Date of filing:23.12.2019

                                                      Date of Disposal:28.02.2024

BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BENGALURU (PRINCIPAL BENCH)

DATED: 28^th DAY OF FEBRUARY 2024

PRESENT

Mr. K. B. SANGANNANAVAR: Pri. Dist. & Session Judge (R)- JUDICIAL MEMBER

Mrs.M.DIVYASHREE : LADY MEMBER

CONSUMER COMPLAINT NO.603/2019

ORDER

BY Mr. K. B. SANGANNANAVAR: Pri. Dist. & Session Judge (R)- JUDICIAL MEMBER

1. This is a complaint filed U/s 17(1) of CPA, 1986, to direct OP Nos.1 and 2 to pay compensation in terms of coverage under peril policy dated 08.06.2018 along with admissible interest from date of complaint till realization and to award adequate compensation towards mental agony and litigation expenses.

2. The brief facts of the case of the complainant is stated below:

He is the proprietor of M/s Sukh Sagar Sweet House carrying on business in food processing.He had set-up the said business in the premises mentioned in the cause title having been availed loan from M/s Canara Bank, Chitradurga and he was running business successfully which was his livelihood.That was on 30.04.2019 and 01.05.2019, at 4:10am an unfortunate fire accident broke out in his factory premises and this information he received from neighboring plot owners and he immediately rushed to the spot, gave information to the fire brigade, jurisdictional police and BESCOM.By the time, fire was dosed; it has caused substantial damages to the building and materials.This incident was also brought to the notice of M/s Canara Bank, Chitradurga from where he had availed loan and the Bank in turn intimated him that the Bank having secured the loan by way of insurance policy being obtained from OPs for such untoward incidence.This information was passed on to OPs and the complainant intimated to the OP2, The Section Officer of BESCOM, Hireguntanuru, in Chitradurga Taluk in writing regarding fire accident through post, since the Bank had already informed OP2 through telephone immediately.The OPs having been received information about the fire accident instructed its officers and surveyor to conduct investigation and find out the cause of the fire.The surveyor having verified the entire premises appears to have issued opinion as to the cause of fire accident. The surveyor had obtained photographs and vediographs of the entire scene of accident.These photograph and vediographs was not made available to the complainant.On 06.05.2019, OP2 intimated complainant to produce the relevant documents towards claims settlement.The OPs had conducted the survey and assessed the loss and the cause for the fire accident through M/s Flourish Insurance Surveyor and Loss Assessor Pvt. Ltd.The said surveyor requested complainant to provide all relevant documents as enlisted in its communication through e-mail.In response to the said request, complainant submitted orally that the loss suffered by him was approximate about Rs.1,40,00,000/-.However, the said company did not communicate its report to complainant. The OP2 intimated the complainant that the new company from Mumbai will be deputed to assess the loss and find out cause of fire.Accordingly, M/s Screen Facts Services Pvt. Ltd., stated to be an expert in Forensic Investigation to ascertain the cause of fire and loss, entered the scene by visiting the premises on 17.06.2019, almost after 17 days from the date of fire accident.The said company opined that fire was not on account of electric short circuit or mechanical or combustion failure but was on account of deliberate setting of fire by pouring ignitable fire accelerants at difference locations in an attempt to stage manage the fire.The policy issued in favour of complainant is named as “Peril Policy”.It is stated by OP2 in its communication dated 26.09.2019 while repudiating the claim has stated that it is the duty of the insured to establish the loss, but complainant has not provided any materials/convincing reasons to the insurer to show the loss is due to short circuit.Complainant has produced necessary photographs, documents and other relevant proof of electric short circuit.After the report of the Forensic Experts was made to M/s Flourish Insurance Surveyor and Loss Assessors mainly prepared the final report, which was finally secured by the complainant through RTI on 20.09.2019 clearly discloses that the surveyor has reported that the fire accident was due to short circuit.Inspite of such report, OPs have resorted to repudiate the claim stating complainant has not provided any materials/convincing reasons to show that the loss is due to short circuit.The photographs produced by the complainant clearly discloses that in the busbar box and at the junction of the MCB’s being placed, a fully charred rat is found but MCB’s has not tripped, so also a fuse wire has not disconnected.It is common sense that the short circuit is result of the rat bit inside the bus-bar box and the charred rat is visible in the photograph taken by the complainant. Even the BESCOM authorities, M/s Flourish Surveyor had also taken photographs.The Photographs taken by M/s Screen Facts Services Pvt. Ltd. would show the busbar box area there is wooden roofing meant for storage wherein packing materials such as LDP, HDPE Covers, Paper boxes, paper cups, paper plates and other miscellaneous items were also stored, which were easy to have caught fire.There was total power shut in the area of the fire incident.The power resumed only next day morning at 8:00am as per the report of BESCOM.The industrial set-up of the complainant is in dealing with food processing business.It is quite but natural that the said factory set-up will have such materials such as groundnut seeds, fried gram, peas dal, channa dal, dhalda, edible oil, ghee, butter, cashewnut, including permitted food chemicals for producing bakery products were also stored which had caught fire quickly.The unit also has a power back-up by operation of generator and for operating the generator which in fact is a diesel generator.Hence diesel was stored in cans for emergency requirement.The fire accident having occurred on the said date which can be clearly known was on account of invention of the rat and fire was broken out.This important aspect has not been dealt with by the forensic agency at the first instance and the report has been blindly accepted by OPs to repudiate the contract of insurance with an intention to escape from its liability to compensation in terms of the peril policy for the period from 08.06.2018 upto 07.06.2019.OP2 repudiated the claim on 26.09.2019. There were stocks worth lakhs of rupees in the premises and the complainant and his labourers were taking care of the entire building and materials with utmost care and custody and had no intention to set fire on their own unit, which is in the nature of mother killing its own child.Such occasion never arose and the unfortunate fire incident is the one which is covered by the peril policy issued by OPs to cover such accidents.The peril policy issued by OPs to cover plant and machinery, furniture and fixtures, stocks, building etc., for a sum of Rs.02 Crores.The loss caused to the complainant by an account of untoward fire incident is assessed by him at Rs.1,43,43,565/-.However, was restricted his claim for a sum of Rs.99,99,000/-.The Act of OPs for having illogical repudiating the legitimate claim amounts to unfair trade practice and he is entitle for relief sought for.

3. Contrary to the above complaint averments, OP Nos.1 and 2 put their appearance through learned counsel and have contested the complaint by filing version, contending that complaint is not maintainable either in law or on facts. However, they have admitted that the policy issued in the name of complainant being a standard fire and special peril policy for the period from 08.06.2018 to 07.06.2019.  This policy covers the damage and loss caused due to the fire accident.  However, the liability of OPs is subject to the terms and conditions of the policy issued.  They have admitted that the fire accident has occurred in the early hours on 01.05.2019.  The claim of the complainant is that the fire incident has occurred due to electrical short circuit.  However, they deny that the fire accident at around 4:10 hours on 01.05.2019 was due to electrical short circuit or on account of mechanical/combustion.  The said incident was deliberate and stage managed with fraudulent intention to overcome the loss that the complainant was suffering in the business.

4. On the cause of fire, OPs have submitted that the BESCOM has visited the site of the alleged fire accident and inspected the site.  After inspecting the site of fire incident, the BESCOM has reported that the alleged fire accident in the premises was not due to electrical short circuit. The BESCOM has reported that as per their log book at the relevant point of time between 2:10 hours and 6:10 hours there was no power supply in the line.  Hence there is no possibility of there being an electrical short circuit in the premises.  One Mr.B.V.Kumar Swamy, surveyor and loss assessor was appointed by OPs to inspect the site of fire accident and submitted report. He had inspected the spot and submitted the report and in his report, he has reported that with regard to the incidence of loss/fire, the insured has not given any reply.  With regard to probable cause of loss, the report says the insured refused to give the probable cause of the loss.  Further OPs have engaged M/s Screen Facts Services Pvt. Ltd., Mumbai an Expert Forensic Investigating Agency to investigate into the cause of the alleged fire accident.  Accordingly, the said expert found the electrical boards on the northern walls were found to be fully burnt due to external fire as no symptoms of short circuit such as blackening, beading and scorching were found.  While inspecting the premises, the said expert collected physical evidence found at the place of fire accident and collected 05 samples of burnt and semi burnt debris at different locations of the premises for subjecting them to GC-MS analysis for detection of fire accelerants.  Each sample was divided into two parts and packed in pouches.  All the pouches were signed by the forensic expert and the insured before sealing them. One set was handed over to the insured and one set was kept by the Forensic Expert for conducting GC-MS analysis.  Further, it has reported that GC-MS analysis of the burnt debris has revealed the presence of inflammable hydro carbons in two five samples.  After taking into consideration of all the relevant facts, M/s Screen Facts Services Pvt. Ltd., reported under Inferences Column and under Opinion Column that the alleged fire accident was not due to the electrical short circuit or on account of mechanical or combustion.  But the same is deliberate in an attempt to stage manage the accidental fire setting fire by pouring ignitable fire accelerants at different locations.  The said experts had also highlighted as follows:

1. Production of Sweets and Bakery items of SSH were stopped since Jan 2019 due to lack of funds and labour problem.
2. Burnt electrical wires, switch boards in the production house did not show symptoms of electrical short circuit.
3. Multiple origins of fire were present in the production house.
4. Due to localized fire, the quantity of heat generated was not sufficient enough to damage the roof.
5. The GC-MS analysis of the samples of burnt debris showed the presence of fire accelerants inferring that fire must have been externally induced using fire accelerants like kerosene.
6. Incident of fire was a deliberate act to spread fire deliberately by igniting the existing raw material of ghee, oil etc accelerated by kerosene indicating that the incident of fire was stage managed.

The investigation was carried out in the presence of the insured/complainant.The report clearly says that during their investigation, the complainant has informed that the production of sweets and bakery items were stopped, since January 2019 due to non-availability of funds from banks and labour problem.

5. There is a delay of 05 days in intimating the fire accident to the insurer as delay in intimation and fraud was involved.  The policy issued by OPs shall be voidable in the event of mis-representations, mis-description or non-disclosure of any materials particulars.  The terms and conditions of the policy bind the insured and insurer.  The complainant insured has failed to give the information on the queries of Mr.B.V.Kumara Swamy the surveyor. No claim under this policy shall be payable unless the terms of this condition have been complied with.

6. The way the fire accident was reported by the eye witnesses clearly reflect that it is clearly stage managed by the insured/complainant.  With regard to the stocks in the premises, the OPs have obtained the Stock Statements submitted by the insured to the bank.  The same reflect that the stock and the value of the stocks in the premises are same from June 2018 to March 2019.  The complainant has stopped the production of sweets and bakery items since January 2019, the stocks are shown even for the months January 2019 to April 2019.  The Altered dates and wrong dates in the statements of stocks clearly reflect that they are prepared in a hurried manner and are created for the purpose of claiming insurance money.  The Statement of Godown Stock as on 31.03.2019 and 30.04.2019 reflect the various products stocked in the godown.  When the production of sweets and bakery items are stopped the necessity for purchase and storing of the material does not arise.  The cost of repairs to the building, plant and machinery and furniture and fixtures, the estimation given by all the three different contractors i.e., M/s Kanchan Civil Consultancy, Mr.Ajjappa G.Class I Civil Contractor and Mr.Thippesh, Class I Civil Contractor reflect the same costs for repairs of building, plant and machinery and furniture and fixtures which is highly impossible.  All the estimates of repair works given by all the above three contractors are cooked up and created for the purpose of insurance claim.  The Amount claimed and the bill submitted to Canara Bank, Chitradurga Branch on 14.06.2019 is much higher than the estimated repairs.   The police have given the value of the damaged material without any estimation only to help the complainant.  M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., has assessed the lost at Rs.30,00,000/- caused in the alleged fire accident but the insured has claimed the loss at Rs.1,43,43,565/-.

7. M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., has assessed the value of the stocks at Rs.20 Lakhs instead of Rs.74.58 Lakhs as claimed by the insured.  While assessing the loss to the building, plant and machinery, furniture and fixtures, the Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., taking into consideration of the value of the building etc., sum insured and the permissible depreciation, at 20%, has assessed the loss.

8. The OPs deny that the complainant has no cause of action as stated in his complaint case and submits complainant has no cause of action against OPs and hence his complaint is liable to be dismissed.

9. In view of rival contentions of the parties to this complaint, Commission held an enquiry. Received affidavit evidence of complainant and OPs along with documents. They are marked for the respective parties to the complaint.   After closure of enquiry, Commission heard learned counsels on record for the respective parties and have also examined all the materials on record. Now the points that arise for consideration would be :

1. Whether complainant has proved,   OPs have rendered deficiency in service on their part as alleged in the matter of Standard Fire and Special Peril Policy issued for the period from 08.06.2018 to 07.06.2019 in respect of fire accident that was occurred on 01.05.2019 in the early hours?
2.  Whether OPs have proved, the fire accident was not due to electrical short circuit but it was deliberate act as contended?
3. Does complainant is entitle for compensation of Rs.99,99,000/- as claimed?
4. For what relief the complainant is entitle for?

The Findings on the above points are recorded as below

Point No.1 and 3:      In the negative

Point No.2:                  In the affirmative

Point No.4:                  As per final order for the following;

Reasons

10. It is an undisputed fact that OP has issued Standard Fire and Special Peril Policy in the name of M/s Sukh Sagar Sweet House, which is proprietary concern and its proprietor is Mr.B.H.Gowdru @ B.Hanumanthappa, being a non-corporate policy by collecting Rs.23,600/- for the sum insured at Rs.02 Crore, for the period commencing from 08.06.2018 to 07.06.2019.  The Cause of Action arose as found from complaint cause of action could be said to have been arose on the intervening night of 30.04.2019 and 01.05.2019 and it falls well within the period of insurance. 

11. The complainant in his complaint has stated an unfortunate fire accident broke out in the factory premises on the intervening night of 30.04.2019 and 01.05.2019.  He has specified time of accident was on 01.05.2019 at 4:10am. He received information from neighboring plot owners that his business unit has got fired.  After he got information about the incident, rushed immediately to the spot. He informed to the Fire Brigade Centre and the jurisdictional police. He also informed to the BESCOM and states   by the time reached to the place fire were dosed. The impact of the fire caused substantial damages to the building premises.  It was also brought to the notice of M/s Canara Bank, Chitradurga, his banker, since availed loan from the said Bank and the bank in turn intimated him that the Bank, having secured the loan, by way of insurance policy, being obtained from OPs for such untoward incidents, and this information was conveyed to OP2 and the Section Officer, BESCOM, Hiriguntanuru, Chitradurga and the said Section Officer, BESCOM in his complaint has also stated that OP2 on 06.05.2019, communicated him to produce relevant documents towards claim settlement.  Further got conducted the survey to asses loss through M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd.  According to complainant, loss suffered by him was approximately Rs.1,40,00,000/-.  OP2 availed services of M/s Screen Facts Services Pvt. Ltd., an expert in Forensic Investigation to ascertain the cause of fire and loss, entered the scene by visiting the premises on 17.05.2019, almost after 17 days from the date of fire accident and opined that the fire was not on account of electric short circuit or mechanical or combustion failure but was on account of deliberate setting of fire by pouring ignitable fire accelerants at different locations in an attempt to stage manage the fire.  According to complainant the photographs taken at the place of incident discloses that in the Busbar Box and at the junction of the MCB’s being placed, a fully charred rat is found but MCB’s had not tripped, so also the fuse wire had not disconnected.  Further the photographs discloses that busbar box area, there is a wooden roofing meant for storage, wherein packing materials such as LDP, HDPE covers, paper boxes, paper cups, paper plates and other miscellaneous items were also stored, which were easy to catch fire.  The Complainant states that there was total power shut down in the area after the fire incident and the power resumed only at 8:00 am as per the report of BESCOM and the probable cause for the fire accident.  The Industrial Set up in the said area is in dealing with food processing business.  As such it is quite but natural that the said factory set-up will have such materials such as ground nut seeds, fried gram, peas dal, channa dal, dhalda, edible oil, ghee, butter, cashew nut, including permitted food chemicals for producing bakery products were also stored, which had caught fire quickly.  He also states that the industrial food processing unit also has power back-up by operation of generator and for operating the generator; diesel was stored in cans for emergency requirement.  The fire accident having occurred on the said date, which can be clearly known was on account of the invasion of rat and fire having broken out, it is quite but natural that the diesel available also probably caught fire and influenced the magnitude of fire.  However, OPs on 26.09.2019 by referring general condition no.1 of the policy document, repudiated the claim, which amounts to unfair trade practice as defined U/s 2(r) of CPA, 1986 and also amounts to rendering deficiency of service.

12. Let us examine the materials placed on record by parties to the complaint to arrive at a conclusion on the fire accident.  Ex.C1 is letter dated 26.09.2019, wherein informed the complainant, that the policy is a Standard Fire and Special Peril Policy, as such it is the duty of the insured to establish the cause of loss, but complainant does not provided any material/convincing reasons to show the loss was due to short circuit.  It was also intimated on 06.05.2019 about deputing M/s Flourish Insurance Surveyors and Loss Assessors for conducting the final survey and they have assessed the loss for Rs.30,00,000/- subject to final decision by the underwriters regarding cause of loss.  It is therefore burden is on the complainant to prove cause of loss was only due to fire accident.

13. The insurer informed complainant though fire was occurred on 01.05.2019 @ 3:20 am, but the insurer received information through post on 06.05.2019, is almost after lapse of 05 days,  although, their office is very near to their factory unit.   According to OP2, complainant has failed to intimate about the incident either over phone or mail, since as per policy conditions intimation should be given immediately.  The complainant has not given an opportunity for immediate inspection of the accident spot, is nothing but violation of policy condition 6(1). Further to be noted herein from Ex.C4 is letter dated 06.08.2019 addressed to insurer by the complainant, wherein could see the branch office situate at Chitradurga and it is found from the evidence of  insurer, is located very near or close to the factory unit, yet information   was sent through registered post could be said unusual actions, since,  we also found no materials on record for having informed fire accident to the insurer immediately after the alleged fire accident occurred on 01.05.2019. It is found from Ex.C6 letter dated 08.08.2019 informing the complainant that they are awaiting for investigation report from Mumbai and surveyor’s report from Bangalore and they are constantly in touch with investigator and surveyor is nothing but their actions to be followed by the insurer in accordance with law.

14. Ex.C9 is the list of Employees and Labourers furnished by the complainant. He has mentioned they are 30 in numbers, yet either the police or the fire brigade failed to examine any one of the employees and labourers, found in the list, which could be observed a peculiar circumstance for the reasons best known either to the complainant or the concerned Police and the Fire Brigade Station. In other words these facts found from the enquiry from the materials could be said not favorable circumstances to the case of complainant, in consideration of the specific defence taken by the insurer in their version and evidence, contending that the alleged fire accident is deliberate in an attempt to stage manage the accidental fire setting fire by pouring ignitable fire accelerants at different locations. In this regard in order to step up such specific or definite defence, insurer referred the Forensic report of M/s Screen Facts Services Pvt. Ltd., Mumbai and would contend M/s Screen Facts Services Pvt. Ltd., is an expert investigation agency  to investigate the cause of the alleged fire accident and they have reported that the electrical boards on the northern wall were found to be fully burnt due to external fire as no symptoms of short circuit, such as blackening, beading and scorching were found.  It was opined by the investigator on the basis of expert’s report, fire is not on account of electrical short circuit or on account of mechanical or combustion failures but was on account of pouring ignitable fire accelerants at difference locations, in an attempt to stage manage the accidental fire by someone. 

15. In the above such circumstances, complainant being proprietor of the factory unit, who was very much available at the place of fire accident, as he has state rushed to the factory unit immediately after he got information about the fire accident through neighbouring plot owners, is also duty bound  to inform   his insurer   to enable them to act upon to conduct their survey through their   assessor and surveyors, but had sent information through registered post on 06.05.2019 and added to this, could be seen from the materials either police or fire brigadier have failed to draw a Panchanama of the place of accident and they have failed hold an inventories of the burnt materials as they are found after the fire was dosed and they have failed to note it down the features of the scene of fire accident spot, assessing he approximate loss. In our view they are   legally expected to do such things during the course of investigation pursuant to the registration of the FAR or FIR as the case may be.  It is not that their duty is to douse fire and leave the matter to the insurer but is duty bound   to investigate, as to how the fire accident was occurred and submit report to that effect. 

16. Admittedly, complainant has setup this factory unit through the funding of Canara Bank and the factory premises, as stated above is covered with insurance policy for the period from 08.06.2018 to 07.06.2019.  In such circumstances, it is also duty of the police and fire brigadier to conduct inventory of the scene of offence.  When the Unit is insured, their duty is more, since they have to assist not only the insurance company but also the adjudicating authorities to decide on the claims in due course of time in accordance with law.  It is true as found from Ex.C15 on 01.05.2019 Rural Police Station, Chitradurga registered FAR on the basis of information furnished by Mr.B.H.Gowdru, who is none other the insured, since he has reiterated   at about 4:00 am on 01.05.2019 received information through one Mr.Ismail over phone, while   he was at home, that at about 3:00 am factory premises caught fire and had seen burning of the same.  It is to be noted herein on the basis of his information FAR was registered. In his information marked as Ex.C16,  has stated due to fire accident  sustained loss the tune of Rs.1,46,50,000/-. He has also stated a Panchanama was drawn as per Ex.C17, in the presence of Mr.Jagadeesh S/o Shanmukhappa and Mr.Akashay S/o Shekar. These contents could be said nothing what complainant has stated in Ex.C16 information is extracted as they are even the figure at Rs.1,46,50,000/- said to be the loss due to fire accident.  We could say is a vague Panchanama drawn by police for the reasons best known to the police and   the complainant.  Even we could not find    time of drawing Panchanama at the place and in order to prove the contents, affidavit of none of the Panchas are submitted during the course of enquiry before the Commission. Further to be noted herein  Ex.C18 is submitted by Mr.Ismail, who said to have informed him about the fire accident and he being the first informer through whom he got information is not examined nor his affidavit is submitted. We could find the police have recorded statement of Mr.Syed Nameed S/o Dadapeer, Nethravathi D/o Thimappa, Mr.Chadrappa, however their affidavit evidence is not submitted by complainant herein during the course of enquiry.  Further we did not find final report submitted by police on the alleged fire accident and it is also not known what the report of fire brigadier was.  Is these reports are not relevant? To decide on the alleged fire accident is not at all explained by the complainant. It is therefore, Commission is of the view that the Police and Fire Brigadier are legally expected to note down in detail the features of scene of offence showing in detail about the burnt articles or the moveable property. In other word,  to  hold  inventory of the list as to the loss sustained due to fire accident, which would enable the insurer further to process the claim of the insured, however they are absent  in  the enquiry of the case,  could be said yet another peculiar circumstances would not substantiate the case of the complainant.

17. We could see from   Ex.C22 on 14.06.2019, complainant had addressed a letter to his banker, Canara Bank, Chief Manager that there was a delay in submitting details of his claim due to pending enquiry of the fire accident and in the said letter  he informed that   had sustained loss to the tune of Rs.1,43,43,565/-. As per Ex.C23 M/s Flourish (FISLA), CMD sought certain documents from complainant for their verification.  On 06.05.2019, OP2 sought original fire claim form, Original Estimation with date, seal and duly signed, policy copy, police report copy, FIR, Panchanama, Certified copy of the Report from the Fire Brigade Department, Cancelled cheque leaf, Duly completed ECS mandate form, photocopy of insured bank pass book clearly showing name of the bank, branch, account type, account number, IFSC and MICR codes.  The other documents placed are Ex.C25 is Standard Fire and Special Perils Policy.  Ex.C26 is fire insurance claim form.  In column no.5 complainant has mentioned suspect of electrical sparks.  Ex.C28 is Statement of account for the period from 29.10.2017 to 27.11.2017. The next to be noted herein complainant has failed to submit his statement of account showing details of transactions, as to ascertain descriptions of withdrawal and deposits made by him and showing his balance at credit prior to the date of alleged fire accident and after the date of the alleged incident.  Ex.C45 to 47 are stock statements for the end of March 2019 and end of April 2019.

18. The next important document placed on record would be Ex.C52(a) is Forensic Investigation Report in respect of fire incident wherein could see in order to carryout detailed investigation of the incident and in order to determine the cause, source and origin of fire, Mr.Hiren Joshi, Members-Advisory Board and Mr.Vineet Bhatt, Scientific Officer, Screen Facts Services Pvt. Ltd., Mumbai under the supervision and guidance of Head – Forensic Investigation Dr.T.S.N.Murthy, visited the affected factory on 17^th May 2019 and carried out detailed forensic investigation and examination of the premises.  During their investigation Mr.B.H.Gowdru, complainant was present throughout the visit of expert team.  Dr.T.S.N.Murthy is a Doctorate in Physics from Osmania University, M.Sc. in Physics from Andhra University, Two years training at AP Forensic Science Laboratory, Hyderabad, Foreign training at Japan in 1990 and England in 1998.  He is accredited to NABL and he is authorized NABL and assessed many Central and State FSL’s as per ISO 17025 for their accreditation.  He has given over 700 courts all over the country.  He is an author of book on “Scientific Aids to Investigation”. His vast experience could be seen from this report. No doubt this report is a confidential and for restricted use only to enable insurer to settle insurance claim since the claim of complainant is denied or repudiated, Commission as a Tribunal, adjudicating the claim dispute, has benefit of examining the report wherein could see – Description of the Premises of SSH known as Production House, where the incidence of fire had occurred, the view of the entry of the premises, view of the main entrance gate of the premises facing west, Bakery and Namkeen Section office, gents rest room, Sales outlet are located from east to west adjoining the northern compound wall were not affected by fire.  Inside view of the premises from the main entrance gate is noted down and photographs are taken, a view of the unaffected namkeen and bakery section situated on the eastern side of the main gate, Inside view of the unaffected Namkeen and Bakery section, Unaffected Bakery oven present in the Namkeen and Bakery Section, Entrance of the unaffected office area, which is situate between the men rest room and bakery section, Inside view of the unaffected office area, view of the men rest room on the northern side from the main entrance gate, view of the sales outlet facing west, near the main entrance gate, view of the security guard room and wash room is noted down and their photographs taken show that they are not affected by fire.  Similarly, a view of the unaffected canteen, emergency exit and view of the transformer were also noted down and photographs were taken, a view of the unaffected ladies rest room, a view of the unaffected diesel generator, a view of the electric meter which is intact, a view of the outward door were noted down and their photographs were taken to show that they are not affected by fire.  Thus, from this report we could see few of the partially damaged inward door of the production house, inside view of the production house showing the fire effected mezzanine floor located towards eastern side, the structure and roof of production house which was not collapsed due to fire, another view of mezzanine floor were noted down, a view of damaged floor at the north east corner, a view of the damaged floor at the south east corner, a view of the burnt racks and other utensils, a view of the burnt utensils which were present near the northwest corner of the premises, inside view of the remnants of the damaged cupboard, tables, steel stands, utensils, etc., lying on the western corner of the premises, a view of the intact roof of production house, a view of unaffected baking machines near the western wall in the machinery room, a view of unaffected baking machines near the southern wall in machinery room. Views of unaffected machines is noted down and its photograph are taken down which are available in this report.  Further the experts team have taken photographs of debris which were dumped at the western side of the premises in an empty space and taken photographs of the electric boards on the northern wall, one near the outward door and other near the inward door, burnt electric cables due to external fire found hanging under the mezzanine floor, a view of the blackening due to soot deposit on the southern wall of the premises and lastly taken photograph of the electric panel and fuse board on the northern wall of the machinery room.  Two electric boards on the northern wall, one near the outward door and other near the inward door, were found to be fully burnt due to external fire as no symptoms of short circuit such as blackening, beading and scorching were observed.  In paragraph-19 expert team have reported that they have collected five samples of burnt and partially burnt debris at different locations of the premises for subjecting them to GC-MS analysis for detection of fire accelerants.  Each sample were divided into two parts and packed in pouches.  All the pouches were signed by the Forensic Expert and the insured before sealing them.  One set of samples were handed over to the insured and the other set was kept by the expert team for conducting GC-MS analysis.  The GC-MS analysis of the burnt debris samples collected from various parts of the affected premises revealed the presence of inflammable hydrocarbons in two out of five samples collected.  The expert team has also collected oral statement of Mr.B.H.Gowdru, the insured and reported that from January 2019 he was only producing spicy powders and ragi flour.  As usual on April 30^th 2019, at around 6 pm closed the premises and went home.  After dinner, at around 9 pm, he again came to factory to complete the accounts work and keep watch, on the premises as there was no watchman in the premises since last 03 months.  After completing his work and switching off the lights and connection of the machines, he locked the inward door from inside and locked the main outward door with latches from outside. After locking the main gate with latches, he went home at around 10:30pm on 30^th April 2019.  Before leaving the premises, he ensured that here was no one in the premises.  On 01.05.2019 at 4:10am, he received a call from Mr.Ismail (his neighbor) that there was fire caught in the factory.  He also informed that he had already informed the Fire Brigade and Police, before he reaches the premises at 4:30am and saw that the fire brigade and police had already come. He could not able to identify the reasons for fire incident.  The experts team by evaluating all the materials collected at the spot, drew an inferences  the production of sweets and bakery items in SSH were stopped from January 2019 onwards due to lack of funds, the burn electrical wires, switch boards in the production house did not show any symptoms of short circuit such as beading.  Hence they ruled out fire due to short circuit.  The charring on the flooring and the intense soot deposit on the walls indicate that at these locations the maximum intensity of fire was generated and hence in all these locations fire originated.  This implies multiple origins of fire were present in the production house. They observed that the structure and the roof of the production house were intact.  This implies that the fires that originated at different locations were localized and hence the quantity of heat generated was not sufficient enough to damage the roof.  It was further reported that GC-MS analysis of the samples of burnt debris collected from different locations of production house showed the presence of fire accelerant, indicating fire must have been externally induced using ignitable fire accelerants, such as kerosene.  Thus the expert team drew an inferences and on an in-depth examination of the patterns of burning, multiple origins of fire, unnatural spread of fire, presence of fire accelerants it was concluded that the incident of fire was a deliberate act to spread the fire by igniting the existing raw material of ghee, oil, groundnut, spices, packing materials etc., by pouring fire accelerants such as kerosene at different locations to cause damage to the property indicating that the incident of fire was stage managed.  Finally the expert team opined that the fire was not on account of electric short circuit, not on account of mechanical or combustion failures, but was on account of deliberate setting of fire by pouring ignitable fire accelerants at different locations in an attempt to stage manage the accidental fire by someone and taking into consideration, the means, motive and opportunity to cause such a deliberate fire, the possibility of the owner being directly or indirectly responsible for its ignition, initiation and propagation, cannot be ruled out.  Even after such report, Commission is surprised note herein that police authority are kept  mum and they have failed to submit final report on the alleged incident or  to act upon either to investigate what actually happened on 01.05.2019 at around 3:20am in the factory premises or informer/complainant or it was occurred as opined by the team of experts. It is therefore we repeatedly of the view the  police and fire brigade have failed to discharge their duties and they simply have closed the fire accident/FAR thinking that it is only a  matter between complainant and OP2/insurer forgetting that they are also responsible officer not only to protect the interest of complainant but  the interest of public money or public at large or the interest of the nation, since the OP is one of the subsidiary Insurance Company and they are also part of the system is bound to assist the adjudicating authority to decide the cause raised in accordance with law.

19. At this stage we are of the view to place on record what exactly the M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., have reported, since their report is submitted on the basis of their visit of factory premises on 11.05.2019 and subsequent days and on physical verification of the damage and relevant documents and records.  This report is marked as Ex.C52(b), wherein could see insured had claimed Rs.1,43,43,565/- and the loss assessor grossly assessed at Rs.69,00,000/- and finally assessed net loss of Rs.30,08,477/-.  The Loss assessor in his report by his inspection of the factory premises had collected information through insured and prepared sketch of the insured premises and affected area which could be said machinery section consisting of Mezzanine Floor with production hall.  He has taken photographs and had mentioned as per the insured, the fire has originated due to electrical short circuit. During their inspection and enquiry, insured was stated after completing his account work on 30.04.2019 at about 22:30 hours, after switching off all the lights and connections of the machines, he locked the door from outside, also locked the main gate and went to his house. As per the preliminary surveyor, the cause of loss is “Insured refused to give cause of loss” he did not mentioned any of his observations nor his findings on fire incident.  On their enquiry with the insured what was the instructions given by the preliminary surveyors he said that, he gave permission to clear the debris and dumped in his compound in open.  As per investigators report, since all the electrical power at the affected area was switched off, fire due to electrical short circuit is ruled out, since all the machinery was switched off, fire due to sparks produced by machinery is ruled out and since the premises was securely locked, fire by arson from outsider is also ruled out.  On perusal of the final report by the investigator, it was noted that the fire was on account of deliberate setting of fire by pouring ignitable fire accelerants at different locations, in an attempt to stage manage accidental fire.  In this regard, they drew inferences, a Fire Triangle or combustion triangle is a simple model for understanding the ingredients necessary for most fires.  The triangle illustrates a fire requires three elements: heat, fuel and an oxidizing agent (usually oxygen).  The fire naturally occurs when these elements are available. The carbon/soot deposition marks on the walls and the ceilings are evident that there is fire in the premises and the same has been depicted in the photos and videos.  If analyses the fire we have observed the combustible is of dry cereals/pulses used for food grade purpose like Ground nut seeds, dosa rice, red chilli, spices, Dalda, Ghee, Chana Dal packing materials and also 15 lts of Diesel.  Regarding the source of Ignition, they have analyzed the most probable causes in order as under:

1.  Short circuit,
2. Spontaneous combustion,
3. Arson,
4. Malicious damage
5. Static charge. 

20. Out of all the above 1 and 2 have chances of making as peril although the power is switched off but there are instances where the tube lights choke can be a suspect during summers in many of our inspections/experience. Upon their inspection, they have noticed cables have melted due to short circuit and switch boards have melted due to heat. They have inspected and analyzed various cables and wires which were present at the scene of accident and all the evidences reveal the very likely possibility of short circuiting and hence they have considered as the top most peril.  Secondly, during long storage of food products they attain fungus and thereby the chance of spontaneous combustion is also one of the probable cause of loss, but in their opinion the stock available at the scene of incident do not really give any indications of spontaneous combustion as a peril and hence they have ignored the spontaneous combustion as a peril.  The rest of the perils like Arson, Malicious damage and Static Charge not showed any physical evidence during their inspection and also in preliminary surveyor photographs. These, surveyors further gave their findings, since he has started, Dhaba Hotel in 2000 and been a successful, he has added the Ground nut decauticater in the year 2005 and sell to nearby states, in 2012 he has became whole seller, in 2012-2015 was a hotelier and hotel on wheels, in 2016 he started Bakery + sweets + mixtures etc also he gives training and job placement to many students and also in 2017 he has taken Bank loan on his property worth of Rs. 1.2 Crores and made an investment of Rs.2.3 Crores. 

21. In view of all the above, the surveyor feels that, insured is a serious business person, working for his development and constant growth in his line of business but in the month of March 2019. He has stopped the production and the unit is silent.  This has drawn everyone’s attention and propagated that; this loss would have stage managed with malafide intentions.  It is their view, that the outcome of the incident had damaged the insured property and the same is beyond recoveries.  It was his view   insured getting profited due to this incident is highly negative, since the total claim will not cross Rs.30,00,000/- and for the startup, he needs nearly Rs.30 Lakhs plus and presently, he is idle and not doing any business in the premises. At this stage we have to observe herein that the claim is almost Rs.1.43 Crore and had restricted one rupee less to one crore to suit the case to be filed before the commission. In such circumstances, only on the view of this surveyor the peril could not be concluded, insured getting profited due to this incident is highly negative, is unacceptable.    Upon  physical verifications afore said loss assessor has confirmed the loss could be due to electrical short circuiting and the  net assessed loss is Rs.30,00,000/- and finally  left  the decisions to the underwriters to take suitable decision at their end. We have to observe herein though the loss assessors in their report has stated about drawing of Panchanama by police and report of fire brigade could not mentioned about conducting of   inventory or details of the features of the scene of accident place and as to the loss of burnt materials found at production hall and mezzanine floor, since they are fire affected area.  As such in view of findings recorded by M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., as against the   Forensic Investigator M/s Screen Facts being expert on 10.08.2019, findings recorded  that fire was not on account of electrical short circuit, not on account of mechanical or combustion failures, but was on account of deliberate setting of fire by fire pouring ignitable fire accelerants at different locations in an attempt to stage manage the accidental fire by someone and taking into consideration the means, motive and opportunity to cause such a deliberate fire, the possibility of the owner being directly or indirectly responsible for its ignition, initiation and propagation cannot be ruled out is being established from the enquiry papers themselves.  In order to substantiate such view it would be proper to examine informative materials supplied by KEB Department or BESCOM as the case may be, regarding the chances of fire due to a short circuit.  In this regard, additional documents placed on record by complainant himself marked as Ex.C85 to Ex.C87, would play a vital importance, since we find in Ex.C85 which being a case No.OMB/B/G-414/2020/D-1510, the electricity Ombudsman, in the case between Mr.B.H.Gowdru @ B.Hanumantappa, Sukha Sagar Sweet House Vs. The Assistant Executive Engineer (Elec), O & M Rural Sub-Division, BESCOM and Chairperson, Consumer Grievance Redressal Forum (CGRF), Chitradurga Division Office, BESCOM on 14.12.2020 held – The Order passed by the CGRF bearing No.ªÀÄEA(«)/aªÀ/CJA(PÀ)/UÁæ.PÀÄA.PÉÆ.¤.ªÉÃ./20-21/4225-230, dated 12.10.2020 directing the Appellant to pay back-billing charges of Rs.1,530/- is set aside and directed the Assistant Executive Engineer (Elec) to refund Rs.9,180/- deposited while presenting the complaint before the CGRF, Chitradurga.  In this order could see in para-15 on page 12 as thus –

“The records produced in this case clearly indicate that the power supply to the Appellant was disconnected on 14.03.2019 and a notice of disconnection was affixed on the wall of the factory of the Appellant.  Such is the case there was no power supply to the factory of the Appellant on the date of the accidental fire.  Furthermore, the logbook entries discloses that on 01.05.2019 from morning 2.10 am to 7.00 am there was interruption of power supply to the 11 KVA electrical line, these was no power supply.  When the power connection to the installation of the Appellant was disconnected which was notified to the Appellant, there was an interruption in the power supply of the 11 KVA line as per the log book entries, the question of accidental fire in the premises of the Appellant by the short circuit is unwarranted.  The Appellant has failed to produce any material evidence before this authority to prove that on 01.05.2019 there was an accidental fire in the godown of the Appellant due to short circuit; thereby the Appellant has failed to prove the same.”

22. And the authority under KERC recorded such definite findings that on 14.12.2020 and as per Ex.C87 on 12.01.2021, pursuant to Ex.C86 review petition, order to reject the application of appellant dated 23.12.2020 and held, if at all the appellant is aggrieved by the order passed by the authority, he is at liberty to question the same before the appropriate authority.

23. In view of the above circumstances, the report of M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., as against the findings recorded by M/s Screen Facts Forensic Experts with such profile with detailed analytical approach from any angle the fire peril could not be concluded loss could be due to electrical short circuiting as set up by the complainant in his complaint and evidence and the throughout enquiry.  In other words, report marked as Ex.C52(a) dated 10.08.2019 could be acceptable, since they have vast experience, having been given over 700 reports in courts  all over the country, worked as Head-Forensic Investigation, being author of book on “Scientific Aids to Investigation” are not in dilemma or confusion but opined definitely, drawing inferences the GC-MS analysis of the samples of burn debris collected from different locations of production house, showed the presence of fire accelerants indicating, fire must have been externally induced using ignitable fire accelerants, such as kerosene and on an in-depth examination of the patterns of burning, multiple origins of fire, unnatural spread of fire, unnatural spread of fire, presence of fire accelerants and concluded that the incident of fire was a deliberate act to spread the fire by igniting the existing raw materials of ghee, oil, groundnut, spices, packing materials etc, by pouring fire accelerants such as kerosene at different locations to cause damage to the property indicating that the incident of fire was stage-managed. In other words, Commission did not have either details of report of concerned police or the fire station or any other materials on record to rebut the experts report and the findings recorded by the learned Ombudsman, who has held as on 01.05.2019 from morning 2.10am to 7.00 am there was interruption of power supply to the 11 KVA electrical line, there was no power supply. The Authority to examine these facts allowed the appeal filed by Mr.B.H.Gowdru, who is none other the complainant/insured herein this complaint.  It was decided as he  filed  an appeal aggrieved by the order passed by CGRF as per Ex.C84 and he has  succeeded or won the appeal case and now   he states that it was a short circuiting which has to be termed   blowing hot and cold at a time   is unacceptable under law by the adjudicatory authority.  It is not that Ex.C84 to Ex.C87 are placed by insurer but by the complainant himself, would go to establish the finding recorded by the experts team.   It is therefore, view from any angle insurer has to be held   justified to repudiate the claim of complainant.

24. It is not that the delay alone in informing the insurer, give rise to repudiate the claim, but such claim has to be examined from all angles and in appreciation of materials on record, coupled with experts reports, report of police, report of fire station, findings recorded by the authority concerned conjointly.  Learned counsel for complainant has placed a decision reported in (2009) 8 Supreme Court Cases 507 in the case between Sri.Venkateshwara Syndicate v. Oriental Insurance Company Limited and another wherein held –

“Appointment of another surveyor for obtaining fresh report – Rejection of report of first surveyor – permissibility – Factors that are to be considered – Held, insurer is not prohibited from appointing second or another surveyor for fresh estimation of loss – However, appointing surveyors one after another so as to get a tailor-made report to the satisfaction of the insurer is impermissible – must specify cogent and satisfactory reasons for not accepting report of first surveyor and need to appoint second surveyor.”

25. In our view, appointing M/s Screen Facts Forensic Experts as against the report submitted by M/s Flourish Insurance Surveyors and Loss Assessors Pvt. Ltd., could not be said appointing surveyors one after the another is a tailor made report to the satisfaction of the insurer, since the materials on record placed by parties to the complaint, satisfy for such appointment even from the findings recorded by learned Ombudsman, accepting the appeal of the complainant as stated supra, as such decision relied on, did not come to assistance of the complainant  not to accept the report submitted by M/s Screen Facts Forensic Experts.  In such conclusion and with such definite findings, we proceed to record findings on point no. 1 and 3 in the negative, on point no.2 in the affirmative and on point no.4 as a result, dismissed the complaint with no order as to cost.  

26. Furnish free copy of this order to both parties for needful.

          Lady Member                                Judicial Member

*GGH*