short circuiting. The investigator had gone a step ahead and "Inferred" that the possibility \. * • of use pf extraneous "fire accelerants" -such' as Kerosene or diesel Oil". '■ ' ' The investigator's observation .al; Point 'C is wrong and in contradictioh to the surveyor's Gliding, where the surveyor affirmed that power supply to the factory indeed remained powered' during ,' . night hours for lighting purpose for safety/security. '• ■ ' • e i 1 Point No',!d,e,f were irrelevant ■ • Tffe ihvdsti'gafdr's Conclusions■ar?cou'nted' by us as under:-
■ Point (a)' is contradictory to th& finding of the surveyor. Refer "Cause of Loss", 1 ♦ . * , •* f »! ( . • b) The insured had never claimed loss to be due to process failure, 4
c) The insured had not claimed loss due to natural causes. "Act of , ' '' God". -' ' . . , .
II ' I ' ' 11 * ' ' t * < f I
..-r-'' ■' . . .'' 1
dj The investigators inferences that, fire -was on account of possible •
use of extraneous ignitable fire accelerants, is mere conjectures and surmises, without solid definite' proof and whether that material 63 lying/stored'was inddental^tO;thc'^ufacWring trade or.not and ' whether 'the accelerating material was illegally brought oh the factory1 ■ ■ 1 1 ' 1 / ■ . ■ premises., \
e) The 'allegations leveled are uhsubstanfiatei and more over, when the investigator states that management was not involved directly or ' ' t » t i , tl3' I < ' .indirectly in the fire loss, the claimed'loss was squarely covered by policy coverage. ' , •- ' t . 4 31 YOUR REPUDIATION LETTER DATED 5/11/20151 , , ..i1'1' 'V.J ■' 1 , ,* '/*. ' ,, 'A i ' j The company in order to repudiate ■ the ' claim, had deliberately ' misread'the Survey- report and investigators report. ' i • f , 4r f r, ft ■ » < * 'We 'submit that both the reports are Complimentary to eabh other, in , the sense, that the surveyor stated that fire loss is due to 'Ignition' , * 1 1 and sparking in the electrical wires spreading to eruption of fire on • 'stocks lying at the premises. Simultaneously, the investigator states 4 that fire "accelerated". , , The underwriters failed to correlate &e sequence, of loss, whereas,, the 1 Surveyor states that Cause of loss was due to .ignition In' electrical cables etc. the investigator states the fire accelerated further. Unless there is 'ignition'' there cannot 'acceleration'. / • ' ' / ' ' ' * * r * * i The surveyor, investigator as well as Underwriters had concluded that ' there was no direct or indirect involvement of the management, that being the admitted position of records, the loss is fortuity covered by 64 fire policy''coverage and insurers W liable to ^ay the rightful claim bi' t than rejeeting the same.
I , • .
Further, the' Investigator was appointed by Head office on • 16/05/2013 and the, investigators report was in the hands of, •insurers on 18/10/3013. The'underwntors n^eds to explain why the • report iyO'Wjit close to chest •foh'taore tfikri'diie year, and not shared 1 • ► with the surveyor and insured. ■ . 1 ' ' '4 .4 ' ' Why the ■'investigator^ report was, also not ...shared, with Police • 'Authorities and •Fire' Brigade: Department, If the findings were contradictory to the Authorities Reports? , . • • . * * "
fWhy the rcpl^/adviscs of the. surveyors tendered vide their letter dated 06/03/2015, were not' acted upon, (please read last para), ^her$ t^ jweyor advised you h? sfiar^b investigation report with police and If police revised their police report,, attributing the loss to malicious damage, you were to rejert back to the surveyors for their I re-commenting for the acceptoilce/rejecthig 'Of the liability? The ( .insurers wilifully choose not to heed to the surveyors |dv|ses and 5 ■ I * went ahead, to'repudiate the claim. All these facts were not.brought '.on record by-tbc branch office through the claim note and the higher .authorities also conveniently over looked the facts and records since ' their intention, was to reject the claim and reduce their claim ratio in their books'of accounts,' ■' • • . ; .. . •. -
, h'"' *'<!• ''?V ' ?' ' j ? '' ''1 1 'I* » 65 BRANCH OFFICE CUIM KQTE PATEP ; 06/08/2015 i > • ' I » J . .The BmqWfftce'received the isUryey^r^'ort.ph^S/10/2014 and did not act-fast to process the claim file in'accordance with the IRDA \ ■ Regulations1 2002. PPI .Interests Regulations clause '9', which requires a claim to be paid or repudiated within 30 days from the . ■ receipt of the Survey report of additional report as the case may < i 4 be or else pay interest 2% higher that the Bank Interest rate. We are'entitled to* be paid claim with'interest from'25/'ll/2014 till the . 'date of payment of loss. .
T|ie 'claim n$e ■^crupdoU8|y>J^bred^1|tJie,>piidingsipf the- Survey- . report, Police Report, Fire Brigade'report, the surveyor's advisoiy letter dated 06/03/2015. The Company's' Engineer's Inspection ' Report, as directed by H.O. was also not brought on.the record in the ■ ' claim-note. The copy was not shared with the purveyor, insured' or .... ; ' :
investigating authorities.
A' dubious, claim ' note with' conccaJment of vital I ' documeni/infonnation and records were prepared by Branch office 'with, sole and malafide. intent to recommend*repudiation; It may ' ' f&her Se'hoted that in'your reputation' letter in the last paragraph you have stated'that policy provides coverage against damage/loss ' caused by an accidental fire* In this regard your attention is drawn to' Section II of Standard Fire and Special Perils Policy (Material Damage) Policy terms and conditions and ask you to ■ show us the word 'accident' appearing in the fire tariff. The preamble'' • I » 1 1 66 <1 ' > of the policy wording states that the company shall pay to the insured. for loss, damage or .destruction to. the policy due to' the'Operation of • the insured perils.. In the entire '.tahiff, thede is not' word like > « ' i! ' 'accident', which you have invented to reject the claim. Please also \ appreciate when the surveyor concludes- that electrical short . 'circuiting has resulted into ignition of fire and the surveyor as well as investigator and also your company admits that the loss/daraage was ' l - t » • npt '(uejojajjy direct dr mdir^t involvement.of tU management and/or their employees, will this not be treated as 'accidental loss' by the company?1 , . ' -
I t
, •. ... i. • ? .■ -1 •n,
•* ! t ■
1 i »
*
THE SVRVEYOR'S LETTER DATED 05/08/2015 , _ ■ 1 I .The-surveyor', had violated the fOA' Regulations by tendering , I I ' ' I ■ 'opinion- that the ignition was not accidental hence, liability does not' , , attach.
,A'
It was.1 the?.surveyor
'
's.duty and rcspansiBility
'■ '* -'k . I. ' i ' ,
to■ have,' involved I
'trie insurca and sought their sUbnfssiohs/The surveydr had over » t ,
turned their own'findings as enumerated in the 'survey-report ''Cause ' of Loss"'without the knowledge of the insured and granting them the ' I • ' , l« I
-
opportunity to present.their rebuttal / - ■ - * • J' • .The surveyor's opinion cannot'be the basis of denial of the claim/The • ' surveyor acted like stooges of insurers, ' • 67 IF REPORTS,. CLARIFICA^IdNiSr INVESTIGATOR^ REPORTS WERE CONTRADICTORY Although, the Surveyor's report and investigators report were not contradictory to each other, rather complimentary, even if, for the \ *1 ' sake of the arguments, there were any ambiguities in the report^ the insurers were duty bound to have referred the matter to IRDA for appointing of second surveyor, under intimation to the insured, . by listing the point which required further clarifications. The insurers were.to act as per Sectot'<4rUM dPthe In&urtOhcc' Act, which requires referring the • matter to 'Authorities' for appointment of another surveyor.
In view of the above submissions/refutations, we call upon you to ' > « > revisit the decision taken on the claim file and pay our legitimate' Claim, without further delay.
We hereby solicit that either the. company pays the claim or refer the claim file to IRDA for appointment of Second Surveyor, not on your , panel or in the end, the insured also reserve ^heir'rigbt tq. appoint their own surveyor, repoft of whom shall be binding on the company.
♦ •
i
We look (orward to the review of the decision taken on the claim file and expect the claim amount to be paid at the earliest possible time.
Thanking « you, Yours faithfully, MR.RISHI. PAL eof' swy 'U£/ 4 Hi ' ' 1» ' 1 ' 'V.* 71 ' "'5': '■ UVLf director 68 A reminder was sent to the same effect on 09.08.2016 and 09.09.2016 raising their objections followed by another reminder on 20.09.2016 but of no avail. It is thereafter that the present Complaint was filed and the Insurance Company filed its written statement on 03.08.2017, to which a rejoinder has been filed on behalf of the Complainant on 19.01.2018.
Having perused the documents and the events referred to hereinabove, the repudiation dated 05.11.2015 proceeds to rely on the report of the Investigator Truth Labs dated 18.10.2013 and the Surveyor's Report dt. 25.10.2014. We may point out that the Report of the Surveyor dt. 25.10.2014 was tendered without any assessment or without having information about the Investigator's Report dated 18.10.2013.
The Insurance Company informed the Surveyor about the Forensic Report dated 18.10.2013 thereafter, which is evident from the letter of the Surveyor addressed to the Insurance Company dated 06.03.2015. The Surveyor categorically states therein that it had reviewed the said Forensic Agency Report, following the submission of their Final Survey Report dated 25.10.2014. The Surveyor has opined that there was a contradiction in the Police Daily Diary Report and the Investigator's Report but since the Investigation Report is based on scientific determination, the Surveyor was placing reliance on the same. However, the Surveyor goes on further to state that if the Investigator's Report and suggestion about an act of deliberate setting of fire is believed without any direct or indirect knowledge or involvement of the Complainant, then the Report of the Investigator should be shared with the Complainant for a complete investigation by the Police. If the Police finds any case of malicious damage, then only will the Surveyor be able to make any recommendation for acceptance or otherwise of the liability of the Insurers.
a O69 The aforesaid letter dated 06.03.2015 therefore makes a recommendation for the assessment of the Investigator's Report by the Police and for obtaining any opinion in that regard, and for that purpose the Report should be shared with the Complainant.
It is with this in mind it seems that the Insurance Company dispatched the letter dated 11.03.2015 to the Complainant referring to the Forensic Investigation Report and called for a clarification from the Complainant. The Complainant has alleged that the Forensic Investigator's Report had not been shared with them but from this letter it appears that the Complainant was made aware about the same.
This stands confirmed because the Complainant gave a reply on 23.03.2015, copy whereof has been extracted hereinabove. In para-3 of the said reply, the Complainant has specifically stated that for manufacturing purposes raw materials are used at the plant, including Phenol (Carbolic Acid), Formalin and Lubricants like Hydraulic Oil. All these items have been explained in para-3 of the said reply to contend that all these chemicals and oils were present and fire had occurred accidentally that spread on account of the presence of such elements. The fire therefore consumed the same including a large quantity of hydraulic oil, the capacity whereof has been indicated to the tune of 500 liters in the core dry machine, 50 liters in the hot press machine and 40 liters in the hydraulic lifts, with which these machines were filled up to their maximum capacity. All these machines had come under the spate of the fire during the incident and the oil within these machines spilled and spread out and therefore the debris was found containing accelerants of gasoline products. This detailed explanation therefore was in relation to the Forensic Report which had indicated the presence of Hydrocarbons.70
Not only this, the Complainant thereafter dispatched a mail on 14.06.2015 and then again on 30.06.2015 explaining the presence of these ignitable commodities in the premises to justify that the debris had indicated traces of these accelerants on account of their presence on the date when the incident occurred. These mails have been extracted hereinabove that have explained the presence of such material in order to justify the presence of Hydrocarbons as indicated in the Truth Labs report.
The repudiation letter in one line states that the clarifications given by the Complainant to the points raised by the Investigator were minutely looked into and were not found convincing. This conclusion in the letter of repudiation is bereft of consideration of the said explanation that was set out in detail by the Complainant. To the contrary, an inference has been drawn that since Hydrocarbons in the burnt debris were found, they were on account of possible use of extraneous ignitable fire accelerants like kerosene or diesel. This inference which has been drawn in the letter of repudiation is without getting the explanation of the Complainant assessed by the Surveyor or by the Investigator. The conclusion drawn is without seeking any opinion from them and the letter of repudiation is only a reproduction of what has been stated in the Truth Labs Report.
It is by now well settled that the Commission has to take notice of expert opinion or the opinion of the Surveyors but the Commission is not necessarily bound to accept the opinion if it is found to be irrational or arbitrary. Reference be had to the judgment of the Apex Court in the case of New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009') 7 SCC 787, where two successive reports of Surveyors appointed one after the other were discarded and it was observed in para-15 as follows:71
"15. ... but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured."
In the instant case the reasoning produced in the repudiation letter dated 05.11.2015 is an arbitrary approach, inasmuch as the explanation given by the complainant has been cursorily in one line stated to be an explanation that was unconvincing. We fail to understand as to why the explanation given by the Complainant in respect of the presence of certain chemicals and oils evidencing availability of usables possessed of Hydrocarbons has been disbelieved and not considered or even not sent either to the Surveyor or to the Investigator for any evaluation. The explanation given by the Complainant therefore has not been considered either appropriately or correctly and the conclusion drawn of the presence of Hydrocarbons in burnt debris in all probability could have possibly been on account of the burning of the chemicals and the hydraulic oil as demonstrated by the Complainant. The evaluation of the explanation given by the Complainant in the letter of repudiation is neither empirical nor objective and its rejection by simply saying that it is not convincing is an arbitrary comment of the Insurance Company.
Learned counsel for the Complainant has rightly cast a doubt on the conduct of the Investigator M/s Truth Labs which he contends to have supplied a tailor-made report that is tainted with prejudices. For this reference be had to the judgment of the Apex Court in the case of Canara Bank Vs. United India Insurance Co. Ltd., which is the same Insurance Company as the opposite party herein, reported in (202(H 3 SCC 455. In that decision the same Insurance Company had relied upon a 72 report by Truth Labs as extracted in paragraph-14 of the said report that is extracted hereunder:
"14. The Insurance Company relies upon the findings given by a company, namely, Truth Labs and those of Rank Surveyors Pvt. Ltd., which read as follows:
"Based on a thorough and in-depth inspection of the incident site, forensic examinations, field investigations, documentary evidence analysis and personal evidence obtained, it is concluded that the fire occurred in M/s Sree Devi Cold Storage, Biliary on the intervening night of 13-1- 2014/14-1-2014:
(a) Was not due to spontaneous combustion on account of bacterial/chemical fires.
{b} Was not due to electrical failure caused by short circuit.
(c) And was on account of extraneous ignitable fire accelerants such as kerosene used deliberately for ignition, initiation, propagation and burning of stocks in the cold storage through human intervention.
(d) Based on the motive, means and opportunity to carry out such malicious acts the possibility of the involvement of management in such a nefarious act cannot be ruled out." "
A comparison of the language used by M/s Truth Labs in the present case also is quite similar to the words used in the aforesaid report that was being considered by < :
the Apex Court. In that case also the Apex Court found that the presence of Hydrocarbons was on account of certain material as urged by the Insured that was used for the construction of a cold storage that had in all probability led to the presence of Hydrocarbons. The same Investigator M/s Truth Labs had conducted itself in a manner that was not approved by the Apex Court. Paragraphs-13, 15, 16 and 17 of the said judgment are extracted hereunder:
"Whether the fire was an accident?
13. As far as this issue is concerned, both the State Commission and the National Commission have come to the conclusion that the fire was an accidental fire and occurred due to a short circuit. These are pure findings of fact which, in our view, cannot be challenged in these proceedings. However, since lengthy arguments were addressed by Shri P.P. Malhotra in this behalf, we shall deal with the same. At the outset, we may note that the electrical inspector, the police investigation team and the forensic 73 science laboratory (FSL) have all come to the conclusion that the fire took place due to a short circuit. The concluding portion of the report of the FSL reads as follows:
"From the above examination, the following observations have been made:
1. Presence of combustible materials like thermocol (which are used to insulate the walls) pillars, wooden partitions and the grains stored inside the building could have enhanced the spread of fire.
2. The congested space in the building might have accelerated the smouldering fire.
3. The fire might have originated at the sixth floor front side of the building. But it was not possible to locate the exact place of origin of fire since the complete building was involved in fire.
4. An electrical short circuit may have initiated the fire."
15. We may note that it is not disputed that in the construction of the cold store, the temperature was maintained by insulating the walls of the cold store. Bitumen (coal tar) and thermocol were used for providing insulation. FSL found that in a fire which takes place in a building where such material is used for construction, hydrocarbons would obviously be present. On the other hand, M/s Truth Labs mainly relied upon the presence of hydrocarbons to come to the conclusion that the fire had not occurred spontaneously and on account of electrical short circuit but occurred on account of extraneous ignitable fire accelerants such as kerosene. The conclusions of M/s Truth Labs were based on some inspection and chemical analysis carried out by a team headed by Dr R. Srinivas. Admittedly, this report of Dr R. Srinivas was never furnished to the parties nor was placed before the State Commission. Interestingly, when Mr G.V.H.V. Prasad, Director of M/s Truth Labs was put a specific query whether the walls of the ground floor and the top floor and the inside portion of the cold store along with 169 pillars were constructed by sandwiching bitumen and thermocol between the concrete in order to raise the level of insulation, he replied that "he was not aware of how the cold storage was built". This clearly shows the shoddy manner in which M/s Truth Labs conducted the investigation. There can be no proper investigation of a fire if the investigating agency does not even try to find out what is the nature of construction of the building which has been destroyed in the fire. M/s Truth Labs has clearly stated that the observation that fire took place on account of extraneous ignitable fire accelerants, is based on the chemical analysis report which shows presence of hydrocarbons in the debris. It is apparent that M/s Truth Labs, for reasons best known to it, did not analyse the material used for construction because if it had done so, it would have realised that hydrocarbons would be present when thermocol or bitumen are burnt. Thermocol is basically a rigid plastic foam material which is derived from petroleum and natural gas by-products. Bitumen is a semi-solid hydrocarbon product produced 74' from crude oil. Both thermocol and bitumen are derivatives of petroleum products and hence are hydrocarbons by their very nature. Therefore, presence of hydrocarbons would be natural when a fire takes place. The presence of hydrocarbon could not lead to a conclusion that kerosene oil had been used to ignite the fire.
16. The National Commission has also dealt in detail with this issue and has come to the conclusion that M/s Truth Labs visited the burnt cold store on two occasions and collected samples on both the occasions. It, however, decided to send 12 samples collected only in the second visit for analysis. Interestingly, the controlled samples were collected from a plastic bag containing (fresh unaffected), chillies found in the burnt stock of the affected premises. The controlled samples did not show presence of hydrocarbons and hence, the assumption that the presence of hydrocarbons in the remaining samples was not relatable to thermocol and tar. There is no explanation why the samples taken on the first visit were not sent for analysis. It is also difficult to believe that in a building which has been totally gutted in a fire, there would be one plastic bag containing (fresh unaffected) chillies found in the burnt stock. It is possible that these unburnt chillies may have been introduced later on. Therefore, we cannot place any reliance on the report of M/s Truth Labs.
17. In any event, neither in the report of M/s Truth Labs nor in the other reports by the Insurance Company is there anything to show that the insured had set the cold store on fire. Whether the fire took place by a short circuit or any other reason, as long as insured is not the person who caused the fire, the Insurance Company cannot escape its liability in terms of the insurance policy. We reject the contention of the Insurance Company that the fire was ignited by the use of kerosene and hence it is not liable."
The absence of any such investigation in the present case is also writ large, inasmuch as firstly the report of the Investigator M/s Truth Labs was sent to the Surveyor after the submission of the Final Survey Report and in spite of the recommendation of the Surveyor to share it with the Complainant, no action was taken by the Insurance Company thereafter to call for any further investigation or report from the Investigator on the explanation given by the Complainant clearly stating that there were chemicals and hydraulic oil and other substances present that were consumed in the fire that in all probability would have led to the presence of the Hydrocarbons in the debris. The said aspect was neither addressed to nor 75 investigated and the Insurance Company has simply brushed it aside by saying that it has been considered and is unconvincing without any attempt to analyze or rebut the same.
What appears to be unacceptable is the Insurance Company again approaching the Surveyor and obtaining their letter dated 05.08.2015. The letter has been extracted above and once the Complainant had given an explanation, it is hot understood as to why the letter dated 05.08.2015 does not refer to the explanations given by the Complainant, which obviously means that the Insurance Company never sent the explanations given by the Complainant referred to above to the Surveyor for any reassessment or evaluation as indicated above nor does the explanation seem, to have been either noticed or evaluated.
The letter dated 05.08.2015 therefore as per its recital simply informs the Insurance Company that the Investigator has confirmed that the source of ignition was not accidental and therefore no liability arises against the Insurance Company. We are unable to sustain the aforesaid approach of the Surveyor, inasmuch as the Complainant has rightly urged that there is a distinction between source of ignition and the cause of fire. As discussed above, no material has been brought forward'to contradict the reports of the Police, the Fire Station and the Surveyor himself indicating that the cause of fire was suspected to be a short-circuit. The U-turn taken by the Surveyor in the letter dated 05.08.2015 is based on the Investigator's Report which seeks to derive its inference on the presence of Hydrocarbons in the debris whereby it has been concluded that some inflammable accelerants like diesel or kerosene seems to have been utilized. As explained above, this inference is without taking into account the presence of any chemical or hydraulic oil etc. that was explained in detail by the 76 Complainant to the Surveyor as well as to the Insurance Company. The Investigator's confirmance is based on speculation without evaluating the aforesaid factors has been explained by the complainant that was never made known to the Investigator. The Investigator M/s Truth Labs on its own speculation inferred an imagined alleged possible use of diesel and kerosene as an accelerant. This imagination was purely speculative and there was no evidence except the presence of the Hydrocarbons which could have been in all probability due to the presence of chemicals and the hydraulic oil as stated by the Complainant. This was neither investigated by the Surveyor or by the Investigator nor did the Insurance Company get it evaluated as observed above.
We may therefore once again reiterate that as in the case of Canara Bank Vs. United India Insurance Co. Ltd. (Supra) decided by the Apex Court it can be safely presumed that the report nowhere establishes that it is the Insured who had caused the fire and consequently the Insurance Company cannot be absolved of its liability.
The letter dated 05.08.2015 therefore seems to have been procured by the Insurance Company to reaffirm their approach in order to proceed for repudiation.
The said sudden turn taken by the Surveyor is contrary to the conclusions drawn by him in his own Survey Report. This renders the opinion of the Investigator and the Surveyor as uncreditworthy.
The Insurance Company therefore attempted to arrive at a decision to repudiate by all means which does not appear to be fair and therefore this is a clear deficiency in service. The approach of the Insurance Company is absolutely unwarranted and seems to be guided with a view to dislodge the claim of the Complainant and make it appear to look like an act of instigation and not an accident.
77The nature of the fire, its extent and its description in the Survey Report dated 25.10.2014 establishes beyond doubt that the fire was accidental; its spread was devastating; and was caused due to the presence of some accelerants that has been explained by the Complainant as referred to above. We therefore find this to be a more probable and rather a highly probable cause of an accidental fire and we therefore reject the conclusions drawn by the Investigator that the fire might have been instigated.
As pointed out above, it is not the case of the Insurance Company that someone was found igniting the fire with any extraneous source. There is no material to substantiate the same including the Police report as well. The inference is based only on the inferential speculation of the Investigator which we have found to be unacceptable. Learned counsel for the Complainant has rightly relied upon the judgment in the case of New India Assurance Company Limited Vs. Protection Manufacturers Private Limited (Suora^ to urge that the act of arson nowhere stands proved and therefore no conclusion of any deliberate act can be inferred. The conclusions drawn by us hereinabove on the basis of material on record are therefore supported by the ratio of the aforesaid judgment.
We may point out that even otherwise if the cause of fire remains indeterminate, the Apex Court in the case of New India Assurance Co. Ltd. & Ors.
Vs. Mudit Roadways 2023 SCC OnLine SC 1532 has held that in the absence of any element of instigation the Insured deserves to be indemnified.
The aforesaid decision also supports the conclusions drawn by us and the Complainant is entitled to claim indemnification for the loss and consequently deserves to be compensated.
78We are therefore of the opinion that the claim deserves to be allowed and accordingly we hold that the Insurance Company was unfair and has committed an act of deficiency in service by repudiating the claim vide letter dated 05.11.2015. The repudiation therefore cannot be sustained and we therefore find that the Complainant is entitled for the relief as prayed for.
The claim made by the Complainant is for Rs.2,13,38,400/- whereas the Surveyor has assessed the claim to the tune of Rs.1,19,28,871/-. We have perused the Surveyor's Report and the assessment of loss that has been made by it is step-
wise and item-wise. in our considered opinion, the loss assessment and the adjustments made by the Surveyor have been drawn up objectively and empirically.
We do not find any error in the calculations and the computation made by the Surveyor in respect of the calculated and adjusted loss. The settlement recommended according to the Final Survey Report is for Rs. 1,19,28,871/-. We accept the same and allow the Complaint with a direction to the Insurance Company to remit a sum of Rs. 1,19,28,871/- to the Complainant within two months from today along with interest @ 6% per annum with effect from the date of loss i.e. 16.05.2013 till the date of actual payment. In the event of any default of making the payment, the rate of interest shall stand enhanced to 9%.
With the aforesaid directions, the complaint is allowed.
Sd/-
( A.P. SAHI, J. ) PRESIDENT Sd/-
( BHARATKUMAR PANDYA ) Mukesh/VM/Court-l/Reserved Matter MEMBER 79