Oriental Insurance Co. vs J and K State Consumer Protection Commission

Y.P. Nargotra, J.—The Complainant-respondent No. 2 insured his house situate at Banna Mohalla Srinagar with the petitioner-company

vide policy No. 23418/11/91/00426 dated 7.8.1990 for a period of one year i.e. till 6.8.1991 for covering fire risk which included damage on

account of terrorists activities. On the intervening night of 8th/9th October 1990 the housing neighboring the house of the complainant were gutted

in fire due to militant activity, however, the house of the complainant was saved but on the same day locks of his house were broken open and his

property lying in the house was looted. Claiming that he had suffered a loss of more than one lac he lodged a claim with the petitioner-company.

The petitioner-company repudiated the claim of the petitioner on 6.11.1990 on the ground that the insurance policy of the petitioner did not cover

the damage to his house articles caused by burglary. The petitioner filed a complaint against the petitioner herein before the Divisional Forum

constituted under J&K Consumers Protection Act on 25.6.1998. The petitioner took up the stand before the said Forum that the complaint of the

petitioner was time barred and therefore was liable to be dismissed.

That when the claimant had lodged the claim with the petitioner-company and the same was repudiated on 6.11.1990, there was no provision

under the J&K Consumers Protection Act for regulating the limitation for filing the complaint u/s 10 of the Act. It is only by Amendment Act No.

XIX of 1997 that a provision in this regard came to be enacted u/s 18A, prescribing limitation of two years. The Divisional Forum being of the

view that in absence of a specific provision in the Act question of limitation was governed by Article 57 of the Limitation Act under which a suit on

the policy of insurance could be instituted within three years from the time when claim on account of death or loss was given to or received by the

insurer, and repudiated by him held that the complaint of the respondent was time barred, and dismissed the same by its order dated 1.12.1999.

Against the order of the Divisional Forum the petitioner filed an appeal before the State Consumers Commission Jammu. In the view of Learned

State Commission a complaint filed after 12 months from the date of disclaimer in terms of Clause 3 of conditions of the policy would be time

barred but dismissal of the complaint was not justified because after the first repudiation of the claim on 6.11.1990 the complainant had made a

representation on which his claim was again repudiated on 19.11.1992, the complainant however, again represented and his third representation

was rejected on 7.1.1998, as such the complaint being filed on 12.5.1998 was within time for having been filed within 12 months from the date of

last repudiation. Learned Commission therefore set aside the order of the Divisional Forum. Aggrieved by the order of the State Commission the

petitioner, insurance company, has filed this writ petition, seeking setting aside of the order of the learned State Commission.

I have heard the learned Counsel for the parties. The contention of Mr. Kapahi learned Counsel for the petitioner is that limitation as per policy

for filing the petition was 12 months from the date of disclaimer. The claim of the respondent was first time repudiated on 6.11.1990 therefore the

complaint of the respondent was clearly time barred. According to him limitation period would not have revived by subsequent rejection of the

representations of the complainant. According to him the State Commission has committed serious error of law by holding that limitation would

have revived after every repudiation of the claim made through, subsequent representations. On the other hand the contention of Mr. Koul, learned

Counsel for the respondent-claimant, is that once the petitioners on fresh representations of the complainant respondent reconsidered his claim and

repudiated it on such repudiation fresh cause of action arises in favour of the complainant and the complainant could file the claim within the period

prescribed from the last repudiation. According to him the complaint was within time and learned State Commission was legally correct in holding

that the complaint was within time.

Undisputedly under Clause (3) of the policy the limitation prescribed is 12 months. Clause 3 reads as under:

In no case whatsoever shall the company be liable for any loss or damage after expiry of 12 months from the happening of the loss or damage

unless the claim is subject of pending action or an arbitration, it being expressly agreed and declared that if the company shall disclaim liability for

any claim hereunder and such claim shall not within 12 calendar months from the date of the 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.

As already said Article 57 of the J&K Limitation Act prescribes limitation of three years for a suit on such a claim. The question whether period

of limitation prescribed by Limitation Act could be curtailed by incorporating such a clause in the insurance policy is not relevant for the purpose of

this case. Here the question is when limitation of 12 months or three years, whichever governs the limitation, would start to run. If it is held that it

would have started to run from the date of first disclaimer then the complaint of the complainant for having been filed almost after eight years would

be clearly time barred as admittedly first disclaimer was made on 6.11.1990. The limitation started to run from first repudiation against the

complainant from 6.11.90 undisputedly. Once the limitation starts to run it does not suspend. It can only extend in a case where before expiry of

period prescribed for a suit or application an acknowledgement of liability in respect of such property or right is made in writing, signed by the

party against whom such property or right is claimed or by some person through whom he derives the title or liability. In such a case u/s 19 of the

Limitation Act a fresh period of limitation can be computed from the date of acknowledgement. In the present case limitation after having started to

run from 6.11.1990 would have expired on 5.11.1993. If taken to be three years in terms of Article 57 of the Limitation Act, and it would have

expired on 5.11.1991, taking the same to be 12 months from the date of disclaimer in terms of Clause 3 of the insurance policy. Admittedly in the

present case the complainant did not file the complaint within any of such periods, so his subsequent representations for lodging the claims and

repudiations thereof could not give him a fresh cause of action for having been filed and repudiated after the expiry of the limitation computed from

6.11.1999.

The contention of Mr. Koul that on the assurance being extended by the petitioner-company that case of the complainant would be

reconsidered he had filed the representations and such representations had been considered and his claim however was repudiated, in such

circumstances, according to him, fresh cause of action would have become available to the complainant on every repudiation. I am not in

agreement with Mr. Kaul. Once limitation period expires after having started to run, it does not get revived by subsequent repudiations of the same

claim merely because the complainant represented after the expiry of period of limitation and his claim was repudiated again. In Kerala Agro

Machinery Corporation Ltd. Vs. Bijoy Kumar Roy and Others, , it was held by their lordships as under:

There is no dispute that the claim petition was barred by limitation. The National Commission has only observed that the delay was due to the

assurance given by the dealer to get the defects rectified but surprisingly no letter has been particularly indicated in the order much less within

limitation by which liability may have been acknowledged by the appellant. The Commission further observed that at this stage there could not be

any question of interference in the order of the State Commission on the point of limitation. There seems to be no justification for negating the plea f

limitation with such cursory and passing observations. The question of stage of proceeding has no relevance so far question of limitation is

concerned. The claim has been filed beyond the period of limitation say more than four years after defects were pointed out.

After holding so their lordships held that the claim of respondent No. 1 was not entertainable by the District Consumer Forum being barred by

limitation.

Learned State Commission seems to have been swayed to hold that fresh limitation had become available to the complainant after last

repudiation on fresh representation of the complainant on the basis of the judgment of a Division Bench of this Court rendered in National

Insurance Co. v. Smt. Roopa Rani Koul VIMA 9/99 in which it stood observed as follows:

The next contention with respect to repudiation and delay in lodging any complaint is untenable. After communicating the repudiation, complainant

rebutted against the same. The matter was reconsidered again and repudiated. If counted from this stage, complaint is within time. The contention

is also rejected.

In my view the reliance placed by the State Commission on the said authority is clearly misplaced as in the judgment the ratio decendi is not that

on every fresh repudiation the fresh period of limitation would start to run.

For the aforesaid reasons I am of the view that the order of the learned State Commission dated 22.1.2002 is not sustainable in law, same is

therefore, quashed and the writ petition is allowed. The order of the learned Divisional Forum is upheld. Resultantly the complaint of the

respondent-complainant shall stand dismissed as barred by limitation. Connected CMPs shall also stand disposed of.