New India Assurance Co. Ltd vs Anil Traders

DELAY of 38 days in filing the revision petition is condoned. This revision petition has been filed by the New India Assurance Co. Ltd., the sole opposite party before the District Consumer Disputes Redressal Forum, Thane (District Forum for short) against the order dated 24.08.2009 passed by the Maharashtra State Consumer Disputes Redressal Commission (State Commission for short), vide which the State Commission, while upholding the order passed by the District Forum, has dismissed the appeal of the petitioner/opposite party both on account of delay as well as on merit. The District Forum after due appreciation of evidence adduced before it by both the parties vide its order dated 09.08.2007 had partially allowed the complaint of the respondent/complainant and directed the petitioner/opposite party to pay to the respondent/complainant Rs.1,50,000/- on account of losses suffered by him and Rs.5000/- for mental torture caused to him, besides Rs.1000/- as costs. It was also directed by the District Forum that in case the above amount is not paid within two months from the date of receipt of the order, then 9% interest will also be payable on the amount from the date of the order till the date of payment.

BRIEF facts of the case, as alleged by the complainant in his complaint, are that he was a Whole-Sale Merchant and for his shop he had taken a shopkeepers policy issued by the petitioner-Insurance Company. The policy was effective and valid from 29.06.2005 to 28.06.2006. During the currency of the said insurance policy, on 26th & and 27th of July, 2005 there was heavy rain in Mumbai, due to which rivers and drainages were flooded and the Mumbai and Thane regions were submerged under water for 48 hours. The water level rose upto 7-8 feet. In this natural calamity the respondent/complainant suffered heavy losses and accordingly he intimated about the same to the petitioner-Insurance Company. The petitioner-Insurance Company appointed a surveyor to assess the loss reported by the respondent/complainant. On 11th of August, 2005 the petitioner-Insurance Company sent a letter to the complainant to the effect that FST (Flood, Storm and Tempest) is excluded from the scope of the policy and his claim may not be entertained. In response to the said letter, the complainant vide his letter 12th of August, 2005 replied to the petitioner-Insurance Company that various other shopkeepers have taken insurance policy from the Insurance Company and their policy covers the risk of FST. As a proof to this, the complainant also annexed Xerox copies of the insurance policy and settled claim cheque in respect of one Radha Traders. Pursuant to information sought under Right to Information Act by the complainant, on 14th of February, 2006 the petitioner-Insurance Company with a copy of the survey report replied that FST is excluded from the insurance policy and his claim was treated as No claim. The report of the surveyor shows the losses suffered by the complainant to the tune of Rs.3,87,315/-. In this background, alleging discrimination by the petitioner-Insurance Company among its customers, the respondent filed a complaint before the District Forum, praying for a compensation of Rs.4,04,815/- in toto. The District Forum partially allowed the complaint and directed the petitioner-Insurance Company in the manner indicated above. Feeling aggrieved with the order of the District Forum, the petitioner-Insurance Company filed an appeal before the State Commission, which too was dismissed on merit as well as on delay.

Hence, this revision petition by the petitioner-Insurance Company against the order of the State Commission. We have heard Ms. Meenakshi Midha, learned counsel for the petitioner-Insurance Company and Mr. B.S. Sharma, learned counsel for the respondent-complainant. Learned counsel for the petitioner-Insurance Company assails the order of the State Commission primarily on the ground that when the policy document clearly stated FST risk excluded from policy cover; meaning thereby that damage/loss on account of Flood, Storm and Tempest would not be covered under the policy, it was not within the jurisdiction of the State Commission to have ignored this and travel beyond the scope of the policy to have upheld the award of the District Forum. On the question of delay in filing the appeal before the State Commission, she has submitted that sufficient cause was shown to explain the delay as the papers first had to move from the Divisional Office to the Regional Office, from-where it had to be referred to New Delhi. Besides, it entailed soliciting the legal opinion from a senior advocate and thereafter nominating another advocate for drafting and filing the appeal etc. It required some time. Contending that since the fora below had passed an order which was legally not tenable and the petitioners case deserved to be considered on merit, it was wrong on part of the State Commission to have rejected their application for condonation of delay. In this respect, she has relied upon the judgment of the Honble Supreme Court in the case of Ram Nath Sao alias Ram Nath Sahu and others Vs. Gobardhan Sao and others [(2002) 3 SCC 195].

LEARNED counsel for the respondent/complainant on the other hand has justified the impugned order stating that the complainant was not made aware of the incorporation of the exclusion clause for Floods etc. and, therefore, the fora below have rightly held that the petitioner-Insurance Company cannot take advantage of their unilateral decision to incorporate such a clause which render the policy meaningless. We have given our thoughtful consideration to the submissions made by learned counsel for the parties and have also perused the policy document carefully. In this case, the alleged flood/inundation took place on 26th and 27th of July, 2005. The period, therefore, fell within the validity period of the insurance policy, which was effective from 29th of June, 2005 to 28th of June, 2006. We find that in this policy document against the column Nature of Business : GRAIN SHOP (FST RISK EXCLUDED FROM POLICY COVER) has been clearly mentioned. Since this was a renewal policy, we have also perused the policy document of the previous year covering the period from 29th of June, 2004 to 28th of June, 2005 and even there the clause FST RISK EXCLUDED FROM POLICY COVER is mentioned in bold letters. The contention that terms of the policy were not explained to the policy-holder will not lend any support since the complainant is a trading concern and not any illiterate villager. Besides, there has been a renewal of the policy. Since the parties are bound by the terms incorporated in the insurance policy, which are in the nature of a contract between the parties, in our view, the State Commission ought not to have traveled beyond what is incorporated in the policy and held that the petitioner company was not supposed to mention the endorsement FST RISK EXCLUDED FROM POLICY. As held by the Honble Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Sony Cheriyan [(1999) 6 SCC 451] that Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein, it goes without saying that the terms of the policy being in the nature of a contract have to be interpreted as they are and the consumer fora cannot alter or modify the terms of the contract just because the consumer fora considers such a clause to be unreasonable. Reference to the usual clauses which are normally incorporated in the Shopkeepers Policy would be of no relevance since the matter for adjudication before the State Commission was with reference to the specific policy document. Thus, the order passed by the State Commission is patently illegal and, therefore, cannot be sustained.

INSOFAR as delay in filing the appeal before the State Commission is concerned, in our view, as rightly pointed out by the learned counsel for the petitioner-Insurance Company, the State Commission should not have rejected their application for condonation of delay as they had explained the reason behind the delay in filing the appeal. Even though they had not given the details with regard to the exact date of reference of the papers from Divisional Office to Regional Office, from Regional Office to Head Office and then from Head Office to the senior advocate etc., in view of the ruling of the Honble Supreme Court in the case of Ram Nath Sao alias Ram Nath Sahu (supra), wherein it has been held that by taking a pedantic and hypertechnical view of the matter the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, and bearing in mind the fact that the petitioner-Insurance Company is a public sector undertaking and, therefore, certain amount of latitude is not impermissible in condoning the delay, the State Commission, therefore, ought to have considered the delay with pragmatism in a justice-oriented approach rather than the technical detection of sufficient cause for explaining the delay. In this case we may profitably refer to the judgment of the Honble Supreme Court in the case of State of Haryana Vs. Chandra Mani and others [(1996) 3 SCC 132]. In view of the above, this revision petition deserves to succeed. We allow the revision petition, set aside the order passed by the State Commission and dismiss the complaint. However, there shall be no order as to cost.