1997 Supreme(SC) 933

1997(6) Supreme 338
SUPREME COURT OF INDIA
K. Ramaswamy and D.P. Wadhwa, JJ.
New India Assurance Co. Ltd. -Appellant
versus
G.N. Sainani                   -Respondent
Civil Appeal No. 4319 of 1997
(Arising out of SLP (C) No. 440 of 1997)
Decided on 9-7-1997
Counsel for the Parties :
For the Appellant : Mr. J.R. Midha, Mr. D.N. Motiwala and Mr. C.P. Pandey, Advocates.
For the Respondent : Mr. N.K. Mudnaney, Mr. S.M. Tripathi and Ms. Rani Jethmalani, Advocates.

IMPORTANT POINT
Unless the assignee has some insurable interest in the property subject matter of the insurance uptil the time the policy terminates he cannot be beneficiary of any service required to be rendered by the insurer under the policy and when only right to recover the loss suffered by the assured is assigned to the assignee, the complaint filed under the Consumer Protection Act, alleging repudiation of the insurance claim is not maintainable.

Headnote:(i)Limitation-Consumer Protection Act, 1986-Sections 17/18-Complaint against repudiation of insurance policy-Time limit for lodging complaint when Section 24A was not there-Insured could file complaint within three years of date of occurrence causing loss or from the date when claim on policy denied by insurer-Limitation Act, 1963-Article 44 of Schedule.

       Held that the complaint was filed on the basis that claim on the policy was denied wholly by the insurer which was by letter dated July 25, 1989 of the insurer. The cause of action, therefore, arose on the date of denial or repudiation of the policy by the insurer. The question does arise as to when the claim on the policy should have been lodged. It appears the claim on the policy should be lodged within a reasonable time. As to what is reasonable time would depend on the facts and circumstances of each case. Since on the basis of the record we are handicapped to known as to when the claim was lodged, we would, therefore, treat the date, July 25, 1989, when the time for the purpose of limitation had begun to run. As noted above this is the date when the insurer repudiated the claim on the policy. From this angle, therefore, the complaint filed by the assignee on July 23, 1992 is within the period of limitation. It is, however, a different matter when the insurer raises the defence that it had earlier informed the insured that the policy had ceased to be operative in terms of para 9 of the policy. As far as the insured is concerned he can file the complaint within three years of the date of occurrence causing loss or from the date when the claim on the policy is denied by the insurer. For him time for lodging the complaint would not start running while the goods are still in transit as he can claim the policy to be valid till he lodges the complaint. (Para 9)

       (ii) Consumer Protection Act, 1986 -Sections 17/18-Deficiency in service-Marine insurance-Claim on account of shortlanding of consignment under transshipment-Risks covered from port of Antwero to Bombay-Vessel diverted to Muscat and cargo discharged there-Consignee requested insurer to cover the risk accordingly-Insurer informed consignee that consignments were required to re-shipped from Muscat to Bombay within 60 days time, failing which there would be no liability-Request for extension of time beyond 60 days not granted-No evidence that goods were transshipped within 60 days of their discharge at Muscat-Policy would lapse in terms of agreement between parties-Insurer absorved from any claim under policy in view of para 9 of the Policy-Complaint not maintainable-There being no deficiency in service.

       Held : Para 8 above states as to when insurance policy would start and upto what stage it would terminate. Under sub-para 8.3 which is subject to clause 9 the insurance remains in force during the delay beyond the control of the assured. But then under Para 9 the insurance terminates if owning to the circumstances beyond the control of the assured as mentioned therein unless prompt notice is given and continuation of cover is requested. In that case insurance shall remain in force subject to an additional premium if required (1) within 60 days of the arrival of the goods at such port or place other than that named in the policy or until those goods are sold whichever shall occur first unless otherwise specially agreed or (2) if the goods are forwarded within the period of 60 days to the destination named in the policy or within any further extension if agreed to. Since the extension of the period was not agreed to by the insurer the goods had to be forwarded or transshipped from Muscat to Bombay within 60 days of the discharge of the goods there. If these goods are not transshipped within 60 days to the destination as agreed to then clause 8 will not remain in operation. In the present case, there is no evidence that goods were transshipped within 60 days of their discharge at Muscat. That being so the policy would lapse in terms of the agreement between the parties. We have not been shown any provision of law or practice or term of the policy under which the insurer was bound to extend the policy beyond the period of 60 days as per para 9 of the policy. The appellant is right, therefore, in its contention that it is absolved from any claim under the policy in view of para 9 above and it could not, therefore, be said that there was any deficiency in service to come within the purview of the Act. (Para 10)

       (iii) Consumer Protection Act, 1986 -Section 2(d)-Consumer-Definition of-Complaint against repudiation of insurance claim-Maintainability-Insured must have an insurable interest in subject matter insured at time to loss-Assignment of policy-Right to recover loss suffered by assured assigned in favour of complainant-Whether complainant is a consumer?-(No)-Assignee is not beneficiary of any service under the policy-Complaint filed is not maintainable. (Marine Insurance Act-Sections 52 & 53).

       Held : To come under the scope of the word "consumer" as defined in the Act it should be possible for the assured to assign his insurable interest in the goods subject matter of the policy for the assignee as a consumer to enjoy the benefit of the policy with reference to the goods which are insured. What has been assigned in the present case is the amount of loss suffered by the assured on account of shortlanding of the goods, meaning thereby that right to recover the loss is assigned to the assignee and not that any service is to be rendered under the policy by the insurer with reference to the goods. Unless the assignee has some insurable interest in the property subject matter of the insurance until the time the policy terminates he cannot be beneficiary of any service required to be rendered by the insurer under the policy. Admittedly it was much after the goods had reached the port of destination and appropriated that the policy was transferred by the insured to the complainant to recover the amount of loss suffered by the assured. Thus, what is assigned is in effect a mere right to sue for the loss on account of shortlanding of the goods. It is difficult to see as to how it could be said that the respondent, that is the assignee, is the beneficiary of any service under the policy. He may, however, have right to recover the loss from the insurer by filing a suit in a Civil Court but certainly to seek remedy under the act he must be a consumer. By not extending the policy beyond a particular period, that is 60 days, the insurer acted within the terms of the contract of insurance and on that account it could not be said that there was deficiency in service to be provided by the insurer under the policy. (Para 13)

       (iv) Insurance-Marine Insurance Policy - Assignment of -Whether permissible?-(Yes)-Complaint under Consumer Protection Act filed by assignee-Maintainability.

       Held : No doubt the policy can be assigned either before or after the loss. But then the assignee must have insurable interest in the subject matter. (Para 11)

       The question that arises is if the assignee in the facts and circumstances of the present case could be said to be beneficiary so as to stake his claim under the policy. If we see the definition of "service" as provided under the Act it means and includes the provision of facilities in connection with the insurance as well. The complaint under the Act in the present case has to show that the service hired or availed of or agreed to be hired or availed of by the complainant suffers from deficiency in any respect. The complainant, of course, means a consumer and as we have seen above includes any beneficiary. (Para 12)