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PUNJAB STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, CHANDIGARH
Honble Mr. Justice A.L. Bahri, President;
Mr. Jasbir Singh & Mrs. D.K. Bhamrah, Members
UNITED INDIA INSURANCE COMPANY LIMITED—Appellant
versus
PUNJAB STATE CIVIL SUPPLIES CORPORATION—Respondent
Appeal No. 561 of 1997—Decided on 5.4.1999
Counsel for the Parties :
For the Appellant :Mr. D.P. Gupta, Advocate.
For the Respondent:Mr. Suvir Sehgal, Advocate.
A clause in an insurance policy requiring the complaint to be filed within 12 months from the date of repudiation of the claim is void as it contravenes the provision of limitation under the Consumer Protection Act, which provides a period of two years for filing the complaint.
Headnote:
CONSUMER PROTECTION ACT - INSURANCE POLICY - SECTION 24(A) - LIMITATION PERIOD FOR FILING COMPLAINT - INSURANCE POLICY CLAUSE WAIVING RIGHTS WITHIN 12 MONTHS FROM REPUDIATION OF CLAIM - VOID - CONSUMER PROTECTION ACT AMENDED TO PROVIDE TWO YEARS LIMITATION - CONTRACT ACT AMENDED TO PROHIBIT SUCH CLAUSE IN INSURANCE POLICY.
Fact of the Case:
PUNSUP, a complainant, took an insurance policy from United India Insurance Company Limited for a year covering the risk of damage to articles lying in different godowns against fire. The policy expired on July 10, 1993, and was renewed on July 12, 1993. On the same day, another policy was taken covering the risk against floods. On July 12, 1993, floods damaged stocks of PUNSUP in a godown. The insurance company repudiated the claim on the ground that the cover note was issued at 3.00 p.m., while the damage occurred at 11.15 a.m. PUNSUP filed a complaint before the District Forum, which directed the insurance company to pay Rs. 2,09,497/- along with interest and litigation expenses.
Finding of the Court:
The court held that the cover note was issued in the morning of July 12, 1993, and the damage occurred during the day of July 12, 1993, was covered under the policy. The court also held that the clause in the insurance policy requiring the complaint to be filed within 12 months from the date of repudiation of the claim was void as it contravened the provision of limitation under the Consumer Protection Act, which provided a period of two years for filing the complaint.
Issues: 1. Whether the damage to the stocks caused during the day of July 12, 1993, was covered under the policy. 2. Whether the clause in the insurance policy requiring the complaint to be filed within 12 months from the date of repudiation of the claim was valid.
Ratio Decidendi: 1. The court held that the policy would be effective from the commencement of the date, as per the decision of the Supreme Court in New India Assurance Company Limited v. Ram Dayal and Oriental Insurance Company Limited v. Sunita Rathi & Ors. 2. The court held that the clause in the insurance policy was void as it contravened the provision of limitation under the Consumer Protection Act, which provided a period of two years for filing the complaint.
Final Decision: The court dismissed both appeals and affirmed the order of the District Forum.
Mr. Justice A.L. Bahri, President—Vide this order two appeals are being disposed of. Appeal No. 561 of 1997 has been filed by United India Insurance Company Limited, the opposite party, for setting aside order of District Forum, Sangrur dated April 2,1997 vide which a direction was given to the Insurance Company to pay Rs. 2,09,497/- alongwith interest @ 12% w.e.f. January 1, 1994 till realisation alongwith litigation expenses of Rs. 500/- to the complainant Punjab State Civil Supplies Corporation known as PUNSUP. Appeal No. 564 of 1997 has been filed by the complainant aforesaid for the enhancement of the amount of compensation. The main judgment is prepared in Appeal No. 561 of 1997.
2. Some of the facts are not in dispute, hence they can be summarised from the pleadings of the parties. The complainant, PUNSUP, had taken an insurance policy from the United India Insurance Company Limited in the sum of Rs. 80 lacs on July 11,1992 for an year covering risk of damage to the articles of the complainant lying in different godowns against fire. The aforesaid policy expired on July 10, 1993, July 11, 1993 being Sunday was a public holiday, on July 12, 1993 the policy was got renewed. On that very day, another policy was also taken covering risk against floods. Incidently on that very day there were floods resulting in damaging stocks of the complainant lying in the godown in Village Khanauri, District Sangrur. The Insurance Company was informed about the loss. A Surveyor was appointed who submitted his report on January 16, 1994 assessing loss to the tune of Rs. 2,09,497/-. However, the Insurance Company on August 1, 1994 repudiated the claim, inter alia, on the ground that the cover note was issued on July 12, 1993 at about 3.00 p.m. whereas damage on account of floods were caused at about 11.15 a.m. Representations were made by the complainant, ultimately after issuing of notice, complaint before the District Forum was filed on November 20, 1995. The District Forum accepted the stand of the complainant that the risk was covered under the insurance policy. The floods came at about 11.15 a.m. on that date whereas cover note was issued a t about 9.45 a.m. On the basis of the Surveyor’s report, the directions as above were given by the District Forum.
3. Mr. D.P. Gupta, Advocate for the Insurance Company has argued that infact the cover note was issued on July 12, 1993 at about 3.00 p.m. as per evidence produced by the opposite party. In order to defraud the Insurance Company, everything was got manipulated in the matter of issuing of the policy after the damage had already been caused. This contention in the facts of the present case cannot be accepted. The cover note (Annexure C-3) does not indicate the time of issuance of the policy. As per affidavit of Sher Singh, District Manager, PUNSUP, the policy was issued in the morning of July 12,1993. As per affidavit of Vinay Kumar, Accountant of PUNSUP, at about 9.45 a.m. on July 12, 1993 cheque for the premium of insurance was handed over to representative of Insurance Company when he visited their office. On behalf of the Insurance Company, affidavit of Sukhbir Singh, Additional Manager, was produced that the policy was issued on July 12,1993 at about 3.00 p.m. when complainant’s representative came to their office. The version of the opposite party cannot be accepted for the simple reason that time of issuing of cover note was not mentioned therein. The legal consequences there from follow that the policy would be effective w.e.f. previous mid-night. In this respect, reference may be made to the decision of the Supreme Court in the New India Assurance Company Limited v. Ram Dayal , 1990-2 PLR 144, holding that the insurance policy would be effective from the commencement of the date. On the same point is the decision of Supreme Court in Oriental Insurance Company Limited v. Sunita Rathi & Ors., II (1998) 1 Supreme Court Cases 365. That being the position, the damage to the stocks
