Mr. Hari insured his machinery and stock of goods stored in the factory premises against damage by fire and a protection note was given, subject to the usual conditions of the Company's Policy, one warranty clause being

Warranty: A warranty is a statement that is considered guaranteed to be true and, once declared, becomes an actual part of the contract. Typically, a breach of warranty provides sufficient grounds for the contract to be voided. Conversely, a representation is a statement that is believed to be true to the best of the other party's knowledge. In order to void a contract based on a misrepresentation, a party must prove that the information misrepresented is indeed material to the agreement. According to the laws of most states and in most circumstances, the responses that a person gives on an insurance application are considered to be a representations, and not warranties. In the said case, the company denied the claim on the ground that there was a breach of warranty as the fire was occasioned by smoking which is strictly prohibited. But as there was no eye-witness to the origin of the fire, the court held that the cause of the fire was a matter of conjecture. [Bhattacharjee vs. Sentinal Insurance Co.] In the famous case [Dekhari Tea Co vs. Assam Bengal Roadways Company], it was also held that fire cannot always be explained, and it must be a matter of conjecture. As regards the warranty, as the plaintiff had put notices 'Strictly Prohibiting Smoking' in and around the places, in fact there is no breach of warranty. Hence, the denial on the part of the insurance Company is not justified. On the other hand, the Company should make Good the Loss.