The court upheld the repudiation of the insurance contract based on the petitioners' non-compliance with the Supreme Court order and pollution control norms, emphasizing the importance of compliance with legal requirements in insurance claims.

1. The Court :-A notice of repudiation dated November 16, 2012, issued by an insurance company, is under challenge in the present writ petition.

2. Learned Senior Advocate for the petitioners submits that, the first petitioner is a partnership firm. It had taken out a standard fire insurance company policy in respect of a business of carrying on finished leather products at a premises in Tangra. Such business premises was inundated by a fire happening at 8 a.m. on October 23, 2008. The fire devastated the plant, machinery, building and stock at such business premises. The petitioners lodged a claim with the insurance company. The Surveyor inspected the damage caused and submitted a survey report. He refers to the survey report in details and submits that, the Surveyor finds that, the petitioners were carrying on producing finished leather goods. There is no whisper of a tannery business being carried on in the surveyor’s report. He refers to the impugned letter of repudiation and submits that the foundational basis of the repudiation by the insurance company is wrong. The insurance company proceeds on the basis as if the business carried on by the petitioners at Tangra was banned by virtue of a judgment and order of the Hon’ble Supreme Court of India rendered in WP No. 3727 of 1985 (M.C. Mehta-Versus-Union of India). Moreover, the petitioners are alleged to have suppressed material fact and to have come with unclean hands so far as the insurance policy is concerned. The repudiation being bad, the same is required to be set aside. The insurance company should reconsider the entire claim.

3. Learned Senior Advocate for the petitioners draws the attention of the Court to the order of closure issued by the Pollution Control Board. He submits that, the same does not affect the carriage of business of finished leather goods at the subject premises. Tannery operation is prohibited. The petitioners were not doing any tannery business. The survey report does not establish that, the petitioners were carrying on any tannery business. On the contrary it speaks of finished leather goods being available. There is no requirement of any fact to be reassessed by the Writ Court. The materials made available on record can be read, understood and inferred to adjudicate the claim of the petitioners. The repudiation being improperly premised, the same should be set aside. The insurance company should be directed to revisit the claim of the petitioners.

4. Learned Advocate appearing for the Insurance Company submits that, the claim of the petitioners is disputed. There are disputed questions of fact involved and that the Writ Court should not intervene in such a scenario. In support of such contentions, he relies upon an unreported decision of the Court rendered in WP No. 1135 of 2015 with WP No. 1137 of 2015 (Dhansar Engineering Co. Pvt. Ltd. & Anr.-Versus-The New India Assurance Company Ltd. & Ors.). He submits that, such judgment and order dated September 8, 2016 was challenged in appeal and that, the appeal was dismissed without any interference. He relies upon (1997) 1 SCC 156 (State of M.P. & Ors.-Versus- M.V. Vyavsaya & Co.) and submits that, where disputed questions of facts are involved, the Court should not intervene under Article 226 of the Constitution of India. He refers to the forensic report and submits that, the forensic authorities found the petitioners to stack raw hides and chemicals which are required for the processing of raw hides into finished leather goods. This particular type of business was actually prohibited by the Hon’ble Supreme Court of India. He refers to the correspondence exchanged between the Insurance Company and the Pollution Control Board and submits that, upon an enquiry as to whether the petitioners had the consent to operate on the fateful day, the Pollution Control Board informed the insurance company that, the petitioners did not have the requisite consent to operate under the pollution control norm