The period of limitation for an insurance claim starts only when the claim is repudiated by the Insurance Company, and the interest at the rate of 18% per annum is justifiable for the deficiency on behalf of the Insurance Company.

Mr. Justice K.C. Bhargava, President—This is an appeal against the judgment and order dated 29.7.1992 passed by District Consumer Forum, Gorakhpur in Complaint Case No. 131/1992.

2. The facts of the case stated in brief are that the complainant is running a firm under the name of M/s. Gopal Ji Ambica Prasad. He had obtained an insurance policy from New India Assurance Company for keeping money in safe and for transit policy. This policy was effective from 30.7.1987 to 29.7.1987. During this period, the employee of the firm Jawahar Lal Gupta used to realise amount from different shopkeepers. On 3.9.1988 he had collected a sum of Rs. 29,391.40 and after keeping the same in the brief-case was coming by bus. This brief-case was stolen by somebody, the information of which was given to the New India Assurance Company. An F.I.R. was also lodged with the Police Station but nothing has been done even now by the Insurance Company. The complainant has claimed the above mentioned amount along with Rs. 1,000/- as cost.

3. The opposite party was served notice but they did not file any written statement. The learned District Consumer Forum on the basis of cover-note held that as the cover-note was issued for 15 days only, therefore, claim against the Insurance Company cannot be decreed. It also held that the claim was barred by limitation. With these findings, the learned District Consumer Forum dismissed the complaint.

4. Aggrieved against this order, the complainant has come in appeal and has challenged the correctness of the order passed by the learned District Consumer Forum.

5. We have heard the learned Counsel for the parties. Learned Counsel for the appellant has argued that the complainant has deposited the premium for the entire year and the policy was to run for the entire year with effect from 30.7.1987. According to the learned Counsel, the cover-note even if it was issued for 15 days will not bar the present case. The learned Counsel for the opposite party has not contested on this point. When the premium has been paid for once the entire year and a cover-note was issued thereafter the policy was effective. It means that the Insurance Company has accepted the premium and also accepting the insurance done by the complainant. Non-issue of policy in such a case to the complainant will not mean anything and the risk will stand covered. The cover-note is only issued till the policy is issued and reaches the complainant, thereafter the cover-note becomes ineffective.

6. The learned Counsel for the opposite party has raised a preliminary objection that the claim was barred by limitation. Acccording to the learned Counsel the loss was occasioned on 3.9.1988 while the complaint has been filed on 5.5.1992 after the lapse of about three years from the date of loss. The learned Counsel for the appellant/complainant has argued that in the present case the claim was not repudiated by the Insurance Company, hence the period of limitation will not start. According to the learned Counsel the period of limitation will start only when the case is repudiated by the Insurance Company. It is an admitted fact that the claim has not been repudiated till the filing of the complaint. Learned Counsel for the appellant/complainant has placed reliance on certain cases. The first case in the series is Tanawala Synthetic Textile Limited v. Oriental Insurance Company Limited, III (1996) CPJ 99 (NC)=1997 CCJ 1473. The National Commission in para 18 has stated that there has been inordinate delay of more than three years on the part of the Insurance Company in deciding the claim petition. There was a long correspondence between the parties and even after furnishing the survey report the claim was not repudiated. The complainant filed the claim petition and during the proceedings the claim was repudiated by the Insurance Company. On these facts the Hon’ble National Commission has held that the letter of repudiation sent after a long delay of over three years and