Complainantby filing this complaint has alleged that he is a proprietor of M/s. HimadriColour Chemical having its factory at Badu Road, Digberia, Madhyamgram, Dakshin Hat, Kolkata – 700129, District-North 24 Parganas and carrying on printing Ink manufacturing business.  After obtaining all requisite licenses from the Madhyamagram Municipality and West Bengal Pollution Control Board etc.he purchased 2 Insurance Policy from the op no.2 on 18.11.2010 in respect of his factory being No.5104001110020027 which is a Fire and Special Policy and also a special Policy being No.510400/46/10/04/00000113 of Burglary and House Breaking Insurance.

          On 01.03.2011 at about 11:00 am a devastating fire was broke out in factory which resulted damaged of huge quantity of colour materials and finished goods and the local fire brigade was informed and they controlled the fire within 3 hours and fire brigade submitted report on 30.03.2011that cause of fire is not known but the assumption is short circuit and therefore complainant approached the Insurance Company informing it about the incident and accident and has made his claim of Rs.6,97,108/- and complainant maintained the Purchase Register and Finished Goods Registered regularly year by year and also the details of the finished goods stock summary up to 28^th February, 2011.

          Subsequently, surveyor was appointed by the ops and the complainant filed all the requisite documents as he was asked for.  After prolonged period complainant did not get any result and when complainant went to the op no.3 he deliberately rejected the claim of the complainant and for negligent and deficient manner of service and for unfair trade practice complainant is ultimately compelled to file this complaint.

          On the other hand op Insurance Company by filing written statement submitted that after receiving the intimation of the alleged incident of the fire in the factory premises of the complainant on 02.03.2011, op as per Standard Norms and Procedure appointed surveyor Mr. SourenChatterjee a paneled and independent surveyor licensed by IRDA to survey and to assess the loss.  Thereafter the said surveyor immediately on 02.03.2011 visited the factory premises of the complainant and after meticulous survey of the factory premises including taking snap shots, physical inspection of the stock and due consultation of the available accounting records of the stock, finally prepared his report on 15.09.2011 and in the said survey report surveyor was not in a position to reconcile the physical loss with the documents due to absence of insured’s proper representation and the document submitted in support of the claim which are contradicting baseless and not tallied with physical loss and further found that the insured’s claim is also contradicting and record based instead of physical assessment based and not tallied with physical loss and further there was no preventive measures taken by the insured in case of dealing with hazardous materials and the Fire Brigade filed a case against the insured/complainant and the said case is pending as on date.

          Practically the insured failed to establish their claim documentarily and also failed to reconcile the same physically and documentarily and thus the said surveyor based upon aforesaid observations finally opined that considering the whole situation, circumstantial evidence and available documents, the insured has failed to establish his claim documentarily and also failed to reconcile the same physically and for such reason the said surveyor failed to assess and justify the alleged loss conclusively and hence the subject claim was closed as “No claim”.

          Further after consulting the FIR filed by the W.B. Fire Brigade against the complainant u/s 11A and 11B of W.B. F.S. Act 1966 it is found that for violation of the Fire Brigade Rules and Regulations the said case was filed against the complainant in respect of that incident and same is pending before the Barasat Court and after inspection it is found from the report that there were the acts of negligence of the complainant in handling the hazardous and inflammable materials like benzene, Ethyl Acetate, toluene etc. in a most casual manner in open air without having proper infrastructure that led to fire incidence which is clearly in violation of clause 8 of the General Condition of the subject policy and such breach of terms and conditions of subject policy renders the benefits and/or risk of coverage under the policy forfeited and such an act can be better termed as ‘moral hazard’ which is a situation where there is a tendency to take undue risks because the cost of loss are not borne by the party taking the risk and a moral hazard may occur where the behavior of one party may change to the detriment of another after a transaction has taken place or in other words the party insulated from risk behaves differently from how it would it more fully exposed to the risk.

          It is further alleged that under the heading general condition, in clause (B)(I), it has been specified that the policy shall be voidable in the event of mis-representation, mis-description or non-disclosureof any material particular and in the subject claim, as per surveyor’s report, insured/complainant failed to substantiate the volume of affected stock of material of Ethyl Acetate and Toluene as per stock Register except Ethyl Acetate and thus insured failed to clarify the anomaly reasonably by providing supporting documents which tantamounts to an act of mis-representation, mis-descriptionof material particular regarding subject loss and which led to violation of clause B(I) and 6(I)(b) of the General Conditions of the subject policy absolving insurer/op from any risk of cover arising out of the said policy.

          In the above situation op repudiated the claim of the insured and such a rejection of claim is rational, scientific, legal and valid and for which ops submitted that there is no deficiency on the part of op under any circumstances and they did not adopt any unfair trade practice.

Decision with reasons

On proper consideration of the complaint and written version including the arguments advanced by the Ld. Lawyers of both the parties and also relying upon the Standard Fire and Special Peril Policy as issued by the op in favour of the complainant it is no doubt an admitted position that HimadriColour Chemical is insured under the said policy being No.5104001110020027 and it was valid for the period from 18.11.2010 to 17.11.2011.  Fact remains incident took place on 01.03.2011 at about 11:00 am in the said factory and no doubt that was reported to the Insurance Company by the complainant also to Fire Brigade.  No doubt Fire Brigade went there and extinguished the fire after proper service and it is equally true that op forthwith appointed surveyor as per rules and surveyor went to the spot and submitted report on 15.09.2011 but it was surveyed on the dates of 02.03.2011 and 29.06.2011 and practically about the incident information was intimated to the insured on 02.03.2011.  No doubt fire brigade extinguished the fire but they tried to search out the clue for cause of fire but failed to search out it but after investigation they found that complainant did not follow the rules and regulation of the Fire Brigade Authority and for which Fire Brigade Authority lodged a complaint against the present complainant and his proprietor under section 11A and 11B of W.B. Fire Services Act, 1966.  So, apparently there is allegation against the complainant and its proprietor for violation of the norms and terms and conditions of the Fire Brigade License Rules.

          From the Insurance Policy and its terms and conditions it is found that complainant filed some insured summary in respect of covering the risk of the said special policy and from the said policy it is clear in the risk description printing Ink, manufacturing roller, composition, factories is noted.  But from the same insured summary it is found that plant, machinery, accessories, furniture, fittings and other contents, stocks and stocks in process are covered by the said policy but not the building and total sum insured is Rs.16,97,600/-.  But fact remains complainant did not disclose at the time of opening the said fire policy that in his factory flammable articles shall be in stock and same shall be used and there was risk or chance of explosion, hazardous act and fact remains complainant suppressed the fact that Benzene, Ethyl, Acetate and Toluene shall be preserved and same are flammable and products are flammable products and all the products as per materials safety data sheet are highly inflammable in present of open flames and sparks but not flammable in presence of shocks and sometime article produced the vapor that causes explosion and make more temperature.  So, it is clear from the said material safety data sheet that the articles which has been handled by the complainant must not have to handle in open flames and sparks and heat and open air and after studying that statistics data sheet it is clear that said articles are highly inflammable in presence of open flames, sparks and heat but not flammable in presence of shocks and Benzene are products of combustion carbon-di-oxide etc. 

          The complainant at the time of taking the said policy did not submit that those articles shall be in stock and same are flammable and they have taken all possible precautions for getting it and for production.  Fact remains that complainant has not denied that fact when the op submitted in their written version along with the report of the surveyor.  Further from the report of the surveyor it is found that on 02.03.2011 when the surveyor went to the proprietor office i.e. factory of the complainant it was under lock and key and complainant was not found, his mobile phone was switched off and he tried to search out the complainant’s proprietor but he was absent.  But the employees of the complainant opened the factory and narrated the incident.  But after proper enquiry and investigation surveyor found that complainant failed to produce any document to substantiate the stock up to the date of incident or accident and fact remains complainant had no fire safety certificate obtained from the Fire Service Department.  But it is mandatory for producing fire safety certificate by the complainant to get the claim because it is mandatory for any insured to keep it and in fact surveyor confirmed that complainant had no fire safety certificate that means complainant did not take any positive steps for fire safety in the production center or after that and it was also found that there was no fire preventive equipment or firefighting arrangement of the insured which is mandatory in case of stock and producing highly inflammable and hazardous materials and practically complainant failed to produce it.

          Further complainant failed to produce the stock register and other materials and considering all the above facts surveyor submitted report stating that he failed to reconcile the loss of the documents and further there was no preventive measures insurer because the dealing of hazardous materials and complainant also failed to produce safety certificate of the Fire Service Department.

          So, considering all the above fact we have gathered that factory was run by this complainant and the materials which was in stock by the complainant were all highly inflammable and it is mandatory to produce fire safety certificate of any factory and other precautions and arrangement to face any incident of any fire within the factory that was also not found.  But as per policy it is mandatory.  But complainant failed to produce and it is proved that Fire Brigade Authority also found that there was no license of fire safety.  So, they filed a case against the complainant.  Complainant’s negligence is well proved and as per terms and conditions of the policy Fire Safety License is mandatory if it is not kept in that case no claim shall be entertained by the Insurance Company and it is pertinent to mention that complainant did not act as per terms and conditions of the policy for not getting or obtaining any fire safety license from the Fire Brigade Authority.  Complainant has violated all the terms and conditions of the policy and for which rightly the op Insurance Co. repudiated his claim not only that complainant failed to produce the stock register and other materials which was mandatory for determining the loss and in fact due to latches on the part of the complainant for not taking any preventive measures for fire safety during running the said factory and machineries this fire was caused because it was not a short circuit and there was no such prove that electronic meter was burnt.  Electronic meter was okey.  So, it cannot be treated as normal accident but for fault of the complainant it was caused.

          In the light of the above observation we are convinced to hold that latches and fault was on the part of the complainant, complainant had been running a factory by stacking and producing highly inflammable articles but there was no preventive arrangement equipment for fire safety which is proved then how the complainant can claim compensation for his latches.  In the light of the above observation we are convinced to hold that ops have or had no fault, negligent, deficiency and so repudiation was rightly made and was justified.  After considering the above facts we have gathered in case of a Standard Fire and Special Peril Policy insured must have to produce fire safety license of the Fire Brigade to substantiate the vital application that there was preventive measures equipment, gadgets etc. as per Fire Brigade Act, Rules and so in absence of fire safety license no insured shall have to get any compensation even if in any establishment fire is caught due to some accident when the said establishment runs a business or production of such item which is the mixture of highly inflammable articles and in this case same incident happened for which we are convinced and satisfied that repudiation was legal and valid and for which the present complaint fails.

          Hence, it is

ORDERED

          That the complaint be and the same is dismissed on contest against all the ops and the penal cost of Rs.10,000/- which shall be deposited to this Forum during it as penal cost for filing such a complaint suppressing the material facts and complainant shall have to pay that amount to this Forum.