SAIDPUR SAHAKARI KRAYA VIKRAYA SAMITI LTD. And COLD STORAGE vs DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO. LTD

THIS complaint under Section 21 of the Consumer Protection Act, 1985 seeks a compensation of Rs. 31,25,792/- besides interest and has arisen in these circumstances.

THE Complainant is running a cold storage at Saidpur for storing potatoes. THE Complainant had taken out the policies detailed in the complaint from the Opposite Party-United India Insurance Company Ltd. THE first policy was for Rs. 16,80,000 / - covering the risk of deterioration of stock, policy for the old chambers effective from 29.3.88 to 28.10.88. THE second policy was for Rs. 14,00,000/- covering the risk of deterioration of stocks for new chamber and additional chamber effective from 29.3.88 to 28.10.88. THE (bird policy was for Rs. 9,83,000/- called the Machinery Break Down Policy effective from 3lst March, 1988 to 30th March, 1989. THE fourth policy was for Rs. 22,63,000/- called the Fire Policy effective from 31.3.88 to 30.3.89. According to the Complainant it had paid the premium for all the policies and had been received by the Insurance Company, although the cheque of premium for the third policy was dishonoured at the initial stage, but with the consent of the Insurance Company the same was presented again and honoured on 10.6.88. According to the Complainant the stocks of potatoes started deteriorating on 1st August, 1988 and intimation to this effect was sent to the Insurance Company in the letter dated 1.8.88, followed by reminder dated 10.8.88. On 15.8.88, Shri Rakesh Aggarwal, a Chartered Engineer deputed by the Insurance Company inspected the stocks and cold storage and carried out further survey on 5.9.88. The notices and correspondence including telegrams exchanged with the Insurance Company and Surveyor are detailed in the complaint. Ultimately the Complainant submitted on 19.11.88 its claim for Rs. 14,20,484/- with the Insurance Company. The claim was repudiated by the Insurance Company in its letter dated 23rd March, 1990. The Complainant served a notice on 14.4.90 on the Insurance Company who replied the same in their letter dated 30.4.90 reiterating the rejection of the claim. The complaint has been filed on 13.9.93 before this Commission. It is also accompanied by an application for condonation of delay.

The Opposite Party have taken a preliminary objection that the complaint is barred by time and is liable to be rejected on this ground. It is pleaded that the Machinery Break Down Policy was cancelled vide endorsement as the premium cheque was dishonoured. A fresh policy was obtained by the Complainant w.e.f. 10.6.88. However, the liability under D.O.S. Policy could not be entertained as under its terms and conditions no claim could be entertained unless and until there is a Machinery Break Down Policy in existence since the inception of the D.O.S. Policy. As the inception of D.O.S. Policy was w.e.f. 29.3.88 and that of Machinery Break Down Policy was w.e.f. 10.6.88, no claim under D.O.S. Policy was maintainable. It is pleaded that the damage to the stock allegedly occurred due to Machinery Break Down during the period commencing April, 1988, when there was no Machinery Break Down Policy. Opposition has also been filed to the application for condonation of delay. 5. Under Article 44(b) of the Schedule to the Limitation Act, 1963, the period for the claim on a policy of insurance when the sum insured is payable after proof of the loss had been given or received by the Insurance Company is three years. The starting point of the limitation is the date of the occurrence causing the loss or where the claim on the policy is denied either partly or fully, the date of such denial. The consistent view taken by this Commission is that the principle of limitation apply to the complaint filed under the Consumer Protection Act, in the interest of justice, equity and fair play. If a cause of action cannot be agitated in a Civil Court, by reasons of its having become barred by limitation, it cannot be allowed to be made a ground for getting relief before the Consumer Forum. The claim was repudiated by the Insurance Company on 23.3.90 and thus a suit would be barred if filed beyond the period of three years.

SECTION 24A was inserted by the Amendment Act No. 50 of 1993 w.e.f. 18th June, 1993. It is a new SECTION and provides for the period of limitation of two years from the date on which the cause of action has arisen. The complaint filed on 13.9.93 cannot be admitted as the same was not filed within two years. Sub-section (2) of Section 24A, however, provides that notwithstanding anything contained in Sub-section (1), a complaint may be entertained after the period specified in Sub-section (1) if the Complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period. The Consumer Forums have now been vested with judicial discretion to admit a complaint filed after the expiry of a period of two years on sufficient cause being shown for the delay. In construing Sub-section (2) of Section 24A it is relevant to bear in mind that the expiration of the period of limitation gives rise to a right in favour of the Opposite Party. It will not be conducive to public policy and public good to admit stale claims brought up before Consumer Forums for adjudication after lapse of long periods of time thereby depriving the public of a sense of security and certainty that the matters settled by lapse of time will not be re-opened. It must also be borne in mind that the proof of a sufficient cause is a condition precedent to the exercise of discretion vested in the Consumer Forums. However, the words "sufficient cause" should receive a liberal construction so as to advance substantial justice only when no negligence nor inaction nor want of bona fides are imputable to the Complainant. It is thus the duty of the Consumer Forum to scrutinise the facts alleged in the affidavit in support of the application for condonation of delay and ascertain before exercising judicial discretion whether sufficient cause has been established or not.

IN the application for condonation of delay in this case it is stated that Shri Satish Pant Shrivastava, Advocate was instructed to file the complaint and for this purpose a duly signed petition was given to him and that he had assured that the petition has been filed before this Commission. It is then stated that only recently the Complainant came to know that the said Advocate had expired and he had not filed the petition. The affidavit of the Registered Clerk had been filed who deposes that the said Advocate expired on 2.7.91 and the file could not be traced till June 1993, though the file was delivered to the Complainant on 17.8.93. IN our view no sufficient cause has been established on the basis of facts alleged in the affidavit. If a duly signed petition was given to the said Advocate and he had filed the same, then it must have been given before 2nd of July, 1991. The Complainant received no notice of the hearing from this Commission at all and it was his duty to check up with his Counsel. The Complainant did not act as a prudent or reasonable man and was in deep slumber for two years. The Complainant was thus grossly negligent in pursuing his claim petition or enquiring about the developments in the case. The Complainant has not filed so-called duly signed petition given to the said Advocate prior to 2nd July, 1991. If such petition had in fact been drafted and prepared then it must have contained the signature of that Advocate on any affidavit in support thereof attested by an Oath Commissioner. IN the absence of that duly signed petition it cannot be said that the petition in fact was drafted in 1991 itself. No sufficient cause has been established to admit this complaint after a long delay. The complaint is dismissed as barred by time with no order as to costs. Complaint dismissed.