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Judgment
Heard Ms. Sonia Sharma, Advocate, for the complainants and Mr. R.B. Sami, Advocate, for the opposite parties.
M/s. Jodhpur Industries and Ms. Nisha (the Insured) have filed above complaint for directing The New India Assurance Company Limited (the Insurer) to pay (i) Rs.11681327/- with interest @18% per annum, from 01.09.2016 till actual payment, as the insurance claim; (ii) Rs.10/- lacs, as compensation for mental agony and harassment; (iii) Rs.10/- lacs, as business loss; (iv) costs of litigation; and (v) any other relief which is deemed fit and proper, in the facts and circumstances of the case.
The facts as stated in the complaint and emerged from the documents attached with the complaint are as follows:-
(a) M/s. Jodhpur Industries (the Insured) was a proprietorship firm and engaged in manufacture and sale of bread and biscuit. Ms. Nisha (complainant-2) was proprietor of the Insured. The Insured took a shed at B-24-A, RIICO Industrial Area, Rajgarh, Rajasthan, on rent through lease deed dated 22.03.2014 from Prem Kumar Bansal and installed manufacturing unit in it. The Insured was registered as “Small Scale Industry” with District Industries Centre, Churu, Rajasthan on 24.04.2014. The Insured was also registered with Commercial Tax Office, Churu, Rajasthan. The Insured installed its manufacturing unit and started manufacture at the said location since January, 2015.
(b) The New India Assurance Company Limited (the Insurer) was a public sector insurance company and engaged in the business of providing different types of insurance services. The Insured obtained “Standard Fire & Special Peril Policy” No.3315001115011140100000268, for the period of 03.03.2015 to 02.03.2016, from the Insurer, for sum insured of Rs.95/- lacs (i.e. Rs.5/- lacs for Furniture, Fixtures, Fitting & other contents, Rs.15/- lacs for Stock and Stock in process, Rs.70/- lacs for Plant & Machinery and Rs.5/- lacs for Building-superstructure). The Insured obtained renewal “Standard Fire & Special Peril Policy” No. 33150046150100000107, for the period of 03.03.2016 to 02.03.2017, from the Insurer, for sum insured of Rs.95/- lacs (i.e. Rs.5/- lacs for Furniture, Fixtures, Fitting & other contents, Rs.15/- lacs for Stock and Stock in process, Rs.70/- lacs for Plant & Machinery and Rs.5/- lacs for Building-superstructure). Sum Insured for Plant & Machinery was increased by Rs.65/- lacs, through Endorsement No. 33150011160183000001 w.e.f. 24.04.2016.
(c) The factory of the Insured was closed due to ‘Amavasya’ holiday on 01.09.2016. Vikas Goyal, owner of adjoining factory noticed smoke emanating from the factory of the Insured at 15:30 hours on 01.09.2016. He immediately informed Surjeet Singh, husband of complainant-2 and also intimated Police Station, Rajgarh, who in term intimated Fire Service Station, Churu, in this respect. The police personal and the people collected at the site and managed a water tanker and broke out window of the factory and started throwing water inside it. Fire Brigade also arrived at about 17:30 hours and doused the fire. Incident was registered in General Diary on 01.09.2016 at 19:00 hours at police station on the complaint of Surjeet Singh.
(d) The Insured informed the Insurer on 02.09.2016 about the fire incident and loss caused due it. The Insurer appointed B.K. Modi, Surveyor & Loss Assessors, Bikaner, as the surveyor on 02.09.2016, for survey and assessment of loss. The surveyor inspected the factory premises on 03.09.2016, took photographs and made inventories. The surveyor, vide letter dated 03.09.2016, advised the Insured to segregate burnt/damaged stock, submit statement of damaged part of Plant & Machinery, with details of its serial number/configuration/ manufacture year, estimate of loss of buildings and stock, claim form and documents i.e. Books of Accounts, Purchases & Sales Record, Stock Register, Stock Movement Record, Invoices of Machineries and also explain as to how the fire travelled from one portion to other portion of the factory. The surveyor issued reminders dated 07.09.2016, 11.09.2016, 19.09.2016 and 30.09.2016, for aforesaid papers and segregation of burnt/damages stock. The Insured supplied some papers vide letter dated 28.09.2016 and some papers, vide letter dated 04.10.2016. The surveyor, vide letter dated 08.10.2016, asked the Insured to segregate burnt/damaged stock, submit remaining papers and arrange for meeting with repairers of the machinery. The surveyor visited the factory premises on 27, 28, 29 & 30.11.2016 but the repairers did not come. According to the insured, they informed the surveyor on 26.11.2016 on telephone for inspection of damaged machinery and meeting with the repairers on 30.11.2016. But the surveyor expressed his inability to come on 30.11.2016. In the evening of 30.11.2016, the surveyor gave an email to arrange for a meeting with the repairers and factory mistry and labourers engaged for production, within 10 days, to make out a false excuse.
(e) The insured through emails dated 19.12.2016 and 27.12.2016, informed the surveyor that on 27.11.2016, during talk on your mobile, you had expressed your inability to visit the factory on 30.11.2016 but in evening, you send an email, blaming the Insured for not arranging for meeting with the repairers; the Insured had already shown the original papers on 10.09.2016 at your office; instead of vesting time, expedite the survey report. The surveyor again through email dated 29.12.2016, asked for remaining papers and information, with warning that if it is not supplied then he would inform the Insurer for closing the claim invoking clause-6 of General Condition. The Insured supplied the required papers through courier on 02.01.2017 and informed he surveyor through email in this respect but the surveyor again through email dated 04.01.2017 denied supplying the required papers. Then the Insured again supplied those papers to the surveyor on 11.01.2017 and one additional set of papers to Divisional Manager.
(f) The surveyor, vide email dated 14.01.2017, asked for Claim Form, original invoices relating to purchase of the machinery, purchase of raw materials, GR Vat-47 ‘C’ Form, original Books of Accounts for examination/verification. He again asked to segregate burnt/damaged stock and weighment of the same. Quantity and value of item-wise details of raw material, stock in process and finished materials, stock movement and consumption record, Sale Tax Returns, explanation in respect of low consumption of electricity, to arrange opening and inspection of damaged machinery and meeting with repairers, Estimates of electrical items, building loss, Forensic report and factory mistry and labourers presence for their statement.
(g) The Insured, through email dated 21.01.2017, replied that the factory was run by Generator; there was no water connection and the Insured used to buy water from tractor tanker; it was agreed on 10.09.2016 that the Insurer would obtain forensic report. The surveyor again wrote an email dated 21.01.2017, for the same explanations/ papers. Senior Divisional Manager also wrote an email dated 30.01.2017, for supply of the required documents and information. The surveyor vide email dated 15.02.2017, advised to obtain forensic report through local police or privately. The Insured vide email dated 15.03.2017, informed the surveyor to visit site for meeting with the repairer on 18.03.2017. On that day joint inspection of the damaged machinery was done and a memo was prepared in this respect. The surveyor again, vide email dated 29.03.2017 required the Insured to submit quotation of damaged part, which were sent on 30.03.2017. For a long time, the Insured did not receive any information, then the Insured wrote emails on 16.05.2017, 31.05.2017, 14.06.2017, 16.06.2017 and 02.07.2017 to Divisional Manager but no reply was given. The Insured applied for supply of information under Right to Information Act, 2005, in respect of progress in his claim on 12.07.2017 and vide email dated 22.08.2017 submitted that in case status of the case is not supplied then he would initiate legal proceeding. Then the Insurer vide email dated 22.08.2017 informed that the claim has been repudiated. This complaint was filed on 03.11.2017, claiming deficiency in service.
The Insurer filed its written reply on 19.07.2018, and contested the case. The Insurer stated that as soon as the Insured informed on 02.09.2016, regarding loss, B.K. Modi, Surveyor & Loss Assessors, Bikaner, was appointed as the surveyor on 02.09.2016, who inspected the factory of the Insured, on 03.09.2016. Surjeet Singh, in his statement given in writing to the surveyor on 03.09.2016 stated that production of his factory was closed from 16.08.2016; the machineries were of iron body and not damaged; only its circuits, electric wiring, switches, plastic portion were melted from heat. The surveyor, vide letter dated 03.09.2016, demanded various papers, including forensic report, claim form and also required to segregate burnt stocks item-wise, for assessment of loss. The Insured visited the office of the surveyor on 10.09.2016 but did not supply any paper. When the surveyor, vide email dated 11.09.2016, reminded for the papers demanded on 03.09.2016, the Insured through email dated 11.09.2016 informed that he was still suffering with fever. The surveyor wrote reminders on 19.09.2016 and 30.09.2016. Later on, the Insured included cost of the machinery in his claim. The surveyor, therefore, asked for physical verification of the damaged machinery and meeting with the repairing engineers. The Insured fixed 27.09.2016, for physical verification and meeting with engineer and called the surveyor but neither the Insured nor engineer visited the factory premises on 27.09.2016. The Insured, vide letter dated 28.09.2016 informed that he was still suffering with high viral fever; the repairing engineer visited the plant on 13.09.2016 and prepared his report in respect of damaged machinery. The Insured sent some papers through courier on 04.10.2016 (received on 06.10.2016). The surveyor, vide letter dated 08.10.2016, asked the Insured to segregate burnt/damaged stock, submit remaining papers and arrange for meeting with repairers of the machinery and its physical verification. As informed by the Insured, the surveyor visited on 27, 28, 29 & 30.11.2016 but the repairers did not come. The surveyor again reminded the Insured through email dated 30.11.2016, then the Insured vide email dated 19.12.2016, informed that all the documents were sent and queries were explained and he was waiting for survey report. The surveyor again reminded the Insured through email dated 29.12.2016, for the papers etc. Then the Insured sent some papers on 02.01.2017. The surveyor, vide emails dated 04.01.2017 and 14.01.2017, 17.01.2017 again reminded for required papers etc. The surveyor, through email dated 21.01.2017, informed that generate set was not found at the factory premises during physical verification. The Insured visited Divisional Office on 30.01.2017 and pressurised for settlement of his claim. He was advised to submit required papers to the surveyor so that he could submit his survey report which was essential for settlement of the claim. The Insured vide email dated 22.02.2017, consented for supply of original papers and point-wise reply of the queries. There was no water connection in the premises of the Insured. The Insured did not produce any receipt to prove that water was purchased through tractor tanker nor any expenses in this head were mentioned in the account book supplied by him. Joint inspection of the damaged machinery was done on 18.03.2017, by the surveyor and Mr. Ashwani Sharma, Engineer, Hisar in presence of the Insured and inspection memo was prepared and signed by the parties. The surveyor demanded quotation obtained for the repairs. The surveyor wrote emails dated 29.03.2017 and 31.03.2017 in this respect. The Insured supplied quotations of March, 2017, for repairs electrical panel of D-Glymer Machine and Oven, from M/s. New Tech Electronics, Hisar, some quotations of Bharat Mill Store, Hisar, M/s. Gupta Enterprises Hisar, M/s. Chhabil Chand Nirmal Kumar, Hisar and Indo Sky Overseas, Hisar, on 03.04.2017. The Insured was taking time in supply of the necessary papers to the surveyor but at same time, he was pressurizing for early survey report. The Insurer appointed S.K. Vashisth, Advocate, Hisar to verify the Invoices of M/s. Aditya Trading Company, who submitted his report dated 22.05.2017. After examining the available materials, the surveyor submitted Final Survey Report dated 01.08.2017, assessing the net loss to Rs.2008177/-. The competent authority examined the papers and the report of the surveyor and repudiated the claim vide letter dated 22.08.2017, invoking Clauses-1 and 8 of General Condition of “Standard Fire and Special Peril Policy” as the claim was exaggerated and not proved from the papers. Allegations against the surveyor are incorrect. There was no deficiency in service on the part of the Insurer.
The Insured filed Rejoinder Reply on 22.11.2018, in which, the facts stated in the complaint were reiterated. The Insured filed Affidavit of Evidence of Surjeet Singh and documentary evidence. The Insurer filed Affidavit of Sharda Sharma, Administrative Officer, Affidavit of Evidence of B.K. Modi, the surveyor and documentary evidence. Both the parties filed their written synopsis.
We have considered the arguments of the counsel for the parties and examined the record. The Insured made allegation that the surveyor had made illegal demand, which was not accepted by the Insured, therefore, the surveyor adopted harassing attitude by writing emails/letters again and again demanding same papers, which had been supplied to him. This allegation has been denied by the surveyor in his Affidavit of Evidence. The Insured did not ask for his cross-examination. The Insured never made any complaint to the Insurer in respect misconduct/illegal demand made by the surveyor or for his removal and appointment of new surveyor. In paragraph-13 of the complaint, the Insured has stated that original papers were shown to the surveyor on 10.09.2016, in his office but when the surveyor demanded/reminded for the papers through email dated 11.09.2016, the Insured in his email dated 14.09.2016 (Annexure-C-14), expressed his inability due to illness. The allegation against the surveyor is not liable to be believed.
The Insurer invoked clauses-1 and 8 of General Terms and Conditions of “Standard Fire & Special Peril Policy” for repudiation of the claim, which are quoted below:-
This Policy shall be voidable in the event of misrepresentation, mis-description or non-discloser of any material particular.
6.(i).- On the happening of any loss or damage, the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage or such further time as the Company may in writing allow in that behalf, deliver to the company.
(a) A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items or property damaged or destroyed and of the amount of loss or damage thereto respectively having regard to their value at the time of the loss or damage not including profit of any kind.
(b) The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal format of the truth of the claim and of any matters connected therewith. No claim under this policy shall be payable unless the terms of this condition have been complied with.
“8. If the claim be in any respect fraudulent, or in any false declaration be made or used by the Insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefits under this policy shall be forfeited.”
The Insured claimed (i) Rs.10449100/- for damaged machinery, (ii) Rs.45000/- for reparable machinery, (iii) Rs.127219/- for electrical fittings, (iv) Rs.310650/- for Building, (v) Rs.74500/- for raw materials and (vi) Rs.4358/-, for Fire Brigade charges i.e. total Rs.11681327/-.
The Insured initially based his claim for machinery upon its purchase price and supplied Invoice No.183, of Rs.1621800/-, Invoice No.184, of Rs.1371900/-, Invoice No.185, of Rs.428502/- and Invoice No.186 of Rs.381684/- dated 05.01.2015 of M/s. Aditya Trading Company, Delhi Road, Hisar. Invoice No.016 of Rs.1477000/-, Invoice No..017 of Rs.4986000/- dated 27.04.2016 of M/s. Kamla Trading Company, Hisar. Although it were inter-state transaction but the Insured submitted declaration before Trade Tax Authority on 26.12.2016, in respect of above transactions i.e. after incident. During joint inspection on 18.03.2017, various machinery were found intact and not damaged. Joint inspection memo was signed by the engineer of the Insured. Then the Insured supplied quotations of March, 2017, for repairs electrical panel of D-Glymer Machine and Oven, from M/s. New Tech Electronics, Hisar, some quotations of Bharat Mill Store, Hisar, M/s. Gupta Enterprises Hisar, M/s. Chhabil Chand Nirmal Kumar, Hisar and Indo Sky Overseas, Hisar, on 03.04.2017. As such the claim in respect of machinery was exaggerated inasmuch as the Insured had claimed purchase price for the machinery which were not damaged. The surveyor assessed the loss for Machinery to Rs.1961400/-, after deduction of 20% to 25% in different matters. Exaggeration of the claim is proved.
The observation of the surveyor in respect of machinery are quoted below:-
“iv) PLANT & MACHINERY DAMAGES
a) During the course of survey it was seen that the Plant & Machinery made of metal were directly not engulfed in the fire but due to extensive heat/smoke generated from Stock/Huge Quantity of Old Bardana/Old HDPE Bags/Old Paper Cartoon/Paper Scrap Machineries Upper parts made of plastic/rubber, Electric Wiring, Circuits were melted/damaged. During the course of survey the claimant confirmed in writing that the machineries made of iron/metal are not burnt but its circuits, electric wiring, switches, plastic portions were melted from the heat. The photographs of the damaged machineries, as such was taken. The insured was advised to submit repair estimate of the same & was advised to arrange meeting with the repairer.
b) During the course of survey, it was seen that machines make/ serial number configuration/Product Number/Year of Mfg./Manufacturer name was not embossed/affixed on the machineries hence the insured was advised to clarify the same but the claimant hidden/concealed the fact & merely said that it is not given in the interest of supplier.
c) Subsequently the claimant submitted that the complete Plant & Machineries were damaged in the incidence & submitted Loss Estimate of Rs.1,06,21,319/- (Plant & Machinery Rs.1,04,49,100/- + Repairs Rs.45,000/- + Electricals Rs.1,27,219/-) for all the machineries whether burnt/damaged from upper or internally or not.
d) So to inspect internal damages & discuss the loss with the repairer the undersigned after fixing appointment with the claimant visited Rajgarh on dated 27.10.2016 but on reaching their the insured said that the repairer/engineer could not be able to reach due to his some urgent work & he (Mr. Surjeet) himself cannot open the machineries so he assured to arrange opening the damaged internal parts of the machineries in Ist Week of November, 2016. Subsequently it was decided to inspect the internal damages on 28, 29 or 30 Nov., 2016 but the insured said that the repairer shall be available at Hisar for 2 hours on dated 30.11.2016 and told that he will not reach at Rajgarh, so the undersigned intimated him that if the repairer/engineer agree to reach Rajgarh, the undersigned shall also ready to reach at Rajgarh but the insured did not confirm so the undersigned did not visited Rajgarh on date.
e) Reminder letter dated 20.12.2016. 27.12.2016, 29.12.2016, 5.1.2017, 15.1.2017, 17.1.2017, 30.1.2017, 15.2.2017 & 17.2.2017 were given to the insured to arrange inspection of internally damaged parts after its opening & arrange meeting with the repairer. Initially the insured did not co-operated but lastly the insured agreed for opening & arrange inspection of the internal parts damaged as agreed by the insured the undersigned along with the Consulting Engineer reached at site and jointly enlisted the damaged/melted parts of machinery in presence of Mr. Ashwani Sharma (Engineer/ the repairers), insured & Consulting Engineer Gouri Shankar Agarwal and took detailed photographs of the Burnt/damaged giving serial number of the damaged parts which were as under:-
1.
60 kg. Mixer
Motor To be Check,
V Belt Damage, B 82 X 2 Nos
2.
40 kg. Mixer
Intact
3.
Mixer
Intact
4.
25 kg. Mixer
Intact
5.
West Processing
Intact - Photo S.N.1
V Belt Motor to be check 3 HP NGI Make (2)
6.
Dropping M/C
LCD-Photo S.N.1
Control Panel
Indicator 3-PhotoS.No. 2
MCCB-125 Amp 4 Pole-Photo S.No. 3
PLC-melted-Photo S.No. 4
Contactors-melted-Photo S.No. 5
Soft Starter-Photo S.No. 6 intact PLC Card 2 Nos-Photo S.No. 7 Wiring-Damaged
Gear Motors-To Check - Photo S.No. 8 Front Tray Roller-Photo S.No. 9
Back Tray Roller-Photo S.No. 10 Sensor- Photo S.No. 12
Bushes (2)-Photo S.No. 11
7.
Fermentation
Point Damaged
8.
Pouch Making M/C
Camera Sensor-Photo S. No. 1
Drive-Photo S.No. 2 Wiring-Damaged
PLC &PLC Card-Photo S.No. 3 MCCB-Photo S.No. 4
Contactor-Photo S.No. 5 Meter Digital-Photo S.No. 6 Indicator 4-Photo S.No. 7 Switch 3
Gear Motor 1 HP-Photo S.No.8 Contractors DC Burnt
Comp Conver with plain Photo S.No. 9
9.
Elect. Deglimer
PLC Card-Photo S.No. 1 M/S Talwar Co. 7 Electronics Sensor-Photo S.No. 1
Relay & Wiring-Photo S.No. 4 Drive-Photo S.No.6 Contractor-Photo S.No.5
MCB 3 Pole 10 AMP-Photo S.No.7
Multi Feature Digital meter (3) & indicator (3) Counting meter (1), Switch (2) = Photo S.No.8
10.
Slicer
Blade affected 24-Photo S.No. In2n ade
11.
Batch coding m/c
Burned
12.
Ratary pan
Intact but gear box not available at site- Reported damaged.
13.
Oven
Electric Panel Burnt-Photo S.No. 1
Panel Wiring Burnt-Photo S.No. 3 Drive melted-Photo S.No. 4 Proctor Relay-Photo S.No. 5 Contactor 4-Photo S.No. 6
Card DI 2- Photo S.No. 7
Burner Unit 1 (Testa Japan Make)-Photo S.No. 8 Blower-Ve Belt melted-Photo S.No. 9
12 mm Glass-3'X1% (Heat& Tinted))
14.
Working Table - Top
Wood
6'X3'
15.
DIEBO M/C
Intact (4) Water Pipe Damage
16.
Water Cooler
Intact
Change Over Switch
Starter
4
DCDn Starter
1
Oil Braker Starter
3
Starter Servo
1
Starter
1
Solver
2
The above damages were agreed in writing by the claimant, Mr. Ashwani Repairer and us.
f) Lastly to finalize the loss the undersigned advised the claimant to submit repair/replacement estimate of parts damaged & completely damaged machineries as was jointly inspected on dated 18.3.2017 & to give clarification & provide documents as contained in the letter dated 29.3.2017& earlier letters.
g) In response on dated 3.4.2017 the claimant submitted Photo Copies of following estimates of damaged parts of following parties showing the value of parts:-
M/S Bharat Mill Store, Hisar.
M/S Gupta Enterprises, Hisar
M/S Chhabil Chand Nirmal Kumar, Hisar.
M/S India Sky Overseas, Hisar.
M/S New Tech Electronics, Hisar.
h) The Original Estimate, Claim Form were submitted through letter dated 21.4.2017 (ack. on 23.4.2017) which were examined & considered for assessing the loss. However the claimant failed to provide any documentary evidence which provide complete description & serial number of machine with its manufacturer detail, configuration which reflects that machines are old & second hand. Further the Supplier M/S Aditya Trading Company, Hisar is a dealer of all kind of material building material & not a manufacture or trade of Backery machines hence supply of Backery Machineries to the claimant is doubt full and merely an accounting transaction through raising invoices and collecting payment through bank.
i) To enquire the fact of supply of machineries by M/S Aditya Trading Co., Hisar through their Invoice No. 181 to 186 dated 5.1.2015 the undersigned sent a Regd. A/D letter to them but the letter returned back by the Post Office that no such firm is existing at the address. On mobile discussion with M/S Chiranjee Lal representative of M/S Aditya Trading, he initially said that he cannot disclose the identity of manufacturer and from where he had purchased the said machine to the Insurance Company but verbally confirm that the supplied machines were old. The undersigned vide letter dated 3.9.2017 advised the insured to submit copy of "C" form issued to supplier M/S Aditya Trading company against the purchases of said Plant and Machineries but C Form was not issued to the party by that time however on enquiry same was issued later on dated whereas the firm M/S Aditya Trading was reported closed its business on dated 31.3.2016, this shows that the purchases invoices of the plant and Machineries was merely arranged by charging 2% CST in the invoices. However he confirmed that the said invoices were issued by their firm. The Insurance Company appointed an investigator Mr. Suresh Kumar Vashist, who also confirmed that the said firm was not found at the address given on the invoices. Later on he made contact with Mr. Chiranjee Lal Goyal & during the visit Mr. Chiranjee Lal confirmed to issue Invoice No. 181 to 186 dated 5.1.2015 & sold machineries of Rs. 69,43,300/- through these invoices to M/S Rajgarh Industries, Rajgarh but contrarily in the Ledger account statement the Sales Invoices Bearing No. 205, 206, 207, 208, 209 & 210 dated 5.1.2015 amounting to Rs. 69,43,300/-were issued for the said supply, which reflects that invoices issued by M/S Aditya Trading is having some manipulation. Investigator Mr. Suresh Vashisht has also confirmed that all other invoices (except Invoice No. 181 to 186 dated 5.1.2015) are undated and are having small value whereas Invoice No. 181 to 186 dated 5.1.2015 are of high value which clearly indicates some manipulation in dealing between both the parties.”
Following circumstances create doubt in respect of the Unit being functional as such storage of huge raw material is doubtful:-
(i) The Insured did not give any information to District Industries Centre that his industry had started manufacture, although it was a condition for registration.
(ii) Electricity consumption was found inappropriate to run a factory.
(iii) The Insured pleaded that he was running factory through generator but no generator set was found at the factory premises by the surveyor at the time of his inspections.
(iv) There was no water connection of regular water supply at the factory. The Insured pleaded that he was buying water from tractor tanker but the expenses for purchasing water or for purchasing diesel have not been shown in books of account.
(v) The Insured informed that his factory was closed since 16.08.2016. On the date of incident, it was closed. The surveyor again and again asked the Insured to produce the technical staff and labourers, engaged in manufacture, for recording their statement. But the Insured did not produce any staff engaged in manufacture.
The surveyor made following observations in respect of stock:-
“a) During the course of survey it was seen that the several empty paper cartoons were lying scattered near the stock of Raw Material & same were found burnt & due to huge fire the upper layer Stock of Chokar, Atta, Sugar, Refined Oil Tin were burnt/ damaged from the fire & water as was thrown on it while fire-fighting Photographs No. 3 to 18 clearly reflects the condition of burnt/damaged paper, cartoons & stock. It was seen that the burnt/damaged stock of Chokar, Maida, Sugar etc. were in bags & bags upper portion were burnt & remaining portion was damaged from heat & water. Stock of Refined Oil was in Tins & Tins were heated & got blacken, its seals were loosed.
b) During the course of survey a list of stock burnt/damaged was prepared on stacking basis accordingly following stock was enlisted burnt/damaged:-
Maida 22 Bags
Tin Refined 11 Tins
Chokar 36 Bags
Aatta 13 Bags
Soyabeen 2 Bag
Corrugated Box 1200 Boxes Bingo, Patanjali, Aquafin
etc. (IInd hand)
Finished goods Tost 20 Bags (PC 24)
Sugar 7 Bags
c) During the course of survey the undersigned advised the claimant to arrange segregation of burnt/damaged & arranged weighment of the smoke but inspite of regular follow-up & through various reminders the claimant failed to segregate the stock & thrown the same without ascertaining the quantum so the loss is considered on the basis of physical estimated inventory enlisted on dated 3.9.2016.
d) To finalise the loss the insured was advised to submit Purchases Invoices of the burnt/damaged Stock, submit Stock Register for quantity received, consumption stock, Balance Stock & stock movement for production, books of accounts.”
In view of the aforesaid discussions we do not find any illegality in repudiation letter. The complaint has no merit.
ORDER
In view of aforementioned discussion, the complaint is dismissed.