National Consumer Disputes Redressal
Aman Saraogi vs National Insurance Co.Ltd. & Anr. on 26 August, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 68 OF 2008 1. AMAN SARAOGI Proprietor, M/s S.R. Enterprise, 4/1-A, Jagmohan Mullick Lane Kolkata - 700 007 West Bangal ...........Complainant(s) Versus 1. NATIONAL INSURANCE CO.LTD. & ANR. Through its Chairman-cum-Managing Director, 3, Middleton Street Kolkata - 700 071 West Bengal 2. BRANCH MANAGER, NATIONAL INSURANCE CO. LTD. 8, India Exchange Place Kolkata - 700 001 West Bengal ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Mr. A. K. De, Advocate
Mr. Rajesh Dwivedi, Advocate
Mr. Zahid Ali, Advocate For the Opp.Party : Mr. Kishore Rawat, Advocate
Dated : 26 Aug 2015 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
The complainant in CC No. 70 of 2008 is a private limited company stated to be engaged in the manufacturing and export of plastic comprising plastic Agglomerates, Granules, Eco-Wood, etc. The aforesaid complainant took two Standard Fire and Special Perils Policies from the OP - ICICI Lombard General Insurance Co. Ltd., one insuring its building, plant and machinery for a total sum of Rs.3.80 crores and the other insuring its building, plant and machinery as well as stocks for a total sum of Rs.20 crores. A fire broke out in the units of the complainant situated in Falta Special Economic Zone, Dist.-24 Parganas of West Bengal and all the units are alleged to have been completely gutted. On being informed of the fire, the Insurance Co. appointed M/s Cunningham Lindsey International Pvt. Ltd. (hereinafter referred to as the Surveyor) for the survey and assessment of the loss. One Mr. Shambhu Alagundgi was almost simultaneously appointed as the investigator to investigate into the incident of fire. The surveyor as well as the investigator required the complainant, from time to time, to furnish information/documents, only part of which were actually submitted. The claim having not been settled, for more than 13 months after the incident of fire, the complainant has approached this Commission seeking the following reliefs:-
"(i) hold that the respondents are guilty of deficiency of service and unfair trade practice and have thereby violated the relevant provisions of the Consumer Protection Act, 1986;
award a sum of Rs.23,80,00,000 (Rupees twenty three crore eighty lac) in favour of the complainant payable by the respondent towards the loss suffered by the complainant arising from the incident of fire;
award a sum of Rs.5 crore in favour of the complainant towards compensation for business loss, mental stress, agony and harassment suffered by the complainant;
award interest @ 18% p.a. being pre-suit, pendentelite and future interest on the reliefs claimed in (i) to (iii) above till the date of actual payment.
award costs of Rs.10 lac to the complainant which is likely to be incurred in conducting the present proceedings."
2. The complainant in CC No.68 of 2008 is alleged to be engaged in manufacturing-cum-trading and export of plastic products, engineering goods, textiles and readymade garments. The aforesaid complainant obtained a Standard Fire and Special Perils Policy from the opposite party in this case, namely, National Insurance Co. Ltd. for a total sum of Rs.19 croes, insuring his building, plant and machinery, raw-materials, semi-finished goods, finished goods and packing materials lying at his unit in Falta Special Economic Zone alleging huge loss to his unit in the fire which broke out in the night intervening 8th / 9th April 2007, he also intimated the incident to the Insurance Co. which appointed M/s Mehta and Padamsey Surveyors Pvt. Ltd. for survey and assessment of the loss. In this case also, the surveyor sought information and documents from the complainant from time to time but only part of the same was supplied. Since the claim was not paid, he is also before this Commission seeking the following reliefs:-
"(i) hold that the respondents are guilty of deficiency of service and unfair trade practice and have thereby violated the relevant provisions of the Consumer Protection Act, 1986;
award a sum of Rs.17,02,38,594.31 in favour of the complainant payable by the respondents towards the loss suffered by the complainants arising from the incident of fire;
award a sum of Rs.5 crore in favour of the complainant towards compensation for business loss, mental stress, agony and harassment suffered by the complainant;
award interest @ 18% p.a. being pre-suit, pendentelite and future interest on the reliefs claimed in (i) to (iii) above till the date of actual payment;
award costs of Rs.10 lac to the complainant which is likely to be incurred in conducting the present proceedings."
3. Soon after filing of these complaints, the claim in CC No.70/2008 filed by M/s Plastolene Polymers (P) Ltd. was rejected by the ICICI Lombard General Insurance Co. Ltd. vide its letter dt. 3.6.2008, on the following grounds:-
"While perusing the Survey Report we find that the Surveyor has pointed out the below mentioned facts:
* There was no evidence of storm at Falta SEZ on the date of incident, as evidenced through Meteorological data obtained from Diamond Harbour (at a distance of 13.8 km), Haldia (at a distance of 30.04 km), and Alipore (at a distance of 34.36 km), as well as newspapers, which did not report any storm at Falta during the night of April 8, 2007 or April 9, 2007.
* There was evidence that the HT pole had got bent as a result of an external fire and not due to weather conditions or fatigue. There was also no evidence of electrical short circuit in the electric feeder line from the bent pole to the next pole.
* Material evidence of partially burnt cupboard found in the kitchen on the second floor of the Admin Building in Plot 10 was found missing. Fire incendiary material was found in the partially burnt portion of this cupboard.
* Traces of fire incendiary materials like diesel, kerosene and mineral oil were found in the samples collected from debris at site.
Since the Surveyor has concluded that the cause of fire is not accidental in nature, our liability under this policy does not arise.
Thus, the captioned claim lodged by you is not admissible as it falls outside the purview of the stipulations, provisions and terms and conditions of the policy."
4. In its reply to CC No.70 of 2008, ICICI Lombard General Insurance Co. Ltd. has taken the preliminary objection that the complainant having not approached this Commission with clean hands, their claim is liable to be dismissed at the threshold. It is also stated in the reply that the claim is bogus as revealed during investigation and the complainant had not even provided the entire documents/information sought by the surveyor/investigator. Another preliminary objection taken by the opposite party is that the matter being of a complex nature requiring examination of lot of records/documents and examination of evidence and cross-examination cannot be resorted to under the summary jurisdiction of the consumer forum. On merits, the complaint has been resisted on the same grounds on which the claim was repudiated by the Insurance Co. The National Insurance Co. Ltd, OP in CC No.68 of 2008 also has taken a preliminary objection that the fire in the factory premises of the complainant not being accidental in nature and rather being a deliberate act of arson, the complaint is liable to be dismissed. It is also stated in the reply that the complainant Shri Aman Saraogi is a member of Sontholia Group of Companies which owns Plastolene Polymers Pvt. Ltd., complainant in CC No.70 of 2008. On merits, the complaint has been resisted primarily on the same grounds on which the claim was repudiated by the Insurance Co.
5. Vide its letter dt. 12.2.2009, the National Insurance Co., opposite party in CC No.68 of 2008, rejected the claim stating inter alia as under:-
"We have gone through the reports of the surveyor, their clarifications and other material documents relating to the claim. On close examination of the claim papers we find that not only the policy was obtained by misrepresentation of the material facts, the cause of origin of fire given by you on investigation was found to be totally incorrect.
As per the report lodged by you with the Fire Services and as per your claim, on account of cyclonic conditions, the electric pole of a high tension overhead electric wire collapsed on the unit located at plot No.4 resulting in devastating fire. As per the report of Meteorological Department on the date of incident there was no storm like conditions. Further assuming though not admitting, there was a storm, it is difficult to believe that it had bent a single pole in isolation without leaving any trail/path of damages behind it. Further the surveyor did not find any evidence of torsion on the concerned pole due to violent impact of storm. On the contrary, surveyor has attributed bending of the concerned pole due to external severe heating caused by fire. Further, there was no evidence of electrical short circuit in the electric feeder line from the bent pole to the next pole. That the electric wires produced during examination were found to have been burnt due to external fire with no evidence of electric short circuit. The very basis of your claim with regard to the cause of fire is therefore not based on correct facts and we have reasons to believe that you in order to divert the attention of the surveyor from probing the actual cause of fire have purposely and deliberately twisted the facts with malafide intention to cause unlawful loss to us and unlawful gain to yourself.
As per your own claim, the fire originated at the premises of your sister concern namely Plastolene Polymers Pvt. Ltd. (One of member company of Sonthalia Group of Companies of which you are also one of the member company) and the spread of the fire to your premises as per the forensic experts is beyond comprehension and against the Rule of Fire Dynamics. From the geographical situation of the various units Nos. 4, 9,10,11,12 & 7 affected by fire, the fire moved in a peculiar 'U' shape without affecting the unit No.5 & 6 which belongs to M/s Deltmal. Interestingly all the units referred to above and affected in the fire incident belonged to the Sonthalia Group of Companies, you being a member company of the said group. The ground situation reported by the surveyor is that each unit is separated by sufficient open space which would prevent the spread of fire from one unit to the other especially keeping in view the nature of stocks lying therein. Therefore, your case that the fire spread from one unit to other and ultimately affected your unit is not acceptable and lead us to the conclusion that in all probabilities fire originated in each unit separately and involves a deliberate act on your part.
As per the report of State Forensic Laboratory, the fire was intense having high temperature and height whereas the plastic granules present on the spot were not so highly inflammable. Therefore, it has been opined by the said Laboratory that some highly inflammable material during the fire gave rise to such a devastating fire"
Reliance was placed by the Insurance Co. on Conditions No. 1, 3, 6 and 8 of the insurance policy issued by it.
6. Since the learned counsel for the complainant in CC No.70 of 2008 challenged the very appointment of the investigator on the ground that the said appointment was contrary to the provisions contained in the Insurance Act, the first question which arises for our consideration is as to whether the appointment of the surveyor was illegal and if so, whether the said appointment vitiated the report submitted by the investigator. The appointment of an investigator simultaneously with the appointment of a surveyor cannot be treated at par with the appointment of a second surveyor after report by the first surveyor is submitted to the Insurance Co. Though there may be some overlapping in the functions of the surveyor and the investigator, the role of the investigator is restricted to unearth the mischief, if any, on the part of the insured and to verify the genesis and true nature of the incident which resulted in the alleged loss to the insured. It is not illegal or undesirable on the part of an Insurance Co. to test and verify the genuineness of the claim, particularly when the claim amount happens to be substantial. This issue, in fact, is no more res integra in view of the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Harjeet Rice Mills [III (2005) CPJ 6 (SC)]. In the above-referred case, the Insurance Co. engaged a private investigator who reported that the fire might not have been caused by short-circuit as was claimed by the insured and that it could have been arson or a deliberate attempt to make an insurance claim. The claimant contended that the report of the private investigator could not be looked into in the light of Section 64 UM(c) of the Insurance Act. Rejecting the contention, it was held that the Section 64 UM of the Insurance Act cannot stand in the way of the Insurance Co. in establishing that the claim was a fraud on the company or that it was a case of deliberately causing a fire so as to lay the foundation for an insurance claim. We, therefore, have no hesitation in rejecting the challenge to the appointment of the investigator.
7. In the claim form submitted to the ICICI Lombard General Insurance Co. Ltd., the complainant in CC No.70 of 2008 inter alia stated as under:-
" Cause of Fire/Loss
(ii) Severe cyclone that hit Falta on the night of 8th/9th April, 2007, resulted in collapse of electrical pole with high tension over head wire resulting in the devastating fire.
8. In the claim form submitted by him to National Insurance Co. Ltd., the complainant in CC No.68 of 2008 inter alia stated as under:-
" Supposed Cause of Fire
(ii) On the night of 8th/9th April, 2007, due to cyclonic conditions an electrical pole of WBSEB collapsed with the high tension overhead wire at our unit located at Plot No.4, resulting in the devastating fire. The Fire spread into two other units including ours.
9. It would thus be seen that both the complainants lodged their respective claims giving a specific cause of the fire which is alleged to have engulfed their respective premises. This was not their case, in the claims submitted to the insurers, that they were not aware of the cause of fire. Both of them took an identical stand that a severe cyclone which had hit Falta in the night intervening 8th / 9th April 2007, had caused collapse of the electrical pole which was carrying high tension wires and the said collapse led to a devastating fire, in the premises of the complainant in CC 70/2008.
10. In his Fire Investigation Report, Mr. Shambhu Alagundgi, Investigator who is M.Sc. in Criminology & Forensic Science and was appointed by the ICICI Lombard General Insurance Co. Ltd. for the detailed reasons contained in his report running into 85 pages, inter alia concluded as under:-
"13.6 There is no evidence of storm at Falta SEZ as on date of incident. Even if there was a tornado it cannot be confirmed to insured property. Even the newspapers have not reported of any storm at Falta.
13.7 The electric pole is bent as a result of external fire and not due to whether condition or fatigue.
13.8 There is no evidence of electric short circuit on the electric wires from the bent pole to the pole near the water tank adjacent to Antartica.
14.1 There was an incident of fire at the insured plots in Falta SEZ between the night of April 8th and 9th 2007.
14.2 The cause of fire is arson.
14.3 The moral hazard of the insured is not satisfactory."
11. The repudiation of the claim being based primarily upon the above-referred report of the investigator, it was necessary for the complainants to prove before this Commission that a cyclonic storm had actually hit Falta in the night intervening 8th / 9th April 2007, and the electricity pole carrying overhead high tension electricity wires had collapsed on account of the said cyclonic storm. No credible and authentic evidence, however, has been produced by either of the complainants to prove that such a storm had actually hit Falta after 2.00 a.m. in the night intervening 8th / 9th April 2007, and had resulted in collapse of the electricity pole carrying high tension electricity wires. The report of the investigator shows that the cyclonic data was being maintained at Alipur, Diamond Harbour and Haldia. No meteorological expert from any of the aforesaid observatories has been produced by the complainants to prove that a cyclone had hit Falta after 2.00 a.m. on the night intervening 8th / 9th April 2007, and it was of such an intensity that it could have resulted in collapse of the electricity pole in question. The data collected by the investigator from Diamond Harbour Observatory which is nearest to Falta, shows that the highest speed of the wind in that night was 16 km per hour. The said speed was recorded at 2.30 a.m. and 5.30 a.m. and the direction of the wind was West. The highest speed of the wind recorded by the Haldia Observatory was 42 km per hour at 2.30 a.m. though it had come down to 16 km per hour by 5.30 a.m. The direction of the wind was West-North-West at 2.30 a.m. and South-West at 5.30 a.m. The data collected from Alipur Observatory shows that the highest speed of the wind was 22 km per hour at 3.00 a.m. and 4.00 a.m. and the direction of the said wind was West-South-West. The information downloaded from the website of Metrological Department, to the extent, it is relevant reads as under:-
Table 2. Storm Intensity, Expected Damage and Suggested Actions Intensity Damage expected Action Suggested Cyclonic Storm Damage to thatched huts.
Breaking of tree branches Total suspension of fishing 62 - 87 kmph causing minor damage to operations (34-47 knots) power and communication lines Extensive damage to Total suspension of fishing Severe Cyclonic Storm thatched roofs and huts.
operations.
Coastal hutment Minor damage to power and dwellers to be moved to safer 88-117 kmph communication lines due to places. People in affected areas (48-63 knots) uprooting of large avenue to remain indoors.
trees.
Flooding of escape routes.
Extensive damage to kutcha Total suspension of fishing Very Severe Cyclonic houses. Partial disruption of operations. Mobilise evacuation Storm power and communication from coastal areas.
Judicious 118-166 kmph line. Minor disruption of rail regulation of rail and road traffic.
(64-89 knots) and road traffic.
Potential People in affected areas to threat from flying debris.
remain indoors.
Flooding of escape routes.
Extensive damage to kutcha Total suspension of fishing houses.
Some damage to Extremely Severe Cyclonic old buildings. Large-scale operations.
Extensive disruption of power and evacuation from coastal areas.
Storm communication lines.
Diversion or suspension of rail 167-221 kmph Disruption of rail and road and road traffic. People in (91-119 knots) traffic due to extensive affected areas to remain flooding.
Potential threat indoors.
from flying debris.
Extensive structural damage to residential and industrial Total suspension of fishing buildings. Total disruption of Super Cyclone communication and power operations.
Large-scale supply.
evacuation of coastal 222 kmph and more Extensive damage to bridges population. Total suspension of rail and road traffic in vulnerable areas. People in affected areas (120 knots and more) causing large -scale disruption of rail and road to remain indoors.
traffic. Large-scale flooding and inundation of sea water.
Air full of flying debris.
12. Thus cyclonic storm cyclone occurs when the speed is at least 62 km per hour. There is no difference between a cyclonic storm and a tropical cyclone. The information available on the website of Metrological Department shows that a tropical cyclone is a rotational low pressure system in tropics when the central pressure falls by 5 to 6 hPa from the surrounding and maximum sustained wind speed reaches about 62 km per hour. Since the speed of the wind in the night intervening 8th / 9th April 2007, did not exceed 42 km per hour, there is no escape from the conclusion that no cyclone had actually hit Falta at or after 2.00 a.m. in the night intervening 8th / 9th April 2007, as is claimed by the complainants.
13. It was contended by the learned counsel for the complainants that considering the direction of the wind, the speed of the wind was likely to be higher at Falta. We, however, are unable to accept the said contention. No officer from any of the three observatories, namely, Haldia, Alipur or Diamond Harbour has been examined by the complainants to prove that considering the direction of the wind at the relevant time, the speed at Falta was likely to be at least 62 km at the time the cyclone is alleged to have hit that place. In the absence of such expert evidence, we have no hesitation in accepting the report of the investigator in this regard.
14. On the request of the investigator, a 500 mm long piece of the pole which is alleged to have collapsed due to severe cyclone was tested by the Cosmic Industrial Laboratories Ltd. and after carrying out the requisite test, the said laboratory inter alia concluded as under:-
"2. There was no evidence of cracking or corrosion on the surface except for normal scale formation due to exposure to field environment. Radiographic examination did not reveal cracking, inclusions and other defects.
3. Chemical analysis revealed that the track pole is made of a medium carbon wrought normalized steel.
6. The lower tensile strength (762N/mm2), yield strength (420 & 422 N/mm2) and higher 21 & 22%) elongation in the specimens taken from the bent portion (compared to the higher tensile strength (830 & 833 N/mm2), yield strength (510 & 517 N/mm2) and lower (13.5%) elongation in the specimens taken from the locations away from the bent portion) reveals that the bent portion might have been is exposed to higher temperatures compared to the portion away from the bent portion.
7. Hardness measured along with length of the samples revealed that the hardness was relatively low at two ends of the sample compared to that in the middle. The lower hardness at two ends might be due to cutting of the sample by flame.
8. Bend test on 10 mm thick test specimens revealed that 43-45 kN (appx.4.5 tons) load was required to bend the sample to 45-50o. The force required to bend the pole (140 mm I section) is several times the force required to bend the test specimen. The wind speeds of the order of 5-10 km/hour cannot exert such a large force on the pole and cause the bending. The wind speed alone cannot bend such a thick steel pole."
No expert evidence has been led by either of the complainants to controvert the aforesaid expert opinion obtained by the investigator. Therefore, we have no hesitation in holding that the electricity pole in question could not have collapsed on account of a cyclone and in fact it had got bent due to exposure to external heat, external force or a combination of both of them. This finding also finds strength from the fact that as per the report of the laboratory, the bent portion might have been exposed to higher temperatures, as compared to the portion away from the bent portion.
As per the information available on the website of Metrological Department, the case of a cyclonic storm, when the speed of the wind is between 62 to 87 km per hour, there can be only a minor damage to the power and communication lines. An electricity pole particularly which is made of a medium carbon wrought normalized steel, is not likely to collapse in a cyclonic storm.
15. It appears to us that neither a cyclone hit Falta at or after 2.00 a.m. on the night intervening 8th / 9th April 2007, nor did the electricity pole carrying high tension electricity wires collapsed on account of a cyclone. Consequently, there is no escape from the conclusion that the complainants gave a false origin and cause of the fire to the insurers, which, in turn, shows that the claims lodged by the complainants were not bonafide and genuine that is why they concocted a false cause of the fire. The aforesaid circumstance also gives credence to the report of the investigator that in fact it was a case of fire caused by arson and not due to a severe cyclone.
16. The learned counsel for the complainants drew our attention to the certain statements purporting to have been recorded by the police in P.S. case No.22/07 dated 10.4.2007 under section 11C/11J/11L of West Bengal Fire Services Act 1950 and pointed out that a number of witnesses had stated with respect to cyclone hitting Falta in night intervening 8th / 9th April 2007. He also drew our attention to a TV telecast reporting cyclone at Falta in the aforesaid night. Neither the affidavits of the aforesaid persons have been filed nor have the complainants examined the police officer who purportedly recorded their statements. Section 157 of the Indian Evidence Act to the extent it is relevant provides that a previous statement can be used for the purpose of corroborating a witness. Since the complainant did not file the affidavits of these persons, their statements purporting to have been recorded under section 161 of the CrPC do not constitute substantive evidence admissible before this Commission. The said statements can also be used for the purpose of cross-examination of such a witness in terms of section 145 of the Evidence Act. In any case, the above-referred persons being lay persons, they cannot be in a position to distinguish between a cyclone/cyclonic storm or mere high speed winds. We also find that Ajit Das, Apan Singha, Pankaj Singhania, Raghuvir Singh as well as Meghnad Das and several other workers did not allege in their respective statements that the electricity pole had collapsed on account of a storm which allegedly hit Falta that night, though some other did purportedly state about uprooting of the said pole.
(17) As noted earlier, the FIR subject matter of the final report submitted to ACJM, Diamond Harbour was registered under section 11C, 11J and 11L of the West Bengal Fire Services Act 1950. Section 11C refers to the obligation of the owner/occupier of a high risk building to provide fire prevention and fire safety measures. Section 11J prescribes penalty for contravene of the provision contained in chapter IIIA of the said Act which comprises sections 11 (A) to 11 (K). Therefore, the Fire Department, while investigating into the matter, was not even required to identify the cause of the fire. The final report relied upon by the learned counsel for the complainants, therefore, is of no help to the complainants.
18. Had a severe cyclonic storm capable of bending/uprooting even electricity poles hit Falta in the night of 8th / 9th April 2007, not just one but a number of poles would have bent or collapsed at Falta that night. There is no evidence of any other electricity pole at Falta having collapsed or got bent in the alleged cyclone. As noted in the repudiation letter sent by National Insurance Co. to the complainant in CC No.68 of 2008 even the electric wires produced during examination were found to have been burnt due to external fire with no evidence of electric short circuit.
19. A perusal of the report of Forensic Science Laboratory, Govt. of West Bengal shows that though the cause of fire could not be ascertained, some highly inflammable material could be present during fire which gave rise to such a devastating fire. Noticing that the temperature of the flame inside the shed was more than 600o centigrade, it was observed that the plastic granules present on the spot were not so highly inflammable and some highly inflammable material could be present during fire which gave rise to such a devastating fire.
20. The learned counsel for the complainants drew our attention to the final report submitted before ACJM, Diamond Harbour referring therein to a ferocious cyclone and also referring to the statements of witnesses recorded by the police with respect to collapse of the electric poles in the area due to cyclone. However, the author of the aforesaid report has not been examined. More importantly, the report does not record a finding that the electricity pole in question had collapsed due to a cyclonic storm. It only refers to the statements made by some witnesses to this effect. The aforesaid report does not indicate that the Investigating Officer of the aforesaid case had even tried to find out from the Metrological Department as to whether a cyclonic storm had actually struck Falta that night or not. The Investigating Officer did not even try to identify the cause behind collapse of the pole in question. It would also be pertinent to note here that in the FIR which led to the registration of the above-referred case, there was no allegation that a cyclonic storm had hit Falta that night and led to collapse of an electricity pole carrying high tension wires and that, in turn, had resulted in fire in the premises of the Plastolene Polymers Pvt. Ltd.
21. The learned counsel for the complainants also relied upon the notings alleged to have been made by the fire officers present at the site during the firefighting operations, the aforesaid notings have not been proved in accordance with law since the person who allegedly recorded them has not been examined. In any case, the aforesaid nothings do not show that a cyclonic storm had actually hit Falta in the night intervening 8th / 9th April 2007 and had resulted in the collapse of the electricity pole carrying high tension wires. The aforesaid notings rather clearly show that the cause of fire could not be ascertained by Fire Department as mentioned in the fire report submitted by O/C Fire and, therefore, requisition was made for forensic investigation.
22. The investigator examined the possibility of a spark from the high tension wire falling on the goods kept in open in plot No.4, by tying a rope to the pole near the water tank and the pole that had bent which was located between compound walls of plot No.4 and the SEZ. He concluded that there was no question of any spark falling inside the insured premises. He also found that the wires between the bent pole and the pole near the water tank were intact, undetached and uncut. The portion passing over plot No.4 was found to be well insulated, using PVC pipes. He found no evidence of any electric short circuit on them. It would be pertinent to note here that the complainant had in its letter dt. 12.4.2007 sent to DG Fire stated that the electricity pole had fallen due to storm resulting in electric spark. The surveyor on the basis of visual examination of the wires and conducting above-referred test on the spot, found no possibility of electric spark falling inside the compound of the insured. Since the roof of the open shed had been corrugated with zinc sheets , the spark could not have entered the insured premises. It was on the basis of the above-said scientific evidence that the investigator rejected the statements made by the witnesses.
23. The case of the complainants is that the fire originated from the open area of plot No.4 where plastic scrap had been dumped. The buildings on plots No.5 & 6 which adjoin plot No.4 and were occupied by Deltamal Safety Shoes, however were not seriously affected though some damage was sustained by them for which the occupant was reimbursed by their insurer. Plot No.9 which is at the back of plot No.4 as well as adjoining plot No.10 were badly damaged as a result of the fire. Plot No.8 which adjoins plot No.9 was occupied by Roto India Enterprise which belongs to the same group which owns Plastolene Polymers (P) Ltd. Plot No.11 which was occupied by the complainant in CC No.70 of 2008 was also severely affected by the fire. The State Forensic Laboratory of West Bengal inter alia reported that the pattern of fire showed that it had broken out from inside the sheds and had not followed the rule of fire dynamics. He also noted in its report that the police had ignored the report of the forensic experts to the effect that the fire dynamics were not in order, highly inflammable materials could have been used to obtain greater temperature than that of burning plastic and the electrical wires were burnt due to external fire. It transpired during the course of hearing that except for some damage in the building on the plot of Deltamal Shoes, all the buildings severely damaged due to fire were the buildings of the complainants and their group. It also transpired that the complainant in CC No.68/2008 is the nephew of the Chairman of Sonthalia group which owns the Plastolene Polymers (Pvt.) Ltd. This becomes material, when viewed in the light of the report that the fire had not spread as per the normal fire dynamics.
24. This is the case of the complainants that as a result of the fire, the entire plant & machinery and stock in plot No.4 where the fire originated and plot No.9 which is at the back of plot No.4 were completely destroyed, part of the building entire plant & machinery as well as the stock in plot No.10 which is adjoining plot No.9 was destroyed and the fire also destroyed the building and the stock on plot No.11 which was occupied by the complainant in CC No.68/2008. This is also their case that the stock kept on plot Nos. 12 & 7 which were also occupied by the complainant in CC No.70/2008 or its group companies also got completely destroyed. Considering the normal fire dynamics, the destruction on plot Nos. 5 and 6 occupied by Deltamal Shoes should have been devastating and complete since the fire would normally travel to plot No.7 through plot Nos.5 and 6. It would also be pertinent to note here that plot Nos.5 and 6 occupied by Deltamal Shoes had building structure similar to that of plot No.10 of the complainant. The investigator rightly concluded that the fire could not have travelled in such a way that it would take two right turns only to destroy the entire property belonging to the group companies of the complainants, causing minor damage to the building of Deltamal Shoes and the goods kept there despite the plots of Deltamal Shoes being adjoining to the plot from which the fire originated.
25. A perusal of the report of the investigator shows that the insured stated before him that the flying splinters from plot No.4 propagated the fire. The aforesaid claim, however, was not accepted by the investigator noticing that in such a case splinters would also have fallen on plot Nos.5 and 6 and also on a similar factory opposite plot No.9. He also noticed that roofs of none of the plots affected by fire, i.e., 4,5,6,7,8,9 and 10 indicated fall/deposit of burning particles. It was contended by the learned counsel for the complainants that since chemical was stored in the premises of Deltamal Shoes, the fire officials concentrated firstly on those buildings, as a result of which the damage to the buildings on the said two plots was rather limited whereas the buildings erected on the other plots as well as the stock kept therein got rapidly damaged. However, no official from the Fire Department has been examined by the complainants to prove that initially they had concentrated only on the plots occupied by the Deltamal Shoes and it was on account of this reason that the fire had spread to other plots occupied by the complainants and their group companies. Considering the fact that the fire had not spread in accordance with the normal fire dynamics, there is a strong possibility of the fire having not been caused in the manner claimed by the complainants and rather being man-made fire.
26. The investigator as well as the Insurance Co. have given several other reasons for rejecting the claim. One of them is that traces of fire incendiary material like diesel, kerosene and mineral oil were found in the samples collected from the debris at site. Another reason given by them is that a partially burnt cupboard which was found in the kitchen on the second floor of the administrative building in plot No.10 went missing and fire incendiary material was found in the said partially burnt portion of the said cupboard. The traces of kerosene, diesel and mineral were noticed by the investigator from the report of the RV Briggs and Co. Pvt. Ltd., Government recognized analytical chemist, to whom samples collected from the site were sent by the investigator. The investigator, on inspection found that a room on the second floor which was being used as a kitchen was unaffected by fire but when a cupboard kept in the said room was opened, its third shelf was found having a burnt whole in it. The photographs of the cupboard as well as the room which was being used as a kitchen were taken by the investigator. But, when the investigator again visited the insured premises on 6th & 7th July 2007, the said cupboard was found removed from the kitchen and he was informed by the representative of the complainant in CC No.70/2008 that it had been destroyed. When the investigator sought disclosure of the reasons for destroying the said cupboard, the aforesaid complainant stated that it had not been destroyed. However, the cupboard was not found even at the time of visit on 1.11.2007. The investigator, therefore, concluded, and in our opinion righty so, that the insured had deliberately destroyed an important piece of evidence with respect to the cause of fire. Such a conduct would give rise to the inference that the fire was a deliberate act and not accidental in nature. It would also be pertinent to note here that burning marks were found in a staircase leading to the roof of the building. There was no fuel burning below the said staircase. The investigator, therefore, felt that those burning marks could be caused by a burning fuel in motion from the staircase towards the kitchen which would be an unnatural propagation of fire. According to him, this burning fuel in motion and the burn hole inside the wooden cupboard in the kitchen were indicative factors of man-made fire. In his opinion, it was not possible for the fire to spread inside the cupboard from plot No.10 without affecting other articles and walls of the kitchen since the said cupboard had been placed against the Southern wall of the kitchen.
27. It is an admitted position that the complainant in CC No.68/2008 had obtained an insurance policy in respect of units Nos.11,10,9,37-A,7,12,4 and 8. The aforesaid complainant later admitted that it was occupying only the building on plot No.11. The case of the Insurance Co. is that the aforesaid complainant played a fraud upon them by taking insurance policy in respect of the buildings which were neither owned nor occupied by him. Admittedly, the aforesaid policy was obtained in respect of building, plant & machinery, stocks of plastic granules, reprocessed plastic agglomerates, RP granules, flat tubes, plastic films and PVC components. Thus, the policy was obtained in respect of a manufacturing unit. In the profile submitted to the surveyor, the aforesaid complainant stated that his unit was situated only on plot No.11 and he was engaged in the business of textiles and readymade garments as well besides setting up a manufacturing unit at the aforesaid premises. It was further stated in the profile that the aforesaid unit on plot No.11 had a large network of vendors for sourcing its requirement for readymade garments and textile products. The surveyor appointed by the National Insurance Co. found that apart from plastic goods readymade garments, eco-wood, silk fabrics, jute waste, composite sheets and woolen carpets were also found on plot No.11. Condition No.1 of the insurance policy provided that the said policy would be voidable in the event of any misrepresentation, mis-description or non-disclosure of any material particular. Condition No.3 required the insured to obtain sanction of the Insurance Co. by way of an endorsement if the trade or manufacturing carried by it was to be altered.
28. The case of the aforesaid complainant in this regard is that vide letter dated 27.2.2007, they had requested the Insurance Co. to amend the description of the risks so as to read it as manufacturing-cum-trading of plastic goods, engineering goods, textiles and readymade garments besides requesting that their unit should be read only as the unit on plot No.11. The case of the Insurance Co. is that the aforesaid letter dated 27.2.2007 was never received by it. The complainant has not led any evidence to prove the service of the aforesaid letter on National Insurance Co. The policy to the aforesaid complainant was issued by Direct Agents' Branch at 8 India Exchange Place, Kolkata. On the other hand the stamp which appears on the copy filed by the complainant is of DAB-CRO- II, Royal Insurance Building, 5 NS Road, Kolkata. The complainant has not examined any official from the aforesaid office to prove that the letter dated 27.2.2007 was served with them. More importantly, we fail to appreciate how a letter addressed to 8 India Exchange Place, Kolkata Branch could have been sent to and accepted at DAB-CRO- II, Royal Insurance Building, 5 NS Road Branch. There is no explanation from the complainant as to why this letter was not delivered to Direct Agents Branch at 8 India Exchange Place, Kolkata. In these circumstances, the inevitable inference is that aforesaid letter dated 27.2.2007 was never served on National Insurance Co. Ltd.
29. We are, therefore, of the considered view that the complainant in CC No.68 of 2008 obtained the insurance policy by misrepresenting to the Insurance Co. that he was running unit Nos.11,10,9,37-A,7,12,4 and 8 whereas he was running only unit No.11. The aforesaid complainant also played a fraud upon the Insurance Co. by obtaining a policy on the basis of the aforesaid misrepresentation. The policy, therefore, became voidable, at the option of the insurer, not only in terms of the policy conditions but also in terms of section 19 of the Indian Contract Act. The insurer, therefore, is not under a legal obligation to reimburse the complainant in CC No.68 of 2008, for the loss alleged to have been sustained by him in unit on plot No.11
30. As noted earlier, while obtaining the insurance policy, the complainant in CC No.68 of 2008 had described his unit to be a manufacturing unit engaged in manufacture of plastic products. The said complainant himself stated in his profile that he was engaged in the trading of readymade garments and other textile products. During investigation, the surveyors noted that apart from plastic goods, readymade garments, eco-wood, silk fabrics, just waste, woolen carpets, etc. had been stocked in the unit on plot No.11. It is thus evident that the insurance policy was obtained by the aforesaid complainant by mis-description of his activities and non-disclosure of material particulars such as his being engaged in the trading of readymade garments, textile products, woolen carpets, etc. In view of condition No.1 of the policy, it became voidable on account of the aforesaid mis-description and non-disclosure. In any case, the textile products including garments stored in the unit of the aforesaid complainant were not covered under the insurance policy taken by him.
31. The complainant in CC No.68 of 2008 submitted a claim of Rs.15895760/- for extruder machinery alleged to have been destroyed in fire. The surveyor, however, could not find any trace of the extruder machines in the inspection carried out by them. Had heavy machinery such as extruder machines been actually installed in the premises of the aforesaid complainant, at least some remnants of the said machine would have been found by the surveyor, during the inspection carried out by him. Considering that they are made of heavy iron, extruder machine could not have got fully destroyed and converted into ash, in the fire, though they could have been seriously damaged. Had the said machines been actually installed, some parts, may be damaged parts, of the said machines would have been found by the surveyors during the course of their inspection. The absence of any remnant of the said machine clearly shows that the claim to the extent it pertains to the value of the said machines is false. Condition No.8 of the insurance policy inter alia provides if the claim be fraudulent in any respect or if any false declaration be made or if any fraudulent devices are used by the insured to obtain any benefit under the policy, all benefits under the policy shall be forfeited by making a false claim with respect to the value of the extruder machine, the complainant in CC No.68 of 2008 enabled the insurer to forfeit all the benefits which could available to him otherwise the policy taken by him.
32. The surveyor also noticed that the value of the inventory in the unit at Falta SEZ as on 16.3.2007, when stock audit was conducted was only Rs.14956700/-. The complainant in CC No.68 of 2008, however, claimed that the value of the said inventory had gone upto Rs.165762536/- as on 31.3.2007, meaning thereby that the inventory had increased by 11 times within a span of 15 days. The surveyor on scrutiny of the record did not accept the aforesaid phenomenal increase in the inventory. Detailed reasons in this regard were given by the surveyor in paras 46 to 55 of his report. We, however, need not go into the details of the said reasons considering that the claim of the complainant in CC No.68 of 2008 is otherwise bound to fail for the reasons noted hereinabove.
33. For the reasons stated hereinabove, we are of the considered view that (i) no cyclone hit Falta at or after 2 a.m. in the night intervening 8th / 9th April 2007 (ii) the fire in which the complainants claim to have suffered damages was man-made and not accidental (iii) the complainant in CC No.68 of 2008 obtained the policy by misrepresentation and mis-description thereby rendering the same voidable at the option of the insurer (iv) the claim lodged by the complainant in CC No.68 of 2008 with respect to the loss of the extruder machines was false and (v) textile products including garments alleged to have been stored in the unit of the complainant in CC No.68 of 2008 were not covered under the insurance policy. The OPs, therefore, are not liable to reimburse the complainants for the loss alleged to have been sustained by them. The complaints are, therefore, dismissed without any order as to cost.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER