Judicial Analysis Court Copy Headnote Facts Arguments Court observation

ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Hon’ble Mr. Justice A. Venkatarami Reddy, President;
Smt. J. Ananda Lakshmi, Member; Sh. C.V. Subba Reddy, Member
NEW INDIA ASSURANCE COMPANY—Appellant
versus
MADAMANCHI RATTAIAH—Respondent
C.D.A. No. 501 of 1993—Decided on 3.3.94

Advocates:
Counsel for the Parties :
For the Appellant : Sh. Kota Sibba Rao
For the Respondent: Mr. T. Basanth Mr. Ramakrishna Raju

The period of limitation for filing a claim under the provisions of the Limitation Act, 1963 is three years from the date of cause of action. In the instant case, the cause of action for claiming the amount in this complaint arose when the Surveyor discovered and corrected the mistake.

Headnote:
LIMITATION ACT, 1963 - SECTION 17 - INSURANCE - MISTAKE IN APPORTIONMENT OF LIABILITY - CORRECTION OF MISTAKE - LIMITATION PERIOD STARTS FROM THE DATE OF DISCOVERY OF MISTAKE.
Fact of the Case:

The complainant insured goods in his premises with two Insurance Companies. A fire accident occurred in which the goods were gutted. The Surveyor appointed by the Insurance Companies apportioned the liability equally between them. The complainant signed a discharge voucher in favor of the claim. Later, the complainant discovered that the Surveyor had made a mistake in apportioning the liability. The Surveyor corrected the mistake and apportioned the liability correctly. The complainant filed a complaint before the District Forum for payment of the balance amount.
Finding of the Court:

The District Forum held that the mistake was committed by the Surveyor in apportioning the compensation amount in his first report, and he corrected the said mistake by his letter dated 17.11.1989. Therefore, according to the Surveyor’s letter, the Opposite Party is liable to pay 81.64% which works out to Rs. 1,10,323/-. The settlement arrived at on the basis of a mistake does not bind the complainant. It further held relying on Section 17 of the Limitation Act, 1963 that the period of limitation shall not begin to run until the mistake with reasonable diligence could have been discovered.
Issues: Whether the complaint is barred by limitation.
Ratio Decidendi: The period of limitation for filing a claim under the provisions of the Limitation Act, 1963 is three years from the date of cause of action. In the instant case, the cause of action for claiming the amount in this complaint arose when the Surveyor discovered and corrected the mistake. Since the Insurance Company did not repudiate its liability and as the mistake came to light only in November, 1989 the complaint was filed within the time limit of three years from the date of cause of action.
Final Decision: The appeal is dismissed but without costs.

ORDER

Mr. Justice A. Venkatarami Reddy, President—The New India Assurance Company Limited, the opposite party in the CD. No. 802/ 91 is the appellant in this appeal. The complainant insured goods in his premises with the Insurance Companies, i.e. Full-pressed cotton bales with the Oriental Fire Insurance Company and Lint with the Opposite party i.e. the New India Assurance Company Limited. Fire accident took place on 15.8.1984 in which the pressed cotton bales as well as cotton lint were gutted. Both the Insurance Companies jointly appointed a Surveyor, M/s. Mehta and Padmasey. The Surveyor assessed the total loss at Rs. 1,30,580/- and apportioned the liability equally between the two Insurance companies. The opposite party paid its 50% share of liability of Rs. 65,290/ -. The complainant signed Ex. B.-l, receipt, on 2.7.87 in favour of the claim in respect of cotton stocks damaged by fire on 15.8.1994. It is the case of the complainant that as the Oriental Fire Insurance Company informed the complainant that it was not liable to pay 50% of the loss, complainant sent a letter on 6.9.1989 to the opposite party to rectify the mistake in apportionment of the loss and for payment of the balance. Thereupon, the Manager referred the matter to the Surveyor for clarification. The Surveyor, after examining the matter, sent a corrigendum on 17.11.89 admitting the mistake committed by him in apportioning the liability equally and correcting the same by apportioning the amount payable by the opposite party as 81.64% and the balance J by the Oriental Fire Insurance Company. Hence the complainant asked the opposite party to pay Rs. 41,314.00. As the opposite party failed to pay the same inspite of several notices and letters the complaint was filed for payment of the said amount with interest at 18% p.a.

2. The Opposite Party did not dispute any of the aforesaid facts but opposed the claim on the ground that since the opposite party settled the claim after a thorough enquiry and a discharge voucher towards the full satisfaction was obtained on 2.7.1987. There is no deficiency of service and the complaint which was filed in the year, 1991 is barred by limitation.

3. No oral evidence was adduced by both the parties. Exs. A-1 to A-4 on behalf of the complainant and Exs. B-l and B-2 on behalf of the opposite party were marked.

4. On consideration of the material available on record, the District Forum held that since the mistake was committed by the Surveyor in apportioning the compensation amount in his first report, he corrected the said mistake by his letter dated 17.11.1989. Therefore, according to the Surveyor’s letter, the Opposite Party is liable to pay 81.64% which works out to Rs. 1,10,323/-. The settlement arrived at on the basis of a mistake does not bind the complainant. It further held relying on Section 17 of the Limitation Act, 1963 that the period of limitation shall not begin to run until the mistake with reasonable diligence could have been discovered. It held that there is no reason for the complainant to doubt the correctness of the initial apportionment as both the Insurance Companies accepted. It was only, subsequently, when the Oriental Fire Insurance Company did not agree to pay 50%, the matter was referred to Surveyor and the mistake was rectified. It, therefore, held that the claim is not barred by limitation. Accordingly, the District Forum directed payment of Rs. 41314.00 with interest at 15% p.a. from the date of the complaint till the date of payment.

5. In this appeal, the only contention raised is that the complaint is barred by limitation. According to the learned Counsel the limitation starts from the date of actual damage of from the date of refusal to pay. In the instant case, the accident occurred on 15.8.1984 and the amount was paid under receipt Ex. B-1 dated 2.7.87 accepting full satisfaction from the complainant. Since the complaint was filed on 19.9.91. It is hopelessly barred by limitation. Reliance is plac

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The period of limitation for filing a claim under the provisions of the Limitation Act, 1963 is three years from the date of cause of action. In the instant case, the cause of action for claiming the amount in this complaint arose when the Surveyor discovered and corrected the mistake.

Cases Referred (1)