India: Limitation Vis-A-Vis Consumer Protection Act – An Analysis Of The Judgement Of The Hon'ble Supreme Court Of India In The Matter Of National Insurance Co. Ltd. Vs. Hindustan Safety Glass Works Ltd. And Ors.

The pros and cons of consumerism including rising demands and issues of globalization have been affecting everyone in recent times. In such a scenario, the Indian Government, taking in to account the needs of the people, passed the Consumer Protection Act, 1986, to protect the consumers from unscrupulous suppliers. The Consumer Protection Act, 1986, an Act of the Parliament of India, enacted in 1986, to protect the interests of consumers in India, makes provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes and for matters connected therewith also. Unlike civil suits which are expensive and time consuming, the Consumer Protection Act, 1986, was enacted to provide a simpler and quicker access for redressal of consumer grievances. The Act, for the first time, introduced the concept of 'consumer' and conferred various express additional rights on the person who comes under the purview of 'consumer' as per the Consumer Protection Act, 1986.

One of the main and vital challenges in every adjudication is the period of 'limitation'. It is pertinent to state that Section 24A of the Consumer Protection Act, 1986, defines the limitation period for filing the complaints under the Consumer Protection Act, 1986. As per the definition, the complaint can be filed with District Forum, State or National Commission within 2 years from the date of cause of action having been arisen. However, sub-clause (2) of the said provision states that a complaint filed beyond the prescribed period would be entertained if the complainant satisfies the Forums, State and National Commissions with sufficient reason that prevented him from filing within the prescribed period. A provision is also given mandating the Forum, State Commission, and National commission to record the reasons for condoning the delay and proceed to entertain such delayed complaint.

For the sake of reference, the operative part of Section 24A is reproduced herein below:

Section 24A in the Consumer Protection Act, 1986

[24A. Limitation period.—

(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in subsection (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period; Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

Hence, in view of the aforesaid, the time period for filing a complaint for a consumer from the date of violation of a right is 2 years. The law in this regard is laid down in Sec24-A of the Consumer Protection Act, 1986. However, the Hon'ble Supreme Court of India, in a landmark judgement, on 07.04.2017 in the matter of National Insurance Company Ltd. vs. Hindustan Safety Glass Works Ltd. (MANU/SC/0390/2017), has held that where a supplier is responsible for causing a delay in the settlement of the consumer's claim, the consumer shall be entitled under law to file a complaint in the Consumer Court even after the expiry of the period of two years.

Brief Facts of the Case & Analysis of the Judgment Passed by the Hon'ble Supreme Court of India Hindustan Safety Glass Works Ltd. (i.e. insured) i.e. Respondent, had taken out two policies with the appellant National Insurance Company, both dated August 29, 1990, for a period of one year which were subsequently renewed for another year. The first policy was for an amount of Rs. 4.9 lakhs to cover the risks on office building, residential quarters and canteen etc. in Calcutta. The second policy was for an amount of about Rs. 5.7 crores to cover the risks on building, machinery, finished and semi-finished stocks, store, furniture, wiring and fittings etc. in its factory/works in Calcutta, wherein both the policies included damage or loss due to flood and inundation.

On August 06, 1992, there was heavy incessant rain in Calcutta resulting in heavy accumulation of rain water inside and around the factory/works of the insured, which the respondent claimed had caused considerable damage to raw materials, stocks and goods, furniture etc. As a result of the damage suffered by the insured and in terms of the two policies taken out with National Insurance, claims were filed by the insured on August 07 and 08, 1992, claiming a total amount of about Rs. 52 lakhs.

Pursuant to claims, National Insurance carried out two surveys wherein the reports were submitted on November 11, 1993, and the second report was given on November 23, 1994, assessing the loss/damage suffered by the insured.

In spite of the two survey reports quantifying the loss or damage suffered at about Rs. 24 lakhs, nothing was paid to the insured by National Insurance. Pursuant to the same, notices were served upon the insurer. However, to the utter shock and disappointment, there was no response from the National Insurance. Hence, in view of such circumstances, insured filed a complaint with the National Commission under the provisions of the Consumer Protection Act, 1986 (for short 'the Act') claiming an amount of Rs. 52.32 lakhs, along with an amount of about Rs.1.81 lakhs being the expenses incurred for the purpose of loss minimization, further interest at 18% per annum was also claimed by the insured with effect from December 06, 1992 i.e. four months after the occurrence of the flood or inundation.

There were various objections raised by the National Commission as follows, wherein one of the major objection, which is subject matter of the present article, is regarding the complaint being barred by condition No. 6(ii) of the policies i.e Complaint was barred by limitation as it was filed on August 13, 1996, while the loss/damage to the insured properties had taken place in August, 1992.

Reliance on condition number 6(ii) of the insurance policies it is necessary to first understand the scope of this condition which reads as follows:

In no case whatsoever, shall the company be liable for any loss or damage after the expiration of 12 months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration: it being expressly agreed and declared that if the company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court of law and the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.

A reading of the aforesaid condition leads to the conclusion that National Insurance would not be liable for any loss or damage 12 months after the event that caused the loss or damage to the insured unless the claim is the subject matter of a pending action or arbitration. It was submitted by the learned Counsel for National Insurance that the expression 'pending action' must relate to action instituted in a court of law.

However, the Hon'ble Court held that when a claim is made by the insured, that itself is actionable, there is no question of requiring the insured to approach a court of law for adjudication of the claim and that this would amount to encouraging avoidable litigation, which certainly cannot be the intention of the insurance policies and which in no case in public interest.

However, the learned Counsel vehemently argued that in terms of Section 24A of the Act, the claim made by the insured was barred by limitation, since the complaint was filed with the National Commission on August 13, 1996, while the loss or damage had occurred on August 06, 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 National Commission rejected all the contentions urged by National Insurance and by the impugned judgment and order, the insured was awarded an amount of Rs. 21,05,803.89 with interest at 9% per annum from May 11, 1995, i.e three months after the addendum issued by Seascan Services (WB) Pvt. Ltd. (the second surveyor), furthermore even costs of Rs. 20,000/- were also awarded to the insured.

Aggrieved by the impugned order, National insurance preferred appeals to the Hon'ble Supreme Court of India.


The Hon'ble Supreme Court of India held that the event that caused the loss or damage to the insured occurred on August 06, 1992, was the heavy incessant rain in Calcutta in which the raw materials, stocks and goods, furniture etc. of the insured were damaged. It was observed that 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. It was observed and noted by the Hon'ble Court that National Insurance itself took more than two years in surveying or causing a survey of the loss or damage suffered by the insured and hence, the entire delay is attributable to National Insurance which cannot prejudice the claim of the insured, especially when the insured had lodged a claim well within time. Furthermore, to make matters worse, National Insurance actually repudiated the claim of the insured only on May 22, 2001, which was well after the complaint was filed with the National Commission.

The Hon'ble Court was of the view that 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-a-vis the supplier of services or goods. It was further held that the very purpose of a beneficent legislation, in the form of the Consumer Protection Act, is to overcome this disadvantage. 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. The Court observed that this being the underlying principle, it had no hesitation in concluding that the National Commission was quite right in rejecting the contention of National Insurance in this regard.

Further, it was held that the contention urged was that the first survey report given by N.T. Kothari & Co. was not a bona fide report as the Central Glass and Ceramic Research Institute, Calcutta had not authorized that specific officer to give any report with regard to the damage or loss suffered by the insured. Further, the Hon'ble Court noticed that the second survey report was prepared in consultation with the Central Glass and Ceramic Research Institute, Calcutta, wherein another officer had been consulted. However, it was clearly held that the Insurance Company failed to provide any reason to remotely suggest that the second report was also tainted either because the officer consulted was not authorized to give a report or for any other justifiable reason.

The National Commission accepted the second survey report which was provided by Seascan Services (WB) Pvt. Ltd. as well as the addendum to it and the apex court did not see any reason to disagree with the findings arrived at in the absence of any material to discredit the surveyor or the report of the surveyor.

That the Hon'ble Court in the second appeal being Civil Appeal No. 1156 of 2008, further observed and held that the aforesaid appeal even concerns the interpretation, in the context of limitation, of condition number 6(ii) of the insurance policy taken out by the insured. That in view of the same, it was further observed by the Hon'ble Court that, the insured suffered a loss or damage to its goods in an incident that occurred on September 06, 1993. A claim was lodged by the insured on the next day. The claim was repudiated by National Insurance on December 27, 1999 while a complaint filed by the insured in the National Commission was pending since March 06, 1998. In view of these facts and in view of the discussion in the connected appeal it was held that there is no merit in the objection raised by learned Counsel that the complaint was barred by limitation in view of condition number 6(ii) of the insurance policy or Section 24-A of the Act. In any event, this contention was not strictly pressed by learned Counsel on the facts of this appeal.

Thus, the Hon'ble Supreme Court of India was of the view that National Insurance had not been able to make out a case for interference with the order passed by the National Commission and held that both appeals were without any merit and were accordingly dismissed.


The result of this decision, now, is that in all other complaints, the limitation period under section 24A cannot be strictly construed to disadvantage a consumer. It is pertinent to state that with the economic progress and developments in the trade and commerce, a wide variety of consumer goods and services have started appearing and the very purpose of the Consumer Forums/Commissions is to observe the principle of natural justice for redressing the grievance of the consumers. Hence, as per the aforesaid judgement of the Hon'ble Supreme Court of India, in matters concerning consumer dispute, it is important to take a pragmatic view of the rights of the consumer principally, since it is the consumer who is placed at a disadvantage vis- a vis the supplier of good or services who is a step forward in the legal system of our country and thereby, making it imperative to protect the interest of the consumers who also play a major role in the economics and market dynamics of our country.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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