New India Assurance Co. Ltd vs Delhi Power Co. Ltd

C. Viswanath, J

The present Appeal is filed by the Appellant under Section 19 of the Consumer Protection Act, 1986 against the order passed by the Delhi State Consumer Disputes Redressal Commission, hereinafter referred to as the "State Commission", in Complaint C-08/136 dated 18.03.2011.

In the Complaint case, predecessor of the Respondent/Complainant i.e. the Delhi Vidyut Board obtained a Money Insurance Policy No. 311601/48/01/00053 from the Appellant/Opposite Party covering the theft/loss of cash during transit, valid from 01.04.2001 to 31.03.2002. A theft/loss of Rs.27,00,000/- was reported on 27.02.2002, when the cash boxes/kit was being unloaded at State Bank of India, Chandni Chowk Branch by the officials of East Circle (DVB) and FIR No. 128 dated 27.02.2002 was lodged in P.S. Kotwali.

It was stated that by virtue of Delhi Electricity Reforms Act 2000, DVB was split into six companies, including the three distribution companies, a holding company (Delhi Power Company Limited). With the privatization of three power distribution companies of Delhi Vidyut Board, 51% stake in two of DVB's arms were given to BSES and the third to TATA Power, underthe name NDPL and 49% remained with the Respondent. From 01.07.2002 onwards, M/s BSES succeeded to the East Circle Office of DVB under whose jurisdiction the loss of Rs.27,00,000/- occurred.

The theft was informed to the Appellant/Insurance Company by Delhi Vidyut Board on 27.02.2002 which was received by the Appellant on 28.02.2002.A&R Security Services, who were appointed investigators by the Appellant, submitted their report. The Appellant informed M/s BSES, vide registered mail, that they closed the claim file as NO CLAIM because as per the report of M/s AR Securities that there was non-compliance of formalities.

The Respondent stated that the requisite information was furnished by the Appellant and issued further letters dated 01.09.2006, 03.11.2006, 05.12.2006 and 20.04.2007 seeking reopening of the file and settlement of claim as public money was involved. However, there was no response from the Appellant. It was submitted that as the dispute was between the two Public Sector Undertakings, the Respondent sought settlement of dispute through the designated body/committee in view of the mandate of Hon'ble Supreme Court in SLP No. 21047/04, but the Cabinet Secretariat, vide letter dated 02.11.2017, expressed its inabilityon the ground that the mandate did not extend to consider disputes between State Government and Central Governmententities and has been further challenged by the Central Government in a Revision Petition before the Apex Court. Thus, finding no other alternative, a Consumer Complaint was filed by the Respondent, alleging unfair trade practice and deficiency in service on the part of the Appellant.

The Complaint was contested by the Appellant on the ground that the theft had occurred on account of gross negligence of the security guard in leaving the cash van unattended and not locking the door of the van carrying cash, which was covered by exclusions no. 6 and 11 of the terms and conditions of the Policy. Even after the theft, no noise was made and no efforts were made to chase the culprit. It was further contended that there was also violation of condition no.3 of the Policy, as no reasonable care was taken by the Respondent when the said theft occurred. The Respondent was informed, vide letter dated 30.05.2005, of closing the claim file as no claim, on account of non-compliance of formalities and breach of terms and conditions of the Policy, based on the investigation report dated 30.01.2004 of the Investigators M/s A&R Security services. The case was filed almost four years after closing the claim file. The said Complaint, was therefore, time barred.

The State Commission, vide order dated 18.03.2011 allowed the Complaint on the ground that there was no dispute regarding the facts.The Delhi Vidyut Board, predecessor in the interest of the Respondent company, insured for theft/loss of cash during transit for the period 01.04.2001 to 31.03.2002 vide Insurance Policy No. 311601/48/01/00053.A theft of Rs.27,00,000/- took place on 27.02.2002 and FIR in this connection was lodged. However, in the absence of any agreement between the parties regarding payment of interest or any notice having been served for the purpose, no interest was awarded till the date of passing of the order. Thus, the Appellant was directed to pay to the Respondent Rs.27,00,000/- with cost of Rs.10,000/- within 60 days of the receipt of the order, failing which the awarded amount would thereafter carry interest @9% per annum realization.

Aggrieved by the order passed by the State Commission, the Appellant filed the present Appeal before this Commission.

The Appellant placed reliance on various case laws. In V.N. Shrikhande (Dr.) Vs. Anita Sena Fernandes (2011) 1 SCC 53, the Hon'ble Supreme Court dealing with Consumer Protection Act, 1986 held that "Section 24-A(1) contains a negative legislative mandate against admission of complaint which has been filed after 2 years from the date of accrual of the cause of action. In other words, the Consumer Forums do not have the jurisdiction to entertain a complaint if the same is not filed within 2 years from the date on which the cause of action has arisen. This power is required to be exercised after giving opportunity of hearing to the Complainant, who can seek condonation of delay under Section 24-A(2)by showing that there was sufficient cause for not filing the complaint within the period prescribed under Section24-A(1). If the complaint is per se barred by time and the complainant does not seek condonation of delay under Section 24-A(2), the Consumer Forums will have no option but to dismiss the same."

In State Bank of India Vs. B.S. Agriculture Industries (I), (2009) 5 SCC 121, the Hon'ble Supreme Court while interpreting Section 24-A of the Consumer Protection Act, 1986 held: "it can be seen from the aforesaid provision that it is peremptory in nature and requires the consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, 'shall not admit a complaint' occurring in Section 24-A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within the limitation period prescribed thereunder. As a matter of law, the consumer forum must deal with the complaint on merits only if the complaint has been filed within two years from the date of accrual of cause of action and if beyond the said period, then sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24-A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside."

In Kandimalla Raghavaiah and Company Vs. National Insurance Company and Another (2009) 7 SCC 768 the Hon'ble Supreme Court held: "By no stretch of imagination, it can be said that the Insurance Company's reply dated 21.03.1996 to the legal notice dated 04.01.1996, declining to issue the forms for preferring a claimafter a lapse of more than four years of the date of fire, resulted in extending the period of limitation for the purpose of Section 24-A of the Act. We have no hesitation in holding that the complaint filed on 24.10.1997 and that too without an application for condonation of delay was manifestly barred by limitation and the Commission was justified in dismissing it on the short ground".

The Respondent placed on record various case laws in support of arguments.In New India Assurance Co. Ltd. Vs. B.N. Sainani, Hon'ble Supreme Court held that "it would appear that the complaint was filed on the basis that claim on the policy was denied wholly by the insurer which was by letter dated July 25, 1989 of the insurer. The cause of action, therefore, arose on the date of denial or repudiation of the policy by the insurer. The question does not arise as to when the claim on the policy should have been lodged. It appears the claim on the policy should be lodged within a reasonable time. As to what is reasonable time would depend on the facts and circumstances of the case. Since on the basis of the record we are handicapped to know as to when the claim was lodged, we would, therefore, treat the date, July 25, 1989 when the time for the purpose of limitation had begun to run. As noted above this is the date when the insurer repudiated the claim on the policy. From this angle, therefore, the complaint filed by the assignee on July 23, 1992 is within the period of limitation. It is, however, a different matter when the insurer raises the defence that it had earlier informed the insured that the policy had ceased to be operative in terms of para 9 of the policy. As far as the insured is concerned he can file the complaint within three years of the date of occurrence causing loss or form the date when the claim on the policy is denied by the insurer. For him time for lodging the complaint would not start running while the goods are still in transit as he can claim the policy to be valid till he lodges the complaint."

In Murari Woolen Mills Vs. D.M., United India Insurance Co., this Commission held that "the plea in regard to complaint being barred by time is stated to be rejected. Cause of action to file complaints within the meaning of Section 24-A of Consumer Protection Act , 1986(for short the 'Act') had arisen on 13.05.1997 when the claim was repudiated by Insurance Company and not on 07.06.1982 when the fire broke out and thus, the complaints filed on 30.09.1997 were within limitation."

In Shyam Kumar Vs. Ramesh Bhai Harman Bhai, this Commission held that "cause of action would arise only when complainant actually came to know about failure of operation."

In Transport Corporation of India Vs. Veljan Hydrair Ltd., the Supreme Court held that "the term "cause of action" is of wide import and has different meanings in different contexts, that is when used in the context of territorial jurisdiction or limitation or the accrual of right to sue. It refers to all the circumstances or bundle of facts which if proved or admitted entitles the plaintiff (complainant) to the relief prayed for. In the context of limitation with reference to a contract for carriage of goods, the date of cause of action may refer to the date on which the goods are entrusted, date of issue of consignment note, the date stipulated for delivery, the date of delivery, the date of refusal to deliver, the date of intimation of carrier's request to wait for delivery as the goods are being traced, the date of intimation of loss of goods, or the date of acknowledgment of liability."

IN EICM Vs. South Indian Corporation, the Supreme Court held that "Sub-section (2) of Section 24-A, quoted above, clearly mentions that a complaint can be entertained by the District forum, the State Commission or the National Commission, as the case may be, even after the prescribed period of two years if the complainant satisfies that he had sufficient cause for not filing the complaint within such period.

Heard the Learned Counsel for the Appellant as well as the Respondent and carefully perused the record.

There is no dispute regarding the facts that vide Insurance Policy No. 311601/48/01/00053, Delhi Vidyut Board was insured for theft/loss of cash during transit for the period01-04-2001 to 31-03-2002 and that a theft of Rs.27,00,000/- took place on27-02-2002 when cash van of the insured was parked in front of State Bank of India Branch to unload the cash, while the security guard was standing nearby the door of the cash van and FIR in this connection had been lodged.The OP has, however, declined to honour its commitment on the ground that as per the investigation report of M/S A & R Security Services, due to breach of terms and conditions and non-compliance of requirements as desired by the Investigator, the claim file has been closed.

The Appellant has challenged the impugned order mainly on the ground that the cause of action arose on 27.02.2002 when the burglary/theft took place whereas the complaint was filed on 01.07.2008 hence, it is time-barred. It was submitted that the limitation period is always reckoned from the date the cause of action arose. The Respondent contends that the letter of the insurance company dated 04.08.2006 was received only on 10.08.2006, from which the claimant reckons the limitation.The Claimant states that other than the communication dated 04.08.2006, no other letter/communication closing the claim had been received. The Appellant could not provide any documentary evidence that the Respondent had received information about the repudiation letter before 04.08.2006. Sum and substance of all the citations quoted by the Parties is that Consumer Fora do not have jurisdiction to entertain complaints, if the same are not filed within 2 years from the date of cause of action, unless sufficient cause is shown.It is well-settled law that the cause of action arises only when the party actually comes to know about the repudiation of the Policy by the Insured.The conclusion of the State Commission in so far as the date from which the cause of action arose cannot be faulted.

By virtue of Delhi Electricity Reforms Act, 2000, DVB was split into six companies, including the three distribution companies, a holding company (Delhi Power Company Limited), a generation and transmission company (Delhi Transco Limited).With the privatization of three power distribution companies of Delhi Vidhyut Board, the 51% stake in two of DVB's arms were given to BSES and the third to TATA Power under the name NDPL, whereas the remaining 49% remains with Delhi Power Company, i.e., the Complainant.Since the above said claim was a receivable item from the sale of power to the consumer prior to the unbundling of DVB, the claim was held to the account of DPCL.Accordingly, vide letter dated 29.12.2004, DPCL took over and started pursuing the matter with the Insurance Company.

Preliminary inquiry was carried out by the Respondent, but there was no case against the officials involved in the incident.The gunman was present very close to the door of the van.He was also subjected to lie detector test, but no malafide was observed.FIR was lodged with the Police.The case was, however, categorized as "untraced" since 6 months of investigation did not yield any result.A final report u/s 173 of Cr.P.C. was accordingly filed by Delhi Police in the court on 27.09.2002.

The claim has been denied due to non-compliance of formalities/breach of terms and conditions of the Policy.The State Commission has categorically recorded that "Exclusion clause no.3 is not attracted in the facts and circumstances; exclusion clause no.6 will also not apply as the cash was being carried in cash van no. DL-1L C 2483 and the gunman was present very close to the door of the van.There is no plea or evidence to the effect that required paper/document were not submitted. There is nothing on record to attract Clause No.11.Hence defence plea on merit fails".

Having heard the parties and carefully gone through the order of the State Commission and other record placed before us, in the facts and circumstances of the case, we see no violation/breach of the conditions of the Policy. There is no cause to interfere with the well-reasoned order passed by the State Commission. The Appeal stands dismissed. There shall be no order as to costs.