JUSITCE DEEPA SHARMA, PRESIDING MEMEBR

          The present Appeal has been filed against the order dated 15.12.2018 in CC No. 86/2017.  The Complaint was dismissed on the ground that it was barred by limitation as provided  under section 24-A of the Consumer Protection Act, 1986 (now repealed by Consumer Protection Act, 2019). 

2.       The complainant has challenged the impugned order in the present appeal on several counts.  It is submitted that the order of the State Commission is fraught with illegality.  It is submitted that as per Article 44-A of Limitation Act, 1963, a suit can be filed on a policy of insurance when the same is payable on the death of insured either within 3 years from the date of death of insured or where the claim under the policy is filed with the Insurance Company within 3 years from the date of such denial of the claim wholly or in part.  It is submitted that her husband Sh. Pramod Kumar Singhania obtained two life insurance policies bearing no. 358148559 commencing from 23.04.2010 to 23.04.2030 which were to mature on 23.04.2030. Annual premium of Rs.1,31,472/- was paid by him.  The premium amount was, thereafter, regularly paid.  Other policy i.e. Jeevan Anmol for Rs.15,00,000/- bearing no.358148555 was taken on 28.04.2010 and the premium qua this policy was also regularly paid.  The insured died on 12.08.2012 during the subsistence of the policies.  The complainant submitted the claim with the respondent along with all the original documents.  The claim was repudiated by the respondent after lapse of 2 years from the date of submission of claim on the ground that insured had concealed  the correct status of his health at the time of filling up the proposal form.  It is submitted by learned counsel for the Appellant that period of limitation for filing complaint had started from the date of repudiation of the claim i.e. 26.11.2016 and since the complaint had been filed within 2 years of the said date, the complaint was within limitation and the State Commission has wrongly, relying on the judgments having no bearing on the facts and circumstances of this case, dismissed the claim at the admission stage, holding that the claim was barred by limitation.  It is submitted that the impugned order is a perverse order and patently illegal order and it is prayed that it shall be set aside.

3.       This Commission had issued notice of the appeal to the respondent and both the parties have filed the written synopsises, along with case laws.

4.       We have heard the arguments of the learned counsel for the parties and perused the file. 

5.       It is settled proposition of law that period of limitation has to be reckoned on the basis of facts disclosed by the complainant in the complaint.  The complainant had filed a claim before the State Commission alleging therein that her husband had expired during the existence of the insurance policies, which had been issued by the respondent and that claim form had  duly been filed along with requisite documents but the respondent did not dispose of the claim within the period prescribed for the said purpose and had rejected it vide its repudiation letter dated 26.11.2016 on the ground that insured had concealed its disease at the time when the policy was issued. The State Commission had dismissed the Complaint in limine as it was of the view that complaint was barred by limitation. The State Commission has relied on several judgments in the impugned order.

6.       It is argued on behalf of the Appellant that the judgments relied on by the State Commission have no relevance on the facts and circumstances of this case.

7.       It is argued by learned counsel for the respondent / insurance company that the judgments relied upon are applicable.  It is argued that in this case, the cause of action for filing the complaint had started on 12.08.2012, the date  the deceased insured had died whereas the instant complaint has been filed in 2017. It was not been filed within two years after the cause of action had arisen and, therefore, it was apparently barred and State Commission has rightly dismissed the complaint in limine.   

8.       The issue before us, therefore, is as to on which date it can be said that cause of action had arisen in favour of the complainant for filing the complaint before the State Commission.  The State Commission has justified its findings that cause of action had arisen on the date of death of insured and has relied on several judgments.  It has relied on judgment of Hon’ble Supreme Court in Kandimalla Raghavaiah& Co. Vs. National Insurance Co. & Anr. (2009) 7 SCC 768, which defines ‘Cause of Action’ as under :

“18. The term "cause of action" is neither defined in the Act nor in the Code of Civil Procedure, 1908 but is of wide import. It 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. Generally, it is described as "bundle of facts", which if proved or admitted entitle the plaintiff to the relief prayed for. Pithily stated, "cause of action" means the cause of action for which the suit is brought. "Cause of action" is cause of action which gives occasion for and forms the foundation of the suit. (See: Sidramappa Vs. Rajashetty). In the context of limitation with reference to a fire insurance policy, undoubtedly, the date of accrual of cause of action has to be the date on which the fire breaks out.

9.       We have perused this judgment.  From the perusal of this judgment, it is apparent that this judgment does not deal with the insurance claim qua the life  insurance policies.  It has dealt with the incident of fire and on those facts has held that date of incident of fire, is the date on which cause of action arose.    The facts of the case (supra) are that appellant had taken a fire policy on 04.12.1987 and on 08.03.1988 during the validity of the said policy, he obtained loan by hypothecating the stocks.  On the intervening night of 22.03.1988 and 23.03.1988 i.e. during the policy period, a fire broke out in the godowns allegedly due to electrical short circuit and the entire stock was gutted.  The insured reported the matter to Bank as well as insurance Company. On 24.03.1988 a surveyor was appointed by the insurance company who submitted its claim on 02.04.1988.  However, the fact shows that on the date of incident i.e. 23.03.1988, the bank from where Appellant had taken a loan  had lodged an FIR against the Appellant and its partner under section 380, 420,423, 436, 457, 484 r/w section 120-B of IPC alleging that fire had been intentionally set with a view to lay a false claim for loss of stocks.  The facts show that after the criminal trial the accused were acquitted and Appeal filed against the order of acquittal was dismissed by the High  Court on 05.09.1992.  It was only on 06.11.1992 that appellant asked the insurance company to give them the claim form and  having failed to get any response, sent a legal notice on 26.10.1995.  On 04.01.1996, the appellant again asked for claim form but there was no response.  Ultimately on 21.03.1996, insurance company replied to the legal notice denying the factum of fire and refused to issue the claim form on the ground that claim had become time barred.   On 21.10.1997, the Appellant filed the complaint before the Commission and the Commission held that in such situation, the complaint filed was clearly time barred.  In this case supra, it is apparent that no claim had  been filed by the Appellant after the incident which had taken place on 23.03.1988 till the filing of the complaint and the Complaint had been filed challenging the non-issuance of claim form by the Insurance Company.  The facts of present case are clearly distinguishable.  In this case the insurance company had not repudiated the claim on the ground that claim was time barred but had repudiated it on the ground that insured had concealed material facts at the time of taking the policy.  The findings of the case are clearly distinguishable on the facts and circumstances of the case and reliance by the State Commission on this case is unfounded. 

10.     The State Commission has also relied on the findings of this Commission in Smita Madhav Patki Vs. National Insurance Co. Ltd. & Ors. ( (2013) CPJ 331 NC.  The said order relates to the revision petition and it is apparent that in revision petition, this Commission has a limited jurisdiction and is not required to re-appreciate or re-assess the evidences on record and give its own findings.  Moreover, the revision petition itself was time barred and application for condonation of delay was not allowed and relying on the case of Rubi (Chandra) Dutta V. United India Insurance Co. Ltd. 2011 (3) Scale 654 , this Commission refused to entertain the revision petition.  Since, the findings of this Commission in the case of Smita MadhavPatki  ( supra ) are not on merits, the reliance is misplaced.

11.     The State Commission has also relied on the findings of this Commission in the case of Ganpat Rama Madhavi Vs. New India Assurance Company Ltd. IV (2011) CPJ 210 (NC) wherein this Commission had held that period of limitation is to be reckoned from the date of incident and not from  the date of repudiation of claim.  In that case the facts shows that claim relates to the damage to the fishing boat.  It is apparent that the findings of Commission in Ganpat Rama’s case are given on entirely different set of facts.  There the claim did not relate to the life insurance policies.

12.     The State Commission  has also relied on the findings of Single Bench of this Commission in the case of National Flask Industries Ltd. Vs. Dakshin Gujarat Vij Co. Ltd. & Ors. IV (2015) CPJ 566 NC.  The facts and circumstances of this case are entirely different than that of the present case.  In the said case, the dispute related to the electricity connection and capacitors and had no relevance to the claim under the life insurance policies.  Therefore, findings of the Single Bench of this Commission in National Flask Industries Ltd. ( supra ) is also distinguishable.

13.     Counsel for the respondent, the insurance company, besides relying on the judgments, which had been relied on by the State Commission in its order has also relied on the findings of Bombay High Court in the case of the State of Maharashtra Vs. Sarvodaya Industries 1974 SCC Online Bom 21.  The findings in this case are  not relevant because in that case issue was the territorial jurisdiction.   It has also relied on the Bombay High Court order in Light of Asia Insurance Co. Ltd. Vs. Bai Chanchal 1932 SCC Online Bom 76, which also have  no relevance because it also relates to territorial jurisdiction. 

14.     The complainant on the other hand has relied on the findings of the Supreme Court in the case of Oriental Insurance Company Vs. Prem Printing Press (2010 ) 14 SCC 773, whereby the Hon’ble Supreme Court relying on the clause in insurance policy has held that filing of the complaint after the rejection of the claim by the insurance company within 3 months as per the repudiation clause in the policy does not amount to abandonment of claim.

15.     Section 24-Aof the Consumer Protection Act, 1986 deals with the  period of limitation for filing complaints. It reads as under:

 “24A. Limitation period.—

(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) 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: Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.”

16.     This provision requires that complaint shall be filed within 2 years from the date on which cause of action has arisen.  Cause of action is  not defined anywhere.  It, however, are bundle of facts which gives rise to a claim.  It is apparent that in the case of life insurance policies the factum of death of the insured gives rise to a claim and it is required that claim is to be filed with the insurance company and it is the insurance company who has to determine the claim.   Therefore, on the death of insured, cause of action in favour of the survivor under the policy arises only for filing a claim before the insurance company.  The rules governing the functioning of the insurance companies require that the Company should determine such a claim as early as possible and in any case not beyond the prescribed period.  However, if the insurance company does not decide the claim within the prescribed period and keep it pending, the claimant continues to have hope that his or her claim would be considered favourably by the insurance company and thereby, they would be precluded from unnecessary expenses of litigation by knocking the doors of the Court.  It cannot be said that mere pendency of claim with the insurance company where the party continues to wait for the settlement of its claim with such hope, their rights get extinguished.  The interpretation that right of the claimant to approach this Commission stands defeated only because the insurance company had not settled it and kept it pending would amount to causing undue hardship to the claimant.  It is apparent that insurance is a contract and when a party puts up its claim under an agreement, wherein one of the party under the agreement is authorized legally to grant claim, it is natural for the party to wait for the decision on their claim.  We are of the opinion that so long claim of a party like life insurance policy remains pending, cause of action remains alive and continues till the party gets its final decision on the claim.  Article 44-A of the Limitation Act recognises this aspect and that is why it gives option to the claimant in the case of life insurance policies either to file the claim within 3 years from the death of deceased or within 3 years from the date of denial of their claim wholly or in part by the insurance company. 

          Article 44-A is reproduced as under:

17.     It is apparent that Consumer Protection Act is a welfare enactment and had been enacted for the welfare of the consumers and it is also well settled that provision of the act has to be interpreted keeping in mind the interest of the consumer.  The provision of this Act are not in isolation to the provisions of the other enactments promulgated by the Central Government.  Section 3 of the Consumer Protection Act clearly stipulates that this Act is not in derogation of other provisions of law.  It reads as under:

“3. Act not in derogation of any other law.—The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”

18.     Even though Section 24A of  Consumer Protection Act deals with period of limitation for filing complaints, it is a general clause dealing with all types of complaints.  However, Article 44-A of Limitation Act deals specifically with the period of limitation relating to insurance policies. 

19.     Section 3 of the Consumer Protection Act clearly stipulates that the provisions of the Consumer Protection Act are in addition to other laws for the time being in force, thus Section 24(A) is in addition to Article 44-A of the Limitation Act. The Consumer Protection Act is enacted for the better protection of the interest of consumer, therefore, for the protection of interest of consumers, provisions of Article 44-A of Limitation Act which specifically deals with limitation period for filing complaint in the cases of life insurance policies can be read with Section 24-A of the Consumer Protection Act. Reading both the provisions jointly, it can be said that the consumer has a choice in case of life insurance policies to file complaint within 2 years from the date of death of insured or from the date of rejection of claim by the insurance company.

20.     This view finds support by the order of the Hon’ble Supreme Court in the case of National Insurance Company Limited Vs. Hindustan Safety Glass Works Limited (2017) 5 SCC 776, wherein the Hon’ble Supreme Court has clearly held that “when the claim is made by the insured that itself is actionable.  There is no question of requiring the insured to approach a Court of law for adjudication of the claim.  This would amount to encouraging avoidable litigation which certainly cannot be the intention of the insurance policies and is in any case not in public interest.” 

21.     Section 24-A of the Limitation Act does not restrict the applicability of Limitation Act.  It permits the Commission to entertain the complaint even on expiry of period of limitation.  The Hon’ble Supreme Court has clearly in the case of Hindustan Safety Glass Works Limited (supra) held that  that the provisions of the Consumer Protection Act has to be construed to the benefit of consumer.  The relevant paragraphs are reproduced as under :

“13. We are not at all impressed by this submission. When a claim is made by the insured that itself is actionable. There is no question of requiring the insured to approach a court of law for adjudication of the claim. This would amount to the encouraging avoidable litigation which certainly cannot be the intention of the insurance policies and is in any case not in public interest. Moreover, the disclaimer by National Insurance was only in May 2001 and the period of ‘limitation’ under the policies could not have started before that time. We leave the matter at that, more particularly since the learned counsel for National Insurance strictly did not press this submission.

14. However, learned counsel vehemently argued that in terms of Section 24-A of the Act, the claim made by the insured was barred by limitation since the complaint was filed with the National Commission on 13th August, 1996 while the loss or damage had occurred on 6th August, 1992. Therefore, the National Commission could not have admitted the complaint since it was filed beyond the stipulated period of two years from the date on which the cause of action had arisen.

18. In our opinion, in a dispute concerning a consumer, it is necessary for the courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-à- vis the supplier of services or goods. It is to overcome this disadvantage that a beneficent legislation in the form of the Consumer Protection Act, 1986 was enacted by Parliament. The provision of limitation in the Act cannot be strictly construed to disadvantage a consumer in a case where a supplier of goods or services itself is instrumental in causing a delay in the settlement of the consumer’s claim. That being so, we have no hesitation in coming to the conclusion that the National Commission was quite right in rejecting the contention of National Insurance in this regard.”

22.     In Hindustan Safety ( supra),  the claim with the insurance company was filed by the insured on 07.08.1992 and 08.08.1992 for the loss suffered by it due to heavy rain on 06.08.1992 and till the year 1996, the Insurance  Company did not take any decision on the claim and the insured then on 22.04.1996 sent the legal notice asking the insurance company to settle its claim.  Since this notice was not replied by the insurance company a complaint was filed by the insured under the Consumer Protection Act.   The plea taken by Insurance Company was that the complaint was  barred by limitation as filed on 13.08.1996 while loss / damage to the insured property had taken place in August 1992.  Hon’ble Supreme Court has rejected the contention and has held that complaint cannot be said to be time barred and has  held as under :

“22. This appeal also concerns the interpretation, in the context of limitation, of condition number 6(ii) of the insurance policy taken out by the insured. In this appeal, the insured suffered a loss or damage to its goods in an incident that occurred on 6th September, 1993. A claim was lodged by the insured on the next day. The claim was repudiated by National Insurance on 27th December, 1999 while a complaint filed by the insured in the National Commission was pending since 6th March, 1998. In view of these facts and in view of the discussion in the connected appeal, there is no merit in the objection raised by learned counsel that the complaint was barred by limitation in view of condition number 6(ii) of the insurance policy or Section 24-A of the Act. In any event, this contention was not strictly pressed by learned counsel on the facts of this appeal”

23.     The Hon’ble Supreme Court has clearly held in this case that provisions of law should not be interpreted to the disadvantage of the consumer who is the beneficiary under the Consumer Protection Act.

24.     From the above discussion, it is apparent that the State Commission has adopted a wrong approach and the findings are fraught with perversity.  The impugned order is set aside.  The Appeal is allowed.  The Complaint is restored and the State Commission is directed to decide it on merit.   The Insurance Company now since has the notice of complaint is directed to file its written version within statutory period reckoned from today with State Commission and parties to appear before the State Commission on   15.12.22.