Page 40 - Insurance Times December 2018

Explaining with Indian insurance case 3. In Kandimalla Raghavaiah & Co. v/s National Insurance
Co. Ltd. [III (2009) CPJ 75 (SC), a fire had occurred in
studies: March, 1988. Although the insured intimated the

Now, some of the case studies / case histories are being insurance company about the fire, the claim was not
discussed now with you, with a view to making lodged for years together. The insured asked for the
generalizations with empirical inquiries investigating this claim form in November, 1992 after four-and-a-half
phenomenon with information (within its real-life contexts), years of the day when incident occurred. As the
as given below for detailing this issue of 'Law of Limitation'. insurance company ignored the request and did not
Here this instance of analyzing all these particular cases with issue the claim form, the insured filed a consumer
their brief histories and also with a view to have the in-depth, complaint in the year 1997. The Supreme Court held in
and detailed examination of this subject, as well as its related this case that the cause of action would be the date
contextual conditions as observed by the various judicial when the incident of fire occurred and the limitation
forum /courts and its development over a period of time, as period would begin to run from that date and
observed under the parlance /context of our Indian Law. accordingly held that the complaint was time-barred.
So, all Indian insured please be aware of this blatant
1. Long back in Sirpur Paper Mills Ltd. v/s National face, my dear.
Insurance Co. Ltd. [ II (1997) CPJ 36 (NC) case the full five
member bench of the National Commission has Observations: One sentence from the judgment in the
interpreted the law on the subject. Here a fire had case of Kanimall Raghavaiah is being picked up and
occurred in October, 1986. The claim was rejected by misquoted to argue that in insurance matters, the
insurer in November, 1986. So, insured made limitation period would run from the date of the
representation to the concerned insurance company accident and not the date of rejection of the claim.
which appointed a surveyor who submitted his report in What is lost sight of is the fact that in Raghavaiah's
April, 1989. The insurance company practically slept over case, the claim itself was not lodged and hence there
the claim file and ultimately rejected the same in the was no question of repudiation of the claim and it is in
month of August, 1994. Being aggrieved by the rejection this context that the Supreme Court held that the cause
of this claim, the insured filed a consumer complaint in of action would run from the date of the incident when
the year 1995. The issue before the National Commission the fire occurred. But the well settled principles of law
was whether the claim was time-barred or not. The ought not to be given a go-by in view of the peculiar
commission held that since the claim was under facts in Raghavaiah's case.
consideration by the insurance company, it would be just
and fair to consider that limitation would begin to run Impact: The misinterpretation of Raghavaiah's case is
from the date of final rejection of the claim. playing havoc with regard to insurance claims. Unless
the law and facts are properly distinguished, consumers
2. In Oriental Insurance Co. Ltd. v/s Prem Printing Press [I will continue to find themselves at the receiving end
(2009) CPJ 55 (SC)], a similar issue came up. After the with genuine complaints being thrown out for being
claim was rejected, the insured sent representations to time-barred. If a claim is settled, there is no cause of
the insurance company to review the claim. The action; whereas if it is rejected, the insured is aggrieved
insurance company agreed to reconsider it, and later and thus the rejection of the claim gives rise to a cause
re-affirmed the rejection. The question here was of action for initiating legal proceedings for the proper
further modified - whether the starting point for Redressal of the complaints / grievances thus
computing the limitation period would be the date of generated. Hence, here limitation has to be construed
first rejection or the final rejection. The Supreme Court from the date of finally the rejection of the claim.
observed that by stating that the matter was under
fresh consideration, the insurance company had So from the judgments of the Supreme Court, it is
"dangled a carrot of hope", because of which the amply clear that the concept of the Law of Limitation
insured had not take legal action. Hence, the order and the Limitation Period may make all insured
came - the limitation period cannot be computed from conscious about the available time frame within which
the date of the original first time rejection of claim, but a person / organization / firm or any entity as insured
would have to be calculated from the date when the must file his Grievance Redressal case before any
claim was rejected for the second time after judicial authority for exercising his rights. Here, any
reconsideration finally. complaint or grievance means "Any communication

40 The Insurance Times, December 2018