BENCH- JUSTICE MADAN B. LOKUR, PRAFULLA C. PANT
JUDGEMENT BY- JUSTICE MADAN B. LOKUR
DATE- 7 APRIL 2017
The Consumer Protection Act, is usually understood by the public as the act which protects the rights and needs of consumers through its legislation and provisions under it but most of us are not aware of the fact that the issues caused in the Insurance Companies also does come under the Consumer Protection Act. This case analyses National Insurance co. ltd. v Hindustan safety glass works ltd. is one of the landmark case when we study the Consumer Protection Act, 1986 and 2019.
FACTS OF THE CASE
The respondent being Hindustan safety Glass works had purchased 2 policies from the appellant the first one was for Rs. 4.9 lakhs which was to cover the building, offices, and canteen and the other one was for Rs. 5.7 crore both the policies were renewed after 1 year and in August 1992, Kolkata experienced heavy rain which flooded many places as a result and the area in and around the factory was also damaged because of the rain, especially the goods and materials which were under the policies therefore the respondent claimed for the compensation there were two surveys done one after the other and due to the vagueness in the first one the second survey was called it said to compensate the loss by Rs. 26 lakhs.
Even after giving reasonable time the insurance company did not respond to the notice and accordingly the insured filed the complaint in the National commission under the provisions of Consumer Protection Act, claiming the policy amount of Rs.52.32 lakhs and the amount of Rs.1.81 lakh as the loss incurred for the loss minimization.
While going through the facts and details we can illustrated that 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 forsaken by National Insurance much later on 22nd May, 2001 which is about five years after the complaint was filed with the National Commission.
And let the facts be for which in response to the complaint and during the course of submissions, National Insurance raised four objections. These have been encapsulated by the National Commission as follows:
Complaint was wedged by condition No. 6(ii) of the policies;
Complaint was wedged by limitation as it was filed on 13.08.1996 while the loss/damage to the insured properties had taken place in August, 1992.
The purported loss was because of the accumulation of dust and moisture on the stocks, goods and materials, lying neglecting because of lock out in the factory from 03.05.1991 and not as a result inundation/flood.
Neither of the surveys specified the basis or fundamental reasoning for the payment of the amount claimed.
THE NATIONAL COMMISSION’S ORDER-
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 Sea scan Services (WB) Pvt. Ltd. (the second surveyor). Costs of Rs. 20,000/- were also awarded to the insured.
SECTION 24A OF CONSUMER PROTECTION ACT, 1986
Section 24A of the act talks about the limitation period for the complaint to be filed in a consumer forum. The section prescribes that the forums (District Forum, State Commission or National Commission) depending on the case shall not consider a complaint if it has been filed after two years after the arising of the dispute. In the case of Anshul Aggarwal v. New Okhla Industrial Development National Law Portal, it was observed that it is imperative to keep in mind the limitation period prescribed by the act. In the case of R.B Ramalingam v. Bhavaneshwari, it was observed that the court has to inspect the postponement of the petition being filed is properly explained and it is a very basic principle that needs to be followed.
The Consumer Protection Act, 1986 was based for this case and the main intention for this very legislature is to protect consumers from the outlawed activities of the manufacturers or the producers and also protect the loyal manufacturers from the dishonest consumers for the welfare of the economy as a whole to eradicate internal disturbance caused therefore in this case we can see that the consumer was at a disadvantage and the insurance company neglected its plea even after having conducted two surveys the National Consumer forum fairly went through the details and discussed the objections raised by Insurance company.
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. It was submitted by learned counsel for National Insurance that the expression ‘pending action’ must relate to action instituted in a court of law.
- National Insurance Co.Ltd vs Hindustan Safety Glass Works – https-//www.consumer-voice.org/consumer-right-laws/national-insurance-co-ltd-vs-hindustan-safety-glass-works/
- National Insurance Company Ltd v. Hindustan Safety Glass Works Ltd. and anr. – https-//indiankanoon.org/doc/89780746/
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