New India Assurance Co. Ltd. vs SOUTH EASTERN ROADWAYS

BRIEF facts of the case are that M/s. Dharam Pal Satya Pal, hereinafter referred to as the insured, obtained a Marine Special Declaration Policy from the New India Assurance Co. Ltd. for the period 5.4.1988 to 4.4.1989. The insured booked two consignments from Sahibabad to Patna vide (i) G.R. dated 2.9.1998 for Rs. 2,08,442.60, and (ii) G.R. dated 1.9.1988 for Rs. 2,46,793.79. The goods covered by the two consignments were loaded in truck No. UTH 1116 and it left U.P. Border for Patna on 6.9.1988. The truck did not report at Patna and the goods were not delivered to the consignee. A claim for Rs. 4,55,263.39 was made against the Insurance Company on 24.9.1988. After investigation of the case, the Insurance Company paid the aforesaid amount on 10.4.1989. Subrogation letter was executed in favour of the Insurance Company. The Insurance Company, in turn, took-up the matter with the aforesaid Transport Company on 16.3.1990, the Transport Company paid a sum of Rs. 1,54,781/- by cheque to the Insurance Company leaving a balance of Rs. 3,04,055/-. The Insurance Company alone filed the present complaint on 29.8.1991 against South Eastern Roadways for the payment of the balance amount together with interest and costs etc.

IN the written statement filed by the Transport Company, it was stated that following the claim put forward by the INsurance Company there were negotiations. The Transport Company was willing to pay 20% of the claimed amount and the INsurance Company was willing to accept 35% of the amount. Ultimately a sum of Rs. 1,54,781/- being 33% of the amount was accepted by the INsurance Company by cheque and the necessary discharge voucher was signed by the authorised representative of the complainant (INsurance Company) in full and final settlement of the claim and the INsurance Company was, therefore, estopped from claiming any further amount. Objection was also taken regarding the territorial jurisdiction of the Commission as the goods were booked at Sahibabad in the State of Uttar Pradesh and were to be delivered at Patna and the Head Office of the respondent Company was at Bangalore and no part of cause of action had arisen at Delhi. It was also pleaded that the parties had agreed to the jurisdiction of the Courts at Bangalore and the said agreement was binding between the parties. Mr. Vijay Khosia filed affidavit on behalf of the complainant and Mr. Mittal filed affidavit on behalf of the opposite party. Both the parties filed interrogatories which were answered by Mr. Vijay Khosia and Mr. Mittal respectively.

Application dated 22.1.1998 was made by the complainant seeking to implead M/s. Dharam Pal Satya Pal, consignor and M/s. D. Lall & Sons (Agencies), Patna consignee as co-complainants alongwith the Insurance Company and for amendment of the title of the complaint accordingly. The aforesaid application for amendment has been opposed mainly on the ground that the remedy of the consignor and consignee had become barred by limitation and allowing the amendment at this stage will deprive the opposite party of valuable right vested in them by lapse of time. We have heard Mr. J.K. Bhola, Advocate for the complainant and Mr. Anil Goyal, Advocate for the opposite party and have carefully gone through the records.

IT will be convenient to refer to the relevant decisions at this stage with regard to the question whether the Insurance Company is covered under the definition of ''consumer'' as defined in the Consumer Protection Act simply on the basis of law of subrogation in its favour. In The New India Insurance Co. Ltd. v. M/s. Green Transport Co. II (1991) CPJ 1, decided on 22.3.1991 this Commission took the view that the Insurance Company was subrogated to right of insured after settling and paying the latter''s claim and it could file complaint for loss caused to the insured goods due to negligence of the employees of the Transport Company. Apparently, following the above decision, the present complaint was filed by the Insurance Company alone on 29.8.1991. In appeal the aforesaid decision of the State Commission was reversed by the National Commission and the decision of the National Commission is reported as II (1992) CPJ 349 (NC), M/s. Green Transport Company v. New India Assurance Co. Ltd. The National Commission held that only the actual person who had hired the service for consideration or any other person availing of the benefit of such service with his approval can be regarded as consumer under the Act. IT was observed that the complainant before the State Commission, namely the New India Assurance Co. Ltd. was not the person who had hired the services nor it availed of the services as beneficiary, with the approval of M/s. Sethi Brothers. IT was further observed that the Insurance Company had merely insured the consignment which formed the subject-matter of contract of carriage. IT was, therefore, held that such being the position, the New India Assurance Co. Ltd. could not be regarded as covered within the definition of ''Consumer'' so as to entitle it to maintain the complaint before the Consumer Forum. The National Commission also observed that a Special Power of Attorney would not in any way improve the position of the Insurance Company so far as proceedings under the Consumer Protection Act were concerned. IT was further observed that it might be that the Insurance Company had a right to institute a suit against the transporter by virtue of subrogation, a deed of transfer or Special Power of Attorney. Those documents would not, however, clothe the Insurance Company with the legal status and character of a consumer so as to entitle it to invoke the special jurisdiction and maintaining a complaint before the Redressal Forum constituted under the Act. Learned Counsel for both the parties agreed that SLPs on this question are pending before the Supreme Court. In a later decision in Transport Corporation of India Ltd. v. Davangere Cotton Mills & Ors., II (1998) CPJ 16 (NC)=1986-94 Consumer 1373, the complaint had been filed by the consignor, the Insurance Company and the consignee. Objection regarding maintainability was raised by the opposite party on the ground that the complainants were not covered under the definition of ''Consumer''. The National Commission distinguished its earlier decision in Green Transport Company (supra), by pointing out that therein the Insurance Company alone had filed the complaint on the basis of the letter of subrogation in its favour and it was rightly held that they were not covered under the definition of ''Consumer''. On the contrary, in the Transport Corporation of India''s case (supra), the consignor and consignee, who had hired the services of the Transport Company for consideration were also co-complainants. The objection regarding maintainability raised by the Transport Company was, therefore, repelled and the revision petition dismissed. The decision in Green Transport Company (supra), was rendered by the National Commission on 20.5.1992 i.e. long after the institution of the present complaint.

THE contention of Mr. Bhola, learned Counsel for the complainant is that the complaint was filed by the Insurance Company in accordance with the law laid down by Delhi State Commission which held the field at the time of institution of the complaint. He pointed out that no objection regarding maintainability of the complaint on the ground that the Insurance Company was not covered under the definition of ''consumer'' was raised in the written statement. It was only when the case came- up for final arguments that the aforesaid objection was raised and without loss of time the complainant made an application of amendment of the complaint by impleading the consignor and consignee as co-complainants. Mr. Bhola also highlighted the fact that there was no dispute between the Insurance Company and the Transport Company on any of the basic facts namely the consignments of goods with the Transport Company, value thereof and the fact that the goods never reached their destination. With regard to the so-called acceptance of part payment as full and final payment, the stand of the Insurance Company was made clear without any loss of time by serving notice dated 10.8.1991 that the said payment had been received only in part payment and M/s. Commercial Syndicate through whom part payment was received, had no authority to settle the claim for Rs. 4,55,236/- by receiving a sum of Rs. 1,54,787/- in full and final settlement leaving a balance of Rs. 3,04,055/-. In other words, there was no equity in favour of the Transport Company as against public funds held by the nationalised Insurance Company. It was emphasised that the Commercial Syndicate was guilty of practising fraud on the Insurance Company by issuing the discharge voucher in full and final settlement and allegations with regard to fraud could be properly enquired into by the Civil Court. He, therefore, urged that in case this Commission took the view that amendment of the complaint is not to be allowed at this stage, the Insurance Company should be relegated to its remedy in the Civil Court on the basis of letter of subrogation and the period from the institution of the complaint till the date of decision should be excluded while computing the period of limitation as far as the Civil Court is concerned. The contention of Mr. Goyal, learned Counsel for the respondent, on the other hand, is that it is fairly settled law that vested rights accrued on account of lapse of time should not be taken away by allowing the amendment where the remedy had already become barred by limitation. Learned Counsel further argued that the Insurance Company cannot be considered to have persued its remedy bona fide and in good faith as necessary law in this behalf had been declared by the National Commission as far back as 20.5.1992 and reported in II (1992) CPJ 349 (NC). Mr. Goyal also emphasised the fact that the Insurance Company which was a party to the case in Green Transport Co. (supra), was the same namely New India Assurance Co. Ltd. (supra), and it could not be pleaded that the Insurance Company was not aware of the correct legal position.

BOTH the learned Counsel argued for and against the scope of authority, if any, given to the Commercial Syndicate and whether the discharge voucher signed by the Commercial Syndicate operated as a estoppel against the Insurance Company. Reference was made in this behalf to the answers to the interrogatories served by both the parties which are on record.

WE do not propose to express ourselves on the question as to the scope of authority of the Commercial Syndicate or for that matter the acceptance of part payment by the Insurance Company and whether the same operated as estoppel so as to bar the Insurance Company from filing the present complaint. This is for the reason that we propose to relegate the complainant to its remedy before the Civil Court on the basis of letter of subrogation executed in its favour and we are anxious that the case of neither party should be prejudiced by our observations one way or the other. After anxious consideration, we are of the view that the application for amendment seeking to implead the consignor and consignee as co-complainants at this stage will take away from the opposite party a valuable right which appears to have accrued in its favour by lapse of time. We, therefore, reject the application for amendment and for the reasons already discussed, relegate the complainant to its remedy before the Civil Court. In our view, the complainant had been bona fide prosecuting its remedy before the State Commission and the period from the institution of the complaint till the communication of this order to the parties deserves to be excluded while computing the period of limitation for approaching the Civil Court. The complaint is disposed of in these terms. A copy of the order be conveyed to the parties. Complaint disposed of.