Per Shri P.N. Kashalkar, Honble Presiding Judicial Member
1. This consumer complaint has been filed by the complainant-M/s.Sheetal Medi-Care Products Pvt. Ltd., Mumbai against the opponent/New India Assurance Company Ltd. alleging deficiency in service on the part of opponent. According to the complainant on 31/07/2005 total stock as per the Bank of Rs.1,95,28,690/- was lying with the complainant. It is a company registered under the Companies Act. Opponent No.1 is the Insurance Company itself and opponent No.2 is the Divisional Manager of the Insurance Company having office at Jyoti Chambers, J.V. Marg, Ghatkopar (W), Mumbai.
2. According to the complainant-company, it had taken insurance cover in terms of policy bearing No.140600/11/05/11/00000889 and made claim amounting to Rs.71,22,521/- in respect of damage to its various insured properties on account of heavy rains in Mumbai. The complainant had paid premium of Rs.20,249/- while purchasing said policy. The complainant-company pleaded that it manufactures various Ayurvedic medicines, Ayurvedia powder, Ayurvedic tablets, oil, granules, extracts etc. It is also exporting medicines under the valid licence to other countries. The complainant had set up a factory at Wada, District Thane. The complainant pleaded that its factory premises, plant, machinery, stock lying at Wada factory was insured with the opponent under the Standard Fire and Special Peril Policy bearing No.140600/11/05/11/00000889 dated 31/05/2005. The sum assured was Rs.75 Lakhs. Under the said policy, the risk covered was for Rs.5 Lakhs towards building, Rs.10 Lakhs towards plant and machinery and other stocks, Rs.60 Lakhs including medicines, raw material located at factory at Wada District Thane. Exhibit-A is the said policy and Exhibit-B is the premium receipt. According to the complainant, as per the Books of Accounts, total purchases in the month of April 2005 to July 2005 were Rs.1,89,77,164/- and total sales in the month of April 2005 to July 2005 were Rs.3,13,77,121/-. According to the complainant, it had borrowed loan from Thane Janata Sahakari Bank Ltd. and it submitted stock statement to its bankers on monthly basis. The complainant pleaded that as on 31st July 2005 total stock as per Bank was Rs.1,95,28690/-. The complainant had stored the goods in the basement admeasuring 8.7 m x 14.9 m. with an internal height of about 3 m. The said godown was about 3 to 3½ ft. below the outside ground level with steps leading down into the godown. The entire compound was sloping downwards from west to east and the basement godown was at the lowest point of the main factory building. According to the complainant, on account heavy rains in Mumbai and surrounding areas including Thane District on 26th and 27th July 2005, the complainants factory and its surrounding areas got badly affected by the flood. The complainants factory was filled with filthy water. The stock stored in the basement godown were submerged in the flood water and value of the stock on that date lying inside the godown was Rs.67,02,895/-. According to the complainant, immediately after the damage caused by the flood, the complainant reported said damage to opponent No.2 vide letter dated 27/07/2005. The opponents appointed M/s.C.P. Mehta and Co. as Surveyor to assess the damage caused to the complainants property including the plant, machinery, etc. lying at its factory at Wada. The claim amount comprised the damage caused to the building Rs.6,65,000/-, damage caused to the plant and machinery Rs.7,41,000/- and damage to the stock valued at Rs.57,16,521/-. The total claim work out to Rs.71,22,521/-. According to the complainant, the Surveyor was provided with all the requisite forms and particulars. The Surveyor visited the complainants site on 10/08/2005 and completed the formalities on 20/06/2006 and submitted its report dated 16/08/2006. On perusal of the said report, it is crystal clear that the Surveyor had physically verified the salvaged goods and collected all the necessary information in support of the complainants estimated loss i.e. Rs.71,22,521/-. According to the complainant, they had given up the claim in respect damage caused to the building and plant and machinery agreeing with the Surveyor that those losses could not be attributed to the floods. With regard to stock, the Surveyor valued the total stock lying at the factory at Rs.58,79,657/- by observing that in item No.12.2 of the Survey Report that âthe insured were hence fully coveredâ.
3. The complainant pleaded that out of this total stock, stock worth Rs.9,86,463/- could be saved and there was no claim for the same. However, Surveyor assessed the loss and recommended the amount of Rs.40,89,416/- after making deduction towards disallowances and policy excess/franchise @ 5%. Exhibit-E is the copy of Survey Report dated 16/08/2006. The complainant pleaded that M/s.C.P. Mehta and Co. is one of the reputed surveyor and therefore, said report should have been given proper weightage by the opponent. The complainant pleaded that they sent a letter dated 18/04/2006 to the Assistant Commissioner, Food and Drug Administration, Maharashtra State, Konkan Bhavan, 4th floor, ESIC Hospital Wagle Estate, Thane and sought permission to dispose of the damaged stock left at the factory. They pleaded that in order to avoid further complications, said permission was sought from Food and Drug Administration and vide letter dated 19/04/2006 after inspecting said goods, the Food and Drug Administration granted permission to the complainant to dispose of said damaged goods. This letter is at Exhibit-F. Thus, damaged stock was destroyed under the supervision of the Surveyor and same was informed to the Senior Divisional Manager of the Insurance Company by letter dated 20/06/2006. The complainant pleaded that the opponent, thereafter appointed M/s.Decent Investigation to investigate into genuineness of the complainants claim, who recommended the Insurance Company to repudiate the claim on the ground that the bills supplied by the complainants supplier were fictitious. The complainant thereafter received repudiation letter dated 16/04/2008 wherein while repudiating the claim of the complainant, it mentioned that the stocks purchased from M/s.Yogini Products and Yogini Ayur Pharma were never brought in India and stocks claimed to have been purchased from Nepal Company were not in existence and therefore, invoice produced could not be said to be genuine invoice and the Company had made an attempt to obtain undue benefits under the policy and it invited invocation of Condition No.8 of said policy. According to the complainant, repudiation is improper. The Investigation Agency had not investigated properly. Moreover, M/s.C.P. Mehta and Company-Surveyor had recommended grant of compensation of Rs.40,89,416/-, but based on report of M/s.Decent Investigation, the opponent/Insurance Company repudiated the claim of the complainant and therefore, the complainant claimed that there was deficiency in service on the part of the Insurance Company and as such, they filed consumer complaint claiming amount of Rs.40,89,416/- towards legitimate claim of the complainant with interest @ 18% p.a. from 20/09/2006 till filing of present complaint. They also claimed Rs.1 Lakh as compensation on the ground of deficiency in service and failure on the part of the opponent to favourably consider the complainants claim. They also claimed costs of Rs.50,000/- from the opponent. The complainant filed various documents in support of the claim.
4. Opponents filed written version and contested the complaint. According to opponent, the complaint is hopelessly time-barred as incident which gave rise to the present complaint occurred on 26-27/07/2005 and present complaint has been filed in the year 2009. Thus, the cause of action arose on 26/07/2005 and complaint is filed after two years from the cause of action and therefore, it is liable to be dismissed with costs in view of Apex Court judgement in the case of Kandimalla Raghavaiah and Co. V/s. National Insurance Co. Ltd. , III (2009) CPJ 75 (SC) and also under the provisions of Section 24-A of the Consumer Protection Act, 1986. Opponent further pleaded that in any event complaint of the complainant is barred by way of waiver as one of the conditions of the insurance policy in question inter alia provides that in no case whatsoever shall the company be liable for any loss of damage after expiry of 12 months from happening of loss or damage unless claim is the subject of pending action or arbitration. Said clause further provides that it is being expressly agreed and declared that if the company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of disclaimer have been made subject matter of a suit in any Court of law then the claim shall for all the purposes deemed to have been abandoned and shall not thereafter be recoverable hereunder. Opponent therefore pleaded that since action is not initiated within 12 months from the date of repudiation under the disclaimer, the complaint must be held to be not maintainable and on that count, it is liable to be dismissed. The opponent also pleaded that the complainant is not a consumer within meaning of Consumer Protection Act, 1986 since, complainant had availed services of opponent purely for commercial purpose. Opponent admitted that complainant was issued Standard Special Perils Policy bearing No.140600/11/05/00889 for period 31/05/2005 to 30/05/2006 inter alia covering building, plant and machinery, stock of medicines as stated in schedule of the insurance policy. The complainant reported flood claim to the contents of the premises situated at Survey No.59, Dakivali Lohape Road, Dakivali, Post-Chamble, Taluka Wada, Dist. Thane. Said loss according to the complainant occurred at their godown on 25-26/07/2005 due to flood. On receipt of flood claim, they had appointed M/s.C.P. Mehta and Co. as Surveyor. Said Surveyor clearly observed that following transactions were unusual :-
â(i)Â The complainant made purchases of (a) Ativish from Yogini products vide their bill No.6 dated 19/06/2005 worth Rs.25,17,840/-, bill No.7 dated 20/07/2005 worth Rs.16,78,560/-. (b) Safed Muesli vide invoice No.78 dated 02/07/2005 for Rs.4,24,320/- and invoice No.81 dated 06/07/2005 for Rs.48,95,040/- which was 4to5 days prior to date of loss. M/s.Yogini Products have claimed to have made the purchases of Ativish from Dharamkumar Ruiiniyar and Madan Rai of Nepal vide their invoice No.05/063 dated 18/04/2005 for Rs.38,45,275/- and Safed Muesli vide invoice No.05/062 dated 18/04/2005 for Rs.8,38,400/-.â
5. The opponent further pleaded that the amount was unusually high, the veracity of the bills was sought to be investigated through their investigator and therefore, they appointed Decent Investigators to investigate into the claim of the complainant. The investigator made thorough investigation and produced evidence in the form of certificates from the Regional Plant Quarantine Office, Nepal that they had not issued certificate to Dharam Kumar Rauniya and Madan Rai of Nepal for the export of the above consignment and certificate from Plant Quarantine Section, Govt. of India, U.P. that they have not received any application from the importer and there was no clearance of the said commodity. Opponent therefore pleaded that investigator further reported that the Indian Customs Authorities had also certified that no such consignment of Ativish and Safed Muesli had been cleared by them or by Enforcement Directorate of Enforcement Division of Govt. of India and M/s.Yogini Products and Yogini Ayur Pharma had not obtained any Import Export Code numbers or licences. They appended Exhibit-B, copy of investigation report to the written version. They pleaded that in terms of finding of investigators, it is crystal clear that items claimed to have been damaged were not in existence and they did not form part of loss due to flood. They examined various documents and came to the conclusion that the complainant had made an attempt to obtain undue benefits under the insurance policy which attracted clause No.8 of the policy condition which stipulated that â âif the claim be in any respect fraudulent or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by willful act or with connivance of the insured, all benefits under this policy shall be forfeitedâ. The Opponent pleaded that they had rejected the complainants claim by letter dated 16/04/2008 which was enclosed as Exhibit-H to the complaint. Opponent also pleaded that the Company had not obtained any order from Food and Drug Administration which directed it to destroy salvage goods because they are affected badly by bacteria. The opponent pleaded that assessment made by the first Surveyor or loss assessed was not binding on the Insurance Company. Liability aspect has got to be examined by the insurer and mere assessment of loss cannot be made binding on the insurer. So, claim assessed by the Loss Assessor or Surveyor to the extent of Rs.71,22,521/- is not admitted by the Insurance Company. Opponent pleaded that they are not guilty of deficiency in service in as much as report of investigator is exhaustive and it goes to the root of the conduct of the complainant-Company and they were right in repudiation of the complainants claim. Opponent denied its liability of the complainant claiming Rs.40,89,416/- as per observations made by M/s.C.P. Mehta and Co. and submitted that the complainant is not entitled to claim relief under Section 13 (3-B) of Consumer Protection Act, 1986. The Survey Report is simply opinion or assessment and does not amount to admission of liability. They pleaded that the Survey Report is not binding on them. Opponent therefore pleaded that complaint should be dismissed with costs.
6. We heard submissions of Advocate Mr.S.B. Prabhawalkar, Advocate for the complainant and Mr.A.S. Vidyarthi, Advocate for the opponent/Insurance Company.
7. We need not go into the merit of the case. Complaint can be or has to be disposed off only on two issues. One issue is about limitation and other is about point of disclaimer. Both issues are raised by the opponent in its arguments. Advocate Mr.Vidyarthi in the course of arguments brought to our notice the fact that this complaint was not filed within two years from the date of accrual of cause of action. The complainant lost stock of medicines, etc. in the heavy rains that lashed Mumbai and adjoining area on 26-27/07/2005 in which premises of the complainant got flooded and his stock of medicines in trade and raw material, etc. was submerged in water and as such rendered unfit for sale. From 27/07/2005 within two years the complaint should have been filed by the complainant in terms of law laid down by the Honble Supreme Court in the case of Kandimalla Raghavaiah and Co. V/s. National Insurance Co. Ltd. , III (2009) CPJ 75 (SC). In our case, the complaint came to be filed on 02/07/2009, whereas the goods of the complainant or stock of medicines of the complainant were damaged in the heavy rains and flood of 26-27/07/2005. So, in any case, by 27/07/2007 the complaint should have been filed, but this complaint is filed as late as on 02/07/2009. Law laid down by the Honble Supreme Court in the case of Kandimalla, supra, is very clear. Cause of action means cause for which suit is brought. Cause of action which give occasion for and forms the foundation of the suit. So, with reference fire policy, undoubtedly, the date of accrual of cause of action on which the fire broke out. In our case, cause of action for filing consumer complaint against the Insurance Company arose to the complainant-Company on 26-27/07/2005 when its goods were damaged in heavy floods and they should have filed consumer complaint within two years in terms of Section 24-A of Consumer Protection Act, 1986 on or before 27/07/2007. But, this complaint came to be filed as late as on 02/07/2009. Thus, agreeing with the submissions made by Advocate Mr.Vidyarthi for the opponent, we hold that this complaint as filed by the complainant-Company is absolutely barred by limitation and since, there was no condonation of delay application accompanying with the complaint, exercising jurisdiction to condone the delay for filing the complaint beyond two years was not called for and therefore, it must be held that complaint as filed by the complainant is absolutely barred by limitation.
8. Secondly, Advocate Mr.Vidyarthi, Learned Counsel for the opponent vehemently submitted before us that the Insurance Company had repudiated the claim by sending letter dated 16/04/2008 and policy stipulated a disclaimer clause which required the aggrieved party to file legal action within 12 months from the date of repudiation of claim preferred by the complainant/Company. It is not in dispute that in the instant policy there was disclaimer clause to the knowledge of the complainant. The claim was repudiated by the Insurance Company by sending letter dated 16/04/2008. In terms of disclaimer clause, this legal action of filing consumer complaint should have been initiated on or before 15/04/2009, but since, this complaint has been filed on 02/07/2009 beyond the period of 12 months from the date of repudiation by the Insurance Company in terms of disclaimer clause, the complaint as filed by the complainant/Company must be held to be not tenable in law since within 12 months from the date of repudiation, the consumer complaint was not filed. Thus, disclaimer clause is clearly applicable and on this count too this complaint must fail.
9. In the case of H.P. State Forest Company Ltd. V/s. United India Insurance Co. Ltd., I(2009) CPJ 1 (SC), the Honble Supreme Court held that if the insurance claim is not pressed within 12 months from the date of loss as per disclaimer clause of the policy, the Insurance Company cease to be liable to pay insurance claim because within 12 months from the date of disclaimer or date of repudiation, no claim or arbitration proceeding was initiated and therefore, the insurance liability stood extinguished in view of disclaimer clause. Same is the situation obtainable in our case. Thus, we are of the view that on the ground of limitation and on the ground of disclaimer clause since the complaint was not filed within 12 months from the date of repudiation of insurance claim by the complainant/Company, the consumer complaint as filed by the complainant/Company must be held to be not tenable in law since it is barred by limitation. Hence, we pass the following order:-
ORDER
1.  Consumer complaint stands dismissed.
2.  No order as to costs.
3.  Copies of the order be furnished to the parties.