A.P. Sahi, President
1. The complainant - cold storage is before us claiming indemnity after the same has been declined through a repudiation letter dated 16.12.2008. The facts giving rise to the complaint have already been recorded along with the submissions raised by Mr. Madhurendra Kumar, learned counsel for the complainant on 20.02.2026, which is extracted herein under:
"1. This complaint arises out of a dispute regarding indemnification of the loss suffered by the complainant in his cold storage in a fire that is stated to have taken place on 09.07.2008. The stocks of the cold storage were secured under two policies dated 09.04.2008 for a total sum of Rs. 3,22,00,000/-. The complainant alleges that the fire was reported to the fire brigade and a report of the said department confirms the occurrence of the fire due to a short- circuit.The fire according to the complainant was accidental and the Insurance Company was accordingly intimated on 15.07.2008 with a request to proceed with the matter and indemnify the claim.
1. The Insurance Company is said to have appointed Mr. R. C. Bajpai as a Surveyor, who tendered his report on 08.11.2008 stating that there were no visible signs of fire and therefore the claim was not indemnifiable. The Survey report also did not accept any of the other claims and recommended for repudiation.
2. The Insurance Company acting on the same repudiated the claim vide a letter dated 16.12.2008. Aggrieved, the complainant has filed the present complaint questioning the correctness of the repudiation and also claiming indemnification against the losses suffered.
3. Notices were issued and the Insurance Company has filed its reply to which a rejoinder has also been filed by the complainant. Evidence affidavit has been filed and the OP-2 has filed the evidence affidavit of Mr. Farman Raza, the Divisional Manager of the Insurance Company which is accompanied by an affidavit of Mr. Bajpai that is on record.
4. The complaint proceeded, but on account of several adjournments and after efforts to hear the matter, orders were passed on 23.09.2024, but the matter was again adjourned on the request of the complainant. Once again an adjournment was sought on 27.06.2025. Thereafter an application I.A. No. 5892/2025 was moved by the complainant to take notice of certain documents to which learned counsel for the Insurance Company urged that it is not necessary to file a reply to the same, keeping in view the exhaustive Surveyor's report which does not suffer from any infirmity. The letter of repudiation is based on firm grounds and therefore the complaint deserves to be dismissed.
5. Advancing his submissions for the complainant, Mr. Madhurendra Kumar, has invited the attention of the Bench to the certificate of the Fire Department to substantiate his submissions. The fire report which is in Hindi language is extracted hereinunder:
“LANGUAGE”
6. The Surveyor issued letter to the complainant calling upon it to submits its documents. The complainant contends that the documents were submitted on 20.07.2008, yet once again the Surveyor sent a letter on 19.08.2008.
7. The documents submitted by the complainant on 20.07.2008 are extracted hereinunder:
8. The notice issued by the Surveyor dated 19.08.2008 is extracted hereinunder:
9. According to the complainant, a full reply was given to all the queries raised and the documents were supplied, yet the Surveyor did not either look into the documents or respond to it in spite of the fact that all the documents were on record. Legal notices and replies were exchanged that are on record.
10. The Survey report dated 08.11.2008 was tendered and the same is extracted hereinunder:
11. The claim was repudiated vide letter dated 16.12.2008. The same is extracted hereinunder:
12. Mr. Madhurendra Kumar urges that the incident of fire was established and the loss had been clearly demonstrated. The report of the Surveyor is absolutely incorrect and it suffers from a large number of infirmities and is against the weight of evidence on record. He therefore submits that the letter of repudiation deserves to be annulled and the claim deserves to be allowed.
13. The arguments could not conclude today due to paucity of time and the arguments of the learned counsel for the Insurance Company is yet to commence.
14. Let the matter be listed on 21.04.2026."
2. Mr. Madhurendra Kumar continued his submissions on 21.04.2026, when we heard the matter at length and it was urged that the source and the cause of fire stood established which cannot be even dislodged by the surveyor. The evidence in this regard was pressed into service by stating that the loss had been reported to the Insurance Company on 09.07.2008 by the respondent no. 2 Bank. The intimation dated 09.07.2008 has been filed along with IA/5888/2025 and IA/5892/2025. The same is extracted herein under:
3. We had entertained the said document that was filed on 09.05.2025 vide diary no. 13077. The police had also been intimated on 10.07.2008, where it was also stated that the loss was due to a short circuit causing a fire. The same is extracted herein under:
4. The complainant also dispatched a letter to the Insurance Company on 11.07.2008 stating that a short circuit had occurred in the cold storage causing loss. The same is extracted herein under:
"REF.BM./2008-09/104 Dated 11.07.08.
To,
The Manager,
The New India Assurance Co. Ltd.
Station Road, Etawah
Dear Sir,
Reg.: A/C M/s. Sangam Cold Storage & ICE Plant Ref: Your Policy No. 421205/1108/11/00000008 dt 09.04.08 & 421205/11/08/11/00000009 M/s. Sangam Cold Storage & Ice Plant situated at Village Mantiza Sonashi, Kishni Distt. Mainpuri has been financed by Central Bank, Takia Azadgan Etawah Insured from your company under two Insurance Policy mentioned above.
It is apprehended that stock kept in the cold storage has been spoiled by short circuit. There is also some loss in Building. Therefore you are required to lodge our claim and send us claim form immediately so that an early step in the matter will be appreciated. Thanking you Sd/-
Yours Faithfully Partner Sangam Cold Storage & Ice Plant"
5. It has been pointed out that the surveyor had doubted the occurrence of fire and he wrote a letter to the Inspector General of Police (Fire), Uttar Pradesh on 18.10.2008, requesting him to issue necessary instructions to carry out a special investigation, as according to him, the fire brigade has not even visited the site or carried out any other exercise. The said request by the surveyor was forwarded by the Uttar Pradesh Fire Services Head Quarters to the Superintendent of Police, Mainpuri to submit a report after investigation. The fire service officer, Kishni, Mainpuri on 05.11.2008 tendered his report, which is extracted herein under:
6. With the aid of these documents, Mr. Madhurendra Kumar further submitted that the surveyor in hot haste without waiting for the report had tendered his survey report on 08.11.2008. Mr. Madhurendra submits that the surveyor does not refer to the letter dated 05.11.2008 sent by the Fire Service Officer, yet he comments upon the incident as having not occurred.
7. Mr. Madhurendra further points out that instead the surveyor seems to have sent a letter on 07.11.2008 to the Fire Brigade Office, Kishni Mainpuri to which a reply was given by the Fire Service Officer on 20.11.2008. This reply obviously is after the survey report had been submitted on 08.11.2008. The same is extracted herein under:
8. Mr. Madhurendra Kumar submits that as already argued previously neither the survey report nor the repudiation letter had been given to the complainant and it is after orders were passed by this Commission on 02.02.2010 that the said documents were brought on record for the first time through the written reply of the Insurance Company.
9. Mr. Madhurendra Kumar, therefore submits that had these documents been provided earlier or any enquiry made from the complainant in respect thereof, the complainant could have given a reply informing the surveyor and the Insurance Company about the correct status of the fire and the evidence relating thereto.
10. Nonetheless, he points out that two affidavits one of Mr. Shivraj Rathore and the other of Mr. Ram Narain Rathore dated 11.09.2008 had been tendered before the Insurance Company, but the Insurance Company totally ignored the said affidavits who had testified in favour of the complainant about the fire caused by short circuit on 09.07.2008.
11. Mr. Madhurendra Kumar urged that the entire report of the surveyor proceeds on assumptions without any foundation to support the same.
12. It has been vehemently argued by the Mr. Madhurendra Kumar that the surveyor while tendering the report has referred to certain documents and annexures. The Insurance Company while filing its written version has not filed any of those annexures so as to support the conclusions drawn by the surveyor. It is pointed out by Mr. Madhurendra Kumar that the affidavit of the surveyor, Mr. R. C. Bajpai has also been filed on 03.12.2013 along with the affidavit of the Divisional manager Mr. Farman Raza. He has urged that the surveyor once again has stated that the report of the fire officers cannot be relied on and that in order to support his conclusions the survey report has already been filed with written reply of the Insurance Company along with annexures. While pointing out to paragraph 8 of the affidavit of Mr. Bajpai dated 16.10.2013, it is urged that the annexures referred to therein do not exist and have not been filed, and therefore the affidavit filed by Mr. Bajpai should not be believed.
13. Mr. Madhurendra Kumar therefore urged that the surveyor has given a totally incorrect report in order to deliberately deny the claim made by the complainant.
14. He has then invited the attention of the Bench to the intimation sent by the complainant through mails to the surveyor along with the documents that were demanded. The documents tendered in response to the letter of the surveyor dated 15.07.2008 has been enlisted as follows:
"Surveyor & Loss Assessor D/4, Triveni Nagar Opp. Rail Bazar Thana Cantt. Kanpur-208004 Dear Sir, Subject: Loss on 09/07/2008 due to fire, Poicy No 421205/11/08/11/08 & 421205/11/08/11/00000009 с/reg. With reference to above subject letter dt 15.07.2008, the requisite documents are submitted as under:
1. Claim form duly completed with required documents.
2. Copy of policy/cover note.
3. Fire brigade report in original.
4. Stock statement enclosed.
5. Copy of Bank Statement of stock.
6. (a) Provisional Profit & Loss & Balance Sheet.
(b) Last One year's trading a/c duly certified by C.A.
(c) I.T. return-not applicable (being in the first year)
7. Sales Tax return/Turn over not applicable (being in first year)
8. Purchase bills of Plant & Machinery enclosed 13 nos.
9. Goods salvaged have been kept aside.
10. Lay out Plan of insured premises enclosed.
11. Statement of 2 eye-witnesses enclosed.
12. As regards cause of loss, it is submitted that fire occurred due to short circuit in electrical installation. A permanent installation was in place before the fire broke out. The loose wires found at the time of survey were laid for lighting purpose to facilitate safe passage.
13. Questionnaire duly completed is enclosed. We hope that above documents meet your requirement. We request you to kindly expedite our claim for speedy disposed.
Thanking you.
Yours Sincerely For Sangam Cold Storage & Ice Plant Partner"
15. It is therefore urged that there was no deficiency of any document and all the stock statement as well as the details of the compensation paid to the farmers due to the loss were all enclosed with the same, together with the other evidence referred to in the list extracted hereinabove. It is therefore urged that there was no dearth of documents to substantiate the loss caused to the cold storage due to fire and all supporting documents regarding the status of plant and machinery and the losses together with the bills and invoices were all placed on record and have been filed along with this complaint, to which there is no rebuttal.
16. He therefore submits that in the absence of any rebuttal to the evidence on record and there being a total omission by the surveyor to assess the loss, the claim deserves to be allowed keeping in view the declaration made in the claim form and the present complaint.
17. Responding to the said submissions, Mr. J. P. N. Shahi, learned counsel for the Insurance Company has urged that the complainant has failed to substantiate the claim by any evidence or proof regarding the existence of fire. He submits neither any photographs nor any evidence of the material having been destroyed due to fire has been produced. The establishment is a cold storage and the surveyor has gone to the extent of indicating that no wooden items including the wooden planks on which the potatoes were stacked had been touched by any fire. He submits that in case there was fire at least the wooden planks and the sacks would have been burnt. No such evidence was forthcoming nor it could be demonstrated by the complainant.
18. It is urged by Mr. Shahi, that the main plank of the argument of the complainant is the report from the Fire Department. He submits that the subsequent report dated 20.11.2008 categorically states that no evidence of fire causing damage to the potatoes or the machine was seen by the fire officer. He submits that the earlier report dated 05.11.2008 was not the correct report, in as much, the only short circuit which was visible was in an MCB Panel with no evidence of any fire having spread on account of the electrical short circuit. He submits that the complainant has been unable to provide any such supporting evidence to substantiate fire having emanated or spread out from any electrical spark.
19. He further submits that in the absence of any visible evidence or burns due to fire the entire story of fire is a concocted. It is urged that it appears that since the complainant only had a fire perils policy, the whole attempt of the loss suffered due to breakdown in the machinery was sought to be converted as a loss due to fire when in fact no fire had occurred, causing damage to the cold storage.
20. He points out that it is for this reason that the complaint was made to the IG Police by the surveyor pointing out that on a physical inspection of the entire premises no visible evidence of fire was available and therefore the report of the fire officer could not be accepted to establish the loss of potatoes due to fire.
21. He submits that even assuming for the sake of argument that there was some loss to the potatoes for which compensation was paid to the farmers, the same was on account of a machinery breakdown and loss of cooling effect in the cold storage which might have resulted in deterioration or damage to the potatoes, and then a consequential compensation to the farmers. This cannot be treated as a loss due to the peril of fire and therefore the claim has been rightly repudiated.
22. He has pointed out that the reasons for repudiation have been clearly mentioned indicating that there was no sign of loss due to fire to the stocks or to the building or to the items kept inside the cold storage.
23. He then urges that in fact the fire brigade never visited the site or carried out any extinguishing operations, as such the fire department could not have tendered any report about the spread of fire due to short circuit. It is therefore urged that none of the grounds raised are tenable and the complaint deserves to be dismissed. He has then read out portions of the written statement particularly paragraphs 26 to 29 thereof to buttress his submissions. The same are extracted herein under:
"26. It is submitted that on actual physical verification by the Surveyor, it was discovered that actually no fire occurred at the cold storage and a fraudulent claim of damage by fire was lodged by the Petitioners herein. This stand of the Respondent is substantiated by the following facts:
• Cold Storage Machine No. KC- 4 and KC-6 were totally in operation.
• Ammonia and Ammonia Tank in the Cold Storage were completely safe.
• There was no sign of fire in the Machine Room. No visible sign of fire extinguishing operation could be seen - All the Fire Extinguishers were intact and there was no used fire extinguisher installed in the cold storage. There was no burning of potatoes. Even wooden planks under the potatoes were safe and unburnt.
27. The Respondent submits that the Surveyor has dealt with the cause and assessment of loss and has inter alia rendered the following findings:
i. There has been no fire /short circuiting in the Plant & Machinery in the instant case and as per the written statement of the insured's employees present at the time of the Survey, they have clearly mentioned that the Insured has lodged a bogus claim. Therefore, in our opinion there is no loss on account of fire/short circuiting and hence there is no point of making Assessment of Loss under the policy. ii. The stock of potatoes has been spoiled on account of temperature which was not maintained due to inadequate infrastructure etc. Insured has also taken out 2500 bags of potatoes which were not affected in the instant case. iii. The insured has obtained Cold Storage License on 3rd July, 2008 and at the utmost surprise he is keeping stocks of potatoes w.e.f 07.03.2008 and till issuance of license he has already kept substantial stock of potatoes even without arrangement of power/electricity. The power connection in the cold storage was connected only in the first week of June, 2008.
iv. During our survey we observed that there was no fire/short circuit in the Plant in the instant case rather, it seems that the potatoes stored in the cold storage decomposed/decayed due to non-availability of freezing facilities/power supply. The insured has stored material in the cold storage much before the power connection as well as the license from the Food Processing Department was obtained probably to get the loan facilities from the Bank and the insured has not complied with the infrastructural requirement for running the cold storage.
v. Had there been such a massive fire the building of the Cold Storage must have been affected but the same was found unaffected even the plant inside the cold storage was found unaffected *** ***
28. As regards the cause of fire, the Surveyor observed as follows:
"6. CAUSE OF FIRE There was no electrical short circuiting as evident from the safe Plant & Machinery and Ammonia Tanks. Even the wooden planks inside the cold storage were totally safe and unburnt. We did not find any burning of potatoes. Rather we observed that the potatoes were rotten, much earlier, probably during March 08 to May 08 and thereafter lodged a bogus claim. Our enquiry revealed that the Insured tried to run the Cold Storage by unauthorized power connection. Even during our survey the Insured's employee was trying to connect power through unauthorized broker. Insured failed to produce power bills from March 08 till date of loss.
There was a minor fire seen in the MC.B. meant for light purpose. It had no connection with Power Supply of Plant & Machinery. The burning of M.C.B. is suspicious in nature and appears to be managed with an intention to create evidence for fire claim. In this case, neither there is short circuiting in Plant & Machinery nor any fire. In any case there is no accidental fire and the risk is not covered under the policy."
28. It is submitted that the Petitioners herein submitted a fire Brigade Report purportedly issued by the Fire Brigade Officer, Mainpuri. The said Report states that a fire took place at the Cold Storage Pant of the Petitioners and fire extinguishers were used to control the said fire. However, on a proper examination, the said report purportedly issued by the Fire Brigade Officer does not appear to be genuine. The Fire Officer has nowhere in the said report stated the date, time, nature of the said loss, the affected property and the extent of loss, etc. whereas whenever a Fire Report is issued by a Fire Officer, it is common to specify these details. Moreover, the said report is on plain paper and merely states that the fire occurred and was extinguished by the workers of the Cold Storage and on account of the said fire substantial loss was suffered by the Petitioners herein. A true translated copy of the said letter is hereto annexed and marked as ANNEXURE A5. It is further submitted that the Surveyor, to clarify the position as regards the alleged fire, wrote to the Fire Brigade Officer for certifying the actual status of loss to the stock and machinery. In response to the said letter, another letter dated 20.11.2008, was received by the Surveyor on 22.11.2008 clearly stating that there was no loss to the stock of potatoes and the wooden planks and machinery. A true translated copy of the said letter dated 20.11.2008 is hereto annexed and marked ANNEXURE AM From a perusal of the records, it appears that the Petitioner herein submitted a fake report to get compensation from the Respondent herein.
29. As regards the extent of fire, the Surveyor has rendered the following categorical findings.
1. EXTENT OF FIRE During survey, along with our associate engineer, we found the following facts:
a. Cold Storage Machine No. KC-4 and KC-6 are totally in operation.
b. Ammonia and ammonia Tank in the Cold Storage is completely safe. There is no sign of fire in the Machine Room or the Generator c. Generator is not in working condition d. There is no fire inside the Cold Storage also e. No visible sign of fire extinguishing operation could be seen and even the fire brigade was not called.
f. All the Fire Extinguishers were intact and there was no used fire extinguisher installed in the cold storage g. There was no burning of potatoes. Even won planks which were laid below the potatoes were safe and unburnt. It is evident from the above mentioned fact and figures that there has been no fire and Ironured has froschdently intimated cause of loss as "short circuit" resulting in the spoilage of stock of potatoes in the Cold Storage. There cannot be any short circuit even if there is any fire in MCB installed in the passage at the opposite direction of the Machine Room. This has been provided for temporary lighting arrangement to the internal passage of the Cold Storage. It is needless to mention that this MCB has nothing to do with the main Plant & Machinery. As already stated the main Plant and Machinery is totally intact and there is no loss to Plant & Machinery. In fact the Insured has tried to create evidence of short circuit in a very safe manner so that spoilage of potatoes due to short circuit resulting in breakdown of Plant & Machinery could be claimed Although there was no machinery breakdown and even wooden planks of the cold storage have not been effected and Insured's statement is totally false that 54,500 qtls potatoes were spoiled which according to the Insured valued at Rs. 30.00lacs. If there would have been breakdown in the Plant & Machinery total stock would have been spoiled whereas our enquiry revealed that 2500 qils potatoes were taken out as fresh from the cold storage."
24. We have considered the submissions and it is the complainant who had to substantiate the claim with regard to the actual occurrence of a fire and the loss being caused due to the same. From the record of the surveyor as also the contention of the complainant coupled with a part of the fire station report, this much appears to be correct that there was a spark in the electrical panel, but there is no evidence forthcoming that the said electrical spark which might have been due to a short circuit had further developed into any flames or fire causing damage to other buildings, plant and machinery or the stocks of potatoes. The complainant has not broughtforth any photographs, immediately on the occurrence of the incident, to demonstrate the same. The fire brigade had not visited the site for dousing the fire. This fact is admitted in the letter relied on by the complainant dated 05.11.2008 quoted hereinabove, where it has been categorically stated that the fire brigade had not been informed about the fire and that it had been allegedly doused by the equipments installed in the cold storage itself. It is only on the 11.07.2008 which is after two days of the incident that the fire officer had been informed for carrying out an inspection. In these circumstances it is evident that the fire officer who has tendered the report was not involved in the dousing of the alleged fire as reported and the report was tendered on the basis of some information received or an inspection of the electrical panel. There are no details given in the said report as to what was the extent of damage caused by the fire except for the fact that the MCB Box and the wires inside the same were found to be burnt which was presumably due to a short circuit. Beyond the same there is no other material to infer a fire of a scale so as to cause damage to the stocks, machinery and building to the extent as claimed by the complainant.
25. It is correct that the surveyor prepared his report on the basis of some material that might have been available to him and it is also correct that the complainant had provided documents as referred to hereinabove, but the fact remains that unless the incidence of fire and evidence of its actual occurrence is established, the peril cannot be said to have actually occurred for the purpose of covering the risk of fire and consequential indemnification.
26. What we can infer from the documents on record is that due to some electrical short circuit there might have been a failure of the entire cooling system causing deterioration and damage to the potatoes and the other stocks, but the damage was certainly not on account of any fire as alleged.
There was no machinery breakdown policy, nor any policy covering the loss of potatoes on account of deterioration due to machinery breakdown, and in such circumstances the risk which is being claimed to be covered due to the alleged fire has not been established.
27. There are certain discrepancies in the report of the surveyor and it is correct that all the annexures along with the survey report have not been brought on record. It is also correct that it is after a nudging by this Commission that the repudiation letter and the survey report were brought on record and had not been served to the complainant earlier, but nonetheless after the parties have exchanged the affidavits and the entire evidence has been brought on record we have been unable to find any clinching or convincing evidence to establish the cause of loss due to any fire, much less a substantial fire, as claimed by the complainant. The loss caused to the complainant may have been on some other account, but it is certainly not a loss covered under the terms of the policy, namely, due to the peril of fire. We therefore do not find any merit in the complaint and the same is hereby accordingly dismissed.
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