RK a businessman insured his machinery and stock of goods stored in the factory premises against damage by fire and a protection note was given, which is further subject to the usual conditions of the company's policy, o

In the above 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 fire was a matter of conjecture. (Bhattacharjee vs. Sentinal Insurance Co.) In the famous case Dekhari Tea Co. vs. Assam Bengal Roadways Co. 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. Based on the strict nature of the warranty clause in the insurance policy, the insurance company's denial of the claim is likely justified. The breach of the warranty by allowing smoking, even if it was careless and not directly intended to cause the fire, typically allows the insurer to deny the claim. RK's claim for damages due to the fire would be denied because the warranty regarding smoking was violated, and insurance contracts usually enforce such conditions strictly.