KANDIMALLA RAGHAVAIAH & CO. versus NATIONAL INSURANCE CO. & ANR.

Citation: [2009] 10 S.C.R. 870 · Decided: 10-07-2009 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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. [2009] 10 S.C.R. 870 
KANDIMALLA RAGHAVAIAH & CO. 
v. 
NATIONAL INSURANCE CO. & ANR. 
(Civil Appeal No. 4962 of 2002) 
JULY 10, 2009 
[D.K. JAIN AND R.M. LODHA, JJ.] 
Consumer Protection Act, 1986- s.24A - Held: Bars any 
fora set up under the Act, from admitting a complaint, unless 
C the complaint is filed within two years from the date on which 
the cause of action arose - On facts, fire policy taken in 
respect of tobacco lying in godown - Fire took place in the 
godown in 1988 - Complaint filed in 1997, was clearly time 
barred - Limitation. 
D 
Cause of action - Meaning of - Explained. 
The appellant firm was in the business of tobacco. 
On 4.12.1987, the appellant took out a Fire Policy in 
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respect of tobacco lying in the godowns with the 
respondent insurance company for the period 4.12.1987 
to 3.4.1988. On 8.3.1988, appellant obtained loan from 
respondent bank by hypothecating the tobacco stored in 
the godowns. On 22.3.1988, fire broke out in the godowns 
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allegedly due to electrical short circuit and entire stock 
of tobacco was gutted. The said fact was brought to the 
notice of the insurance company and the bank. The next 
day bank lodged an FIR against appellant for intentionally 
setting on fire the stock in order to lay false claim for loss 
G of stocks. However after trial appellant was acquitted. On 
14.7.1988, the bank filed claim with insurance company 
but did not pursue the claim. On 6.11.1992, appellant 
asked for claim form from the insurance company. 
Appellant did not receive any response and on 26.10.1995 
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870 
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KANDIMALLA RAGHAVAIAH & CO. v. NATIONAL 
871 
INSURANCE CO. & ANR. 
issued legal notice to insurance company. On 4.1.1996, 
appellant again asked for claim forms. On 21.3.1996, 
insurance company replied to the legal notice denying 
the fact of fire and refused to issue the claim form on the 
ground that claim was time barred. 
On 21.10.1997, appellant filed complaints before the 
Commission, which were dismissed as time barred. 
Hence the appeal. 
Dismissing the appeal, the Court 
HELD : 1. Section 24-A of the Consumer Protection 
Act bars any fora set up under the Act, from admitting a 
complaint, unless the complaint is filed within two years 
from the date on which the cause of action has arisen. 
The provision expressly casts a duty on the Commission, 
admitting a complaint, to dismiss a complaint unless the 
complainant satisfies the District Forum, the State 
Commission or National Commission, as the case may 
be, that the complainant had sufficient cause for not filing 
the complaint within the period of two years from the date 
on which the cause of action had arisen. [Para 11) [878-
8-C] 
State Bank of India v. B.S. Agricultural Industries JT 
(2009) 4 SC 191, relied on. 
2. The term "cause of action" is neither defined in the 
Act nor in the Code of Civil Procedure, 1908 but is of wide 
import. It has different meanings in different contexts, that 
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D 
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is when used in the context of territorial jurisdiction or 
limitation or the accrual of right to sue. Generally, it is G 
described as "bundle of facts", which if proved or 
admitted entitle the plaintiff to the relief prayed for. Pithily 
stated, "cause of action" means the cause of action for 
which the suit is brought. "Cause of action" is cause of 
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872 
SUPREME COURT REPORTS 
[2009] 10 S.C.R. 
A action which gives occasion for and forms the 
foundation of the suit. In the context of limitation with 
reference to a fire insurance policy, undoubtedly, the date 
of accrual of cause of action has to be the date on which 
the fire breaks out. (Para 13) [879-C-E] 
B 
Sidramappa v. Rajashetty & Ors. (1970) 1 SCC 186, 
relied on. 
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3. It is clear from the correspondence between the 
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appellant and the Insurance Company that cause of 
action in respect of the special insurance policy arose on 
22nd I 23rd March, 1988, when fire in the godown took 
place damaging the tobacco stocks hypothecated with 
the Bank in whose account the policy had been taken by 
the appellant. Thus, the limitation for the purpose of 
D Section 24A of the Act began to run from 23rd March, 
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1988 and therefore, the complaint before the Commission 
against the Insurance Company for deficiency in service, 
whether for non issue of claim forms or for not 
processing the claim under the policy, ought to have 
E been filed within two years thereof. The complaint was 
in fact filed on or after 24th O

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