New India Assurance Company Ltd vs Shariff Ahmed

This appeal has been filed by the appellant New India Assurance Co. Ltd. against the order dated 26.03.2014 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, (in short 'the State Commission') passed in Complainant No.181/1993.

Brief facts of the case are that on 26.03.1990, bus bearing Registration No.UHD 363 was got insured with the appellant vide insurance policy bearing number 3132110209936. This policy was effective for the period 26-03-1990 to 30-03-1991. On 10.07.1990, bus was stolen. On 20.07.1990, FIR was lodged with the police. Intimation was given to the Insurance Company on 25.07.1990 by the financer i.e. Samrat Motor Finance (Pvt.) Ltd. On 22.03.1993, claim was repudiated by the appellant on the ground of delay in lodging F.I.R. as well as delayed intimation to the Insurance Company. Then, complaint was filed by the respondent against the appellant before the State Commission, which was decided vide order dated 26.03.2014 against the appellant. Being dissatisfied with the order of State Commission, the present appeal has been filed.

Heard the learned counsel for both the parties and perused the record. Learned counsel for the appellant stated that there is delay of 10 days in filing the FIR in respect of the theft of the vehicle and delay of 15 days in informing the Insurance Company. This is a clear violation of the terms and conditions of the policy as the theft was to be intimated to the police immediately as well as to the Insurance Company. As the police was not informed in time, the authenticity of theft is doubtful and the police and the Insurance Company could not get time to recover the vehicle and the possibility of involvement of the complainant may not be ruled out in the alleged theft. Though these points were taken in the written statement, however, the State Commission has not considered these aspects. The State Commission has not even given any reasoning for condoning these delays. Even if a court has to allow condonation of delay, the explanation given by the party has to be accepted. In the present case, first of all, no explanation has been given by the complainant for these delays and moreover, the State Commission has not considered the objection raised by the Insurance Company in respect of delay, which resulted in violation of the terms and conditions of the Insurance Policy.

The learned counsel for the appellant further submitted that the terms of the policy are to be strictly construed to determine the liability. In order to support his argument, the learned counsel for the appellant referred to the judgment of the Hon'ble Supreme Court in Oriental insurance Co. Ltd. Vs. Sony Cheriyan, AIR 1999 SC 325, wherein the following has been observed:

"The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer."

It was mentioned by the learned counsel for the appellant that there has been a delay of 71 days in filing the present appeal. He submitted that the time has been taken in arranging for an Advocate for preparation and filing of the appeal. The delay is not deliberate or due to any negligence or lack of bona fides on behalf of the appellant. The learned counsel prayed for condonation of such delay as no prejudice would be caused to the respondent if the appeal is decided on merits. To support his contention, he referred to the following decision of the Gujarat High Court:

The Municipal Corporation of.. Vs. Manish Enterprises Ltd., AIR 1993, Guj, 145. It has been held that:-

In my opinion, the Court has to bear in mind the principle of 'substantial justice' and if the expression 'sufficient cause' has to receive liberal construction, in the facts and circumstances of the case, sufficient cause can be said to have been made out by the applicant. For that purpose, in my opinion, it is altogether immaterial whether the advocate could have telephoned the officer concerned; whether the said officer could have immediately rushed to the advocate in the High Court; or whether the appeal could have been filed little earlier. The question is whether there is inaction, negligence or want of bona fides as observed by the Supreme Court. According to me, it cannot be said that any of the above elements is present in the instant case. 'Sufficient Cause' has been made out by the applicant Corporation in approaching this Court in filing the appeal and accordingly delay is required to be condoned.

In my judgment, the legal position cannot be disputed that the provisions of the law of limitation must be applied to all persons equally and uniformly. Government departments and local authorities cannot claim any privilege in that regard and they must be treated on par with private individuals. However, as observed by the Supreme Court, the realities of life also cannot altogether be ignored. Whereas a private individual takes a decision one way or the other almost instantaneously, a democratic government or a bureaucratic department hesitates and halts, discusses and debates, considers and consults, peeps through papers and files, speaks through notes and drafts, moves horizontally and vertically till at last it gravitates towards a conclusion, unmindful and oblivious of urgency and emergency.

Looking to the principles laid down by the Hon'ble Supreme Court arid applying them to the case on hand keeping in mind, the hard realities, I have no hesitation in holding that there is no inaction, want of bona fides or negligence on the part of the applicant Corporation in approaching this Court and delay of 38 days should be condoned in the larger interest of justice."

On the other hand, learned counsel for the respondent/complainant stated that the bus was stolen on 10.07.1990. However, the complainant was busy in searching the vehicle locally and then the FIR was lodged on 20.07.1990. After lodging the FIR, the Insurance Company was also informed on 25.07.1990. The police have finally filed an FR along with 'untraceable report'. The police has found the incident of theft as true.

The State Commission has recorded that the Investigator confirmed theft of the vehicle. The learned counsel further argued that even the IRDA has issued the guidelines to the Insurance Companies that the genuine claim should not be rejected only on the technical ground of delay.

The learned counsel for the respondent vehemently argued that the appeal has been filed with a delay of 71 days and no sufficient cause has been shown in the application for condonation of delay for condoning this delay. In fact, no specific reason has been mentioned in the application for condonation of delay and therefore, delay cannot be condoned on the basis of this application for condonation of delay.

I have given a thoughtful consideration to the arguments advanced by learned counsel for the parties and have examined the material on record. It is seen that the present appeal has been filed with a delay of 71 days as reported by the Registry. An application for condonation of delay has been filed praying for condonation of delay of 71 days. The original application for condonation of delay was filed on 27.06.2014, however, the learned counsel for the appellant was granted permission to file better application on 27.07.2014. The delay has been caused in the correspondence between its different offices and getting the final permission for filing the appeal. The Hon'ble Supreme Court in the matter of Esha Bhattacharjee vs. Managing Committee of RaghunathpurNafar Academy and Others., (2013) 12 SCC 649, has laid down:-

"From the aforesaid authorities (case laws referred) the principles that can broadly be culled out are:

21.1. (i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

21.2. (ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.

21.3. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

21.4. (iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

21.5 (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

21.6. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

21.7. (vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

21.8 (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

21.9 (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

21.10 (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

21.12. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are:

22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

22.2. (b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

22.3. (c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

22.4. (d) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters."

The Hon'ble Supreme Court in another case N. Balakrishnan Vs. M.Krishnamurthy, (1998) Supp. 1 SCR 403, has laid down the following:-

"11. Rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis Mum (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.

A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" Under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi Jain V. KuntalKumari, MANU/SC/0335/1968: [AIR 1969 SCR1006 and State of West Bengal Vs. The Administrator, Howrah Municipality, MANU/SC/0534/1971: [1972]2SCR874a.

It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Court should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."

Relying on the above authoritative judgments of the Hon'ble Supreme Court as well as on the decision of Hon'ble High Court in The Municipal Corporation of.. Vs. Manish Enterprises Ltd., (supra), in the facts and circumstances of the case, I deem it appropriate to condone the delay of 71 days in filing the present appeal at a cost of Rs.1,00,000/- (rupees one lakh only) to be paid to the complainant by the opposite party/Insurance Company.

Now coming to the merits, it is clear that the FIR has been lodged after a delay of 10 days of the theft and the intimation was given to the Insurance Company after 15 days from the date of theft. As the FIR has been filed late and the police and the Insurance Company could not get any time to trace and recover the vehicle, the possibility of involvement of the complainant in the theft as alleged by the learned counsel for the Insurance Company cannot be ruled out. No proper explanation has been given by the complainant for the delay in lodging FIR or delay in intimation to the Insurance Company. Under these circumstances, relying on the judgment of Oriental insurance Co. Ltd. Vs. Sony Cheriyan (supra) wherein the Hon'ble Supreme Court has observed that insurance contract is to be construed in the manner it is written and the same is not to be interpreted by the courts differently, I do not find any ground for condoning the delay in filing the FIR and in giving information to the Insurance Company. Clearly, the State Commission has not correctly appreciated the law on the subject and has grossly erred in allowing the complaint of the complainant. Accordingly, order dated 26.03.2014 of the State Commission cannot be sustained in the eyes of law and same deserves to be set aside.

Based on the above discussion, the appeal filed by the appellant being No.395 of 2014 is allowed and the order dated 26.03.2014 passed by the State Commission is set aside. However, appellant/opposite party, Insurance Company is directed to pay Rs.1,00,000/- (rupees one lakh only) to the complainant as cost for condoning the delay in filing the present appeal. This cost of Rs.1,00,000/- (rupees one lakh only) be paid by the Insurance Company within a period of 45 days to the complainant/respondent, failing which an interest @8% shall be payable by the Insurance Company on this amount beyond the date of this order till actual realization. No order as to cost for this first appeal.