NEW ASSURANCE CO. LTD. versus SHRI B.N. SAINANI

Citation: [1997] SUPP. 1 S.C.R. 750 · Decided: 09-07-1997 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
NEW INDIA ASSURANCE CO. LTD. 
v. 
SHRI B.N. SAINANI 
JULY 9, 1997 
B 
[K. RAMASWAMY AND D.P. WADHWA, JJ.] 
Consumer Protection Act, 1986 : 
Section 2 clauses (d) and (g)-lnsurance Policies covering the risk of 
C consignment on shipme/11-Vessel bringing the goods diverted due to 
strike-consignment not reshipped within sixty days from the date of dis-
charge as inf om1ed by the insurer-No extension of policy to cover the 
risk-Short landing of consignment on transshipment-Claim against the 
insurer-Allowed by State Consumer Disputes Redressal Commission-<:011-
fimzed by National Commission-On .appeal, held, goods were neither 
D transshipped within 60 days of their discharge nor the policy was extended 
beyond the period-No deficiency in service by the insurer-Absolved from 
any claim under the policy-Marine Insurance Act, 1963: Sections 51, 52 and 
53. 
E 
Section 2(d)-Maintainability of claim-Assignee assigned with the 
right to recover the loss-No insurable interest in the subject matter of goods 
insured-Whether such assignee a consumer-Held n~Hence he cannot 
maintain a complaint under the Act. 
Limitation Act, 1908 : Article 44 of the Schedule-claim on policy 
F denied by insurer by letter dated July 25, 1989-Complaint filed by assignee 
on July 23, 199l-Held, complaint filed within a period of three years from 
the date of denial of poli~ot barred by limitation. 
Respondent was an assignee of two insurance policies taken by the 
consignee from the appellant-insurance company on February 24, 1984 to 
G cover the risk of computer wastes computer print out for reshipment from 
the port of Antward to Bombay. The consignee informed the 
appellant-insurer that due to strike in Indian Ports, the vessel bringing 
the goods had been diverted to Muscat and therefore requested the insurer 
to cover the risk accordingly. The appellant-insurer replied the consignee 
H that consignment be reshipped within 60 days the date of discharge, failing 
750 
NEW INDIA ASSURANCE CO. LTD. v. B.N. SAINANI 
751 
which there would be not liability of any claim of risk under the policies. A 
It was informed on June 8. 1984 that the consignment was reshipped in 
·another shipping company and brought to Bombay Port. There was short 
landing of consignment under transhipment. The appellant-insurer by a 
letter dated June, 25, 1989 informed the assignee that the insured consign-
ment reached the Port about a year after the discharge of consignment and B 
as there was no extension of the insurance cover, the liability to cover the 
risk under the policies has ceased. The respondent-assignee files com-
plaints before the State Consumer Disputes Redressal Commission 
against the appellant-insurer alleging deficiency in rendering service. The 
said complaint was allowed. On appeal, the National Consumer Disputes 
Redressal Commission confirmed the order of State Commission. Hence C 
the present appeal by the insurer. 
The contentions of the appellant-insurer were that the complaint 
filed by the assignee was barred by limitation; and that the assignee was 
not a consumer within the meaning of the Consumer Protection Act and 
under Clause 9 of the policy he was absolved from claim as the policy had D 
lapsed. 
Allowing the appeal, this Court 
HELD : 1.1. The respondent-assignee has been unable to show that E 
he is a consumer and there has been deficiency in service by the insurer. 
He, therefore, could not maintain a complaint under the Consumer Protec-
tion Act, 1986. Thus the orders of National Consumer Disputes Redressal 
Commission and State Commission are set aside. [763-F-G] 
1.2. Under para 11 in order to prefer a claim under the policy the F 
insured must have an insurable interest in the subject-matter insured at 
the time of loss. The interest of the insured must exist in the case of marine 
insurance at the time of loss and the assured must have some relation to 
or concerned in the subject of the insurance. The service which the insurer 
offers is with reference to the goods and the insurable interest has to be G 
in respect of the goods. To come under the scope of the word "consumer" 
as defined in the Ad it should be possible for the assured to assign his 
insurable interest in th~ goods subject matter of the policy for the assignee 
as a consumer to enjoy the benefit of the policy with reference to the goods 
which are insured. What has been assigned in the present case is the 
amount of loss suffered by the assured on account o

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