United India Insurance Company Limited vs Punjab State Civil Supplies Corporation

VIDE this order two appeals are being disposed of. Appeal No. 561 of 1997 has been filed by United India Insurance Company Limited, the opposite party, for setting aside order of District Forum, Sangrur dated April 2,1997 vide which a direction was given to the Insurance Company to pay Rs. 2,09,497/- alongwith interest @ 12% w.e.f. January 1, 1994 till realisation alongwith litigation expenses of Rs. 500/- to the complainant Punjab State Civil Supplies Corporation known as PUNSUP. Appeal No. 564 of 1997 has been filed by the complainant aforesaid for the enhancement of the amount of compensation. The main judgment is prepared in Appeal No. 561 of 1997.

SOME of the facts are not in dispute, hence they can be summarised from the pleadings of the parties. The complainant, PUNSUP, had taken an insurance policy from the United India Insurance Company Limited in the sum of Rs. 80 lacs on July 11,1992 for an year covering risk of damage to the articles of the complainant lying in different godowns against fire. The aforesaid policy expired on July 10, 1993, July 11, 1993 being Sunday was a public holiday, on July 12, 1993 the policy was got renewed. On that very day, another policy was also taken covering risk against floods. Incidently on that very day there were floods resulting in damaging stocks of the complainant lying in the godown in Village Khanauri, District Sangrur. The Insurance Company was informed about the loss. A Surveyor was appointed who submitted his report on January 16, 1994 assessing loss to the tune of Rs. 2,09,497/-. However, the Insurance Company on August 1, 1994 repudiated the claim, inter alia, on the ground that the cover note was issued on July 12, 1993 at about 3.00 p.m. whereas damage on account of floods were caused at about 11.15 a.m. Representations were made by the complainant, ultimately after issuing of notice, complaint before the District Forum was filed on November 20, 1995. The District Forum accepted the stand of the complainant that the risk was covered under the insurance policy. The floods came at about 11.15 a.m. on that date whereas cover note was issued a t about 9.45 a.m. On the basis of the Surveyor''s report, the directions as above were given by the District Forum. Mr. D.P. Gupta, Advocate for the Insurance Company has argued that infact the cover note was issued on July 12, 1993 at about 3.00 p.m. as per evidence produced by the opposite party. In order to defraud the Insurance Company, everything was got manipulated in the matter of issuing of the policy after the damage had already been caused. This contention in the facts of the present case cannot be accepted. The cover note (Annexure C-3) does not indicate the time of issuance of the policy. As per affidavit of Sher Singh, District Manager, PUNSUP, the policy was issued in the morning of July 12,1993. As per affidavit of Vinay Kumar, Accountant of PUNSUP, at about 9.45 a.m. on July 12, 1993 cheque for the premium of insurance was handed over to representative of Insurance Company when he visited their office. On behalf of the Insurance Company, affidavit of Sukhbir Singh, Additional Manager, was produced that the policy was issued on July 12,1993 at about 3.00 p.m. when complainant''s representative came to their office. The version of the opposite party cannot be accepted for the simple reason that time of issuing of cover note was not mentioned therein. The legal consequences there from follow that the policy would be effective w.e.f. previous mid-night. In this respect, reference may be made to the decision of the Supreme Court in the New India Assurance Company Limited v. Ram Dayal , 1990-2 PLR 144, holding that the insurance policy would be effective from the commencement of the date. On the same point is the decision of Supreme Court in Oriental Insurance Company Limited v. Sunita Rathi & Ors., II (1998) SLT 9=(1998) 1 Supreme Court Cases 365. That being the position, the damage to the stocks caused during the day of July 12, 1993 would stand covered under the policy.

Mr. D.P. Gupta, Advocate for the Insurance Company has further argued that as per terms and conditions of the policy, within 12 months from the date of the repudiation of the claim, the complainant was expected to file the complaint. Having not so done, the complainant has waived his right or claim under the policy. In support of this contention, reliance has been placed on the decision of the National Commission in M/s. Paras Textile v. The New India Assurance Company Limited, I (1993) CPJ 126 (NC). Clause 19 of the insurance policy provided for abandoning the rights under the policy by not filing a suit or taking any action within 12 months from the date of repudiation of the claim by the Insurance Company. It was held that such a contract was not void either under the Law of Limitation or Law of Contract. The National Commission decided the aforesaid case on March 15, 1993. It was thereafter that the Consumer Protection Act was amended specifically providing under Section 24(A), period of two years limitation for filing the complaint. That being the position, such a clause in the insurance policy would be controverting the provision of limitation as provided under the Consumer Protection Act and such a contract which takes away the statutory relief granted under the Consumer Protection Act would be void. It is pointed out that now Contract Act has been amended prohibiting the insertion of such a clause in the insurance policy. The Present complaint having been filed within two years from the alleged date of repudiation of the claim is well within time and the relief due cannot be denied on the aforesaid ground.

MR. D.P. Gupta, learned Counsel for the Insurance Company further argued that disputed questions as referred to above regarding the time of issuance of the policy and effective time of its enforcement can well be decided by the Civil Court and the complainant should be relegated to his remedy to the Civil Court. This contention has no merit in view of the decisions arrived at on the disputed questions referred to above. Learned Counsel for the complainant argued that apart from the loss as assessed, the complainant had also suffered loss with respect to 90 bags of sugar which were stored a short time before the floods came and the Surveyor had not taken into consideration this aspect of the matter. This contention in the facts of the present case cannot be accepted. The Fora is to accept the Surveyor''s Report regarding determination of the loss and if before the Surveyor, the complainant had failed to establish its case, the complainant is to be left to seek remedy in the Civil Court, if so advised. As far as the amount of loss as assessed by the Surveyor is concerned the Fora can legitimately rely upon it and grant the relief to the complainants. For the reasons recorded above, both the appeals are dismissed. The order of the District Forum is affirmed. Appeals dismissed.