Mere Correspondence Cannot Prolong Limitation Period; Insurance Complaints Should Be Filed Within Prescribed Timeframe: NCDRC

Brief Facts of the Case

The complainant, a wholesale trader of FMCG goods, had obtained a Special Fire Special Policy (SFSP) for Rs. 60 lakh for his goods stocked in his godown from New India Assurance. Following a fire on the insured premises, the insurer was informed the next day, and a claim for Rs. 55 lakh under the insurance policy was filed. Despite providing all the information requested by the surveyor appointed by the insurer, the claim was not finalized for nearly 2 ½ years, and further documents were requested. The surveyor had conducted a preliminary inspection and assessed the loss at Rs. 10 lakh on a net salvage basis. Although the surveyor's report mentioned that the complainant was agreeable to settle the claim for Rs. 9,34,838 in full satisfaction, the claim had not been settled. The complainant approached the State Commission, which held that although the complainant was a “consumer” under section 2 (1) (d) of the Act, the complaint was filed after the limitation period had expired. The State Commission held that the insurer had already closed the claim, and subsequent correspondence did not extend the limitation period.

Contentions of the Opposite Party

The insurer argued that the complaint was barred by limitation since it was filed over two years after the event. It was also contended that the surveyor had contacted the complainant and advised them to prepare a room-wise stock list, which was not prepared in a timely manner. According to the surveyor's preliminary inspection, the stock condition on the first floor of the premises was found to be good. Therefore, the complainant was directed to prepare a separate list of stocks in each room and to segregate the good articles, which was not done despite several letters and repeated reminders. The complainant did not cooperate with the surveyor, and information was sought within 15 days but was not complied with. Accordingly, the claim was closed due to the non-supply of relevant documents. As per the report, the surveyor's assessment was for Rs. 10 lakhs, of which a settlement of Rs. 9,34,838 acceptable to the complainant could not be done since this was based on documents that were not supplied.

Observations by the Commission

The Commission observed that the State Commission's decision was based on factual findings and legal principles regarding the delay in filing the complaint. The complainant failed to provide evidence contradicting the finding that the complaint was time-barred, filed two years after the cause of action, except to argue that it was a continuing cause of action due to ongoing correspondence with the insurer. Citing the case of Vandan Pareshkumar Manghita vs Divisional Manager, National Insurance Co. Ltd., it was emphasized that mere correspondence does not extend the limitation period, and the complaint should have been filed within the prescribed two-year period. Furthermore, the Commission referred to the case of State Bank of India vs. B S Agriculture Industries (I), which highlighted the imperative nature of the limitation period under Section 24 A of the Consumer Protection Act. It emphasized that the consumer forum must examine whether the complaint was filed within the limitation period and may condone delay only if sufficient cause is shown and recorded in writing. Failure to adhere to this principle would result in an illegal decision.

The Commission dismissed the appeal and upheld the State Commission's order.

Case Title: M/S. Yash Agencies Vs. New India Assurance Co. Ltd. & Anr

Case Number: F. A. No. 1130/2016