Case: National Insurance Co. Ltd Vs. Hindustan Safety Glass Works Ltd. &amp; Another

2. The respondent Hindustan Safety Glass Works Ltd. (for short `the insured) had taken out two policies with the appellant National Insurance Company, both dated 29th August, 1990 for a period of one year which were subsequently renewed for another year. The first policy was for an amount of Rs. 4.9 lakhs to cover the risks on office building, residential quarters and canteen etc. in Calcutta. The second policy was for an amount of about Rs. 5.7 crores to cover the risks on building, machinery, finished and semi finished stocks, store, furniture, wiring and fittings etc. in its factory/works in Calcutta. The policies included damage or loss due to flood and inundation.3. There is no dispute that on 6th August, 1992 there was heavy incessant rain in Calcutta resulting in heavy accumulation of rain water inside and around the factory/works of the insured. According to the insured, there was considerable damage to raw materials, stocks and goods, furniture etc. As a result of the damage suffered by the insured and in terms of the two policies taken out with National Insurance, claims were filed by the insured on 7th and 8th August, 1992 claiming a total amount of about Rs. 52 lakhs.4. Pursuant to the claims having been made, National Insurance appointed N.T. Kothari & Co. as its surveyor on 24th September, 1992. The requisite survey was carried out and N.T. Kothari & Co. submitted its report on 11th November, 1993 indicating a loss of about Rs. 24 lakhs having been suffered by the insured.5. For reasons that are not very clear, National Insurance did not accept the report and instead appointed Seascan Services (WB) Pvt. Ltd. as a surveyor to report on the loss or damage suffered by the insured. The second surveyor gave its report on 23rd November, 1994 assessing the loss or damage suffered by the insured at about Rs. 26 lakhs. By an addendum issued on 10th February, 1995 the damage or loss incurred by the insured was reduced to about Rs. 24 lakhs.6. In spite of two survey reports quantifying the loss or damage suffered at about Rs. 24 lakhs, nothing was paid to the insured by National Insurance. Consequently, on 22nd April, 1996 the insured sent in notice to National Insurance to the effect that its claim had not been settled and that the loss or damage claimed was to the extent of about Rs. 52 lakhs and that this should be paid.7. National Insurance did not reply to this notice and consequently, the insured filed a complaint with the National Commission under the provisions of the Consumer Protection Act, 1986 (for short `the Act) claiming an amount of Rs. 52.32 lakhs along with an amount of about Rs. 1.81 lakhs being the expenses incurred for the purpose of loss minimisation. Interest at 18% per annum was also claimed by the insured with effect from 6th December, 1992 that is four months after the occurrence of the flood or inundation.8. At this stage, it may be noted that the claims made by the insured in terms of its letters dated 7th and 8th August, 1992 as well as the notice dated 22nd April, 1996 were repudiated by National Insurance much later on 22nd May, 2001 which is about five years after the complaint was filed with the National Commission.9. Be that as it may, in response to the complaint and during the course of submissions, National Insurance raised four objections. These have been summarised by the National Commission asComplaint was barred by condition No. 6(ii) of the policies;(ii) Complaint was barred by limitation as it was filed on 13.08.1996 while the loss/damage to the insured properties had taken place in August, 1992.(iii) Alleged loss had been caused due to accumulation of dust and moisture on the stocks lying unattended because of lock out in the factory from 03.05.1991 and not as a result inundation/flood.(iv) None of the two survey reports can form the basis for payment of the amount claimed.The National Commission rejected all the contentions urged by National Insurance and by the impugned judgment and order the insured was awarded an amount of Rs. 21,05,803.89 with interest at 9% per annum from 11th May, 1995 that is three months after the addendum issued by Seascan Services (WB) Pvt. Ltd. (the second surveyor). Costs of Rs. 20,000/- were also awarded to the insured.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 compliant 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.

Court's reasoning:
Our answer to this question is in the affirmative and we find no reason to interfere with the decision of the National Commission.A plain reading of the aforesaid condition leads to the conclusion that National Insurance would not be liable for any loss or damage 12 months after the event that caused the loss or damage to the insured unless the claim is the subject matter of a pending action or arbitration.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 disclaimerce 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.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-a-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 consumers 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.19. In so far as the third contention urgedce is concerned this is itself contradicted by the reports of the two surveyors appointed by it. It is possibly to get over this difficulty that National Insurance advanced the fourth contention namely that none of the two survey reports could form the basis for payment of the amount claimed.In this context, the contention urged was that the first survey report given by N.T. Kothari & Co. was not a bona fide report inasmuch as the Central Glass and Ceramic Research Institute, Calcutta had not authorised that specific officer to give any report with regard to the damage or loss suffered by the insured.Without going into this aspect of the matter since the National Commission itself did not rely upon the first survey report, we may notice that the second survey report was prepared in consultation with that very institute namely the Central Glass and Ceramic Research Institute, Calcutta but on this occasion, another officer had been consulted. The Insurance Company failed to provide any reason before the National Commission or even before us to remotely suggest that the second report was also tainted either because the officer consulted was not authorised to give a report or for any other justifiable reason. The National Commission accepted the second survey report which was provided by Seascan Services (WB) Pvt. Ltd. as well as the addendum to it and we do not see any reason to disagree with the findings arrived at in the absence of any material to discredit the surveyor or the report of theAPPEAL NO. 1156 OFHaving gone through the evidence on record, we find that the view taken by the National Commission is not only based on the evidence on record, but is in any event a possible view. In the absence of any material error in appreciation of the evidence, we do not think it proper to substitute the view taken by the National Commission with our view.25. Therefore even in this appeal, National Insurance has not been able to make out a case for interference with the order passed by the National Commission.