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2009(5) Supreme 377
SUPREME COURT OF INDIA
D.K. Jain and R.M. Lodha, JJ.
Kandimalla Raghavaiah & Co. — Appellant
versus
National Insurance Co. & Anr. — Respondents
Civil Appeal No. 4962 of 2002
Decided on : 10-07-2009
Facts of the Case :
Present Appeal has been filed against order passed by National Commission, whereby Commission dismissed appellant’s two complaints alleging deficiency in service against two different insurance companies on account of non-settlement of insurance claims made by appellant, on the ground that both the complaints were barred by limitation under Section 24A of the Act.
Findings of the Court :
Evidence on record showed that cause of action in respect of the special insurance policy arose on 22nd / 23rd March, 1988, when fire in the godown took place damaging the tobacco stocks hypothecated with the Bank in whose account the policy had been taken by the appellant.Thus, the limitation for purpose of Section 24A of the Act began to run from 23.03.88 and therefore, complaint before Commission against Insurance Company for deficiency in service, whether for non issue of claim forms or for not processing the claim under policy, ought to have been filed within two years thereof. However complaint was in fact filed on or after 24.10..97, which was clearly barred by time. All factual aspects had been duly taken into consideration by Commission. No error was found in finding of Commission that filing of claim by the Bank on 14 th July 1988, would not have, in any way, helped the appellant.On their showing, for the first time, only on 6th November, 1992 and then again on 26th October, 1995, appellant had requested Insurance Company to issue claim form to enable them to prefer a claim which request was declined by the Insurance Company on 21st March, 1996. By no stretch of imagination, it could be said that Insurance Company’s reply dated 21st March, 1996 to the legal notice dated 4th January, 1996, declining to issue the forms for preferring a claim after a lapse of more than four years of the date of fire, resulted in extending the period of limitation for the purpose of Section 24A of the Act. Hence held that complaint filed on 24th October, 1997 and that too without an application for condonation of delay was manifestly barred by limitation and Commission was justified in dismissing it on that short ground.Appeal having no merit was dismissed.
Result : Appeal dismissed.
The key points from the provided legal document are as follows:
The provision under Section 24A of the Consumer Protection Act, 1986, mandates that complaints must be filed within two years from the date the cause of action arises, unless sufficient cause is shown for delay, which can be condoned by the consumer forum (!) (!) .
The cause of action in this case originated on the date of the fire incident, which was between 22nd and 23rd March 1988, when the tobacco stocks in the insured premises were damaged (!) (!) .
The complainant (appellant) first requested the insurance company for claim forms in November 1992, which was more than four years after the incident, and this delay was not justified or condoned (!) (!) .
The insurance company’s response denying the claim and stating that the claim was time-barred was issued in March 1996, after a significant delay (!) (!) .
The complaint was filed in October 1997, which was beyond the two-year limitation period from the date of the cause of action, and no application for condonation of delay was made (!) (!) (!) .
The courts held that the complaint was barred by limitation because the cause of action accrued on the date of the fire, and the delay in filing was not sufficiently explained or condoned (!) (!) (!) .
The courts emphasized that the limitation period begins from the date the cause of action arises and that the filing of the complaint after this period, without condonation, is invalid (!) (!) .
The courts also clarified that mere requests for claim forms or correspondence does not extend the limitation period or constitute a fresh cause of action (!) (!) .
The appellate court dismissed the appeal, affirming that the complaint was time-barred and that the consumer forum was justified in rejecting it on this ground (!) .
Overall, the decision underscores the importance of timely filing of complaints in consumer disputes related to insurance claims and clarifies that delays beyond the statutory period cannot be excused unless explicitly condoned by the forum (!) (!) (!) .
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JUDGMENT
D.K. Jain, J.—
1. Challenge in this Appeal under Section 23 of the Consumer Protection Act, 1986 (“the Act”, for short) is to a common judgment and order dated 17th April, 2002, passed by the National Consumer Disputes Redressal Commission, (“the Commission”, for short) in Original Petitions No. 97 of 1996 and 248 of 1997, whereby the Commission has dismissed appellant’s two complaints alleging deficiency in service against two different insurance companies on account of non-settlement of insurance claims made by the appellant, on the ground that both the complaints were barred by limitation under Section 24A of the Act.
2. The salient facts giving rise to the appeal are as follows:
The appellant firm was engaged in the business of tobacco at Chelakaluripet, Guntur District, Andhra Pradesh. They constructed godowns in the premises of M/s Kandimalla Venkateswarlu at Padripuram, in the same district for storage of tobacco. On 4th December, 1987 the appellant took out a Fire Policy ‘C’ with the National Insurance Company — Respondent No.1 in this appeal (subject matter of O.P. No. 248 of 1997), in the account of the Indian Bank - Respondent No.2 herein, against loss or damage by fire etc. for a period of 4 months from 4th December, 1987 to 3rd April, 1988 for a sum of Rs.1,35,000/- and paid a premium of Rs.17,634/-. On 8th March, 1988 the appellant obtained loan from Respondent No.2 — Indian Bank by hypothecating the tobacco stored in the godowns. In the intervening night between 22nd and 23rd March, 1988 a fire broke out in the godowns, allegedly due to electrical short circuit and the entire stock of tobacco was gutted. The appellant reported the matter to the present contesting parties, i.e., both the Insurance Company and the Bank. On 24th March, 1988 a Surveyor was appointed by Respondent No.1 — Insurance Company, who submitted his report on 2nd April, 1988.
3. However, it appears that on 23rd March, 1988 i.e., the date of the incident, Respondent No.2 — the Bank lodged First Information Report (FIR) against the appellant firm and its partners resulting in filing of Criminal Case No.72 of 1988 against them under Sections 380, 420, 423, 436, 457, 484 read with Section 120 (B) of the Indian Penal Code (IPC), inter alia, alleging that they had intentionally set fire to the tobacco stocks with a view to lay a false claim for loss of stocks. After the trial, the accused were acquitted by the Sessions Judge, Narasaraopet on 22nd August, 1991. Appeal filed by the Bank against order of acquittal was dismissed by the High Court on 5th September, 1992.
4. In the meanwhile, on 14th July, 1988, Respondent No.2 — the Bank preferred a claim (subject matter of the present appeal) with Respondent No.1 — the Insurance Company for an amount of Rs.1,32,85,760/-. It seems that the Bank did not pursue the claim. On 6th November, 1992, the appellant asked for the claim form from the Insurance Company — Respondent No.1. Having failed to get any response, on 26th October, 1995 issued a legal notice to Respondent No.1. On 4th January, 1996, the appellant again asked for claim forms but still there was no response. Ultimately, on 21st March 1996 the Insurance Company replied to the legal notice, denying the factum of fire and refused to issue the ‘claim form’ on the ground that the claim had become time-barred.
5. On 21st October, 1997, the appellant filed the complaint before the Commission. Before the Commission, appellant’s case was that they had asked for the ‘claim form’ from the insurance company on 6th November, 1992, which was not given although Respondent No. 2 —Bank being a ‘co-insured’ had lodged a claim with the Insurance Company on 14th July, 1988, and they were pursuing their claim with the Insurance Company on behalf of the appellant. Since the denial of the Insurance Company in honouring the claim was received on 21st March 1996, the period of limitation to file complaint would commence from that date and therefore, their com
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