The court held that disputes regarding insurance claims involving factual determinations are not suitable for resolution under Article 226, necessitating civil proceedings or arbitration.

ORDER :

VENKATESWARLU NIMMAGADDA, J.

The instant Writ Petition is filed under Article 226 of the Constitution of India by the Petitioners for the following relief:

“..to issue a writ or direction more in the nature of or writ of mandamus a) By calling for the Investigation Report dated 10.07.2023 submitted by the Respondent No.7 and the Survey Report dated 17.07.2023 submitted by the Respondent No.6 and quash the same for being violative of the statutory provisions of IRDA Act, Rules and Regulations;

b) Consequently, to set-aside the Repudiation Letter vide bearing No.150098/NMCH/ /2023-24, dated 29.08.2023 issued by the Respondent No.5;

c) Direct the Respondent No.4 and 5 to release the claim amount as per the summary in terms of assessment of loss, as submitted by the Petitioner No.1 along with interest from the date of claim till realization;

d) Direct the Respondent No.4 and 5 to pay Rs.50,00,000/- as damages to the Petitioners;

e) And/or to pass..”

2. The Petitioners’ case is that the Petitioner No.1 company was founded by Petitioner Nos.2 and his wife i.e., Petitioner No.3 and they established M/s. Vantage Spinners Private Limited at Hanuman Junction Road, Gollapalli Village, Nuzivid Mandal, Eluru District with the primary goal of generating employment opportunities for the local/rural community. Their commitment has resulted in over 2000 individuals being directly employed by the company, with an additional 6000 to 1000 people indirectly dependent on its operation. The company’s operations also entail the consumption of 60 acres of crops daily, demonstrating their significant support to local cotton farmers.

(a) The Petitioner company purchased the following three insurance policies from the Respondent Company which covered building, transformer, electric installation, plant and machinery, stocks, furniture & fixtures, gross profits etc.,

(b) While things stood thus, on 04.04.2022 to the unfortunate of the Petitioner fire occurred accidentally in the factory premises of the Petitioner company resulting a major portion of the factory premises causing huge loss to the Petitioner company. The Petitioner company has two manufacturing units – Spinning and Opened Unit with galvalume sheet roofing in the premises. The incident occurred in storage godown commonly used by both the units. Both units used to store their stocks within the four walls of the affected common warehouse/godowns. Since the stocks of OE unit (Unit-II) were also affected, the policy No. 1507001121P106752083 (LUS) covering its various assets for a total sum insured of Rs.50 Cores which includes stocks for a sum insured of Rs.19 Crores was also operative for the coverage of the subjected claim.

(c) The Police made detailed enquiries about the cause of fire and examined the reports of the fire department officers RFSL, Vijayawada and CFSL, Hyderabad dated 28.10.2022 and came to conclusion that the fire was caused accidentally and there was no foul play on the part of anyone in causing the fire. Respondent No.7 carried out the investigation regarding the cause of fire at the instance of the Surveyor at the factory premises. They were appointed contrary to the guidelines of Insurance Regulatory and Development Authority of India (for short “IRDA”) for Forensic Investigation of the incident. Respondent No.7 made a report dated 10.07.2023 stating that arson was the cause of fire and the said report has not been provid