Case: M/S. Sbhobika Attire Vs. New India Assurance Co. Ltd.

and glass shelves, as also the glass tops of the sales counters were absolutely intact. It was also indicated that once the mob had set fire to the elevated ground floor, nobody could have entered the basement levels and that since fire in the ground floor had been started a little after 4.00 P.M. and the same was extinguished at around mid-night, nobody could have entered the premises during this period when the elevated ground floor was burning. 12. In view of the above, the surveyors only took into consideration the damage caused to the stock in the elevated ground floor level and the insurance company settled the claim for loss to the stock on the said basis. From the statements of the sales persons who were in the two basement levels, it was sought to be argued that no one from the mob had entered the two levels of the basement as long as the employees were inside and it was doubtful as to whether after they left whether anyone could have entered the two levels of the basement in view of the conditions prevailing in the elevated ground floor. From the submissions made on behalf of the parties, it is evident that in the wake of a series of bomb blasts in the city of Coimbatore on 14th February, 1998, there was wide spread unrest in the city of Coimbatore coupled with mob frenzy, arson and looting. Although, an attempt has been made on behalf of the investigating agency to clinically examine the manner in which the incident involving the appellants firm had occurred, it is doubtful whether the incident which occurred at the showroom of the appellants on 14th February, 1998 can be explained with such clinical precision as to when exactly the sales persons in the two basement levels escaped from the showroom through the elevated ground floor or when the police and fire fighting personnel arrived at the site and when exactly the riotous mob took over the showroom. The statements of the sales persons clearly indicate that when they were fleeing the showroom they saw the mob trying to break through the plate-glass doors and windows leading to the first level of the two basement floors. There is also no denial of the fact that the said plate-glass doors and windows were in fact broken and for which insurance coverage was paid by the National Insurance Company on the basis of a report submitted by M/s. Comtec, Surveyors, Valuers and Assessors. The report submitted by the investigators, M/s. Vasu Associates, proceeds to a large extent on surmises and the conclusion ultimately arrived at by them which reads as follows does not inspire much confidence:- "The owners themselves claim looting, because they did not find some of the textile goods after the incident, but they have no material to strengthen their claim by way of supplying us with substantial evidence which are unassailable. In the absence of substantial evidence they themselves are not for sure, it was looting. From what we have seen and heard, we are also of the opinion that, there could not have been looting at all. Surveyors are also convinced and therefore, they are not also inclined to assess the loss" 13. As will be evident from the above, it will appear that the aforesaid conclusion was arrived at by adopting a negative approach. The investigators reached the aforesaid conclusion merely by stating that the appellants had no material to strengthen their claim by providing unassailable evidence of looting. Such an approach cannot be supported since apart from claiming that the goods in the showroom had been looted and the attendant circumstances, the appellants were not in a position to supply any further evidence. 14. That there was communal unrest in the city of Coimbatore on the date in question is not denied. That the mob attacked and set fire to the showroom of the appellants is also an established fact. That the showroom was attacked by a frenzied mob, which set fire to the elevated ground floor of the showroom and indulged in looting, is also established. At exactly what point of time the mob may have entered into the two basement levels is difficult to determine in the prevailing circumstances and it is quite possible that the looting had taken place before the police and the fire fighting personnel arrived at the site. 15. There is nothing on record to indicate that the stock in trade had been removed from basement levels in anticipation of any such rioting. On the other hand, the bank has clearly supported the case of the appellants by informing the insurance company that the stock insured was for Rs.2 crores and the average stock at any point of time in the insured premises was more than Rs. 2 crores and the bank requested the insurance company to re-consider the claim of the appellant-firm. 16. Although, M/s. Vasu Associates were engaged on a suspicion that the appellants had themselves transported part of the goods from the showroom, there is no real evidence in support thereof. 17. In our view, the appellants had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy and it was for the insurance company to disprove such claim with evidence, if any. In our view, the insurance company, despite the report of the investigator, failed to establish that the claim of the appellants was not justified and was not covered by the policy of insurance. 18. Inasmuch as, the insurance company was within its rights to cause an inquiry into the incident and it approved the appellants claim of Rs.1,02,38,738/- based on the report of the investigator, we are unable to agree with the submission made on behalf of the appellants that apart from the actual claim, the appellants are also entitled to payment of compensation towards hardship, mental agony and harassment. 19.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]In view of the above, the surveyors only took into consideration the damage caused to the stock in the elevated ground floor level and the insurance company settled the claim for loss to the stock on the said basis. From the statements of the sales persons who were in the two basement levels, it was sought to be argued that no one from the mob had entered the two levels of the basement as long as the employees were inside and it was doubtful as to whether after they left whether anyone could have entered the two levels of the basement in view of the conditions prevailing in the elevated ground floor. From the submissions made on behalf of the parties, it is evident that in the wake of a series of bomb blasts in the city of Coimbatore on 14th February, 1998, there was wide spread unrest in the city of Coimbatore coupled with mob frenzy, arson and looting. Although, an attempt has been made on behalf of the investigating agency to clinically examine the manner in which the incident involving the appellants firm had occurred, it is doubtful whether the incident which occurred at the showroom of the appellants on 14th February, 1998 can be explained with such clinical precision as to when exactly the sales persons in the two basement levels escaped from the showroom through the elevated ground floor or when the police and fire fighting personnel arrived at the site and when exactly the riotous mob took over the showroom. The statements of the sales persons clearly indicate that when they were fleeing the showroom they saw the mob trying to break through the plate-glass doors and windows leading to the first level of the two basement floors. There is also no denial of the fact that the said plate-glass doors and windows were in fact broken and for which insurance coverage was paid by the National Insurance Company on the basis of a report submitted by M/s. Comtec, Surveyors, Valuers and Assessors. The report submitted by the investigators, M/s. Vasu Associates, proceeds to a large extent on surmises and the conclusion ultimately arrived at by them which reads as follows does not inspire much confidence:-"The owners themselves claim looting, because they did not find some of the textile goods after the incident, but they have no material to strengthen their claim by way of supplying us with substantial evidence which are unassailable. In the absence of substantial evidence they themselves are not for sure, it was looting. From what we have seen and heard, we are also of the opinion that, there could not have been looting at all. Surveyors are also convinced and therefore, they are not also inclined to assess the loss"As will be evident from the above, it will appear that the aforesaid conclusion was arrived at by adopting a negative approach. The investigators reached the aforesaid conclusion merely by stating that the appellants had no material to strengthen their claim by providing unassailable evidence of looting. Such an approach cannot be supported since apart from claiming that the goods in the showroom had been looted and the attendant circumstances, the appellants were not in a position to supply any further evidenceThat there was communal unrest in the city of Coimbatore on the date in question is not denied. That the mob attacked and set fire to the showroom of the appellants is also an established fact. That the showroom was attacked by a frenzied mob, which set fire to the elevated ground floor of the showroom and indulged in looting, is also established. At exactly what point of time the mob may have entered into the two basement levels is difficult to determine in the prevailing circumstances and it is quite possible that the looting had taken place before the police and the fire fighting personnel arrived at the siteThere is nothing on record to indicate that the stock in trade had been removed from basement levels in anticipation of any such rioting. On the other hand, the bank has clearly supported the case of the appellants by informing the insurance company that the stock insured was for Rs.2 crores and the average stock at any point of time in the insured premises was more than Rs. 2 crores and the bank requested the insurance company to re-consider the claim of the appellant-firmAlthough, M/s. Vasu Associates were engaged on a suspicion that the appellants had themselves transported part of the goods from the showroom, there is no real evidence in support thereofIn our view, the appellants had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy and it was for the insurance company to disprove such claim with evidence, if any. In our view, the insurance company, despite the report of the investigator, failed to establish that the claim of the appellants was not justified and was not covered by the policy of insurance