J.M. Malik, Presiding Member
1. The main question which falls for consideration is, œWhether, this complaint is barred by time??. The facts of the complaint case are these. Tainwala Personal Care Product Pvt. Ltd., the complainant, obtained a Standard Fire and Special Perils Policy in relation to its factory premises, situated at Plot No.4, Government Industrial Estate, Village Khadoli, Silvassa, Dadra and Nagar Haveli, in the sum of Rs.2,70,00,000/- on or about 12.02.2008, from Royal Sundaram Alliance Insurance Co.Ltd., the opposite party, in this case, for the period commencing from 14.02.2008 to 13.02.2009. The complainant paid a sum of Rs.23,891/-, vide cheque, dated 13.02.2008 to the Insurance Brokers. The insurance Brokers, in turn forwarded the proposal form in respect of the complainants said factory unit for an insurance cover, to the Insurance Company, vide covering letter dated 14.02.2008. The Opposite Party, vide its letter dated 14.02.2008, issued a Risk Confirmation to the complainant in respect of the Standard Fire and Allied Special Perils Insurance Policy, for the above said period. The complainant was also informed that the policy documentation was under preparation and it would be forwarded to the complainant, in due course.
2. Unfortunately, a major fire occurred, on 17.02.2008, which gutted the complainants insured factory premises. Information was given to the insurance company. The premises were visited by the Surveyor and he submitted his report. The claim of the complainant was repudiated vide letter dated 18.02.2008, the relevant portion of which, runs as
œSub: Proposal for fire and allied perils SI “ Rs.270 lakhs
We are in receipt of your fax dated 14th February, 2008, requesting for insurance cover for your factory at Plot No.4, Govt.Industrial Estate, Khadoli Village Silvasa, Dadra and Nagar Haveli. The premium cheque for Rs.23,891/- (as against our quot e of Rs.30,716/) was received by us, only on 15th February, 2008.
You may kindly note that the consideration received for covering this risk is less than the offer given by us. Hence we are not in a position to cover the risk as requested by you.
Hence, you may kindly note that we are not on cover for the above mentioned risk.
For Royal Sundaram Allied Insurance Co.Ltd. Dt. 18.02.2008?. At this stage, we are not concerned with the merits of this case. The main question is whether the case is barred by time or not.
3. Instead of approaching the consumer fora, the complainant approached the Arbitrator. The complainant believed that it was entitled to invoke arbitration. The relevant clause No.13 of the General Conditions, stipulates :-
œIf any dispute or difference shall arise as to the quantum to be paid under this Policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration, the same shall be referred to a panel of three arbitrators, comprising of two arbitrators one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996. It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore provided, if the Company has disputed or not accepted liability under or in respect of this Policy. It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this Policy that the award by such arbitrator/ arbitrators of the amount of the loss or damage shall be first obtained.?
4. The insurance company declined to appoint an Arbitrator, inter alia, contending that there was no concluded contract of insurance between the parties. The complainant approached the Honble High Court of Bombay, which, vide its order dated 07.05.2012, disposed of the application. The Honble High Court of Bombay, held that œit is evident that there is no arbitration agreement between the parties for the reasons which have been indicated above?.
5. The complainant submits that the aforesaid order of the Honble High Court of Bombay is ultra vires on the following grounds. The relevant para is S1, which is reproduced as under :-
(i) The Risk Cover Note dated 14 February 2008 per se constitutes a valid and binding insurance agreement between the Complainant and the Insurer, particularly when the said Risk Cover Note categorically stated that the policy document is under preparation and will be submitted in due course?.
6. However, it is interesting to note that, although, the order of the
HonbleHigh Court was called into question in these Proceedings, yet, no appeal or SLP was preferred before the Honble Supreme Court of India. Counsel for the complainant has invited our attention towards an authority of the Supreme Court, reported in Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Ors., (2008) 7 SCC 169, wherein in para Nos. 22 and 31, it has been held, as under :-
œ22. The policy of the section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of Act, it becomes clear that the legislature enacted the said section to exempt a certain period covered by a bonafide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the Act of 1996. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or (sic of ) law or defect of procedure. Having regard to the intention of the legislature, this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded.
31. To attract the provisions of Section 14 of the Limitation Act, five conditions enumerated in the earlier part of this judgment have to co-exist. There is no manner of doubt that the section pre-requisites for attracting Section 14. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under the particular circumstances. The time during which a court holds up a case while it is discovering that it ought to have been presented in another court, must be excluded, as the delay of the court cannot affect the due diligence of the party. Section 14 requires that the prior proceeding should have been prosecuted in good faith and with due diligence. The definition of good faith as found in Section 2(h) of the Limitation Act would indicate that nothing shall be deemed to be in good faith which is not done with due care and attention. It is true that Section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard-and-fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case, be more or less, a question of degree. The mere filing of an application in wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In the light of these principles, the question will have to be considered whether the appellant had prosecuted the matter in other courts with due diligence and in good faith?.
7. On the other hand, counsel for the Opposite Party vehemently argued that the case filed by the complainant before the Honble High Court is lame of strength. He submitted that, instead of contesting the judgment before this Commission, which has no power to upset the judgment of the Honble High Court in this context, the complainant should have challenged the same before the Honble Supreme Court of India. Although this point carries value in a measure, yet, it will not assist us in deciding the question of limitation. It is explained that after dismissal of the petition on 07.05.2012, by the Honble High Court, Bombay, the petition was filed immediately in this Commission, on 13.08.2012. Counsel for the Opposite party further argued that there was no concluded contract. Section 14 of the Limitation Act requires that the request made by the complainant should be bonafide. He contended that after having lost the battle in one forum, the complainant is attempting to try his luck, somewhere else.
8. We find force in the arguments submitted by the counsel for the Opposite Party. Moreover, the Honble Supreme Court in LaxmiEngginering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583, held :-
œ23. The appeal accordingly fails and is dismissed, but without costs. If the appellant chooses to file a suit for the relief claimed in these proceedings, he can do so according to law and in such a case he can claim the benefit of Section 14 of the Limitation Act, to exclude the period spent in prosecuting the proceedings under the Consumer Protection Act, while computing the period of limitation, prescribed for such a suit?.
9. It is clear that the complainant had initiated the proceedings in good faith. The Arbitrator has no jurisdiction to try this case and there lies no rub in filing this case before this Commission, by virtue of Section 3 of the Consumer Protection Act, 1986. Consequently, the said delay is hereby condoned. However, it is made clear that nothing in this order shall tantamount to the merits of this case. All the points are being kept open.
10. The case is now fixed for complainants evidence by way of affidavit, on 08.09.2014.