State Consumer Disputes Redressal Commission
The Oriental Insurance Co.Ltd. vs Dhansay & Anr. on 25 January, 2014
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/13/90
Instituted on : 28.01.2013
The Oriental Insurance Co. Ltd.,
Divisional Manager, Divisional Office, Bilaspur (C.G.),
Through: Sr. Divisional Manager, D.O.No.1
RAIPUR (C.G.) ... Appellant.
Vs.
1. Dhansay, S/o: Shri Ramswarup,
Address - Opposite Amrit Kalash Bhawan,
Godari Para,Chirmiri, Post - Chirmiri, Dist. Korea,
BAIKUNTHPUR (C.G.)
2. South Eastern Coal Fields Ltd.,
Through: Chief General Manager, S.E.C.L., Chirmiri Area,
G.M. Complex, P.O. West Chirmiri,
Dist. KOREA (C.G.) ... Respondents.
PRESENT: -
HON'BLE JUSTICE SHRI R.S.SHARMA, PRESIDENT
HON'BLE MS. HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES: -
Shri R.N.Pusty, Advocate for the appellant.
Shri N.S.Parmar, Advocate for respondent no.1.
Shri O.P.Agrawal, Advocate for respondent no.2.
ORDER
Dated : 25/01/2014 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. This appeal is directed against the order dated 19.12.2012 passed by District Consumer Disputes Redressal Forum, Korea, Baikunthpur (C.G.) (henceforth called "District Forum") in Complaint Case No.89/2012. By the impugned order, the District Forum allowed the complaint of the complainant/respondent No.1 and directed the // 2 // appellant / O.P. no.1 to deposit a sum of Rs.5,00,000/- (Rupees Five Lakhs only) with District Forum, along with interest @ 9% p.a. from the date of filing of the complaint, for payment of the same to the complainant. The District Forum also awarded Rs.2,000/- as cost of litigation to the complainant and further directed that if the aforesaid amount is not deposited within 45 days, the same will be payable along with interest @ 12% p.a.
2. Briefly stated the facts of the complaint case filed before the District Forum are as under :-
2.1. That the complainant /respondent no.1, is permanent employee of S.E.C.L. and he was insured with the O.P. no.1 Insurance Company under Group Janta Personal Accident Insurance Policy. On 26.04.2004, the complainant met with a rail accident and sustained injury. He became handicap and permanent disabled in the aforesaid accident. Complainant made claim before the O.P. No.1/Insurance Company for a sum of Rs.5,00,000/-, which is payable under the insurance policy, but the insured amount could not be paid to the complainant till filing complaint. Due to which, the complainant sent a legal notice through his Advocate, then on 06.06.2012, OP no.1 issued a letter and wrote that 'if he has submitted his claim form, then inform us' and did not show any interest in the matter. Thus, deficiency in service has been committed by OP no.1 in not paying the // 3 // compensation. Therefore, the complainant filed complaint before the District Forum.
3. The appellant/O.P.No.1 filed written version and averred that the insurance policy was cancelled by the appellant/O.P.No.1 on 08.03.2002 and contract of insurance was not existed between the appellant/O.P.No.1 and the complainant and prior to the accident of the complainant, the insurance policy was cancelled by the appellant/O.P.No.1, therefore, the complainant is not entitled to recover the said amount. The appellant/O.P.No.1 further averred in its written statement that on the basis of condition no.5 mentioned in the insurance policy, the appellant/O.P.No.1 is entitled to cancel the insurance policy unilaterally and the appellant/O.P.No.1, had already cancelled the insurance policy prior to the accident of the complainant, therefore, the complainant is not entitled for insured amount.
4. O.P. no.2 / respondent no.2 admitted in his written version that he had co-operated the employees in obtaining Group Janta Personal Accident Insurance Policy and in this regard a Memorandum of Understanding (M.O.U.) was executed on 06.09.1999 between the appellant/O.P.No.1 and representative of workers of S.E.C.L. In said M.O.U. it is mentioned that if certain modification is required, this will be done with the representatives of the Insurance Company from the insurance side and the representative from S.E.C.L. Management side // 4 // by CGM (P & A) and Keshav Kanskar, JCC Member. The payment of benefit shall be regulated as per standard policy and condition. The salient features will not be changed. The appellant/O.P.No.1 without complying the above M.O.U. cancelled the insurance policy unilaterally and it did not comply the conditions mentioned in M.O.U. and O.P.No.2 filed writ petition before High Court of Chhattisgarh, which is registered as Writ Petition No.327/2002.
5. The O.P.No.2/S.E.C.L. was exonerated by the District Forum from the liability of payment of claim amount to the complainant. It has been held that the insured policy had already been cancelled by the Insurance Company prior to the accident of the insured complainant, but the Insurance Company had not followed the necessary condition, therefore, the appellant/Insurance Company is liable to pay the amount of claim to the complainant.
6. Shri R.N. Pusty, learned counsel for the appellant/O.P. no.1 argued that in condition no.5 of the insurance policy it has been mentioned that the company may at any time cancel the policy. In the instant case, the appellant/Insurance Company had already cancelled the policy prior to the accident of the insured complainant. He further argued that the complainant / respondent no.1 did not lodge any formal claim within the prescribed period. Since no claim was made by the complainant in the terms of the policy of insurance, the question of // 5 // deficiency in service did not arise. He further argued that the incident took place on 26.04.2004 and the complainant / respondent no.1 made application on 09.05.2008 and the complainant filed complaint before the District Forum on 13.09.2012. it appears that the complaint of the complainant is hopelessly barred by time. He placed reliance on H.P. State Forest Co. Ltd. Vs. M/s. United India Insurance Co. Ltd, 2009 AIR SCW 865. He further argued that the appellant/Insurance Company is not liable to pay compensation to the complainant. He further argued that learned District Forum, awarded interest @ 9% p.a. on the awarded amount, which is excessive.
7. Shri N.S.Parmar, learned counsel for complainant/respondent no.1, supported the impugned order.
8. Shri O.P.Agrawal, learned counsel for respondent no.2 / S.E.C.L. also supported the impugned order.
9. We have heard learned counsel for the parties present at length and have also perused the record of the District Forum.
10. We have perused the condition no.5 as mentioned in the insurance policy. The condition No.5 reads as under :
"The company may at any time by notice in writing terminate this policy provided that the company shall in that case return to the insured the then paid premium in respect of such person in respect of whom no claim has arisen, less // 6 // prorate part thereof for the portion of the insurance period which shall have expired. Such notice shall be deemed sufficiently given if post addressed to the insured at the address last registered in the Company's books and shall be deemed to have been received by the insured at the time when same would be delivered in the ordinary course of post. Needless to mention that as the policy stands cancelled with effect from 4.6.2002 on claim of whatsoever nature will be entertained / tenable / payable for any damages occurred on or after 4.6.2002 which please note."
11. In Kandimalla Raghavaiah And Co. Vs. National Insurance Co. & Anr., (2009) 7 Supreme Court Cases 768, Hon'ble Supreme Court observed thus:
"17. Section 24-A of the Act bars any fora set up under the Act, from admitting a complaint, unless the complaint is filed within two years from the date on which the cause of action has arisen. The provision expressly casts a duty on the Commission, admitting a complaint, to dismiss a complaint unless the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that the complainant had sufficient cause for not filing the complaint within the period of two years from the date on which the cause of action had arisen. Recently, in SBI v. B.S.Agriculture Industries (I) this Court, while dealing with the same provision, has held: (SCC p. 125, paras 11-12) "11. ...It would be seen from the aforesaid provision that it is peremptory in nature and requires the consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, 'shall not admit a complaint' occurring in Section 24-A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within the limitation period prescribed thereunder.
// 7 //
12. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24-A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside.
18. The term "cause of action" is neither defined in the Act nor in the Code of Civil Procedure, 1908 but is of import. It has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought, "Cause of action" is cause of action which gives occasion for and forms the foundation of the suit. (See Sidramappa v. Rajashetty.) In the context of limitation with reference to a fire insurance policy, undoubtedly, the date of accrual of cause of action has to be the date on which the fire breaks out."
12. In H.P.State Forest Co. Ltd. Vs. M/s. United India Insurance Co. Ltd, (supra) Hon'ble Supreme Court observed thus:
"5. It is clear from the record that the timber had been washed away some time in September 1988 and after prolonged correspondence, the respondent ultimately vide its communication dated 13th October, 1988 repudiated the appellant's claim. It is also clear from the counter-affidavit filed by the respondent that the appellant had, vide its letter dated 7th November, 1987, asked for insurance cover for a period of 8 months and that the period of one year fixed in the insurance policy was evidently a typographical mistake which had, in any case, been rectified in the records of the company on 17th December, 1987, that is long before the flood. The claim of the appellant that the respondent - company had, even after the 13th October, 1988, impliedly admitted its liability under the policy also appears to be incorrect as the surveyors had been appointed on the persistent demand of the claimant / appellant and the premium taken thereafter was only to make good the deficiency // 8 // in the premium that had been paid for the policy for the period of eight months. It is therefore, apparent that as on the date of the flood, there was no insurance policy in existence or any commitment on behalf of the respondent to make the payment under the policy. We therefore, endorse the argument raised by the respondent that even accepting the case of the appellant at its very best that the period of limitation would be 3 years under Section 44 of the Limitation Act, the complaint would, even then, be beyond time, having been filed in April 1994."
13. In Smita Madhav Patki Vs. National Insurance Co. Ltd. & Ors, I (2013) CPJ 331 (NC), Hon'ble National Commission observed thus:
"17. State Commission in its order has observed:
5. Cause of action for the insurance claim in question but arose on the death of late Madhav Patki and not on the date of repudiation of the insurance claim as alleged by the complainant. A useful reference can be made to the decision of the Apex Court in the matter of Kandimalla Raghavaiah & Co. v. National Insurance Co.
Ltd. and Others, 2009 CTJ 951 (SC) (CP). Insurance claim, thus, is preferred beyond the period of two years from the date of cause of action, supra and as such barred by limitation. There is no application for condonation of delay, admittedly, made.
6. Janata Personal Group Accident Policy is on record. Amongst other terms it also submitted as under:
"It is also hereby further expressly agreed and declared that if the Company shall disclaim liability to the insured for any claim hereunder and such claim shall not within 12 calendar months from the date of such ...have been made the subject of a suit in a Court of Law then the claim shall for all purpose be deemed ... been abandoned and shall not thereafter be recoverable hereunder."
7. As held by the Apex Court in the matter of Himachal Pradesh State Forest Co. Ltd. v. United India Insurance Co. Ltd, (2009) 2 SCC 252, though above referred clause in view of Section 28 of the Contract Act will not be acted upon for the curtailment of the period of limitation still the later part of it which refers to extension of the right itself unless exercised within specified time can be enforced. Therefore, since the claim // 9 // was not made within 12 calendar months from the date of happening, the claim shall for all purposes be deemed to have been abandoned and is not recoverable after the expiry of the said period.
8. For the above said reasons, we find that no fault can be found with the impugned order resulting into dismissal of consumer complaint. Holding accordingly, we pass the following order."
14. In the instant case, incident took place on 26.04.2004 and the complainant / respondent no.1 sent application for the first time to the appellant / OP no.1 on 09.05.2008. The cause of action for insurance claim arose on when the incident took place and the complainant injured did not submit claim before the appellant / OP no.1 within 12 months from the date of incident. He submitted his application before the appellant / OP no.1 for the first time on 09.05.2008 and thereafter sent legal notice on 16.05.2012 and prior to this legal notice sent letter dated 03.01.2011. Looking to the above documents filed by the complainant / respondent no.1 himself, it appears that he did not submit his claim within 12 months of the alleged accident and cause of action arose when the accident took place and the claim was made by the complainant/respondent no.1 for the first time on 09.05.2008 i.e. after 12 months from the occurrence of accident and claim was not filed within 12 months as prescribed in the insurance policy. Even, if we consider that the cause of action arose on the date when complainant made claim before the Insurance Company i.e. 09.05.2008, therefore, the cause of action has arisen on that day and not on the date // 10 // on which the claim was repudiated by the Insurance Company. The complaint filed by the complainant/respondent no.1 on 13.09.2012 after four years of submitting claim form before the Insurance Company.
15. It appears that the complaint of the complainant/respondent no.1, was apparently time barred.
16. In view of above discussions, we hold that the complaint of the complainant/respondent no.1 is time barred, therefore, the order passed by learned District Forum, is not sustainable and is liable to be set aside. Hence, the appeal of the appellant/O.P. No.1 is allowed and the impugned order dated 19.12.2012, passed by learned District Forum, is set aside. Consequently, the complaint of the complainant/respondent, is dismissed as time barred. No order as to the cost of this appeal.
(Justice R.S.Sharma) (Ms.Heena Thakkar)
President Member
/01/2014 /01/2014