SUNFLAG IRON & STEEL COMPANY vs NEW INDIA ASSURANCE CO. LTD. & 3 ORS.

This appeal has been filed by the appellant against the order dated 29.9.2015 passed by the State Consumer Disputes Redressal Commission, Maharashtra (in short, ''the State Commission'') in Complt. No.CC/03/2007 ? Sunflag Iron & Steel Co. Ltd. Vs. The New India Assurance Co. Ltd. & Ors. by which, complaint was dismissed as barred by limitation.

Brief facts of the case are that Complainant/appellant is registered company and it is engaged in manufacturing of iron and steel products and other such allied products. It obtained insurance policy from the OP No.1/Respondent No. 1 insurance company and thereby insured its machinery for sum assured of Rs.31,70,55000/- by paying premium of Rs.43,13,812/-. During the subsistence of the coverage, there was breakdown of EAF 40 MVA/NOVA make furnace transformer and in that breakdown, the said transformer was damaged. Information about the same was given by them to the Ops. The OP No.2/Respondent No. 2 appointed surveyor Mr. Shankar Dhawan. Further correspondence was made by the complainant with the OP No.2 as specified, in detail, in the complaint in respect of its claim. The surveyor also paid visit and witnessed the assembly of LV coil, HV coil and regulatory coil of the transformer. Necessary documents were also furnished by the complainant to the Ops in support of the claim. The complainant submitted claim for Rs.104009120/- along with relevant documents to OPs. Further information sought for by the surveyor was also furnished by the complainant to him. The surveyor submitted final survey report assessing the loss at Rs.36,72,136/-. Thereafter, the complainant sought clarification regarding the basis of depreciation of 60% charged by the surveyor while assessing the loss. The OP No.2 sent reply about that clarification on 8/3/2004. The complainant sent letter dated 15/3/2004 to the Ops inviting their attention to the notification issued by Tariff Advisory Committee (TAC) thereby applicability of depreciation adjustment for rewinding machine was withdrawn from 1/9/1998. The complainant requested the OP to add the deducted amount of Rs.6104400/- towards depreciation and revive the claim to that extent. The complainant, then again, vide letter dated 31/3/2004 requested the OP No.2 to revise claim and make payment of Rs.88,77,538/-. Thereafter, the surveyor reassessed the liability and completely changed the basis of assessment from repair basis to total loss basis and revised the claim by assessing net loss of Rs.3786683.79 though the said transformer, after repairing is working normally. The complainant, vide letter dated 28/6/2004 requested the Ops to settle the dispute at an earliest. However, vide letter dated 12/1/2005, Ops informed the complainant regarding approval of claim of Rs.3796679/- only. They also enclosed discharge voucher and requested the complainant to return the same duly signed to issue the cheque. The complainant signed it under protest and sent the same alongwith its letter dated 8/2/2005 to the Ops. The complainant thereafter received cheque for Rs.37,17,045/- dated 17/2/2005. Thereafter, the complainant, vide letter dated 22/7/2005 requested the Ops to reconsider the matter and to re-examine the matter after taking an independent opinion. Lastly, the complainant, vide letter dated 20/9/2005 called upon Ops to settle the claim or else refer the matter to Arbitrator. The Ops wrote letter stating that they have referred the matter to OP No.3/Respondent No. 3 and would revert back after receiving information from them. But, thereafter, no response was received from Ops. Alleging deficiency on the part of OPs, complainant filed complaint before State Commission.

OP resisted complaint, admitted issuance of policy and payment made to the complainant, but submitted that complaint is not maintainable before this Commission as voluminous evidence is required to be adduced. Moreover, the rate of depreciation calculated by Ops on the basis of contract of the insurance entered into between the parties in the year 2004 and hence the complainant cannot raise the plea about withdrawal of depreciation value. The total cost of replacing coils of the generator was close to the 65% of the original cost of the Generator and if the depreciation value is deducted, then the total cost of replacing the coils would come to more than the cost of the generator. The complainant had agreed to depreciation rate irrespective of the notification of the TAC and the depreciation was nowhere made subject to guidelines of TAC in the contract of insurance entered into between the OP and the complainant. The complainant has not established as to how the claim would come to Rs.88,77,538/-. The complainant made the claim excluding the depreciation of the machine. It is denied that the complainant accepted cheque for Rs.37,17,045/- under protest. The claim of the complainant is based on assumption and on ifs and buts and the claim under loss and profit cannot be made on probabilities and it has to be real. Denying any deficiency on their part, prayed for dismissal of complaint. Learned State Commission after hearing both the parties, dismissed complaint as barred by limitation against which, this appeal has been filed along with application for condonation of delay.

Heard learned Counsel for the parties finally at admission stage and perused record.

As far delay in filing appeal is concerned, appellant has filed application for condonation of delay of 3 days whereas as per office report there is delay of 37 days. Appellant has mentioned in the application that he received free copies of the order on 9.12.2015 and he never received free copy before it whereas office has calculated delay on the basis of receiving free copy on 5.11.2015, which is apparently not correct. As there is delay of only 3 days in filing appeal, delay stands condoned for the reasons mentioned in the application.

Learned Counsel for the appellant submitted that inspite of proving through letters that complaint was within limitation, learned State Commission has committed error in dismissing complaint as barred by limitation; hence, appeal be allowed and impugned order be set aside and matter may be remanded back to learned State Commission to decide complaint on merits. On the other hand, learned Counsel for the respondents submitted that order passed by learned State Commission is in accordance with law; hence, appeal be dismissed.

Learned Counsel for the appellant has drawn my attention towards letter dated 8.2.2005 by which, discharge voucher for Rs. 37,83,679/- towards settlement of the claim was sent by appellant to respondents. In this letter OP was requested to reconsider the case for review pertaining to depreciation charges. This letter does not reflect that aforesaid amount was received under protest, but it was simply mentioned that depreciation charges may be reconsidered. After 7 months by letter dated 20.9.2005, appellant wrote to the respondents that Rs. 37,83,679/- was received under protest and appellant is not agreeable to settlement and matter may be referred to the Arbitrator. Thus, it becomes clear that after 7 months, appellant has inserted word "under protest" in the letter and requested respondent to refer the matter to the Arbitrator and respondent vide letter dated 20.10.2005 apprised to appellant that matter has been referred to Regional Office for information and necessary action and as soon as advice is received, it will be intimated. When complainant requested OP to refer matter to Arbitrator, there was no occasion to file complaint before State Commission after 1 ? year.

Once appellant has accepted payment through discharge voucher dated 8.2.2005, whether that was with or without protest, he was required to file complaint within a period of 2 years whereas this complaint has been filed on 10.4.2007 and limitation is not extended by future correspondence dated 20.9.2005 and reply dated 20.10.2005. Learned State Commission after discussing many judgements and after elaborate discussion rightly observed in para 15 to 17 as under: "15. However, it is pertinent to note that the said letter dated 20/10/2005 does not pertain to the fact that the Ops agreed to reconsider the claim of the complainant. Their said letter is relating to taking further advise from their Regional Office about appointment of the Arbitrator as requested by the complainant vide letter dated 20/9/2005. The said letter dated 20/10/2005, therefore, cannot be said to be a promise on the part of Ops to take up the matter afresh for consideration. It cannot be said from the said letter that after receiving the said letter of the complainant, the head office of the Ops has agreed to reconsider the claim afresh. Hence the aforesaid decision of the Hon''ble Supreme Court relied upon by the learned advocate of the complainant is not applicable to the present case in which after repudiation of the claim in which the insurance company had created a hope for fresh consideration of the claim of the complainant which was earlier repudiated by it. Thus, the facts and circumstances of the present case are totally different from those of the aforesaid case relied upon by the learned advocate of the complainant. 16. On the contrary, the aforesaid decisions relied upon by the learned advocate of the Ops are applicable to the present case. In the case of New India Assurance Co.Ltd. Vs. Gauru Padma III (2011) CPJ 431 (NC) relied upon by the learned advocate of the Ops it is clearly observed by Hon''ble National Commission that the insurer neither reopened the case nor acknowledged the complainant''s right to receive compensation vide letter dated 15/3/2002 and, therefore, the complaint is barred by limitation. Moreover, in the another case of Pornima Vs. Seven Hills , III (2011) CPJ 431 (NC), the Hon''ble National Commission has held that the period of limitation does not enlarge as cause of action arose in the year 2002 and correspondence was done in the year 2007. 17. In the instant case, we have found that the OP, in their last letter dated 20/10/2005 had simply submitted that they have referred the matter to their Regional Office about the request of the complainant for appointing Arbitrator. In our view, the said letter does not extend the period of limitation in filing the complaint before this Commission as appointment of Arbitrator for settlement of dispute is a totally different aspect than reconsideration of the claim by the Ops themselves. Thus, as under that letter dated 20/10/2005, the Ops did not accept reconsideration of the claim, the said letter is of no use to the complainant to show extension of period of limitation or to show that cause of action arose lastly on 20/10/2005 for filing complaint before this Commission. Therefore, we hold that as the cause of action lastly arose on 8/2/2005, when the complainant signed discharge voucher and agreed to receive cheque for Rs.37,83,679 /- and as the complaint was not filed within two years from 8/2/2005 and as it is filed on 10/4/2007, it is barred by limitation. Thus, we hold that as the complaint is barred by limitation, the merits of the case cannot be considered. Thus, the complaint deserves to be dismissed as it is barred by limitation. Hence the order"

I do not find any illegality in the impugned order and learned State Commission has not committed any error in treating complaint as barred by limitation and appeal is liable to be dismissed.

Consequently, appeal filed by appellant is dismissed with no order as to costs.