M/S. Sonell Clocks and Gifts Ltd. v. the New India Assurance Co. Ltd.
A. M. KHANWILKAR, J. 1. The appellant filed a complaint
before the National Consumer Disputes Redressal Commission, Ne w
Delhi being Consumer Complaint No.20 of 2006, asserting that it h ad
taken an Insurance Policy from the respondent (Insurance Co mpany)
for a period of one year from 19 th July, 2004 to 18 th July, 2005, in respect
of its building, plant and machinery at plot No.70/3, B .K. Textile
Compound, Dan Udyog Sangh Ltd., Piparia, Silvassa, Dadra Nagar,
Haveli, for a sum assured of Rs.2,87,00,000/- (Two Crore Eighty Seven
Lakh Only) on reinstatement value basis. Due to torrentia l rains and
floods in the entire area, the water gushed into the factory prem ises
39
causing damage to the machinery as well as raw material lying therein.
This event occurred on 4 th August, 2004. Intimation of the loss was
given to the respondent after a gap of 3 months 25 days, on 30 th November,
2004. Thereafter, the respondent appointed a surveyor to assess the
loss caused due to the flooding of the factory premises. The surveyor
after causing inspection submitted its report to the respondent inter alia
stating that the claim was not payable on account of the f ailure of the
complainant to comply with the mandate of Clause 6 of the ge neral
conditions of the policy. Acting upon the said report, the respondent vide
letter dated 18 th February, 2005 conveyed rejection of the claim to the
appellant on the ground that neither the intimation of the loss had been
given to it immediately nor were the requisite particulars of the loss
conveyed within stipulated period. Thus, there was breach of terms and
conditions of Clause 6 of the general conditions of the policy.
2. As a sequel, the appellant approached the Commission for a
declaration that the respondent was guilty of deficiency in s ervice as
well as unfair trade practices. Additionally, to direct the respondent to
sanction the genuine claim of the appellant and reimburse the loss caused
to it due to the floods to the tune of Rs.2,66,05,000/-(Two Crore Sixty
Six Lakh Five Thousand Only) with interest at the rate of 21% p er
annum from the date of incident till realization of t he same. The
appellant also prayed for compensation amount of Rs.5,00,000/- (Five
Lakh Only) towards mental agony and cost and further an amount of
Rs.1,00,000/- (One Lakh Only) towards incidental expenses.
3. The complaint was opposed by the respondent on the ground
that there was gross violation of the terms and conditions of the policy
as no intimation muchless immediate information about the los s was
given to the Insurance Company nor was a claim lodged with the
requisite particulars within the time stipulated in the policy.
4. This objection commended to the Commission as a result of
which, the complaint filed by the appellant came to be dismissed by the
judgment and order dated 10 th December, 2015 on the following terms:
“5. It would thus be seen that as per the terms and conditions of
the policy taken by it, there were three obligation s on the
complainant/insured. The first obligation was to give notice of the
loss to the insurer, immediately on the said loss taking place. The
second obligation on the complainant was to submit a claim f or
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
the loss or damage, giving all necessary particulars of t he loss,
within a period of 15 days or such other time as the insurer might
allow. The third obligation on the insured was to intimate the
insurer, within six months of the date of the loss, that it intended to
replace or reinstate the property which had been destroy ed or
damaged.
6. It is not in dispute that the alleged loss despite having occurred
on 04.08.2004 was reported to the Insurance Company only on
30.11.2004. Thus neither immediate intimation of the loss was
given to the Insurance Company nor was a claim lodged with the
requisite particulars within the time stipulated in the policy. The
complainant Company, therefore, contravened clause 6 of the
insurance policy taken by it on account of the above referred two
defaults.
7. It is contended by the learned counsel for the complainant that
the requirement of intimating the insurer and submitting a claim
within 15 days of the loss stands superseded by clause 4(3)
applicable to reinstatement value policies, which require d the
requisite intimation to be given within six months of the date of
loss. I, however, find no merit in the contention. The obligation of
the insured under clause 4(3) applicable to reinstatement va lue
policies was independent of the obligation placed upon it under
clause 3 of the said policy. Under clause 3 of the policy , the
insurer was to be informed immediately on happening of the loss
followed by lodging of the claim with necessary particulars within
15 days of the loss or within such further time as sho uld be
extended by the insurer, whereas under clause 4(3), which was
applicable to reinstatement value policies, it has to exp ress its
intention to replace or reinstate the property which had been
destroyed or damaged. There is no question of any supersession
of clause 6 of the policy by clause 4(3), applicabl e to
reinstatement value policies, the reinstatement of these cl auses
being distinct and separate from each other.
8. For the reasons stated hereinabove, I have no hesitation in
holding that the complainant committed breach of clause 6 of the
insurance policy, and therefore as stipulated in the said clause, no
claim under the policy is payable.
The complaint is, therefore, dismissed with no order as to costs.”
41
5.The aforementioned decision was assailed before this Court by
way of Civil Appeal No……..(D.No.6048 of 2016). This Court vide
order dated 26 th February, 2016, relegated the parties before the
Commission by giving liberty to the appellant to file a review petition
before the Commission on the singular contention of waiver of condition
stipulated in Clause No.6 by the respondent. The order reads thus:
“O R D E R
Delay condoned.
Heard Mr. Jitendra Mohan Sharma, learned senior counsel for
the appellant. It is submitted by the learned counsel that the
insurer has waived the condition relating to delay in
intimation by appointing a surveyor.
On a perusal of the order passed by the National Consum er
Disputes Redressal Commission (N.C.D.R.C.), New Delhi, we
do not find that the said issue was raised before the N.C.D.R.C.
In view of the aforesaid, we permit the appellant to file an
application for review and put forth the issue of waiver before the
N.C.D.R.C. within a period of four weeks hence. The
N.C.D.R.C. will entertain the application for review singularly on
this score.
With the aforesaid observation, the appeal is disposed of.”
(emphasis supplied)
It is noticed that no liberty was given to the appellant to challenge
the judgment and order dated 10 th December, 2015 passed by the
Commission, in the event the review petition was decided agai nst the
appellant.
6. Be that as it may, as per the liberty given by this Cour t the
appellant preferred a review petition before the Commission bearing
Review Petition No.662 of 2016. The singular issue as to whether the
respondent (insurer) had waived the condition relating to delay in
intimation by appointing a surveyor was considered by the Commission.
The Commission adverted to the decision of this Court in Oriental
Insurance Co. Ltd. Versus Parvesh Chander Chadha 1. It then
noticed the decision of the Commission in New India Assurance
1 MANU/SC/1343/2010 Civil Appeal No.6739 of 2010 dat ed 17 th August, 2010
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
Company Ltd Versus Trilochan Jane 2. Additionally, the Commission
adverted to the decision in State of Punjab Versus Davinder Pal Singh
Bhullar and Others 3 and on analysing the factual matrix concluded
that there was nothing to indicate an intentional a nd conscious
relinquishment by the respondent (insurer) of its right to reject the claim
on account of the delayed intimation of the loss, by appointing a
surveyor to assess the loss claimed by the insured (appell ant). The
Commission distinguished the decision of this Court in Galada Power
and Telecommunication Ltd. Versus United India Insuranc e Co.
Ltd. and Another ,4 which was profusely relied upon by the appellant
as not applicable to the facts of the present case. At the end, the
Commission also relied on the observation in Reliance General
Insurance Company Ltd. Versus Harleen Kaur 5.
7. The review petition filed by the appellant was according ly
dismissed vide judgment and order dated 25 th October, 2016. Both the
decisions of the Commission dated 25 th October, 2016 in Review
Application No.77 of 2016 and dated 10 th December, 2015 in Consumer
Complaint No.20 of 2006 have been assailed in the present appeals.
8. The appellant would contend that the issue is no more res
integra. For, this Court in Galada Power and Telecommunication
Ltd. (supra), while considering similar contention has held t hat the
insurer having appointed a surveyor despite stipulation such as in Clause
6, waives its right to advance the plea that the claim was not entertainable
because of the condition enumerated in duration cla use was not
satisfied.
9. Per contra, the respondent would contend that the dictum in
the said decision is contextual and in the backdrop of the factual matrix
of that case. In other words, the issue of waiver by the insurer has been
answered against the insurer not merely because of a ppointing a
surveyor despite the stipulation in the policy, but the Court at more than
one place while analysing the facts noted the additional circumstance
that the letter of repudiation sent by the insurer merely stat ed that, the
claim lodged by the insured was not falling under the purview of the
transit loss. The Court opined that the appointment of a surveyor despite
2 First Appeal No.321 of 2005 dated 9 th December, 2009
3 (2011) 14 SCC 770
4 (2016) 14 SCC 161
5 In Revision Petition No.2850 of 2015
43
the stipulation in Clause 5 therein was a positive action taken by the
insurer reinforcing the finding of waiver of its right to advance the plea
that the claim was not entertainable because the condition enumerated
in duration clause was not satisfied.
10. We have heard Mr. Jitendra Mohan Sharma, learned senior
counsel for the appellant and Mr. Joy Basu, learned senior counsel for
the respondent.
11. The singular question involved in these appeals is whether the
respondent (insurer) had waived the condition relating to delay in
intimation, by appointing a surveyor.
12. It is well established position that waiver is an int entional
relinquishment of a right. It must involve conscious abandonment of an
existing legal right, advantage, benefit, claim or privilege, which except
for such a waiver, a party could have enjoyed. It is an agreement not to
assert a right. To invoke the principle of waiver, the person who is said
to have waived must be fully informed as to his rights and wit h full
knowledge about the same, he intentionally abandons them. [See para
41 of State of Punjab (supra)]. There must be a specific plea of waiver,
much less of abandonment of a right by the opposite party.
13.We shall, therefore, first traverse through the pleadings of the
parties. The appellant has asserted that it was poi nted out to the
respondent that the act of appointing surveyor by the respondent was an
implied consent of condoning the delay. In case the respondent wanted
to repudiate the appellant’s claim only on the technical gro und of 15
days’ delay, it should have done at the first instance and the re was no
need to have appointed a surveyor thereafter.
14. The respondent while refuting the said assertion of the
appellant stated in the written version filed before the Commission that
the appellant was negligent in dealing with its affairs, including in the
matter of informing the respondent forthwith about the claim after the
loss or damage caused on account of flooding as was essential as per
condition No.6 of the policy. Condition No.6 of the policy reads thus:
“6. (i) On the happening of any loss or damage the insured shall
forthwith give notice thereof to the Company and shall within 15
days after the loss or damage, or such further time as the
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
Company may in writing allow in that behalf, deliver to the
Company
……………………………..
No Claim under this policy shall be payable unless the term s of
this condition have been complied with.”
The respondent also urged that after the receipt of the c laim
intimation from the Bank, it immediately appointed M/s. Saran
Engineers & Consultants to survey and assess the loss. The su rveyor
after visiting the premises gave a detailed report dated 29 th December,
2004 including its recommendation that the loss is not payable as per the
policy (B) General Conditions, Para 6. On the basis of that report and
keeping in mind the terms and conditions of the policy, the respondent
repudiated the claim in terms of policy condition No.6 and intimated the
repudiation of the claim to the appellant vide letter dated 18 th February,
2005. The respondent also asserted that the true import of the letter of
repudiation is a matter of interpretation. In any case, the appointment of
the surveyor was necessary, otherwise the appellant would have
complained about the non-appointment of the surveyor. The respondent
urged that the appellant was in breach of the policy condition.
15.The Commission considered the pleadings of the parties and
including condition No.6 of the Insurance Policy, the repudiation letter
dated 18 th February, 2005 and the Surveyor’s Report which had
recommended that the loss as such is not payable as per the Policy. The
Commission then went on to distinguish the decision in Galada Power
and Telecommunication’s case, (supra).
16. In the said case, the issue of waiver was decided on the facts
of that case as is evinced from the dictum in paragraphs 18-20 of the
said decision. The same reads thus:
“18. In the instant case, the insurer was in custody of the
policy. It had prescribed the clause relating to durat ion. It
was very much aware about the stipulation made in Clauses
5(3) to 5(5), but despite the stipulations therein, it appointed
a surveyor. Additionally, as has been stated earlier, in the
letter of repudiation, it only stated that the claim lodg ed by
the insured was not falling under the purview of transit loss.
Thus, by positive action, the insurer has waived its right to
advance the plea that the claim was not entertainab le
45
because conditions enumerated in duration clause were not
satisfied. In our considered opinion, the National Commission
could not have placed reliance on the said terms to come to t he
conclusion that there was no policy cover in existence and that
the risks stood not covered after delivery of goods to the consignee.
19. Coming to the merits of the claim, we find that the surveyor
had given a report that there was a loss. He had al so
quantified it. The State Commission after elaborate discussion
has held as follows:
‘The surveyor also confirmed in their reports, the shortage/loss of
AAAC due to pilferage during transit and estimated the l oss as
per Ext. A-12. This shortage was also confirmed by Katigorah
Police as per Ext. A-13 and as reiterated earlier by the Takeover
Certificate, Ext. A-19. Taking into consideration that the surveyors
appointed by the insurance company have completed th eir
investigation and submitted their reports and there after an
investigator was appointed on 16-4-1998 without any valid reasons.
It is held by the National Commission in Gammon India Ltd. v.
New India Assurance Co. Ltd. that: (CPJ p. 10)
‘… Report of first Surveyor not accepted, second Surveyo r
appointed — Appointment of second Surveyor not explained —
Deficiency in service proved — Report of first Surveyor upheld.…’
and the investigator in the instant case submitted his report on
28-12-1998 i.e. almost 8 months after his appointment. Taking
into consideration all the above submissions, we are of the
considered opinion that the appellant complainant was able t o
establish that there was shortage/damage to the consignment which
was given to the second respondent for transportation.’
20. Though the said aspect has not been gone into by the National
Commission, yet we find, the findings recorded by the Sta te
Commission are absolutely justified and tenable in law being based
on materials brought on record, in such a situation we do not think
it appropriate that an exercise of remit should be carried out asking
the National Commission to have a further look at it. In any
case, the exercise of revisional jurisdiction by the National
Commission is a limited one. We may hasten to add that to
satisfy ourselves, we have perused the surveyor’s r eport
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
and scrutinised the judgment and order passed by the State
Commission in this regard and we are completely satisfied
that the determination made by it is absolutely impeccable.”
(emphasis supplied)
17. In the present case, it is common ground that the letter of
repudiation dated 18 th February, 2005 elucidates that the claim of the
appellant was rejected on the ground that neither the intima tion of the
loss had been given to it immediately after the loss no r were the
requisite particulars of the loss conveyed within stipula ted period and
there was breach of terms and conditions of Clause 6 of th e general
conditions of the policy. Additionally, the surveyor report predicates that
it was very difficult to estimate the damages for the reasons mentioned
therein and that the claim of the appellant was not payable on account of
breach of Clause 6 of the general conditions of the policy. That
recommendation commended to the respondent. It has been so
incorporated in the letter of repudiation dated 18 th February, 2005.
18. The respondent has rightly pointed out the other distinguishing
features in the present case. To wit, in that case [ Galada (supra)], the
Court had considered Clause 5 of a Marine Insurance Policy wherein
the issue was whether the insurance cover itself had extin guished by
efflux of time and that the intimation given by the insured to the insurer
was not made within 7 days of arrival of the vehicle at the destination
mentioned in the policy. According to the insurer, on expiry of 7 days
from delivery the insurance cover stood perished and no cover woul d
subsist beyond the said 7 days period. It is in that context, the Court
noted that appointment of the surveyor by the insurer beyond the said
period can be construed as an act of waiver by the ins urer of the
position that the policy stands extinguished. In other words, appointment
of a surveyor by the insurer was interpreted as a manife station of the
stand of the insurer that the insurance cover still subsists. This is evident
from the dictum in paragraph 13 of the reported decision as th e Court
noted that once a surveyor was nominated to verify the loss, the insurer
could not be allowed to take a stand that the claim is hit by t he clause
pertaining to duration and moreso because of absence of any mention in
the letter of repudiation. Thus, it went on to hold that from the positive
conduct of the insurer in unequivocally appointing a surveyor, the
insurer had waived the right which was in its favour under the duration
clause.
47
19. The expression “duration” is of some significance whic h is
reflective of the existence or otherwise of the policy itself. In the present
case, there is no dispute about the subsistence of the policy but is one of
violation of condition No.6 of the policy. Furthermore, in the prese nt
case the controversy will have to be answered on the basis of Standard
Fire and Special Perils Policy relatable to condition No.6 obligating the
insured to give forthwith intimation of the loss to the insurer. The two
clauses are materially different and relate to two different a nd distinct
insurance policies. In other words, Clause 5 of the Marine Ins urance
Policy and Clause 6 of the present policy are incompar able being
qualitatively different.
20. To put it differently, Galada’s case (supra) was not a case
which considered repudiation based on a premise or a reason similar to
condition No.6 of the present policy and a specific plea take n by the
insurer in that behalf in the repudiation letter itself. Notably, Clause 5 of
the Marine Insurance Policy which was the subject matter in Galada’s
case (supra) did not have a negative covenant as in this ca se in the
proviso to condition No.6 of the subject policy. The fulfillme nt of the
stipulation in Clause 6 of the general conditions of the policy is the sine
qua non to maintain a valid claim under the policy.
21. We, therefore, agree with the respondent that the dictum in
Galada’s case (supra) is in the context of the facts of that case a nd
does not lay down that on the appointment of a surveyor, per se, the
insurer is estopped from raising a plea of violation of the condition
warranting a repudiation of the claim. The factum of waive r has to be
gathered from the totality of the obtaining circumstances.
22. Suffice it to observe that Galada’s case (supra) will be of no
avail to the facts and circumstances of the present case . In that, the
event occurred on 4 th August, 2004 but intimation was given to the
insurer only on 30 th November, 2004 after a gap of around 3 months 25
days. No explanation was offered for such a long gap muchless
plausible and satisfactory explanation. The stipulation in condition No.6
of the policy to forthwith give notice to the insurer is to fac ilitate the
insurer to make a meaningful investigation into the cause of damage and
nature of loss, if any. This Court in Parvesh Chander Chadha (supra)
has held that it is the duty of insured to inform the loss forthwith after the
incident.
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
23. The respondent has also invited our attention to the fact that
in Galada’s case (supra), this Court has had no occasion to consider the
efficacy of Insurance Surveyors and Loss Assessors (Licensing,
Professional Requirements and Code of Conduct) Regulations, 2000,
which came into effect from 14 th November, 2000. For, the claim in
Galada’s case (supra) arose in 1998 and the repudiation took place in
1999. By virtue of the regulations, it is mandatory to appoint a surveyor
on receipt of intimation about the loss; and the surveyor so a ppointed
has to discharge his responsibilities and duties sp ecified in the
regulations while submitting its report.
24. Thus, the appointment of a surveyor by the respondent after
receipt of intimation of the loss from the appellant, in the context of the
present insurance policy, coupled with the 2000 Regulations and in
particular an express stand taken in the repudiatio n letter dated
18 th February, 2005 sent by the respondent to the appel lant after
consideration of the surveyor’s report, it cannot be constru ed to be a
case of waiver on the part of the respondent.
25.The appellant would then contend that the respondent did not
take a plea that the surveyor was appointed because of statutory
obligation. Such a plea is raised for the first time before this Court. Even
this submission does not commend us. For, that plea has been taken as
an additional factor to distinguish the decision in Galada’s case (supra).
The party is not expected to state the provisions of law in its pleading.
The fact that such obligation flows from the regulation, in that sense, is
a mixed question of fact and law. The fact remains that the respondent
had appointed a surveyor to enquire into the entire matter and submit its
report. The surveyor expressly recommended that the claim was not
payable on account of the infringement of Clause 6 of the g eneral
conditions of the policy.
26.We also find no merit in the grievance made by the appellant
that the Commission did not consider the issue of waiver for which the
appellant was granted liberty to file review petition by this Court. We
say so because we find that the Commission considered the sai d issue
as the singular issue and after analysing relevant aspects concluded that
there was nothing to indicate that the respondent i nsurer had
intentionally or consciously relinquished or waived its right to reject the
claim on delayed intimation of loss, by appointing a surveyor to assess
the loss claimed by the insured. For the above reasons, the argument
49
that the Commission has not analysed the said issue, as has been done
by us, will make no difference to the conclusion recorded by it.
27.The appellant has also placed reliance on the decision in Om
Prakash Versus Reliance General Insurance and Anoth er ,6 to
contend that the genuine claim of the appellant ought not to be rejected
on technical ground, keeping in mind that the Consumer Protection Act
is a beneficial legislation warranting liberal cons truction. That
contention cannot be taken forward at the instance of the appellant who
has failed to fulfill the threshold stipulation contained in Clause 6 of the
general conditions of the policy and for which reason must suffer the
consequence. It is not a technical matter but sine qua non for a valid
claim to be pursued by the insured, as agreed upon between the parties.
28. In view of the above, we uphold the conclusion of the
Commission that the respondent (insurer) had not waived the condition
relating to delay stipulated in Clause 6 of the general conditions of the
policy, by appointing a surveyor. Accordingly, these appeals must fail.
29. The appeals are dismissed with no order as to costs.
Nidhi Jain Appeals dismissed.
M/S. SONELL CLOCKS AND GIFTS LTD. v. THE NEW INDIA
ASSURANCE CO. LTD. [A. M. KHANWILKAR, J.]
6 (2017) 9 SCC 724