National Consumer Disputes Redressal
Japjeet Singh Chadda vs United India Insurance Co. Ld. & Anr. on 6 May, 2014
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.2387 OF 2012 (Against the order dated 14.3.2012 in First Appeal No.A/10/363 of the Maharashtra State Consumer Disputes Redressal Commission, Mumbai) Japjeet Singh Chadda ..... Petitioner 22nd Dilip Nivas, DD Sathe Marg Opera House, Mumbai-400004 Versus 1. United India Insurance Co. Ld. ...... Respondents Cmbatta Building, 3rd Floor, M.K. Road, Churchgate, Mumbai-400 020 2. Srivatsan Surveyors Pvt. Ltd. Through the United India Insurance Co. Ltd. Cmbatta Building, 3rd Floor, M.K.Road, Churchgate, Mumbai-400 020 BEFORE: HONBLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER HONBLE MR. SURESH CHANDRA, MEMBER For the Petitioner : Mr. Ravi Gopal, Advocate For the Respondents : Mr. V.S. Chopra, Advocate PRONOUNCED ON : 06th MAY, 2014 ORDER
JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER This revision petition is directed against the order of the State Consumer Disputes Redressal Commission Mumbai ( in short, the State Commission) dated 14.03.2012 whereby the State Commission allowed the appeal of the respondents opposite parties against the order of the District Forum on the point of limitation and dismissed the complaint as barred by limitation.
2. Briefly stated facts leading to filing of this revision petition are that the petitioner complainant obtained Burglary and House Breaking Insurance Policy for Rs.6.00 lacs from respondent no.1 for the stock and trade at his business premises.
The period of insurance was w.e.f. 03.12.2002 to 02.12.2003. On the night intervening 20-21st January, 2003, shop of the petitioner was burgled. According to the petitioner, mobile phones stocked in the shop worth Rs.6.00 lacs were stolen. Matter was reported to the police vide FIR No. 18 of 2003 dated 21.01.2003 at P.S. D.B.Marg Mumbai. Respondent no.1 was also informed about the accident. Respondent no.2 was appointed Surveyor to inspect the subject premises and assess the loss. Respondent no.2 visited the premises of the petitioner on 24.01.2003 and submitted his report after inspection, wherein it was opined that the story of the burglary put forth by the petitioner appeared to be false. Consequently, the insurance claim was petitioner was repudiated vide letter dated 29.03.2004. It is the case of the petitioner that he responded to the repudiation letter vide Advocates notice dated 15.04.2004 wherein respondent no.1 was requested to review its decision of repudiation of claim. Respondent no.1 vide its letter dated 28.12.2004 intimated the petitioner that complaint was registered in Grievance Cell and the claim filed by him was being reviewed. Despite of that respondent no.1 failed to pass any effective order for the request of review. This led to the filing of the complaint.
3. Respondent insurance company in its reply admitted the issuance of insurance policy It was also admitted that on the receipt of information, Surveyor was appointed. Stand of the respondent is that the independent surveyor in its report doubted the correctness of story of burglary resulting in theft of mobile phones put forth by the complainant. Thus in view of the investigation report, the insurance claim was rightly repudiated.
The respondent also took the plea that in view of Section 24A of the Consumer Protection Act, 1986 ( in short, the Act), the consumer complaint is barred by limitation as it has been filed after the expiry of two years from the date of repudiation of the claim.
4. The District Forum South Mumbai on consideration of the pleadings and the evidence led by the parties allowed the consumer complaint and directed respondent no.1 to pay to the petitioner a sum of Rs.4,14,608/- with 9% interest thereon w.e.f. 29.03.2004. Besides, the petitioner was awarded Rs.2000/- as compensation for harassment and Rs.1000/- as litigation expenses.
5. Being aggrieved of the order of the District Forum, respondents opposite parties approached the State Commission in appeal. The State Commission accepted the plea of limitation raised by the respondents and allowed the appeal. Consequently, the complaint was dismissed as barred by limitation and not maintainable in view of the following contract:
It is also hereby expressly agreed and declared that if the Company shall disclaim liability to the Insured for any claim hereinunder, and such claim shall not within 12 calender months from the date of such disclaimer have been made the subject matter of a suit in a court of law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.
6. Shri Ravi Gopal, Advocate for the petitioner has contended that order of the State Commission is based upon incorrect appraisal of facts. Expanding on the argument, learned counsel for the petitioner contended that State Commission while dismissing the complaint had failed to appreciate that the repudiation of the claim of the petitioner had not become final as it was reopened on the request of the petitioner for review of the claim. In support of this contention, learned counsel for the petitioner has drawn our attention to the letter dated 28.12.2004 written by Manager United India Insurance Company Limited ( Ex.G) addressed to the petitioner company. It is further contended by learned counsel for the petitioner that State Commission has misinterpreted the ratio of the judgment of the Supreme Court in the case of Kandimalla Raghavaiah & Co. Vs. National Insurance Company Ltd. III (2009) CPJ 75 (SC) and failed to appreciate that it is case of continuous cause of action. Learned counsel for the petitioner has thus urged us to accept the revision and remand the matter back to the State Commission for dismissal of appeal on merits.
7. Shri V.S.Chopra, Advocate for the respondent on the contrary has argued in support of the impugned order. He has contended that claim of the petitioner was rejected vide repudiation letter dated 29.03.2004. Just because the petitioner sought review of the order and he was conveyed vide letter dated 28.12.2004 that his claim was being considered, it cannot be said that it is a continuous cause of action. Learned counsel thus submitted that State Commission has rightly dismissed the complaint as time barred in view of the ratio of the judgment of the Supreme Court in Kandimalla Raghavaiah & Co.(supra) as also in the matter of H.P.State Forest Company Ltd. Vs. United India Insurance Co. Ltd. I (2009) CPJ 1 (SC).
8. From the submission of the parties, it is clear that issue which needs determination in this revision petition is whether final cause of action arose on 29.03.2004 when the insurance claim of the petitioner was repudiated or the cause of action is still continuing because of the fact that review of repudiation is still not decided.
9. There is no dispute on facts in this case. It is not disputed that the insurance claim of the petitioner was repudiated vide letter dated 29.03.2004. The respondents in their written statement have not denied that they issued letter dated 28.12.2004 to the petitioner. The contents of the letter are reproduced as thus:
Dear Sir Re : Claim No. 2554/2002 Burglary Insurane (Business Premises) Non L.R. Policy No. 021800/46/03/11/110054/02 Date of Loss 21.01.2003 We refer to your letter dated 17.12.2004 on the captioned subject. We have registered the complaint under Grievance Cell and the claim file is being reviewed. You will be hearing from us very shortly.
Thanking you.
10. On reading of the above, it is clear that respondent insurance company informed the complainant on 28.12.2004 that they have registered his complaint with Grievance Cell and his claim file was being reviewed and he would not be informed of the outcome shortly. This implied that the insurance company after the repudiation of the claim had reopened the same. Therefore, in our considered view, the repudiation of claim had not become final.
Thus we find merit in the plea of the petitioner that this is a case of continuing cause of action. Counsel for both the parties have relied upon decision of the Supreme Court in the case of Kandimalla Raghavaiah & Co. (supra). Honble Supreme Court while dealing with Cause of Action in the above said matter has observed thus:
The term "cause of action" is neither defined in the Act nor in the Code of Civil Procedure, 1908 but is of wide 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 Vs. Rajashetty & Ors., (1970) 1 SCC 186). 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.
11. On analysis of the facts of this case in the context of the above observations of the Honble Supreme Court that cause of action first arose on the date of which alleged burglary took place, the cause of action for filing of the complaint again arose when the insurance claim was repudiated by the insurance company vide letter dated 29.03.2004. The respondent, however, before the expiry of limitation of two years from the date of repudiation vide its letter dated 28.12.2004 registered the protest of the complainant against the repudiation of the claim and intimated him vide letter dated 28.12.2004 that his claim file was being reviewed.
This obviously gives an impression to the petitioner that his request for review was accepted and his claim file was under consideration. Therefore, he was justified for awaiting the outcome of the review instead of rushing for judicial remedy. Since the review has not been decided, we are of the view that given the peculiar facts of this case, the cause of action is still continuing.
The State Commission has failed to appreciate the above aspect of the matter and consequently fallen in error.
Thus, in our view, the order of the State Commission dismissing the complaint as barred by limitation in view of section 24-A of the Act and also in view of violation of the term of the insurance contract, is not sustainable particularly when the final decision to disclaim the liability to the insured is yet to be taken.
12. In view of the discussion above, the impugned order of the State Commission is not sustainable. Revision petition is, therefore, allowed, impugned order is set aside and the matter is remanded back to the State Commission to decide the appeal on merits after hearing the parties. Since this is an old matter, the State Commission is requested to decide the appeal preferably by the end of this year. Parties are requested to appear before the State Commission on 02.07.2014.
.Sd/-
(AJIT BHARIHOKE, J) (PRESIDING MEMBER) .Sd/-
(SURESH CHANDRA) (MEMBER) Am