Insurance policies cannot be repudiated without clear evidence, and ongoing communications may extend limitation periods for claims under the Consumer Protection Act.

JUDGMENT :

SOMASEKHAR SUNDARESAN, J.

1. Rule. By consent of parties, made returnable forthwith and taken up for final hearing.

Context and Factual Background:

2. This Petition impugns a judgement passed by the National Consumer Disputes Redressal Commission (“National Commission”) dated March 4, 2024 (“National Commission Order”), refusing to interfere with an Order passed by the State Consumer Disputes Redressal Commission, Maharashtra (“State Commission”) dated November 15, 2016 (“State Commission Order”).

3. The Petitioner, New India Assurance Co. Ltd. (“New India”) had issued a Standard Fire and Special Perils Policy on July 25, 2004 (“Insurance Policy”) to the Respondent No.1, Gayatridham Phase Co-op Housing Society (“Society”) which was scheduled to expire on July 24, 2005. Ahead of the scheduled expiry, on July 17, 2005, the Society paid the applicable premium amount for renewal of the Insurance Policy. The cheque towards premium amount for Rs.18,910/- had been drawn on Respondent No. 2, The Thane District Central Co-operative Bank Ltd. (“Thane Bank”).

4. On July 22, 2005, New India renewed the Insurance Policy and issued a fresh Policy for the next year i.e. between July 25, 2005 and July 24, 2006. Two days into the new policy, on July 26, 2005, torrential rains struck Mumbai leading to severe damage being caused to the Society and its property, which led to filing of a claim on August 7, 2005.

5. As it transpires, although the cheque had been received on July 17, 2005, after which the insurance policy was issued on July 22, 2005, New India had deposited the cheque only on July 30, 2005. On August 4, 2005, New India claims to have written a standard letter to the Society stating that the cheque issued by the Society had been dishonoured, purportedly on account of insufficient funds, because of which the insurance policy issued to the Society was being cancelled.

6. On August 7, 2005 the Society filed a claim request with New India making a claim seeking indemnification for the loss suffered by the Society on July 26, 2005. There is nothing on record to indicate that New India expressed surprise at the claim being made on a cancelled insurance policy. The Thane Bank is on record confirming that the Society had adequate and sufficient funds.

7. As it transpired, on August 11, 2005, the Thane Bank wrote to New India that the transaction had not been processed owing to the torrential rains. According to the Thane Bank, the advice issued by New India to the Society, namely that the cheque had been dishonoured owing to insufficient funds was not accurate. According to the Thane Bank, it had in fact indicated that the cheque ought to be presented afresh by State Bank of India, which was New India’s banker, and that the dishonour was owing to the breakdown of infrastructure due to the floods and not due to insufficiency of funds in the account of the Society.

8. In the course of two rounds of proceedings before the State Commission and the National Commission, a copy of the original advice that would have been received by New India from State Bank of India of by State Bank of India from the Thane Bank was not traceable. It is the stance of the Thane Bank throughout proceedings that the State Bank of India had been asked to present the cheque afresh and there was