State Consumer Disputes Redressal Commission
M/S Goindwal Co-Operative Spinning ... vs National Insurance Company Limited, on 13 May, 2011
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
SCO NOS.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No. 1565 of 2005
Date of institution : 9.12.2005
Date of Decision : 13.5.2011
M/s Goindwal Co-operative Spinning Mills Ltd., having its office at Goindwal
Sahib, District Amritsar through Official Liquidator, Goindwal Co-operative
Spinning Mills Ltd., Goindwal Sahib, Amritsar.
....Appellant.
Versus
National Insurance Company Limited, having its Branch Office at Queens Office,
Amritsar through its Branch Manager.
...Respondent.
First Appeal against the order dated 5.7.2005 of
the District Consumer Disputes Redressal Forum,
Amritsar.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Mrs. Amarpreet Sharma, Member.
Present:-
For the appellant : Sh. Puneet Kansal, Advocate
For the respondent : Sh. Parminder Singh, Advocate
INDERJIT KAUSHIK, PRESIDING MEMBER:
Appellant/complainant(hereinafter called 'the appellant') has filed this appeal against the impugned order dated 5.7.2005 passed by the District Consumer Disputes Redressal Forum, Amritsar(hereinafter called, 'the District Forum').
2. Facts in brief are that the appellant filed a complaint under Section 12 of the Consumer Protection Act(hereinafter called 'the Act') through its Liquidator against the respondent, pleading that the appellant is a Society duly registered under the Punjab Co-operative Societies Act, 1961 and SPINFED is the apex body, which was entrusted with the responsibility for making arrangements of the raw material and marketing the products. SPINFED usually entered into bulk deals with various Co-operative Federations situated in cotton growing States such as First Appeal No. 1565 of 2005 2 Maharashtra, Gujrat and Rajasthan. It was further pleaded that the affiliated mills were not able to store the bulk material due to paucity of funds and SPINFED usually financed for purchasing of raw material etc. and created a Central Warehousing facility at Bathinda in which cotton bales purchased on behalf of the mills were stored. Due to the deep recession in the Textile industry, the appellant incurred heavy losses and the mill stopped functioning in the year February, 2002. After due process, the appellant mill was brought under the process of winding up by the Registrar, Co-operative Society w.e.f. 19.5.2003 and the winding up affairs were looked up by Sh. Ashok Sekhar, IAS, in the capacity of Liquidator.
3. When the appellant mill was in operation, SPINFED entered into deal for the purchase of cotton bales with the Maharashtra State Co- operative Cotton Growers Federation and under this deal, 50 number of cotton bales of NHH quality were dispatched by Maharashtra Federation from Jintore to Cotton Cell, Bathinda and these cotton bales alongwith other 30 cotton bales, which were to be despatched to Abohar Mill were loaded in a Truck bearing Registration No. PB-02-G-9226 on 18.8.2000 booked by Shyam Transport under G.R./ Builty No. 340 dated 18.8.2000. Maharashtra Federation also raised provisional invoice of dated 18.8.2000 in the name of the appellant Mill for 50 bales and in order to avoid the transit risk of cotton bales, the appellant Mill has taken insurance cover for a sum of Rs. 15 crore from respondent - National Insurance Company Ltd. vide policy No. 4400334 dated 4.3.2000. Under the said insurance cover, the cotton bales number 50 were sent by Maharashtra State Co-op. Federation through M/s Shyam Transport to the Warehouse of the appellant but the said Truck carrying 50 bales of the appellant mill and 30 bales of the Abohar mill never reached its destination. First Appeal No. 1565 of 2005 3
4. The Chief Executive of the appellant mill vide his letter dated 11.9.2000 sent a telegram to the respondent regarding non-receipt of these bales for registration of the insurance claim. In the meantime, Police Station Kotwali of Police District, Parbhani registered one criminal case for commission of the offence under Section 420, 406, 468, 471 IPC vide F.I.R. No. 115 dated 12.9.2000 and the intimation was given to the respondent. The respondent through registered letter dated 13.9.2000 asked the appellant to furnish the claim alongwith documents. M/s Shyam Transport also furnished shortage certificate of 80 bales. The appellant was required to furnish monthwise detail regarding the cotton bales purchased from different sources so that the sum insured in the policy may be given accordingly. Appellant furnished the complete details and also issued a notice under Section 10 of the Indian Carriers Act to M/s Shyam Transport for making good the loss so suffered by the appellant on account of non-delivery of consignment and the copy was sent to the respondent. Non-traceable report was also forwarded and all the necessary documents were submitted to the respondent. The respondent was asked to make interim payment and thereafter various reminders were written to the Superintendent of Police for providing non-traceable certificate but the same has not been received.
5. The Divisional Manager of the respondent intimated the appellant vide letter dated 28.3.2002 that they have got the matter investigated at their own from M/s Sattelite Investigations, Pune, who reported that solely on account of the reasons that FIR has not been registered under Section 407 of the IPC, therefore, provisions of policy cannot be invoked and the claim of the policy was not maintainable. Appellant mill conveyed to the respondent that claim is maintainable and submitted all the requisite documents. But the respondent did not file the First Appeal No. 1565 of 2005 4 claim. Legal notice was sent to the respondent on 11.5.2004 and the reply was received on 26.5.2004 and the appellant on 26.5.2004 came to know that the respondent has no intention to pay the loss suffered by the appellant and prayed that the respondent may be directed to make payment of Rs. 4,20,166/- on account of loss suffered and to pay interest @ 18% per annum.
6. The respondent filed the reply taking preliminary objections that the complaint is not maintainable as the appellant is a commercial concern and is carrying on commercial activity at a large scale. The claim has been repudiated on merits by the respondent and no 'consumer' dispute survives and the appellant is estopped by its own act and conduct to file the present complaint. No transit period ever started and there is no question of any liability and the complaint is bad for non-joinder of necessary parties and cause of action. The complaint has been filed through the Liquidator but no order of the Court has been placed on file showing the permission obtained by the Liquidator and the complaint is barred by limitation. On merits, similar pleas were repeated and denying the allegations, prayed that the complaint be dismissed.
7. Parties led evidence in support of their respective contentions by way of affidavits and documents.
8. Learned District Forum after considering the evidence and material placed on file by the parties and after hearing the learned counsel for the parties, observed that the claim lodged by the appellant was repudiated by the respondent on 28.3.2002 and cause of action arose on 28.3.2002 and the present complaint was filed on 1.7.2004 and the same is time barred. The present complaint was filed on behalf of the mill through its Liquidator and the Liquidator was required to obtain permission from the Court before filing any loss on behalf of the appellant. No First Appeal No. 1565 of 2005 5 evidence has been brought to show that permission to file the complaint was obtained and the complaint is not legally maintainable and dismissed the complaint.
9. Aggrieved by the impugned order dated 5.7.2005, the appellant has filed this appeal.
10. We have heard the learned counsel for the parties and have gone through the order of the District Forum as well as documents placed on file with the assistance of the learned counsel for the parties.
11. Learned counsel for the appellant contended that the Liquidator was appointed under Section 58 of Punjab Co-operative Societies Act, 1961(hereinafter called 'the Act') by the Registrar, Cooperative Society and not under the Companies Act, thus, the permission of the Court was not required and as such, the appointment of the Liquidator made by the Registrar under the Act is legal and valid.
12. So for the limitation is concerned, counsel for the appellant has contended that the letter dated 28.3.2002 has been treated as the letter of repudiation whereas as per Annexure A-1, the claim was repudiated on 5.7.2002 and the complaint was filed on 1.7.2004 and the same is within limitation.
13. On behalf of the respondent, it was contended that the complaint is hopelessly time barred and the claim of the appellant was repudiated vide letter dated 28.3.2002 and only the comments were sought from the appellant mill within seven days and that does not extend the period of limitation. It was further contended that letter Annexure A-1 was written in connection with other letter of the appellant and the limitation cannot be calculated from 5.7.2002 because the claim was already repudiated on 28.3.2002 and the complaint has rightly been dismissed by the District Forum and the appeal may be dismissed. First Appeal No. 1565 of 2005 6
14. We have considered the submissions made by the learned counsel for the parties.
15. As per Section 57 of the Act, the Registrar, Cooperative Society can order for winding up of a Cooperative Society and under Section 58, he can appoint a Liquidator and there was no illegality in appointment of the Liquidator but the District Forum was swayed with the idea of appointment of Liquidator under Companies Act and wrongly held that the Liquidator has to be appointed by the Court under the provisions of the Companies Act, 1956 whereas the appellant is a Cooperative Spinning Mill and comes within the purview of the Act and the Liquidator was appointed by the Registrar of the Cooperative Societies and there is no illegality and the order of the District Forum qua the appointment of the Liquidator is incorrect and is accordingly set-aside.
15. Next important question to be decided in the present appeal is the question of limitation. The respondent has relied upon the letter dated 28.3.2002 written by the National Insurance Co. Ltd. to the appellant and the appellant has relied upon the letter dated 5.7.2002 written by the National Insurance Co. Ltd. to the appellant.
16. In order to appreciate and to correctly interpret, the letter dated 28.3.2002 is reproduced as under:-
"Symbol National Insurance Company Limited (Subsidiary of General Insurance Corporation of India) Div. Office: Queen's Road, AMRITSAR-143001 OUR REF.: 404400/DK/PKS/2002 WITHOUT PREJUDICE YOUR REF.: 28th March, 2002.
M/s Goindwal Co-op. Spinning Mills Ltd., Goindwal, Asr.
Ref.: Loss of your 50 cotton bales under Marine Claim This has reference to your letter No. Acctts/CE/3571-73 dated 21/27.02.2002 on the subject cited above.
First Appeal No. 1565 of 2005 7
As we have received Investigation Report of our investigator M/s Sattelite Investigations, Pune with the following remarks:
"That the offence was committed prior to the departure of the vehicle and at the godown. Section 407 was not applied meaning thereby that in that case the offence of Criminal Breach of Trust by the Carrier had not occurred during transit and the policy covers the goods in transit only. Therefore in the present case the provision of the policy cannot be invoked. Moreover, FIR was lodged u/s 420, 406, 468, 471 IPC vide C.R. No. 0115/2000 and not u/s 407. In our opinion, the witnin mentioned claim is not maintainable under above sections as per Marine Transit Policy."
Keeping in view the above, please let us have & your comments within 7 days from the date of this letter.
Thanking you, Yours faithfully, Sd/-
(Authorised Signatory)"
17. Learned counsel for the respondent laid much stress on this letter and argued that the claim was repudiated by the respondent Insurance Co. as it was clearly mentioned that the claim is not maintainable.
18. We are not inclined to accept this argument of the learned counsel for the insurance Co. because these were the remarks given by the Investigator - M/s Sattelite Investigations in its report and the same was reproduced by the respondent Insurance Co. in inverted commas and it cannot be termed as the repudiation of the claim by the respondent Insurance Co. because the repudiation was not made on behalf of the respondent Insurance Co. but it was the recommendation of the Investigator and in the last line the comments were sought by the respondent Insurance Co. within seven days from the date of this letter i.e. 28.3.2002.
19. In the letter dated 5.7.2002, the claim of the appellant was repudiated. The relevant portion of the letter is reproduced:- First Appeal No. 1565 of 2005 8
"This has reference to the aforesaid claim. While going through the file we have observed that Section 407 IPC was not applied, meaning thereby that in this case, the offence of criminal breach of trust by the Carrier had not occurred, no offence occurred during transit.
Keeping in view the above we have no other alternative but to repudiate the said claim."
20. Thus from the above, it is clear that the claim of the appellant was in fact repudiated on 5.7.2002 and the complaint was filed on 1.7.2004 well within the period of limitation and the District Forum has wrongly held that the claim was repudiated on 28.3.2002, therefore, the findings of the District Forum that the claim is time barred cannot be sustained and is liable to be set-aside.
21. Accordingly, the appeal is accepted and the impugned order under appeal dated 5.7.2002 is set-aside. No order as to costs.
22. Since the District Forum has disposed of the complaint on the question of limitation and the appointment of Liquidator but has not discussed anything on merits, therefore, the case is remanded back to the District Forum with the direction that after giving due notice and opportunity to the parties, the complaint shall be decided on merits.
23. Since the matter is very old, the District Forum shall dispose of the complaint within six months on receipt of the copy of the order.
24. The arguments in this appeal were heard on 4.5.2011 and the orders were reserved. Now the order be communicated to the parties.
25. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Inderjit Kaushik)
Presiding Member
May 13, 2011. (Amarpreet Sharma)
as Member