Delhi District Court
M/S Cellular Shoppe vs The Oriental Insurance Company Ltd on 19 September, 2011
IN THE COURT OF SHRI MAN MOHAN SHARMA
ADDITIONAL DISTRICT JUDGE (CENTRAL)12
TIS HAZARI COURTS, DELHI.
Civil Suit no.: 380/09
Unique case ID no. : 02401C5092772004
M/s Cellular Shoppe,
Presently Shopped at:
D851, New Friends Colony,
New Delhi110 065
(Represented by its director Vinod Sachdeva
..........Plaintiff
Versus
The Oriental Insurance Company Ltd.
DRO1, Jeevan Bharti Building,
9th Floor, TowerI
124, Connaught Circus,
New Delhi110 001
(Through its Asst. General Manager)
.........Defendant
Date of institution : 29.04.2004
Date of reserving judgment : 08.09.2011
Date of pronouncement : 19.09.2011
1. The plaintiff has filed a suit for recovery of Rs. 13,52,172/ for
C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 1 of 22
recovery of insurance claim and interest as well as other reliefs.
Briefly stated, the case of the plaintiff is as under:
(i). The plaintiff organization is a commercial firm
which was being run in the name and style of M/s Cellular
Shoppe from shop no. 102 at the ground floor of the three
storeyed building at plot no. 11/12, Ring Road, Lajpat Nagar
IV, Near State Bank of India, New Delhi110 024 and Sh.
Vinod Sachdeva was and is the Director of the plaintiff
company which stopped operating from this address from July
1997.
(ii). The plaintiff got an insurance for Rs.8,00,000/
towards stock of cellular phones & accessories and
Rs.70,000/ towards the furniture, fixtures and fittings with
AC & other electrical equipments from the defendant. The
risks covered by the defendant was vide cover note no. 9999
and corresponding policy no. 1997/299 for period 24.07.96 to
23.09.97.
(iii). The said firm stopped functioning after the rented
shop at Lajpat Nagar was vandalized in June 1997 and vacated
C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 2 of 22
in July 1997 after the occurrence of burglary/robbery/theft
committed therein on the night of 1st and 2nd June, 1997. The
incident was reported and is recorded with PS Lajpat Nagar
vide FIR 610/97 dated 02.06.97 U/s 395/458/380/412/341 IPC.
The investigation agency had recorded various seizure memos.
(iv). The plaintiff company also sent the information of
burglary/robbery/theft to the insurer's Branch Manager of the
defendant at their JanpuraBhogal Branch office at New Delhi
110 014 on 03.06.1997 together with the copy of the FIR. The
loss was assessed under four subheads totaling to
Rs.11,64,200/.
(v). The police investigated the crime and arrested
five accused persons and the case is at the trial stage with the
court of ld. ACMM at P.H.C. N. Delhi. (vi). That
the plaintiff company filed the insurance claim of loss on the
printed claim from supplied by the lossassessorcum
investigator of the respondent office. the itemwise detail of
loss totaled to Rs.8,01,610.07 besides loss of cash in the sum of Rs.14,200/ loss of fixtures, furniture & fitting valued at Rs.25,000/. Fax Machines was also worth Rs.25,000/ (make C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 3 of 22 of Fax Machine "Cromption Greaves", year of purchase1997) sent to the respondent office on 03.06.97 itself. The total loss claimed was valued at Rs.8,68,810.07. The interest was also claimed @ 12% from the respondent insurance company.
(vii). The defendant insurance co. appointed their surveyor who visited the shop and checked up the leftover stock, different records of the plaintiff company and questioned the plaintiff's representative Sh. Vinod Sachdeva personally in a searching and in a very intriguing manner. The assessor assessed the actual loss and submitted his report directly to the respondent organization.
(viii). Inspite of the fat that all relevant details are available with the respondent office; the claim of the plaintiff organization was not settled amicably by the respondent. Even no offer/communication was initiated / sent by the respondent organization to the plaintiff till the year 2003 even after repeated requests and prayers made by the plaintiff organization personally and in writing for early settlement of the claim vide their urgent reminders dated 15.12.99, 10.03.2000, 20.01.01, 15.09.01, 08.04.02, 20.05.02 and C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 4 of 22 25.07.02 respectively. Finding stalemate the plaintiff organization finally filed a complaint with the appropriate District Consumer Disputes Redressal Forum on 28.07.03. The WS was also filed by the respondent organization in which one of the preliminary objections of the respondent organization was that the complaint was not maintainable since the organization was a profitearning commercial organization.
(ix). In view of the amendment to the Consumer Protection Act of the year 2002, the plaintiff organization felt that the case was in fact no maintainable in the District Consumer Disputes Redressal Forum. Accordingly, the complaint no. 1203/2003 was withdrawn by the plaintiff organization on 18.03.2004. Thus, the present petition is being filed now before this Hon'ble Court.
(x). The defendant, for reasons best known to it, has not yet made the copy of the Surveyor & Loss Assessment Report available to the plaintiff organization during the period June 1997 to July 2003. Even after filing the complaint with District Consumer Disputes Redressal Forum, New Delhi, in C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 5 of 22 July, 2003, the copy of the Survey and Loss Assessment Report has not been filed in the Consumer Court or a copy of it has also not been supplied to the plaintiff company till date.
(xi). Even the legal notice sent by the plaintiff company on 10.03.03 has not been replied by the defendant.
2. The notice of suit was sent to the defendant who contested the suit by filing its written statement.
3. In its written statement, the defendant no. 1 has taken two preliminary objections. Firstly the objection is as to limitation. It is stated that he burglary had taken place on 01.02.1997/02.06.1997 and the instant suit has been instituted in April 2004 is barred by limitation. Secondly the suit is not properly instituted which is apparent from the resolution of the plaintiff which shows that Cellular Shoppe is a division of Rex Poly Films (P) Ltd. As such Shri Vinod Sachdeva is not a competent person to institute the suit.
4. On merits, in sum and substance, the defendant no. 1 denied the material averments of the plaint, on which the plaintiff has propounded its cause of action. As explanatory facts, the defendant has pressed the following facts in service: C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 6 of 22
(i). The policy is admitted as per the terms and condi tions contained. The incident of 01.02.1997/02.06.1997 was reported by the plaintiff to police. Information of burglary was given to the defendant on 3.6.1997 in writ ing by plaintiff. The defendant then deputed M/S Omni scient Detectives. M/S Omniscient Detectives asked the plaintiff to submit claim documents, list of stolen arti cles and inform about the progress of police investiga tion. Various letters in this regard were written by M/S Omniscient Detectives but in vain. Investigator submit ted his report dated 11.08.1998. Conduct of the plaintiff has been stated to be not in accordance with policy terms, hence claim not maintainable. After repeated re minders the plaintiff submitted its claim form dated 7.11.1997.
(ii). The Surveyor submitted his report dated 11.7.2000, assessing the loss without prejudice to Rs. 3,04,849/ It submitted a consent letter dated 7.7.2000 of insured for Rs. 3,05,460/ Without prejudice, the de C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 7 of 22 fendant states that the liability in case exceeds Rs. 3,04,849/
(iii). The case in District Consumer Disputes Re dressal Forum, New Delhi, was withdrawn by the plain tiff itself and no fault can be found with the defendant.
(iv). The claim of the plaintiff is not maintain able for breach of condition no. 5(b) of the Policy.
5. The plaintiff filed its replication and denied the material aver ments/objections of the written statement and reiterated and reaf firmed the averments of the plaint.
6. On the available pleadings, the following issues were framed on 04.10.2005:
1) Whether the suit is barred by the limitation? OPD
2) Whether the plaintiff is entitled for the claim of insurance, if so what amount?
OPP
3) Whether the plaintiff is entitled for
interest, if so, at what rate and for which
C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 8 of 22
period? OPP
4) Relief.
7. Both the parties have led their evidence. I have heard Shri S. D. Wadhwa, Ld. Counsel for the plaintiff and S/Shri A. K. Jha and Sanjay, ld. counsel for the defendant. In support of its submission, the plaintiff has cited some case law. No case law has been cited by the defendant, despite opportunity afforded.
8. Ld. Counsel for the plaintiff argued that he has filed an application for condonation of delay and that he was pursuing with the defendant for the settlement of the claim and waiting for response and sent repeated communications and lastly the notice. The plaintiff was pursuing a complaint against defendant in the Consumer Court which could not be maintained due to the amendment in the Consumer Protection Act, 1986 and it is entitled to concession on that aspect also. The claim on merits is legally maintainable supported with proved documents and the oral evidence on record.
9. Ld. Counsel for the defendant has vehemently argued that the suit is barred by limitation; there is no question of condonation of C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 9 of 22 delay in a suit and the relief on account of pendency of case in the Consumer Forum is not available to the plaintiff and considering all the facts the suit is hopelessly time barred. The defendant has never rejected the claim of defendant, therefore the suit under Article 44 of the Schedule to the Limitation Act is not maintainable. On merits also the defendant has no claim and the suit be dismissed with costs.
10. In rebuttal, while concluding the arguments, Ld. Counsel for the plaintiff argued on the various facets of the Article 44 of the Schedule to the Limitation Act, 1963. No other point was argued or urged.
11. I have considered the material on record any my issue findings are as under: Issue no.1: Whether the suit is barred by the limitation?
12. In this context, it is just and necessary to dwell upon the Article 44 of the Limitation Act, 1963 which is relevant to the present lis: C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 10 of 22
44. (a) On a policy of in Three The date of the death surance when the years of the deceased, or sum insured is where the claim on payable after proof the policy is denied, of the death has either partly or whol been given to or re ly, the date of such ceived by the insur denial.
ers.
(b) On a policy of insur Three The date of the oc
ance when the sum years currence causing the
insured is payable loss, or where the
after proof of the claim on the policy is
loss has been given denied, either partly
to or received by or wholly, the date of
the insurers. such denial.
13. Thus a bare reading of the article 44(b) shows that the period of limitation as prescribed is three years. Under this Article, an alternative point of starting of limitation has been provided i.e. there are two starting points of limitations viz. the date of the occurrence causing the loss, or where the claim on the policy is denied (either partly or wholly) the date of such denial. In other words, it can also be said that the former part purely pertains to 'limitation', but the latter part ('where the claim on the policy is denied, either partly or wholly, the date of such denial') is a C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 11 of 22 'prescription' as well as 'limitation'. Till the claim on the policy is denied (in whole or in part), the right to sue does not accrue under the latter provision. It is only when such denial is communicated to the claimant, that the right to sue is crystallized, the 'prescription' is complete and the 'limitation' commences.
14. It is settled law that the limitation only bars the remedy, it does not extinguish the right.
15. The burglary/theft has taken place on the night intervening 01.02.1997/02.06.1997. The instant suit has been instituted on 29.04.2004. The plaintiff has filed on record an application for condonation of delay. The application is based on two counts. Firstly the case of the claimant is that he was pursuing with the defendant for the settlement of the claim. Secondly, the case of the claimant is that it was pursuing a case in the Consumer Court which could not be maintained due to the amendment in the Consumer Protection Act, 1986. As per para 9 of the plaint the complaint in the Consumer Forum was filed on 28.07.2003 and withdrawn on 18.03.2004, for the above reason.
16. Though the plaintiff did not mention the various C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 12 of 22 provisions under which his application for condonation of delay is maintainable. However, it is the duty to court to cull out the relevant provisions of law that may be applicable in the light of the substantive averments of the pleadings.
17. On a meaningful reading of the pleadings, it is apparent that the plaintiff seeks the benefit of section 5 and 14 of the Limitation Act, 1963.
18. Section 5 of the Limitation Act, 1963 reads as under:
"5. Extension of prescribed period in certain cases. --Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period, if the appel lant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.
Explanation.-- The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section."C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 13 of 22
19. A bare reading of the provision under section 5 of the Limitation Act, 1963 shows that the same is not applicable to suits. Thus the plaintiff's plea on this count is not maintainable.
20. Section 14 of the Limitation Act, 1963 reads as under:
"14. Exclusion of time of proceeding bona fide in court without jurisdiction. -- (1) In comput ing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceedings, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first in stance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 14 of 22 1908 (5 of 1908), the provisions of subsection (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
Explanation.-- For the purposes of this section, --
(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) misjoider of parties or of causes of action shall be deemed to be a cause of a like nature with de fect of jurisdiction."
21. As per the first part of Article 44 (b) the limitation is three years starting from the date of the occurrence causing the loss. Admittedly, the loss was occasioned on the night intervening 01.02.1997/02.06.1997. Thus limitation under first part had expired on 01.02.2000 therefore the provisions of section 14 are not attracted as the complaint was filed in the Consumer Forum on 28.07.2003, after the expiry of the limitation under the first part. C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 15 of 22
22. For examining the second part of the Article 44 (b) the following part of testimony of DW1 Shri S. K. Samantray, Manager of Defendant, is relevant: "...It is correct that Plaintiff had informed about the alleged burglary that had taken place in their shop on the intervening night of 1/2.6.97, on 3.6.97. We had received the claim of the Plaintiff. Since as per the investigators report the Plaintiff had failed to submit/supply supporting documents, the case was closed in 1998. Neither acceptance nor repudiation of the claim was mentioned. The contract of insurance was between the parties to suit. Intimation of closure of case was not given to the Plaintiff..."
"...The surveyor however assessed the loss of Plaintiff as Rs. 3,04,849/ Defendant did not offer this amount to the Plaintiff. The surveyor had obtained the consent of Plaintiff for restricting his claim to this extent..."
23. Thus from the evidence on record, it is the admitted case of the defendant that it had never communicated any repudiation of the claim to the plaintiff. In Ramsons Southend vs. Divisional Manager, New India Assurance Co. 1998 DLT 842, it has been held that the starting point of limitation would be only after service C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 16 of 22 of repudiation of claim as well as of service of letter of disclaimer and not before.
24. Thus the latter part of Article 44(b) has not yet arrived as it is the admitted case of the defendant, in view of the above testimony of DW1, that neither the claim has been repudiated, nor any such communication given to the plaintiff. Therefore as far as the latter part of Article 44(b) of the Schedule to the Limitation Act, 1963 is concerned, the limitation visàvis the same has not yet commenced for want of repudiation/communication of repudiation on the part of the defendant.
25. In view of the above discussion, it is held that though limitation for instituting the suit under former part of the Article 44(b) of the Schedule to the Limitation Act, 1963, has expired but the limitation under latter part of the Article 44(b) of the Schedule to the Limitation Act, 1963, has not yet commenced.
26. My finding on this issue is returned in the above terms. Issue no. 2: Whether the plaintiff is entitled for the claim of insurance, if so what amount?
27. In view of my findings on the issue no. 1, the sub C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 17 of 22 stratum for the issue no. 2 does not subsist. Hence this issue is answered accordingly.
Issue no. 3: Whether the plaintiff is entitled for interest, if so, at what rate and for which period?
28. In view of my findings on the issue no. 1, the sub stratum for the issue no. 3 does not subsist. Hence this issue is answered accordingly.
Relief
29. In view of my finding on the issue no. 1, the plaintiff is not entitled to the relief(s) claimed in the present suit except costs, as the plaintiff has been made to suffer and institute the present lis on account of the failure of the defendant to take any decision on the claim since 1997; the filing of the present lis has been necessitated on account of the default of the defendant. The defendant has not been able to elucidate any justification for its sitting over the claim of the plaintiff, without repudiating or accepting it. The defendant has offered no explanation under what law or policy it can put the claim in suspended animation without taking or communicating any decision to admit or reject it. Even during the currency of the lis no C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 18 of 22 decision has ostensibly been taken. This state of affairs speaks for itself. I, therefore, in the special facts and circumstances of the case award costs of the suit quantified at Rs. 30,000/ (Rupees Thirty Thousand Only) to the plaintiff payable by the defendant. The moot question however remains, as to who will pay the piper?
30. I find my answer in the judgment in which Hon'ble the Supreme Court of India in Lucknow Development Authority vs. M. K. Gupta AIR 1994 SC 787 has held as under:
"11. Today the issue thus is not only of award of compensation but who should bear the brunt. The concept of authority and power exercised by public functionaries has many dimensions. It has undergone tremendous change with passage of time and change in socioeconomic outlook. The authority empowered to function under a Statute while exercising power discharges public duty. It has to act to subserve general welfare and common good. In discharging this duty honestly and bona fide loss may accrue to any person. And he may claim compensation which may in circumstances be payable. But where the duty is performed capriciously or the exercise of power results in harassment and agony then the responsibility to pay the loss determined should be whose? In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 19 of 22 matters which require immediate attention linger on and the man in the (street is) made to run from one end to other with no result. The culture of window clearance appears to be totally dead. Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system. Public administration, no doubt involves a vast amount of administrative discretion which shields the action of administrative authority. But where it is found that exercise of discretion was mala fide and the complainant is entitled to compensation for mental and physical harassment then the officer can no more claim to be under protective cover. When a citizen seeks to recover compensation from a public authority in respect of injuries suffered by him for capricious exercise of power and the National Commission finds it duly proved then it has a statutory obligation to award the same? It was never more necessary than today when even social obligations are regulated by grant of statutory powers. The test of permissive form of grant are over. It is now imperative and implicit in the exercise of power that it should be for the sake of society. When the Court directs payment of damages or compensation against the State the ultimatesufferer is the common man. It is the tax payers' money which is paid for inaction of those who are entrusted under the Act to discharge their duties in accordance with law. It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 20 of 22 or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund 'immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries."
31. As the defendant, Oriental Insurance Company, is a public corporation, its corpus is made up of tax payer's money. How can a member of public be compensated with the money which is the trust money of the public at large? This would be doing double wrong to the public.
32. For the reasons best known to the defendant, it put the claim of the defendant in cold storage, neither rejecting it, nor allowing it. In its written statement it has admitted having received a legal notice from the plaintiff (para 11 of reply on merits of the written statement) but it had chosen not to reply. Even after the receipt of the summons of the suit, it did not take any action on the claim and put a contest to the suit, thus clogging the judicial system with avoidable litigation. In this process, it put additional burden on the public by burdening the public money with expenditure on C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 21 of 22 account of Advocate's fee and other charges. This is the least expected of a public enterprise.
33. Therefore, it is directed that the cost as imposed above be paid to the plaintiff at the first instance by the defendant and that the defendant shall recover the same and other costs incurred from the salary of the official(s) in default.
34. Finally to sum up, the suit is dismissed with cost of Rs. 30,000/ (Rupees Thirty Thousand Only) payable to the plaintiff at the first instance by the defendant and that the defendant shall recover the same and other costs incurred from the salary of the official(s) in default.
35. Decree shall be drawn accordingly.
36. File, after necessary compliance, be consigned to the Record Room.
Announced in the Open Court On this 19th day of September 2011 (MAN MOHAN SHARMA) ADJ (Central)12, Delhi C. S. 380/2009 M/S Cellular Shoppe vs. The Oriental Insurance Co Ltd. Page 22 of 22