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The Supreme Court has observed that provisions of limitation in the Consumer Protection Act cannot be strictly construed to the disadvantage of a consumer.
The observation came in a judgment delivered by Justices Madan B Lokur and PC Pant in a consumer dispute against National Insurance Company.
The case began when certain goods belonging to Hindustan Safety Glass Works was damaged in rains. The Glass company raised an insurance claim of Rs. 52 lakh with the National Insurance Company. Two surveyors were appointed to assess the damages and they arrived at figures of Rs. 24 lakh and Rs. 26 lakh. Despite the same, no amount was paid to Hindustan Glass whereupon it filed a complaint with the National Consumer Disputes Redressal Commission (National Commission) under the provisions of the Consumer Protection Act, 1986 claiming an amount of Rs. 52.32 lakhs.
The National Commission rejected all the contentions urged by National Insurance Company and ordered the Insurance Company to pay an amount of Rs. 21 lakh to Hindustan Glass.
This judgment was assailed in the Supreme Court by the National Insurance Company.
One of the contentions raised by the Insurance Company was that the claim was barred by limitation. The counsel for the Insurance Company argued that in terms of Section 24-A of the Consumer Protection Act, the claim made by the insured was barred by limitation since the complaint was filed with the National Commission on 13th August, 1996 while the loss or damage had occurred on 6th August, 1992. Therefore, the National Commission could not have admitted the complaint since it was filed beyond the stipulated period of two years from the date on which the cause of action had arisen.
The Court, however, turned down the contention stating that the Insurance Company itself took more than two years to survey the loss.
“Strictly speaking, the event that caused the loss or damage to the insured occurred on 6th August, 1992 when due to heavy incessant rain in Calcutta, the raw materials, stocks and goods, furniture etc. of the insured were damaged. On the very next day, the insured lodged a claim with National Insurance. In response, National Insurance first appointed N.T. Kothari & Co. to assess the loss suffered by the insured and a report was given by this surveyor after more than one year. Thereafter, for reasons that are not at all clear, National Insurance appointed a second surveyor which also took about one year to submit its report and eventually gave an addendum to that report thereby crossing one year in completion of its report along with the addendum. In other words, National Insurance itself took more than two years in surveying or causing a survey of the loss or damage suffered by the insured. Surely, this entire delay is attributable to National Insurance and cannot prejudice the claim of the insured, more particularly when the insured had lodged a claim well within time. To make matters worse, National Insurance actually repudiated the claim of the insured only on 22nd May, 2001 which is well after the complaint was filed with the National Commission.”
It then proceeded to state that in consumer disputes, courts have to take a pragmatic view of the rights of the consumer and provisions of limitation in the Consumer Protection Act in such disputes should not be construed strictly to the disadvantage of the consumer.
“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-à-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 consumer’s claim.
It, therefore, rejected the appeal by the National Insurance Company.
Read the judgment below.