Case: SAURASHTRA CHEMICALS LTD.(PRESENTLY KNOWN AS SAURASHTRA CHEMICALS DIVISION OF NIRMA LTD.) Vs. NATIONAL INSURANCE CO. LTD

allowed to take a stand that the claim is hit by the clause pertaining to duration and more so because of absence of any mention in the letter of repudiation. Thus, it went on to hold that from the positive conduct of the insurer in unequivocally appointing a surveyor, the insurer had waived the right which was in its favour under the duration clause. 21. The expression duration is of some significance which is reflective of the existence or otherwise of the policy itself. In the present case, there is no dispute about the subsistence of the policy but is one of violation of Condition 6 of the policy. Furthermore, in the present case the controversy will have to be answered on the basis of Standard Fire and Special Perils Policy relatable to Condition 6 obligating the insured to give forthwith intimation of the loss to the insurer. The two clauses are materially different and relate to two different and distinct insurance policies. In other words, Clause 5 of the Marine Insurance Policy and Clause 6 of the present policy are incomparable being qualitatively different. 22. T o put it differently, Galada case was not a case which considered repudiation based on a premise or a reason similar to Condition 6 of the present policy and a specific plea taken by the insurer in that behalf in the repudiation letter itself. Notably, Clause 5 of the Marine Insurance Policy which was the subject- matter in Galada case did not have a negative covenant as in this case in the proviso to Condition 6 of the subject policy. The fulfilment of the stipulation in Clause 6 of the General Conditions of the Policy is the sine qua non to maintain a valid claim under the policy. 23. We, therefore, agree with the Respondent that the dictum in Galada case is in the context of the facts of that case and does not lay down that on the appointment of a surveyor, per se, the insurer is estopped from raising a plea of violation of the condition warranting a repudiation of the claim. The factum of waiver has to be gathered from the totality of the obtaining circumstances. (Emphasis supplied) 18. In view of the law laid down by the three Judge Bench in the Sonnel Clocks (supra), the argument that by appointing a surveyor the respondent- insurer is estopped from raising the plea of violation of condition prescribing a time limit for intimation/lodging of the claim, has no legs to stand. Thus issue no. (1) is answered accordingly. 19. Insofar as issue no. (2) is concerned it is undisputed that the letter of repudiation did not even remotely mention anything about violation of duration clause stipulated in Clause (6) (i) of the General Conditions of Policy. The Respondent-insurer repudiated the claim solely on the ground that since spontaneous combustion did not result into fire and loss had not been caused by fire as stipulated by policy conditions, there was no liability under the policy. It was for the first time the respondent-insurer raised the issue of delayed intimation of claim and violation of stipulation of Clause 6(i) of the General Conditions of Policy in its reply filed before NCDRC. 20. This court in the case of Galada Power Ltd. (supra) has elucidated upon issue (2) as under : It is evincible, the insurer had taken cognizance of the communication made by the Appellant and nominated a surveyor to verify the loss. Once the said exercise has been undertaken, we are disposed to think that the insurer could not have been allowed to take a stand that the claim is hit by the clause pertaining to duration. In the absence of any mention in the letter of repudiation and also from the conduct of the insurer in appointing a surveyor, it can safely be concluded that the insurer had waived the right which was in its favour under the duration clause. In this regard, Mr. Mukherjee, learned Senior Counsel appearing for the Appellant has commended us to a decision of the High Court of Delhi in Krishna Wanti v. LIC, wherein the High Court has taken note of the fact that if the letter of repudiation did not mention an aspect, the same could not be taken as a stand when the matter is decided. We approve the said view. (Emphasis supplied) 21. Undoubtedly, as mentioned supra, this Court in Sonnel Clocks (supra) has distinguished Galada Power on facts and held that the appointment of a surveyor cannot, as a matter of law, be construed as a waiver of the terms and conditions of the insurance policy. However, in Sonnel Clocks, the insurer had taken a specific plea in the repudiation letter that the loss was not conveyed within the stipulated period. Hence the singular issue before this Court was only whether the insurer had waived the condition as to delay in intimation by appointing a surveyor. This Court in Sonnel Clocks did not have the occasion to consider whether the insurance company could have raised delay as a ground for repudiation for the first time before the consumer forum. 22. Hence we are of the considered opinion that the law as laid down in Galada on issue (2) still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC. 23. Admittedly in the case at hand there was no reference of delay in intimation or lodging of the claim as stipulated in Clause 6(i) of the General Conditions of Policy in the repudiation letter. 24. The NCDRC has failed to take into consideration this aspect of the matter and, therefore, cannot be held to be justified in rejecting the claim of the appellant, on that ground.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. As is evident from the repudiation letter there is no reference to any of the aspects enumerated in Clause 6(i) of the General Conditions of Policy which reads as under:-6(i) On the happening of any loss or damage, the insured shall forthwith give notice thereof to the company and shall within 15 days after the loss or damage or such further time as the company may in writing allow in that behalf deliver to the company17. However, the dictum in Galada case (supra) came up for consideration before a three Judge Bench of this Court in the case of Sonnel Clocks and Gifts Ltd. (supra) and it was distinguished on the ground that dictum in Galada is in context of the peculiar facts and circumstances of that case and does not lay down that on appointment of the surveyor, the insurer is estopped from raising of plea of violation of condition stipulated in the insurance policy. It may be relevant to extract the following from the said report:-20. The Respondent has rightly pointed out the other distinguishing features in the present case. T o wit, in that case [Galada], the Court had considered Clause 5 of a Marine Insurance Policy wherein the issue was whether the insurance cover itself had extinguished by efflux of time and that the intimation given by the insured to the insurer was not made within 7 days of arrival of the vehicle at the destination mentioned in the policy. According to the insurer, on expiry of 7 days from delivery the insurance cover stood perished and no cover would subsist beyond the said 7 days period. It is in that context, the Court noted that appointment of the surveyor by the insurer beyond the said period can be construed as an act of waiver by the insurer of the position that the policy stands extinguished. In other words, appointment of a surveyor by the insurer was interpreted as a manifestation of the stand of the insurer that the insurance cover still subsists. This is evident from the dictum in para 13 of the reported decision as the Court noted that once a surveyor was nominated to verify the loss, the insurer could not be allowed to take a stand that the claim is hit by the clause pertaining to duration and more so because of absence of any mention in the letter of repudiation. Thus, it went on to hold that from the positive conduct of the insurer in unequivocally appointing a surveyor, the insurer had waived the right which was in its favour under the duration clause21. The expression duration is of some significance which is reflective of the existence or otherwise of the policy itself. In the present case, there is no dispute about the subsistence of the policy but is one of violation of Condition 6 of the policy. Furthermore, in the present case the controversy will have to be answered on the basis of Standard Fire and Special Perils Policy relatable to Condition 6 obligating the insured to give forthwith intimation of the loss to the insurer. The two clauses are materially different and relate to two different and distinct insurance policies. In other words, Clause 5 of the Marine Insurance Policy and Clause 6 of the present policy are incomparable being qualitatively different22. T o put it differently, Galada case was not a case which considered repudiation based on a premise or a reason similar to Condition 6 of the present policy and a specific plea taken by the insurer in that behalf in the repudiation letter itself. Notably, Clause 5 of the Marine Insurance Policy which was the subject- matter in Galada case did not have a negative covenant as in this case in the proviso to Condition 6 of the subject policy. The fulfilment of the stipulation in Clause 6 of the General Conditions of the Policy is the sine qua non to maintain a valid claim under the policy23. We, therefore, agree with the Respondent that the dictum in Galada case is in the context of the facts of that case and does not lay down that on the appointment of a surveyor, per se, the insurer is estopped from raising a plea of violation of the condition warranting a repudiation of the claim. The factum of waiver has to be gathered from the totality of the obtaining circumstances18. In view of the law laid down by the three Judge Bench in the Sonnel Clocks (supra), the argument that by appointing a surveyor the respondent- insurer is estopped from raising the plea of violation of condition prescribing a time limit for intimation/lodging of the claim, has no legs to stand. Thus issue no. (1) is answered accordingly19. Insofar as issue no. (2) is concerned it is undisputed that the letter of repudiation did not even remotely mention anything about violation of duration clause stipulated in Clause (6) (i) of the General Conditions of Policy. The Respondent-insurer repudiated the claim solely on the ground that since spontaneous combustion did not result into fire and loss had not been caused by fire as stipulated by policy conditions, there was no liability under the policy. It was for the first time the respondent-insurer raised the issue of delayed intimation of claim and violation of stipulation of Clause 6(i) of the General Conditions of Policy in its reply filed before NCDRC20. This court in the case of Galada Power Ltd. (supra) has elucidated upon issue (2) as under :It is evincible, the insurer had taken cognizance of the communication made by the Appellant and nominated a surveyor to verify the loss. Once the said exercise has been undertaken, we are disposed to think that the insurer could not have been allowed to take a stand that the claim is hit by the clause pertaining to duration. In the absence of any mention in the letter of repudiation and also from the conduct of the insurer in appointing a surveyor, it can safely be concluded that the insurer had waived the right which was in its favour under the duration clause. In this regard, Mr. Mukherjee, learned Senior Counsel appearing for the Appellant has commended us to a decision of the High Court of Delhi in Krishna Wanti v. LIC, wherein the High Court has taken note of the fact that if the letter of repudiation did not mention an aspect, the same could not be taken as a stand when the matter is decided. We approve the said view21. Undoubtedly, as mentioned supra, this Court in Sonnel Clocks (supra) has distinguished Galada Power on facts and held that the appointment of a surveyor cannot, as a matter of law, be construed as a waiver of the terms and conditions of the insurance policy. However, in Sonnel Clocks, the insurer had taken a specific plea in the repudiation letter that the loss was not conveyed within the stipulated period. Hence the singular issue before this Court was only whether the insurer had waived the condition as to delay in intimation by appointing a surveyor. This Court in Sonnel Clocks did not have the occasion to consider whether the insurance company could have raised delay as a ground for repudiation for the first time before the consumer forum22. Hence we are of the considered opinion that the law as laid down in Galada on issue (2) still holds the field. It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation. If the insurer has not taken delay in intimation as a specific ground in letter of repudiation, they cannot do so at the stage of hearing of the consumer complaint before NCDRC23. Admittedly in the case at hand there was no reference of delay in intimation or lodging of the claim as stipulated in Clause 6(i) of the General Conditions of Policy in the repudiation letter24. The NCDRC has failed to take into consideration this aspect of the matter and, therefore, cannot be held to be justified in rejecting the claim of the appellant, on that ground.