IMPORTANT POINT
Even part of the claim is proved to be false; the insurance company has the right to repudiate the entire claim.

The complainant which is a partnership firm engaged in trading, manufacturing etc. of synthetics/cotton yarn, obtained a Standard Fire & Special Perils Policy to the extent of Rs. 3.5 crores in respect of stock of Grey Cloth, Yarn, Spare Parts etc. and to the extent of Rs.75.00 lacs in respect of finished goods stored in its godown at 164-165, Guru Krupa Industrial Industrial, Surat. Yet another policy for the same purpose was obtained to the extent of the sum insured of Rs. 2.55 crores. It is alleged that a fire broke out in the godown of the complainant in the night intervening 8/9.07.2010 and the entire stock stored in the godown got burnt, and consequently damaged. This is also the case of the complainant, that at the time of fire, poly and poly yarn worth Rs.1,68,77,311/-, grey man made fabric worth Rs.23,695,721/-, finished cloth and cloth-cut worth Rs.25,037,902/- and embroidery machine parts worth Rs.18,58,745/- had been stored in the said godown. This is also the case of the complainant that a site visit was held by the Branch Manager of the insurer on 13.7.2010, wherein he confirmed the earlier visit of the Development Manager on 30.6.2010, when the entire stock and documents were verified. According to the complainant, its Chartered Accountant had also certified the closing stock of the godown at Rs.6,74,69,679/-. The claim lodged by the complainant however, was repudiated by the insurer vide letter dated 23.5.2011. Being aggrieved, the complainant is before this Commission, seeking payment of Rs.8,57,50,357 with interest. The bank from which credit facility had been taken by the complainant, namely IDBI bank, is impleaded as opposite party No.2 in the complaint.

2. The complaint has been resisted by opposite party No.1 which has taken a preliminary objection that the complainant has relied upon a forged and fraudulent document, which has been annexed to the complaint. It is further alleged that the majority of the transactions could not be verified as the same were stated to be cash transactions. It is also alleged that despite repeated follow up, no supplier or third party verified or confirmed the transaction claimed by the complainant. It is also alleged that the quantity of the damaged goods did not match with the claim of the complainant.

3. The letter of repudiation dated 23.5.2011 to the extent it is relevant reads as under:

“We regret to inform you that your fire claims under above two policies are hereby repudiated for the following reasons:

1. That your transactions in cash of huge amounts are suspicious and not proved.

2. The huge increase in purchase and decrease in sales are unbelievable.

3. The suppliers and you are unable to provide details of supply i.e. L.R. Copies, Driver details, freight paid details, bank accounts and TDS details.

4. The building, cement sheets of roof, windows and gates are not affected by fire.

5. The policies are obtained with ulterior motive to claim huge amount. So, we are unable to entertain the claims and repudiated the claims and closed as “rejected”.

It would thus be seen that huge payments alleged to have been made by the complainant to its supplier have not been believed by the insurer and the same are claimed to be suspicious.

4. Annexure C-13 to the complaint is a visit report dated 13.7.2010 purporting to be written by hand, by the then Branch Manager of the opposite party No.1. Vide this letter, he purported to certify his personal visit to the godown on 13.7.2010 and having checking the godown and all the papers comprising purchase bills, photos. He also purported to certify that all the goods of Gulab Trading Company were totally lost in fire and its amount was Rs.6.8 crores. The aforesaid letter bears the seal of Dhule Branch of the Oriental Insurance Company Ltd., meaning thereby that according to the complainant the said visit was undertaken