Delhi District Court
Klj Resources Limited vs Oriental Insurance Co Ltd on 30 July, 2025
IN THE COURT OF Sh. RAJESH KUMAR GOEL
District Judge (Commercial Court) -02,
Central, Tis Hazari
DLCT010063692023
CS (COMM.) No. 776/2023
CNR No.DLCT01-006369-2023
M/S K.L.J Resources Limited
through its Director
At: 8A, Shivaji Marg,
Moti Nagar,
New Delhi, Delhi -110 015 ......Plaintiff
Versus
Oriental Insurance Co. Ltd
Through its Divisional Manager
A-25/27, Asaf Ali Road,
New Delhi - 110 002 ......Defendant
Date of filing of suit : 10.05.2023
Date of Argument : 23.07.2025
Date of Judgment : 30.07.2025
JUDGMENT
Prologue
1. There are thirteen connected cases pending
before this Court wherein principally the parties are
the same. In all the aforesaid cases, the main dispute
between the parties is whether loss of quantity(s) in
question is/are covered under the Insurance policy(s)
Digitally signed
or not ? Further, in most of the cases, the evidence led
RAJESH by RAJESH
by the parties, arguments and contentions are
KUMAR GOEL
KUMAR Date:
GOEL 2025.07.30
16:53:10 +0530KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 1 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
absolutely identical and similar. Rather in a few cases,
even the cross examination of the witnesses appears to
be photocopies. Further, reference to the provisions of
law and judicial authorities is also the same, therefore,
this judgment in a way, would be reproduction of the
same judgment in all the thirteen cases after making
few cosmetic changes regarding the insurance cover
notes, insurance policies, details of consignment and
surveyor reports etc.
2. Here it is pertinent to mention that in the present
case the evidence of both the parties has been recorded
by the Ld. Court Commissioner appointed by the Ld.
Predecessor of this Court. From the records of these
cases, it is evident that even those documents have
been given exhibit mark which are either dim or
absolutely dark and not legible. It was the duty of the
Ld. Court Commissioner to ask the party concerned to
provide the legible copies. During the Final
arguments, Ld. Counsel for the plaintiff was asked to
provide the legible copies of such documents, so that
the same may be considered. This court is not happy
with the way Ld. Court Commissioner has recorded
the evidence. Be that as it may, this Court tried its
best to consider the documents as relied upon by the
parties for adjudicating the dispute effectively between
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 2 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
them.
3. Vide this judgment, I shall dispose of the present
suit for recovery of Rs 48,40,520/- ( Rs Forty Eight
Lakhs Forty Thousand Five Hundred and Twenty
only) filed by the plaintiff company against the
defendant company alleging that the defendant
company has wrongfully rejected the insurance claims
of the plaintiff company.
Factual Matrix
4. The brief facts of the case, as made out from the
plaint are that the plaintiff company is stated to be a
company registered under the companies Act, 1956,
and is engaged in the trading of
Chemicals/Petrochemicals & allied items and also in
import/export of various types of chemicals/
petrochemicals; as a matter of business prudence, the
plaintiff company would insure all its consignments to
be imported against the various transit risk under ‘All
Risk Insurance Policy’.
5. It is the case of the plaintiff company that in
order to protect its Chemicals/petrochemicals to be
imported by the plaintiff company against any kind of
loss or damages during transit, plaintiff company had
obtained insurance covers from the defendant
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 3 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
company, who is stated to be a leading insurance
company of the country in public sector and also a
Body incorporated and registered under the
Companies Act,1956; defendant company issued cover
notes in respect of all the consignments by providing
cover for all kind of transit risks from Anywhere in
the world to Anywhere in India via any Indian Port on
shore tank to shore tank basis.
6. The details of the said cover notes and insurance
policies issued by the defendant company are as under:
Cover Note No. Policy No.
308910 272200/21/2012/992
308920 272200/21/2012/1071
308920 272200/21/2012/1071
7. It is stated that all the aforesaid cover notes and
insurance policies were issued by the defendant
company in respect of the following consignments:
Invoice Dated Quantity Ship Name Delivery
No. Port
90097752 18.11.2011 1000.00 SICHEM Kandla
/53 MT Lily V.100
MC-2832 29.11.2011 2190.67 DL Kandal
MT Diamond
MC-2831 29.11.2011 1005.03 D.L Kandla
MT Diamond
8. It is the further case of the plaintiff company
that the plaintiff company received a short quantity of
the consignments and has suffered losses. According
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 4 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
to the plaintiff company, the unloading of the
consignments was done under the supervision of the
Insurance Surveyors; defendant company after
obtaining the report of first surveyor, had deputed
second surveyor for the same loss and had obtained
another report; the surveyors in their reports confirmed
the losses due to short quantities received by the
plaintiff company. The details of the Surveyors reports
are as under:
Surveyor Dated 2nd Short Claim Claim Bill Short
Report Survey Quantity Intimation Quantity
Ref. No. or Letter to Ins.
report Co.
Ref.
No.
JB 05.12.20 Bhima 15.310 MT 10.01.2012 10.01.2012 15.310
Boda/K 11 ni & MT
DL/0389 Co.1/2/
2/11/AA 212/11-
12
JB 12.12.20 bHima 21.686 MT 12.12.2012 12.12.2012 21.686
Boda/K 11 ni &
DL/0400 Co.
7/11/AA I/217-
A/11-
12
9. The plaintiff company is said to have lodged
their claims for shortage of the said material to the
Ship’s agents also vide their letters and then to the
defendant company in respect of the aforesaid losses.
10. It is stated that the defendant company did not
settle the claims of the plaintiff company despite theKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 5 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
reminders having been sent by the plaintiff company
and instead rejected the claims of the plaintiff
company on the ground that under the insurance
policy, the defendant company has no liability as the
same being beyond the scope of insurance policies
taken by the plaintiff company.
11. According to the plaintiff company, the plaintiff
company had taken the insurance policies ” All Risk
Policy” covering all kind of losses without any
exception, therefore, the shortage of material would
come within the scope of insurance policies and the
defendant company is under statutory obligation to
indemnify the plaintiff company to the extent of losses
which have been suffered by the plaintiff company.
12. Another set of facts, as emanate from the plaint,
is that after rejection of the claims by the defendant
company, plaintiff company had approached District
Consumer Dispute Redressal Forum, Central, Delhi (
hereinafter referred to as “District Forum”); the claims
of the plaintiff company were returned by the District
Forum as it was observed that it lacked pecuniary
jurisdiction; plaintiff company then approached the
National and State Commission seeking redressal and
consequently the complaints were returned to the
District Forum by the State Commission; the entireKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 6 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
process of trial was repeated at the District Forum;
District Forum observed that the claims/complaints
filed by the plaintiff company are not maintainable as
it was the business to business transactions and is not
covered under the Consumer Protection Act 1986;
District Forum is said to have been apprised of by the
plaintiff company that pursuant to the judgment of
National Commission, the claims were maintainable
but despite that the complaints of the plaintiff
company were returned.
13. It is also stated that the claims/complaints of the
plaintiff company were never dealt with by the District
Forum on merits, therefore, the plaintiff company is
entitled for the benefit under section 14 of the
Limitation Act for which a separate application has
been filed and the case of the plaintiff company falls
within the prescribed period of limitation and is
maintainable.
14. It is stated that since the claims of the plaintiff
company were rejected wrongly by the defendant
company, therefore the defendant company is liable to
pay the interest @ 12% p.a from the date of
repudiation i.e. 07-03-2012 till 30-04-2023 to the
extent of Rs 27,70,516/-. According to the plaintiff
company a total amount of Rs 48,40,520/-( Rs
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 7 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
20,70,004/- as Principal + Rs 27,70,516/- as Interest)
is due and outstanding against the defendant company.
15. In compliance of the provision of section 12A of
the Commercial Courts Act, 2015, as amended to date,
the plaintiff company filed a pre-litigation mediation
application before the Delhi Legal Service Authority,
Central District, Tis Hazari Courts, Delhi, (in short
“DLSA”) against the defendant company; the DLSA
has released a non-starter report dated 11.04.2023.
16. Prior to the issuance of the summons of the
present suit, the plaintiff company moved an
application under order VI rule 17 r/w 151 CPC
seeking amendment in the plaint. It was submitted on
behalf of the plaintiff company that after filing the
present suit, it was noticed that in para 23 of the plaint,
an error has crept in as due to inadvertence some of
the words were omitted and averments about clubbing
of claims in the present suit remained incomplete. By
way of the said application, the plaintiff company
sought to amend the para 23 of the plaint. That
application was allowed by the Ld. Predecessor of this
Court vide order dated 3.6.2023 and the amended
plaint was directed to be taken on record.
17. Thereafter, Summons of the suit were issued to
the defendant company. The defendant company
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 8 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
made the appearance and has filed the written
statement.
18. Since, there was a delay of a few days in filing
the written statement, therefore, an application under
order VIII rule 1 CPC was moved on behalf of the
defendant company seeking condonation of delay,
which was allowed vide order dated 11.9.2023 by the
Ld. Predecessor of this Court and the written statement
filed by the defendant company was taken on record.
19. In the written statement, the defendant company
has taken certain preliminary objections to the effect
that the present suit is liable to be dismissed as the
plaintiff company has clubbed separate claims arising
out of separate policies having different surveyors
reports and different assessment of losses; the suit of
the suit of the plaintiff company is barred by
limitation as the losses were reported by the plaintiff
company and came to be rejected by the defendant
company on 07.03.2012, whereas the present suit was
filed in the year 2023; the present suit is bad for non-
joinder of necessary and proper party and is liable to
be rejected as shipping agent should have been made a
party etc.
20. On the merits, the defendant company has not
denied that the plaintiff company had taken the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 9 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
insurance policies in question but the stand of the
defendant company is that the claims of the plaintiff
company are not payable as the alleged loss of
quantities reported by the plaintiff company neither
come within the scope of coverage under the insurance
policies nor payable under the terms and conditions of
the Marine Cargo Single Voyage (Sea) Policy-Institute
Cargo Clauses (A). According to the defendant
company, there was no evidence of any insured marine
peril activated when the cargo was pumped from shore
tank to ship tank at the time of loading and the ship
tank to the shore tank at the time of discharge;
defendant company has alleged that shortage was not
due to any insured peril and hence the defendant
company has no liability under the insurance policies,
therefore the claims of the plaintiff company were
rejected.
21. It is the further stand of the defendant company
that the Marine Cargo Policy makes it crystal clear
that company insures against loss or damage or
expenses subject to clauses, endorsements, conditions
and warranties mentioned in the schedule and attached
thereto which included Institute Cargo Clause-A. By
referring to clause 4.2 of the Institute Cargo Clause
(A), it is stated that in no case shall this insurance
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 10 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
cover for ordinary leakage, ordinary losses, weight or
volume and ordinary wear and tear of the subject
matter insured.
22. The defendant company has also referred to the
reports of the surveyors and it was stated that the cause
of shortage is attributed to the transfer of goods from
shore tank to the ship’s tank at the port at the time of
loading and discharge. It is also stated that the alleged
shortage, as reported by the plaintiff company, is a
normal phenomenon in transit of chemicals by ship
and the actual shortage would be found to be an
ordinary leakage or ordinary loss in weight or volume,
which is as per the nature of the subject matter
insured. Hence the present suit of the plaintiff
company is liable to be rejected.
23. The defendant company has filed an affidavit of
admission and denial of the documents along with the
written statement.
24. Thereafter, the plaintiff company filed the
rejoinder to the written statement of the defendant
company denying the allegations made by the
defendant company and reiterated the facts as
mentioned in the plaint. Along with the rejoinder , the
plaintiff company has also filed the statement of
admission and denial of documents.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 11 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
25. After completion of pleadings, vide order dated
17.10.2023, following issues were framed by the Ld.
Predecessor of this Court:-
1. Whether the present suit is not maintainable being
barred by Limitation, as alleged by the defendant in the
written statement ( Para 3-Preliminary Objections) ?
(OPD)
2. Whether the suit is bad for non-joinder of necessary
parties, as alleged by the defendant in the written
statement ( Para 4- Preliminary Objections)? (OPD)
3. Whether the claims of the plaintiff were rightly
repudiated by the defendant, as alleged by the defendant
in the written statement? (OPD)
4. Whether the present suit is not maintainable the
plaintiff having clubbed together separate claims arising
out of the separate policies having different survey
reports and different assessment of loss, as alleged by
the defendants in the written statement ( Para 2-
Preliminary Objection) ? (OPD)
5. Whether the plaintiff is entitled to recovery of the
principal amount, as asked for in plaint? (OPP)
6. In case if issue no. 5 is decided in affirmative, whether
the plaintiff is entitled for any interest, as asked for in
the plaint? (OPP).
7. Relief
26. Vide order dated 23.11.2023, the Schedule of
Second Case Management hearing was fixed by the
Ld. Predecessor of this court and Ld. Court
Commissioner was appointed to record the evidence of
both the parties..
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 12 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
27. The Ld. Court Commissioner has already
submitted her report to this court.
28. In support of its case, the plaintiff company has
examined two witnesses i.e. PW1 Gopal Krishan
Walia, manager in the plaintiff company and PW2
Satish Kumar, ASO from District Forum. No other
witness was examined by the plaintiff company and
the plaintiff evidence was closed.
29. The defendant company has examined one Smt
Renuka Chaudhary, Manager, as DW1, who has filed
her evidence by way of affidavit. No other witness was
examined by the defendant company and the
defendant’s evidence was closed.
30. PW1 Gopal Krishan Walia has deposed on the
lines of the averments made in the plaint in his
evidence filed by way of affidavit Ex.PW1/A. He also
relied upon the documents i.e Board Resolution
ExPW1/1, Memorandum and Articles of Association
of the plaintiff company ExPW1/2 (colly), Copy of
Final Order dated 27.03.2017 of the Consumer
Complaint filed by plaintiff ExPW1/3, Copy of Order
dated 24.07.2017 of NCDRC, Delhi ExPW1/4, Copy
of Final Order dated 11.01.2018 of the Consumer
complaint filed by the plaintiff Ex ExPW1/5 , Copy of
Final Order dated 12.01.2018 of the Consumer
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 13 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
complaint filed by the plaintiff ExPW1/6, Copy of
order dated 15.11.2018 of State Commission,
ExPW1/7, Copy of order dated 18.12.2018 &
01.02.2019 of State Commission, Delhi ExPW1/8,
Copy of Order dated 05.04.2019 of State Commission
ExPW1/9, Copy of Order dated 09.02.2022 of the
Consumer District Commission ExPW1/10, Copy of
complaint with supporting affidavit in Policy No.
272200/21/2012/992 filed by Plaintiff Co. before
Consumer forum, Central, Delhi ExPW1/11, Copy of
Board Resolution dated 02.09.2014 filed by Plaintiff
Co. before Consumer Forum, Central, Delhi
ExPW1/12, Copy of Letter dt 14.10.2011 sent by
plaintiff to defendant ExPW1/13, Copy of Insurance
Cover Note No. 308910 ExPW1/14, Copy of
Insurance Policy 272200/21/2012/992 ExPW1/15,
Copy of Invoice No. – 90097752 & 90097753 dated
18.11.2011 ExPW1/16, Copy of Bill of Lading No.
QII/11/45/01 & 02 dated 18.11.2011 ExPW1/17, Copy
of warehouse bill of entry ExPW1/18, Copy of letter
dated 24.11.2011 sent by plaintiff to defendant
ExPW1/19 , Copy of J.B. Boda Surveyors Survey
Report dated 05.12.2011 ExPW1/20, Copy of Bhimani
& Company Surveyors Survey Report dated
21.12.2011 ExPW1/21, Copy of letter dated
09.01.2012 sent by plaintiff to Atlantic shipping Pvt.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 14 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
Ltd. ExPW1/22, Copy of claim form with letter dated
10.01.2012 along with claim bill sent by plaintiff to
defendant ExPW1/23, Copy of letter dated 13.04.2012
& e mail dated 10.03.2014 sent by plaintiff to
defendant ExPW1/24, Copy of letter dated 20.03.2014
sent by defendant to plaintiff ExPW1/25, Copy of
repudiation letter dated 07.03.2012 received by the
plaintiff from the defendant ExPW1/26 , Copy of letter
dated 28.03.2014, 08.04.2014 & 29.07.2014 sent by
plaintiff to defendant ExPW1/27, Copy of Written
Statement filed by defendant before consumer forum
ExPW1/28, Copy of Order dated 09.02.2022 of the
Consumer District Commission ExPW1/29, Copy of
complaint with supporting affidavit in Policy No.
272200/21/2012/1071 filed by the plaintiff Co. before
Consumer Forum, Central, Delhi ExPW1/30, Copy of
Board Resolution dated 02.09.2014 filed by Plaintiff
Co. before Consumer Forum, Central, Delhi
ExPW1/31, Copy of letter dated 04.11.2011 sent by
plaintiff to defendant ExPW1/32, Copy of Insurance
Cover Note No. 308920 ExPW1/33, Copy of
Insurance Policy 272200/21/2012/1071 ExPW1/34,
Copy of Bill of Lading No. – DLD281111-01 to 03
dated 28.11.2011 ExPW1/35, Copy of Debit note No.
BMD2-11-673 of NHL Development Co. dated
29.11.2011 ExPW1/36, Copy of Bill of Lading No. –
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 15 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
DLD281111-01 TO 03 dated 28.11.2011 ExPW1/37,
Copy of warehouse bill of entry ExPW1/38, Copy of
letter dated 07.12.2011 sent by plaintiff to defendant
ExPW1/39, Copy of J.B Boda Surveyors Survey
Report dated 12.12.2011 ExPW1/40, Copy of Bhimani
& Company Surveyors Survey Report dated
21.12.2011 ExPW1/41, Copy of letter dated
09.01.2012 sent by plaintiff to Atlantic shipping Pvt.
Ltd. ExPW1/42, Copy of claim form with letter dated
10.01.2012 along with claim bill sent by plaintiff to
defendant ExPW1/43, copy of e-mail dated
10.03.2014 sent by plaintiff to defendant, Copy of
letter dated 20.03.2014 along with undated letter sent
by defendant to Plaintiff ExPW1/45, Copy of letter
dated 28.03.2014 & 08.04.2014 sent by plaintiff to
defendant ExPW1/46 , Copy of Written Statement
filed by defendant before consumer forum ExPW1/47 ,
Copy of order dated 09.02.2022 of the Consumer
District Commission ExPW1/48, Copy of complaint
with supporting affidavit in Policy No.
272200/21/2012/1071 filed by Plaintiff Co. before
Consumer Forum, Central, Delhi ExPW1/49, Copy of
Board Resolution dated 02.09.2014 filed by Plaintiff
Co. before Consumer Forum, Central, Delhi
ExPW1/50, Copy of letter dated 04.11.2011 sent by
plaintiff to defendant ExPW1/51 , Copy of Insurance
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 16 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
Cover Note No. 308920 ExPW1/52, Copy of
Insurance Policy 272200/21/2012/1071 ExPW1/53,
Copy of Invoice No. MC-2831 dated 29.11.2011
ExPW1/54, Copy of Bill of Lading No. DLD271111-
05 dated 27.11.2011 ExPW1/55, Copy of warehouse
bill of Entry ExPW1/56, Copy of letter dated
07.12.2011 sent by plaintiff to defendant ExPW1/57,
Copy of J.B. Boda Surveyors Survey Report dated
12.12.2011 ExPW1/58, Copy of Bhimani & Company
Surveyors Survey Report dated 21.12.2011
ExPW1/59, Copy of letter dated 09.01.2012 sent by
plaintiff to Atlantic shipping Pvt. Ltd. ExPW1/60,
Copy of claim form with letter dated 10.01.2012 along
with claim bill sent by plaintiff to defendant
ExPW1/61, Copy of letter dated 13.04.2012 & e mail
dated 10.03.2014 sent by plaintiff to defendant
ExPW1/62, Copy of letter dated 20.03.2014
ExPW1/63, Copy of repudiation letter dated
07.03.2012 sent by defendant to plaintiff ExPW1/64,
Copy of letter dated 28.03.2014 & 08.04.2014 sent by
plaintiff to defendant ExPW1/65, Copy of Written
Statement filed by defendant before consumer forum
ExPW1/66.
31. PW1 Gopal Krishan Walia was cross examined
by the Ld. Counsel for the defendant company.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 17 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
32. PW2 Satish Kumar is a summoned witness
from District Forum, who produced the original case
diary register of 25.11.2014 having reference of CC
No.399/2014, CC No. 397/2014 and 398/2014
ExPW2/1( Colly).
33. PW2 Satish Kumar was not cross examined by
the Ld. Counsel for the defendant company despite
opportunity being given.
34. DW1 Renuka Chaudhary tendered her evidence
by way of affidavit ExDW-1/A and has deposed on the
lines of stand taken in the written statement filed by
the defendant company. She has relied upon the
documents i.e Power of attorney dated 15.07.2021
ExDW1/1, the Institute Cargo Clauses (A) is
ExDW1/2, Survey report dated 21.12.2011 under
cover note No. 308910 issued by Bhimani & Co.
ExDW1/3, Survey report date 21.12.2011 under cover
note no. 308920 issued by Bhimani & Co. ExDW1/4.
35. DW1 Renuka Chaudhary was cross examined
on behalf of the plaintiff company.
36. Here it is pertinent to mention that at the stage
when evidence of the defendant company has already
been recorded, the defendant company moved an
application under order 16 Rule (1) (3) r/w section 151
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 18 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
CPC making a request to summon additional witnesses
to be examined by the defendant company. Vide
aforesaid application defendant company wanted to
produce and prove “Institute Cargo Clauses (A) as
applicable to Marine Cargo- Single Voyage (Sea) Policy”.
37. The said application moved on behalf of the
defendant company was allowed by this Court vide
order dated 27.04.2024 subject to the cost whereby the
defendant company was allowed to summon the
concerned witness. Pursuant to the summons issued by
the court, one Sh. R.Pardha Saradhi appeared on
06.5.2024, and he was examined as DW2 in another
connected case bearing no. 763/2023. In that case, he
proved the Institute Cargo Clauses (A) as applicable to
Marine Cargo- Single Voyage (Sea) Policy as Ex
DW2/A.
38. Both the parties made a request to place the
copy of the said document ExDW2/A in each of the
files, including the present case and it was stated that
in that eventuality there would not be any need to
examine the witness Sh. R. Pardha Saradhi as one of
the defendant witnesses in each and every case. It was
also stated on behalf of both the parties that they do
not have any objection, if the said document
ExDW2/A is read and considered into evidence while
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 19 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
deciding the case at the time of final hearing.
39. Considering the request of both the parties and
no objection from their side, the copy of Institute Cargo
Clauses (A) as applicable to Marine Cargo- Single Voyage
(Sea) Policy ExDW2/A, was directed to be placed in
each of the cases pending between the parties
including the present one and it was directed that same
shall be read in evidence at the stage of final disposal
of the cases. Accordingly, the present case reached the
stage of final arguments.
40. When the case was at the stage of final
arguments, the plaintiff company moved an
application under order 6 Rule 17 r/w section 151 CPC
seeking certain amendments in the plaint. By way of
the said application plaintiff company had made a
request to amend para 7 and 9 of the plaint which
basically is having the details of the consignments and
surveyor reports. It was stated on behalf of the plaintiff
company that there being 13 cases pending between
the parties, therefore, inadvertently, there are
typographical mistakes regarding the details of the
consignments and surveyor reports which need to be
corrected.
41. Although, the defendant company filed the reply
to the aforesaid application, however, Ld. Counsel for
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 20 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the defendant company submitted that he has no
objection if the aforesaid application of the plaintiff
company is allowed with a rider that it should not be
presumed that the documents relied upon by the
plaintiff company stand proved as the defendant
company has already taken objections regarding mode
of proof of certain documents.
42. Vide order dated 20.7.2024, the aforesaid
application was allowed/disposed of subject to certain
conditions as mentioned therein. The defendant
company was given the liberty to file the written
statement and in case no amended written statement is
filed, the original statement filed on behalf of the
defendant company shall be considered and the case
again came to be adjourned for final argument.
Pertinent to mention that the defendant company has
not filed any amended written statement, therefore, the
written statement filed originally at the initial stage has
been considered.
43. Ld. Counsels for both the parties have filed the
written synopsis of arguments and have argued the
matter orally as well at length. Their arguments shall
be considered while giving the findings on the issues.
44. Ld. Counsel for the plaintiff company has relied
upon the following judicial pronouncements:-
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 21 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
a) M.P Steel Corporation Vs Commissioner of Central
Excise, (2015) 7 SCC 58
b) Saurashtra Chemicals Ltd vs National Insurance
Company Ltd , (2019) 19 SCC 70.
c) Bharat Watch Company Vs NIC (2019) 6 SCC 212.
d) National Insurance Company Ltd Vs Mangalagowri
Cashew Industries, II (2006) CPJ-32 (National
Commission)
e) Bajaj Allianz GIC Ltd vs G P Petroleums Ltd. (State
Commission Mumbai), Appeal No. A/16/2917
f) Texco Marketing Pvt Ltd vs Tata AIG Capital General
Insurance Company Ltd and Ors, IX (2022) SLT 144
g) Narsingh Ispat Ltd Vs OIC Capital, 2022 SCC
OnLine SC 535.
h) Mavji Kanji Jungi & Anrs vs Oriental Insurance
Company Ltd. I (2021) CPJA 435 ( National
Commission)
i) Mappie International Ltd Vs Oriental Insurance Co.
Ltd, (NCDRC, New Delhi ) CC N. 5 of 2015
j) Sri Venkaterswara Syndicate Vs. Oriental Insurance
Co. Ltd II (2010) SLT 664
45. Ld. Counsel for the defendant company has
relied upon the following judicial authorities:
a) House of Lords in case of British and Foreign Marine
Insurance Co. Ltd Vs. Gaunt ( 1921) 2 AC 41 (HL)
b) New India Assurance Co. Ltd Vs Hira Lal Ramesh
Chand and Ors, AIR 2008 SC 2620
c) Josita Antony vs New India Assurance Company Ltd,
II (2006) ACC 713
d) J.M.F Sea Foods, Alleppey and Ors vs National
Insurance Co. Ltd, Alleppey, AIR 1992 Ker 202.
e) Bajaj Allianz General Insurance Co. Ltd and Ors Vs
The State of Madhya Pradesh , AIR 2020 SC 2237.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 22 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
f) General Assurance Society Ltd vs Chandumull Jain
and Anr. , 1966 (3) SCR 500
g) Consolidated Engineering Enterprises vs Principal
Secretary, Irrigation Department and Ors ( 2008) 7
SCC 169.
h) Ghasi Ram & Ors Vs Chait Ram Saini & Ors (1998) 6
SCC 200.
i) Maidi Bhikashmiah & Anrs Vs. Venugopalrao & Ors,
1958 SCC OnLine AP 206.
j) Hassan Chand & Sons Vs H.H Majaraja Shri Gaj
Singh, 1961 SCC OnLine Raj 125.
k) Sohan Singh Vs State of Rajasthan & Ors, 1977 WLN
(UC) 96.
l) Bihar Supply Syndicate Vs Asiatic Navigation (1993)
2 SCC 639
m) Oriental Insurance Company Ltd Vs Peacock
Plywood (P) Ltd. 2004 SCC OnLine Cal 681.
46. I have gone through the material available on
record and heard the Ld. Counsel for both the parties. I
have also gone through the case laws cited at bar.
47. For the sake of convenience, firstly I will be
deciding issue no.1, then issue no.2, followed by the
decision on issue no.4, thereafter issue no.3 & 5
together, followed by findings on issue no. 6 and
finally issue no.7.
Issue No.1
Whether the present suit is not maintainable
being barred by Limitation, as alleged by the
defendant in the written statement? (OPD)
48. In the written statement, one of the objections
taken by the defendant company is that the suit filed
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 23 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
by the plaintiff company is barred by limitation. Ld.
Counsel for the defendant company submitted that it is
not in dispute that the claims of the plaintiff company
were rejected on 07.03.2012; the present suit was filed
in the year 2023 which is beyond the period of
limitation. He further submitted that the plaintiff
company cannot be given the benefit of section 14 of
the Limitation Act,1963 as neither the relief to file the
fresh suit was sought by the plaintiff company nor was
granted by the Ld. District Forum; the present
proceedings are distinct from the proceedings which
took place before the consumer forum; the period of
limitation in both the said proceedings is different ; the
proceedings before the consumer forum were not
prosecuted diligently and in good faith and the
plaintiff company was well aware that the case of the
plaintiff company would not fall under the definition
of consumer; By referring to the order passed by the
Consumer Forum, Ld. Counsel for the defendant
company submitted that the complaints of the plaintiff
company were dismissed vide order dated 09.2.2022.
The plaintiff company approached the Pre-Litigation
Mediation on 11.11.2023, therefore, the protection as
available u/s 14 of the Limitation Act would not be
available to the plaintiff company.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 24 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
49. In reply to that Ld. Counsel for the plaintiff
company submitted that the alleged repudiation letter
dated 07-03-2012 was never received by the plaintiff
company. According to him when the plaintiff
company sought to know the status of its claims from
the defendant company then the plaintiff company
vide letter dated 20-03-2014 was informed about said
rejection. He further submitted that the plaintiff
company had diligently followed up its complaints
before the Consumer Forum and there were repeated
rounds of litigations about the maintainability of the
complaints; the complaints were returned vide order
dated 09.2.2022; the defendant company admitted the
part of the said processes and has participated in the
same before the Consumer Forum and the Consumer
Forum had not adjudicated the dispute on merits. He
further submitted that the relief sought by the plaintiff
company before Consumer Forum and before this
court is identical and in a separate application moved
u/s 14 of the Limitation Act, the plaintiff company has
given details indicating how the present suit is within
limitation. He further submitted that the time spent by
the plaintiff company before the Consumer Forum has
to be excluded.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 25 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
50. It will be relevant to refer to Section 14 of the
Limitation Act, which reads as under:-
“14. Exclusion of time of proceeding bona fide in
court without jurisdiction.–(1) In computing the
period of limitation for any suit the time during which
the plaintiff has been prosecuting with due diligence
another civil proceeding, whether in a court of first
instance or of appeal or revision, against the
defendant shall be excluded, where the proceeding
relates to the same matter in issue and is prosecuted
in good faith in a court which, from defect of
jurisdiction or other cause of a like nature, is unable
to entertain it.
(2) In computing the period of limitation for any
application, the time during which the applicant has
been prosecuting with due diligence another civil
proceeding, whether in a court of first instance or of
appeal or revision, against the same party for the
same relief shall be excluded, where such proceeding
is prosecuted in good faith in a court which, from
defect of jurisdiction or other cause of a like nature, is
unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of
Order 23 of the Code of Civil Procedure, 1908 (5 of
1908), the provisions of sub-section (1) shall apply in
relation to a fresh suit instituted on permission
granted by the court under Rule 1 of that Order,
where such permission is granted on the ground that
the first suit must fail by reason of a defect in the
jurisdiction of the court or other cause of a like
nature.
Explanation.–For the purposes of this section–
(a) in excluding the time during which a
former civil proceeding was pending, the day
on which that proceeding was instituted and
the day on which it ended shall both be
counted;
(b) a plaintiff or an applicant resisting an
appeal shall be deemed to be prosecuting a
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 26 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
proceeding;
(c) misjoinder of parties or of causes of
action shall be deemed to be a cause of a like
nature with defect of jurisdiction.”
51. Section 14 of the Limitation Act deals with
exclusion of time of proceeding spent bona fide in a
court without jurisdiction. On analysis of the said
section, it becomes evident that the following
conditions must be satisfied before Section 14 can be
pressed into service:
(1) Both the prior and subsequent proceedings are civil
proceedings prosecuted by the same party;
(2) The prior proceeding had been prosecuted with due
diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of
jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding must
relate to the same matter in issue and;
(5) Both the proceedings are in a court.
52. Here I may refer to a few judgements touching
the controversy in question qua limitation. In the case
of Laxmi Engineering Works vs P.S.G. Industrial
Institute,1995 SCC (3) 583, the following order of
National Commission dated 07-12-1993 was assailed
before Hon’ble Supreme Court:-
“From the facts appearing on record it is manifest
that the complainant is carrying on the business of
manufacture of machine parts on a large scale for the
purpose of earning profit and significantly one single
item of machinery in respect of which the complaint
petition was filed by him before the State
Commission itself is of the value of Rs. 21 lakhs andKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 27 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
odd. In the circumstances, we fail to see how the
conclusion can be escaped that the machinery, in
question which is alleged to be defective was
purchased for a commercial purpose. Hence, the
complainant is not entitled to be regarded as a
consumer and the complaint petition filed by him was
not maintainable before the State Commission. He
order passed by the State Commission is set aside.
The complaint petition is dismissed.” The National
Commission, however, observed that their order does
not preclude the appellant from pursuing his remedy
by way of ordinary civil suit.”
53. In that case Hon’ble Supreme Court observed as
under:-
“25.So far as the present case is concerned we must
hold (in agreement with the National Commission),
having regard to the nature and character of the
machine and the material on record that it is not goods
which the appellant purchased for use by himself
exclusively for the purpose of earning his livelihood by
means of self employment, as explained hereinabove.
26.The appeal accordingly fails and is dismissed but
without costs. If the appellant chooses to file a suit for
the relief claimed in these proceedings, he can do so
according to law and in such a case he can claim the
benefit of Section 14 of the Limitation Act to exclude
the period spent in prosecuting the proceedings under
the Consumer Protection Act, while computing the
period of limitation prescribed for such a suit.”
54. In a similar case of Saushish Diamonds Ltd. vs
National Insurance Co. Ltd.,(1998) 8 SCC357, the
appellant had approached the National Consumer
Disputes Redressal Commission for recovery of the
loss of diamonds entrusted to the Commission Agent.
The National Consumer Disputes Redressal
Commission, New Delhi in its order dated 28-9-1995
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 28 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
passed the order holding that since the Insurance
Company has repudiated the claim, it declined to grant
the relief. Thus, an appeal was preferred before the
Hon’ble Supreme Court.:-
“2. Shri Harish Salve, the learned Senior Counsel for
the appellant, contended that in view of the policy
undertaken by the respondent, the Commission could
have granted the relief, instead of relegating the
appellant to a civil action. We find no force in the
contention. We have gone through the stand taken by
the respondent in the repudiation. The very
interpretation of the policy itself is a subject-matter of
the dispute. Under these circumstances, the
Commission rightly relegated the parties to a civil
action. It is true that limitation has run out against the
appellant during the pendency of the proceedings.
Therefore, the time taken between the date of the filing
of the claim before the Commission and the date of its
disposal, namely, 28-9-1995 would be considered by
the civil court for exclusion under Section 14 of the
Limitation Act, 1963. The appeal is accordingly
dismissed.”
55. In Basheer Ahmed Noor-ul-Hussain Farooqui Vs.
Shaikh Hamad , MANU/MH/1527/2021, the Hon’ble
High Court of Bombay, while considering the
contentions regarding the applicability of section 14,
Limitation Act upon the time spent by the plaintiff
bona fide before a Court without jurisdiction. It was
held:-
“It is thus material to note, that the District
Consumer Forum, had entertained the plea of the
plaintiff for a direction to the defendant to execute the
sale deed upon the receipt of the balance
consideration and had issued an according direction.
It is quite another matter altogether, that the State
Commission by its order dated 04.01.2010, dismissedKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 29 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the claim of the plaintiff and directed him to approach
the Civil Court which order was confirmed by the
National Commission on 14.03.2011 immediately
after which the plaintiff approached the Civil Court
on 13.04.2011 with the suit for specific performance.
The very fact that the District Forum, had ruled in
favour of the plaintiff would indicate that the plaintiff
had prosecuted the remedy before the Consumer
Forum diligently and bonafidely. In a series of
decisions, namely, Laxmi Engineering Works;
Saushish Diamonds Ltd.; M/s Deokar Exports Pvt.
Ltd. and Shangrilla Apartments Co-Operative
Housing Society ltd (Supra), it has been held, that
prosecution of a remedy before the Consumer Forum,
would be a legal and valid ground, to invoke and
apply the provisions of Section 14 of the Limitation
Act. There is no reason whatsoever, why the same
benefit, cannot be granted to the plaintiff, specifically
in light of the fact, that the District Consumer Forum
in fact entertained the plea of the plaintiff and had
granted relief. It therefore cannot be said that
prosecution of the remedy by the plaintiff before the
authorities under the Consumer Protection Act was
either malafide, or with knowledge that the same was
not maintainable. Ramji Pandey (Supra) upon which
reliance has been placed by Mr. Deshpande, learned
counsel for the respondent, is on a different footing
altogether as in that case, the initial institution of the
suit itself, was in the proper forum that is the Civil
Court and it was not a case where at the inception, the
proceedings were filed and prosecuted in a forum
which subsequently was held to be without authority.
The courts below, have failed to consider the above
position, in light of the settled position of law, and
therefore, the finding in this regard, cannot be
sustained. It is therefore held, that the suit as filed by
the plaintiff, was maintainable in view of the
availability and applicability of Section 14 of the
Limitation Act, to the plaintiff, for if the period spent
before the Consumer Forum and the Higher
Authorities under the Consumer Protection Act was
subtracted, then the suit filed by the plaintiff, was
clearly within the limitation as prescribed under
Section 54 of the Limitation Act.”
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 30 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
56. In the case of Purni Devi Vs Babu Ram , 2024
INSC 259, by referring to the cases of Consolidated
Engg. Enterprises vs The Principal Secretary
(Irrigation Department) & Ors, (2008) 7 SCC 169 and
the case of Sesh Nath Singh Vs Baidyabati
Sheoraphuli Coop. Bank Ltd., (2021) 7 SCC 313,
Hon’ble Supreme Court observed as under:-
34. The judgment of this Court in M.P. Steel (Supra)
discussed the phrases, “due diligence” and “in good
faith” for the purposes of invocation of Section 14 of the
Limitation Act. While considering the application of
Section 14 to the Customs Act, it was observed:
“10. We might also point out that Conditions 1 to 4
mentioned in the Consolidated Engg. case have, in
fact, been met by the Plaintiff. It is clear that both the
prior and subsequent proceedings are civil
proceedings prosecuted by the same party. The prior
proceeding had been prosecuted with due diligence
and in good faith, as has been explained in
Consolidated Engg. [(2008) 7 SCC 169] itself. These
phrases only mean that the party who invokes Section
14 should not be guilty of negligence, lapse or
inaction. Further, there should be no pretended
mistake intentionally made with a view to delaying
the proceedings or harassing the opposite party.
49. ……. the expression “the time during which the
plaintiff has been prosecuting with due diligence
another civil proceeding” needs to be construed in a
manner which advances the object sought to be
achieved, thereby advancing the cause of justice.”
(emphasis supplied)
35. The judgments in Consolidated Engg. Enterprises
(Supra) and M.P. Steel (Supra) have been followed
consistently by this Court. For instance in Sesh Nath Singh
v. Baidyabati Sheoraphuli Coop. Bank Ltd. 5 (2-Judge
Bench), while holding Section 14 to be applicable to
applications under Section 7 of the Insolvency and
Bankruptcy Code, 2016 and the SARFAESI Act, it was
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 31 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
observed:-
“75. Section 14 of the Limitation Act is to be read as
a whole. A conjoint and careful reading of sub-
sections (1), (2) and (3) of Section 14 makes it clear
that an applicant who has prosecuted another civil
proceeding with due diligence, before a forum which
is unable to entertain the same on account of defect
of jurisdiction or any other cause of like nature, is
entitled to exclusion of the time during which the
applicant had been prosecuting such proceeding, in
computing the period of limitation. The substantive
provisions of sub-sections (1), (2) and (3) of Section
14 do not say that Section 14 can only be invoked on
termination of the earlier proceedings, prosecuted in
good faith.”
57. Here it would be relevant to refer to the
observation of the Hon’ble Supreme Court made in the
case of M.P. Steel Corporation (supra), which are as
under:-
” 34. It now remains to consider the decision of a 2-
Judge Bench reported in P. Sarathy v. State Bank of
India, (2000) 5 SCC 355. This judgment has held that an
abortive proceeding before the appellate authority under
Section 41 of the Tamil Nadu Shops and Establishment
Act would attract the provisions of Section 14 of the
Limitation Act inasmuch as the appellant in this case had
been prosecuting with due diligence another civil
proceeding before the appellate authority under the Tamil
Nadu Shops and Establishment Act, which appeal was
dismissed on the ground that the said Act was not
applicable to nationalized banks and that, therefore, such
appeal would not be maintainable. This Court made a
distinction between “Civil Court” and “court’ and
expanded the scope of Section 14 stating that any
authority or Tribunal having the trappings of a Court
would be a “court” within the meaning of Section 14. It
must be remembered that the word “Court” refers only to
a proceeding which proves to be abortive. In this context,KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 32 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
for Section 14 to apply, two conditions have to be met.
First, the primary proceeding must be a suit, appeal or
application filed in a Civil Court. Second, it is only when
it comes to excluding time in an abortive proceeding that
the word “Court” has been expanded to include
proceedings before tribunals.
35. This judgment is in line with a large number of
authorities which have held that Section 14 should be
liberally construed to advance the cause of justice – see:
Shakti Tubes Ltd. v. State of Bihar, (2009) 1 SCC 786
and the judgments cited therein. Obviously, the context
of Section 14 would require that the term “court” be
liberally construed to include within it quasi-judicial
Tribunals as well. This is for the very good reason that
the principle of Section 14 is that whenever a person
bonafide prosecutes with due diligence another
proceeding which proves to be abortive because it is
without jurisdiction, or otherwise no decision could be
rendered on merits, the time taken in such proceeding
ought to be excluded as otherwise the person who has
approached the Court in such proceeding would be
penalized for no fault of his own. This judgment does not
further the case of Shri Viswanathan in any way. The
question that has to be answered in this case is whether
suits, appeals or applications referred to by the
Limitation Act are to be filed in courts. This has nothing
to do with “civil proceedings” referred to in Section 14
which may be filed before other courts or authorities
which ultimately do not answer the case before them on
merits but throw the case out on some technical ground.
Obviously the word “court” in Section 14 takes its colour
from the preceding words “civil proceedings”. Civil
proceedings are of many kinds and need not be confined
to suits, appeals or applications which are made only in
courts stricto sensu. This is made even more clear by the
explicit language of Section 14 by which a civil
proceeding can even be a revision which may be to a
quasi-judicial tribunal under a particular statute”.
58. Coming back to the case at hand, it is not in
dispute that initially the complaints of the plaintiff
company were returned by the District Forum vide
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 33 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
order dated 27.3.2017 ExPW1/3. From the order dated
27.03.2017 ExPW1/3, it is evident that Ld. District
Forum observed that it has no pecuniary jurisdiction to
entertain the complaints filed by the plaintiff company.
The matter landed before National Commission, then
before State Commission and finally vide order dated
09.02.2022, again the complaints of the plaintiff
company were returned by the District Forum vide
order dated 09.2.2022 ExPW1/10 observing that “the
dispute raised by the complainant company as involved in
the instant case is a dispute between “business to business”
and is not covered under the Act as observed by Hon’ble
Apex Court in Laxmi Engg. Works (Supra). The instant
complaint is therefore dismissed as not maintainable
before Consumer Commission under the Act”. From the
said order it is evident that District Forum had
dismissed the complaints of the plaintiff company on
the ground that the purpose of transaction between the
parties were commercial and the complainant
( plaintiff company) is not a consumer under section 2
(1) (d) of the Act. Meaning thereby, the District Forum
did not consider the complaints of the plaintiff
company on merits.
59. Having said so, there would be no difficulty in
arriving at a conclusion that the case of the plaintiff
company comes within the ambit of section 14 of the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 34 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
Limitation Act. In the present case it is not in dispute
that the proceedings before the District Forum were
between the same parties i.e M/s KLJ Resources Ltd
vs The Oriental Insurance Co. Ltd who are the plaintiff
company and defendant company respectively before
this Court. There would be no denial of the facts that
the proceedings before the District Forum were civil
proceedings and so is the case before this Court.
There is nothing on record suggesting that the plaintiff
company had not prosecuted its complaints with due
diligence and in good faith. Assailing the order of
District Forum before the Appellate Authority i.e
State Commission and National Commission indicates
that plaintiff company was diligent enough in
prosecuting its claim before the District Forum. The
orders passed by the District Forum, State
Commission and National Commission would make it
further clear that the plaintiff company had tried its
best to get its claims adjudicated by the District
Forum. As noted herein above the proceedings came
to be dismissed by the District Forum on technical
grounds of jurisdiction. Last but not the least, the issue
between the parties before the District Forum as well
as before this Court are the same i.e according to the
plaintiff company the repudiation of the claims of the
plaintiff company by the defendant company is illegal.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 35 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
60. In view of my aforesaid discussion and the
observations made in various judgments, as noted,
now it is no more res Integra that prosecution of a
remedy before the Consumer Forum, would be a legal
and valid ground, to invoke and apply the provisions
of Section 14 of the Limitation Act. There is no reason
whatsoever why the same benefit cannot be granted to
the plaintiff company in the present case. It is
therefore cannot be said that prosecution of the remedy
by the Plaintiff company before the authorities under
the Consumer Protection Act, 2019 was either
malafide, or with knowledge that the same was not
maintainable. Thus, the plaintiff company is entitled to
exclusion of the time during which the plaintiff
company had prosecuted its claims before the District
Forum.
61. Having said so, now it is to be seen whether the
present suit has been instituted within the period of
limitation or not even after giving the benefits of
section 14 of the Limitation Act.
62. According to the plaintiff company, the claims
of the plaintiff company were repudiated by the
defendant company vide communication dated
07.03.2012 ExPW1/26 but the information about the
repudiation of the claims of the plaintiff company was
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 36 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
given to the plaintiff company vide communication
dated 20.03.2014 informing the plaintiff company that
the claims of the plaintiff company have been rejected
on 07.03.2012. According to the plaintiff company
the cause of action has arisen on 20.03.2014, whereas,
it is the case of the defendant company that the cause
of action arose on 07.03.2012 when the claims of the
plaintiff company were repudiated.
63. Before venturing into the main issue of
limitation, it has to be seen as to when the cause of
action has arisen in the present case. Whether it arose
on 20.03.2014, as claimed by the plaintiff company ?
Or on 07.03.2012, as claimed by the defendant
company?
64. In order to prove its case including the fact that
the present suit is within limitation, the plaintiff
company has examined two witnesses. The main
witness is Gopal Krishan Walia (PW1), Manager in
the plaintiff company, who has filed his evidence by
way of affidavit ExPW1/A. His entire affidavit
ExPW1/A is silent about the claim of the plaintiff
company that the had received the information about
the rejection of the claim on 20.03.2014. The only
deposition in this regard has been made in para 11,12
and 13 of the said affidavit ExPW1/A, which are as
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 37 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
under:–
” 11. I say that the plaintiff also sent claim bills to
the defendant company in respect of aforesaid loss .
12. I say that the defendant company did not settle
the claims of the plaintiff for long, therefore, the
plaintiff sent reminders to the defendant company
and sought early settlement. However, the
defendant company sent their letters thereby
denying their liability under the insurance policy.
13. I say that the grounds taken by the defendant
for rejecting the claims of the were utterly wrong,
beyond the scope of insurance policy and not
tenable under the law. The defendant had taken
similar grounds while rejecting the claims of the
plaintiff company.”
65. In case the information about the rejection of the
claims was received by the plaintiff company on
20.3.2014, in that eventuality there was no occasion
for the plaintiff company at least not to plead the same
in the plaint and also not to make the deposition at the
time of adducing the evidence. If the aforesaid
deposition as laid in the para 11, 12 and 13 of the
affidavit ExPW1/A is considered in totality then it can
be easily inferred that plaintiff company has not
disputed the letters/communications sent by the
defendant company rejecting the claims of the plaintiff
company including the repudiation letter/
communication dated 07.3.2012 ExPW1/26.
66. Here I may refer to the cross examination of
PW1 Gopal Krishan Walia. During his cross
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 38 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
examination PW1 was specifically asked (Q.No.15)
when did the plaintiff company receive the repudiation
letters from the defendant company in the present
case, he replied he does not know the exact date. This
also goes against the plaintiff company to accept its
contention that information about rejection of claims
was received by the plaintiff company on 20.3.2014.
67. Further, DW1 Renuka Chaudhary, Manager in
the defendant company in her evidence filed by way of
affidavit ExDW1/A deposed that ( para 4) the loss was
reported by the plaintiff company and two of the
insurance claims were repudiated in the year 2012. It
was further deposed that the present suit has been filed
in the year 2023 which is beyond the period of
limitation.
68. DW1 Renuka Chaudhary was cross examined
by the Ld. Counsel for the plaintiff company but not
even a suggestion was put to DW1 that the claims of
the plaintiff company were not repudiated in the year
2012 and so the present suit of the plaintiff company is
not barred by limitation. There is no evidence on
record to prove that first time the intimation about the
rejection of the claim was given on 20.3.2014. The
communication dated 20.3.2014 ExPW1/25 is not in
dispute. In that communication also it has been
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 39 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
categorically mentioned that the claim of the plaintiff
company was repudiated by the competent authority
and it was informed through a registered letter dated
07.3.2012 and the reason for repudiation is mentioned
in the said repudiation letter. Although, the plaintiff
company is admitting the said communication dated
20.3.2014 but is disputing the contents thereof, which
is not permissible. There is nothing on record
suggesting that the plaintiff company ever raised any
objection regarding the contents of the communication
dated 20.3.2014 ExPW1/25.
69. Further, it is evident that plaintiff company had
sent few communications/letters dated 28.3.2014,
08.4.2014 and 29.7.2014 ExPW1/27 subsequently to
the defendant company after receipt of the
communication dated 20.3.2014 but even in those
communications also no objection was raised by the
plaintiff company that the plaintiff company had not
received any registered letter dated 07.3.2012 whereby
the claims of the plaintiff company were repudiated.
The only grievance and challenge in the said
communications ExPW1/27 was in respect of the
ground(s) on the basis of which the claims of the
plaintiff company were rejected.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 40 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
70. Moreover, during the cross examination of DW1
Renuka Chaudhary, one of the questions ( Q. No. 10)
put to her was ” is it correct that insurance company is
forced to settle a claim within30 days after receipt of a
survey report”. This question was answered in
affirmative. In the present case surveyors reports are
dated 21.12.2011 ExPW1/21, ExPW1/41, ExPW1/59
and report dated 12.12.2011 ExPW1/58. In case the
plaintiff company’s stand is to be accepted then the
defendant company was supposed to settle the claims
within 30 days after receipt of surveyor report i.e at
the most by 20.1.2012 which was not done. Therefore,
the cause of action had arisen even prior to specifically
repudiation by the defendant company i.e on
20.1.2012.
71. Thus, in view of my aforesaid discussion, I am
of the considered opinion that the plaintiff company
had duly received the repudiation letter dated
07.3.2012 ExPW1/26 whereby the claims of the
plaintiff company were rejected, therefore , the cause
of action arose on 7.3.2012 and not on 20.3.2014.
Thus, limitation to file the present suit started on
08.03.2012.
72. In ordinary circumstances, the period of
limitation for filing the present suit for recovery would
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 41 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
have expired on 07.3.2015.
73. In the present case, the plaintiff company has
filed a separate application under section 14 of the
Limitation Act seeking to exclude a certain period
while calculating the period of limitation and has
sought the benefit under section 14 of the Limitation
Act. According to the plaintiff company as pleaded in
the said application, the plaintiff company is said to
have preferred the complaints to the District Forum on
24.11.2014. Meaning thereby, the plaintiff company
kept waiting during the period from 8.3.2012 to
24.11.2014 and even as per the case of the plaintiff
company, the complaints before the District Forum
were filed after Two years, Eight Months and
Seventeen Days. As per the case of the plaintiff
company, the last order passed by the District Forum
was of 09.02.2022 as the complaints of the plaintiff
company came to be dismissed or returned on the
ground of maintainability. From this, it is evident that
the plaintiff company has spent the time before the
Consumer Forum from 24.11.2014 to 09.2.2022 and
that has to be excluded in terms of section 14 of
Limitation Act.
74. The limitation period started from 08.3.2012 and
it stopped on 24.11.2014 at the time when the plaintiff
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 42 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
company preferred complaints before the District
Forum. The limitation would again start w.e.f.
10.2.2022 i.e. one day after the day when the
complaints were returned by the District Consumer
Forum. The present suit has been filed on 10.5.2023
i.e after One year and Three months. The total period
spent by the plaintiff company, excluding the period
spent before District Forum, would be Two years
Eight Months and Seventeen days + One Year Three
Months i.e Three years Eleven Months and Seventeen
Days. The plaintiff company can be given the benefit
under section 14 of the Limitation Act,1963 only for
that period which was spent before the District
Forums.
75. We can understand it from another angle also.
There are three blocks of the time period which are
relevant for calculating the period of limitation. The
first block would be from 8.3.2012 to 24.11.2014.
This is a period which was spent by the plaintiff
company and no claims were preferred by the plaintiff
company before any Court, Tribunal or Judicial
Authority. The second block would be the time spent
by the plaintiff company before the District Forum i.e
from 24.11.2014 to 09.2.2022. This time has to be
excluded and the third block would be the period from
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 43 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
09.2.2022 to 10.5.2023. As far as calculating the
period of limitation is concerned, the time spent in
first block and third block would be added which
comes as noted herein above i.e Three years Eleven
Months and Seventeen days. Meaning thereby, there is
a delay of around Eleven Months and Seventeen Days
in filing the present suit.
76. Further, in terms of the proviso attached to the
section 12 A of the Commercial Courts Act,2015, the
time spent in Pre-Litigation Mediation is to be
excluded while calculating the period of limitation. In
the present case, as per the non starter report, the
application before the Pre-Litigation Mediation was
preferred on 11.1.2023 and the non-starter report was
released on 11.04.2023, therefore, around three
months were spent by the plaintiff company before the
Pre-litigation Mediation and that period has to be
excluded. Even if the said period is excluded, the
present suit has been filed beyond the period of
limitation i.e after Three Years Eight Months and
Seventeen days ( Three years Eleven Months Seventee
days – Three months).
77. There is a delay of around Eight Months
Seventeen days in filing the present suit which is
beyond the period of limitation . Hence, the defendant
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 44 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
company has been able to establish that the present
suit filed by the plaintiff company is barred by
limitation. Accordingly, issue no.1 is decided in
favour of the defendant company and against the
plaintiff company .
Issue No. 2
Whether the suit is bad for non-joinder of necessary
parties, as alleged by the defendant in the written
statement? OPD
78. The next objection taken by the defendant
company is that the present suit is bad for non-joinder
of necessary and proper parties and is liable to be
dismissed. Ld. Counsel for the defendant company
submitted that the shipper or the shipping agent to
whom also the plaintiff company had raised the
claims, was a necessary party and he has not been
made defendant in the present case. He submitted that
the goods in question were transported by the shipper
and it was the responsibility of the shipper to make the
loss good, as per the case of the plaintiff company,
therefore, the shipping agent was a necessary party
which is not there, therefore, the suit is liable to be
dismissed.
79. Refuting the allegations of the defendant
company, Ld. Counsel for the plaintiff company
submitted that as per the insurance policies issued by
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 45 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the defendant company, it was not obligatory for the
plaintiff company to implead the shipping agent in
case of losses covered under the policies. He
submitted that the plaintiff company had lodged a
protest on the shipper therefore, preserving the rights
to subrogation and it cannot be expected from the
plaintiff company to indulge in litigation with the
shipper to claim the indemnity from the Insurer.
80. Before proceeding further, I may mention that
the general rule in regard to impleadment of parties is
that the plaintiff company in a suit, being dominus
litis, may choose the persons against whom he wishes
to litigate and cannot be compelled to sue a person
against whom he does not seek any relief.
Consequently, a person who is not a party has no right
to be impleaded against the wishes of the plaintiff
company. But this general rule is subject to the
provisions of Order 1 Rule 10(2) of the Code of Civil
Procedure, which provides for impleadment of proper
or necessary parties. The said sub-rule is extracted
below:
“10. (2) Court may strike out or add parties.–The
court may at any stage of the proceedings, either
upon or without the application of either party, and
on such terms as may appear to the court to be just,
order that the name of any party improperly joined,
whether as plaintiff or defendant, be struck out, and
that the name of any person who ought to have been
joined, whether as plaintiff or defendant, or whoseKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 46 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
presence before the court may be necessary in order
to enable the court effectually and completely to
adjudicate upon and settle all the questions involved
in the suit, be added.”
81. The said provision makes it clear that a court
may, at any stage of the proceedings, either upon or
even without any application, and on such terms as
may appear to it to be just, direct that any of the
following persons may be added as a party: (a) any
person who ought to have been joined as plaintiff or
defendant, but not added; or (b) any person whose
presence before the court may be necessary in order to
enable the court to effectively and completely
adjudicate upon and settle the questions involved in
the suit. In short, the court is given the discretion to
add as a party any person who is found to be a
necessary party or proper party.
82. Here I may refer to the case of Mumbai
International Airport (P) Ltd. v. Regency Convention
Centre & Hotels (P) Ltd., (2010) 7 SCC 417, wherein it
was held that:-
“15. A “necessary party” is a person who ought to
have been joined as a party and in whose absence no
effective decree could be passed at all by the court. If
a “necessary party” is not impleaded, the suit itself is
liable to be dismissed. A “proper party” is a party
who, though not a necessary party, is a person whose
presence would enable the court to completely,
effectively and adequately adjudicate upon all
matters in dispute in the suit, though he need not be a
person in favour of or against whom the decree is toKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 47 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
be made. If a person is not found to be a proper or
necessary party, the court has no jurisdiction to
implead him, against the wishes of the plaintiff. The
fact that a person is likely to secure a right/interest in
a suit property, after the suit is decided against the
plaintiff, will not make such person a necessary party
or a proper party to the suit for specific
performance.”
83. In the present case, it is not in dispute that all the
consignments belonging to the plaintiff company were
insured by the defendant company and for that
separate cover notes and insurance policies were
issued. As such it is also not in dispute, rather it has
come on record that there was a loss of quantities of
the goods which were imported by the plaintiff
company. The bone of contention between the parties
is whether that losses, as detailed, are covered by the
insurance policies or not? It is also a matter of fact
that the plaintiff company is stated to have lodged the
claims before the Shipper also. There is nothing on
record suggesting that it was the pre-condition to
accept the claims of the plaintiff company by the
defendant company to raise the claim first to the
shipper. Further, it is not that the liability of the
shipper and the insurance company is joint and
several.
84. There was a separate contract of insurance
between the plaintiff and the defendant company and
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 48 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the consideration thereof was the premium to be paid
by the plaintiff company to the defendant company
and defendant company was under obligation to make
the losses good in terms of the clauses of the insurance
policies as agreed between the parties, in case it comes
within the ambit of the policies. There is no privity of
contract between the shipper and the insurance
company as such. Therefore, in any claim filed by the
plaintiff company against the defendant company, the
shipper would not be a necessary or proper party.
Therefore, issue No. 2 is decided in favour of the
plaintiff company and against the defendant company.
IssueNo. 4
Whether the present suit is not maintainable the
plaintiff having clubbed together separate claims
arising out of the separate policies having different
survey reports and different assessment of loss, as
alleged by the defendants in the written statement?
(OPD)
85. The next objection taken by the defendant
company is that the present suit is not maintainable as
the plaintiff company has clubbed together separate
claims arising out of separate policies. Ld. Counsel for
the defendant company submitted that for each of the
consignments, there was a separate cover note and
separate policy. The claims of the plaintiff company
have been rejected by the defendant company
separately. Therefore, there was a different cause of
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 49 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
action for each of the claims and the plaintiff company
cannot be allowed to club the same as one cause of
action. He further submitted that the plaintiff company
has filed the claims of more than one consignment just
to bring the claim within the pecuniary jurisdiction of
this court. On this ground, the present suit is liable to
be rejected.
86. Per contra, Ld. Counsel for the plaintiff
company submitted that in the present case, the parties
are the same; all the claims were processed and
rejected by the defendant company on the same day’
all the claims are of the similar nature which came to
be dismissed or rejected on the ground by the
defendant company. There is a common relief sought
by the plaintiff company. He has also taken me to
order 2 rule 3 CPC, Ld. Counsel for the plaintiff
company submitted that the plaintiff company is
within its right to club more than one cause of action
when the parties are the same.
87. Since the present suit is being challenged for
misjoinder of causes of action also, it is pertinent to
mention here the law on the point which is as under:
Order 2 Rule 3 CPC
“3. Joinder of causes of action.–(1) Save as
otherwise provided, a plaintiff may unite in the
same suit several causes of action against the same
defendant, or the same defendants jointly; and anyKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 50 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
plaintiffs having causes of action in which they are
jointly interested against the same defendant or the
same defendants jointly may unite such causes of
action in the same suit.
(2) Where causes of action are united, the
jurisdiction of the Court as regards the suit shall
depend on the amount or value of the aggregate
subject-matters at the date of instituting the suit.”
Order 2 Rule 6 CPC
“6. Power of court to order separate trials.–Where it
appears to the court that the joinder of causes of action
in one suit may embarrass or delay the trial or is
otherwise inconvenient, the court may order separate
trials or make such other order as may be expedient in
the interests of justice.”
88. The expression “cause of action” is the fact or
facts which give a person a right to judicial relief. A
cause of action, thus, means every fact, which, if
traversed, it would be necessary for the plaintiff to
prove in order to support his right to a judgment of the
court. In other words, it is a bundle of facts which,
taken with the law applicable to them, gives the
plaintiff a right to relief against the defendant . It must
include some act done by the defendant since in the
absence of such an act no cause of action can possibly
accrue. It is not limited to the actual infringement of
the right sued on but includes all the material facts on
which it is founded.
89. Order 2 Rule 3 CPC provides for the joinder of
several causes of action and states that a plaintiff may
unite in the same suit several causes of action against
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 51 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the same defendant, or the same defendants jointly or
several plaintiffs having causes of action in which they
are jointly interested against the same defendant or
defendants jointly may unite them in one suit. The
remedy for any possible inconvenience with regard to
the said rule is supplied by the provisions of Order 2
Rule 6, which authorises the Court to order separate
trials of causes of action which though joined in one
suit cannot be conveniently tried or disposed of
together.
90. In the case of Prem Lala Nahata v. Chandi
Prasad Sikaria, (2007) 2 SCC 551, it was held that:-
“11. Order 2 deals with frame of suits. It provides
that every suit shall be framed as far as practicable
so as to afford grounds for final decision upon the
subjects in dispute and to prevent further litigation
concerning them. It is also insisted that every suit
shall include the whole of the claim that a plaintiff
is entitled to make in respect of its subject-matter.
There is a further provision that the plaintiff may
unite in the same suit several causes of action
against the same defendant and the plaintiffs
having causes of action in which they are jointly
interested against the same defendant, may unite
such causes of action in the same suit. It provides
that objection on the ground of misjoinder of
causes of action should be taken at the earliest
opportunity. It also enables the court, where it
appears to the court that the joinder of causes of
action may embarrass or delay the trial or
otherwise cause inconvenience, to order separate
trials or to make such other order as may be
expedient in the interests of justice.
12. Thus, in a case where a plaint suffers from the
defect of misjoinder of parties or misjoinder ofKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 52 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
causes of action either in terms of Order 1 Rule 1
and Order 1 Rule 3 on the one hand, or Order 2
Rule 3 on the other, the Code itself indicates that
the perceived defect does not make the suit one
barred by law or liable to rejection. This is clear
from Rules 3-A, 4 and 5 of Order 1 of the Code,
and this is emphasised by Rule 9 of Order 1 of the
Code which provides that no suit shall be defeated
by reason of non-joinder or misjoinder of parties
and the court may in either case deal with the
matter in controversy so far as it regards the rights
and interests of the parties actually before it. This
is further emphasised by Rule 10 of Order 1 which
enables the court in appropriate circumstances to
substitute or add any person as a plaintiff in a suit.
Order 2 deals with the framing of a suit and Rule 3
provides that save as otherwise provided, a
plaintiff may unite in the same suit several causes
of actions against the same defendant and any
plaintiffs having causes of actions in which they
are jointly interested against the same defendant
may unite such causes of action in the same suit.
Rule 6 enables the court to order separate trials
even in a case of misjoinder of causes of action in
a plaint filed.
13. After the amendment of Order 16 Rule 1 in
England, it was held by the Court of Appeal in
England in Thomas v. Moore [(1918) 1 KB 555 :
87 LKB 577 (CA)] thus:
“Whatever the law may have been at the time when
Smurthwaite v. Hannay [1894 AC 494 : (1891-4)
All ER Rep 865 (HL)] was decided, joinder of
parties and joinder of causes of action are
discretionary in this sense, that if they are joined
there is no absolute right to have them struck out,
but it is discretionary in the Court to do so if it
thinks right.”
14. The Privy Council in Mahant Ramdhan Puri v.
Chaudhury Lachmi Narain [AIR 1937 PC 42 :
1937 All LJ 556] pointed out: (AIR p. 45)
“It is desirable to point out that under the rules
as they now stand the mere fact of misjoinder isKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 53 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
not by itself sufficient to entitle the defendant to
have the proceedings set aside or action
dismissed.”
Of course, their Lordships were speaking in the
context of Section 99 of the Code. Their
Lordships referred to the above quoted
observation of the Court of Appeal in Thomas
v. Moore [(1918) 1 KB 555 : 87 LKB 577
(CA)] in that decision. It is therefore clear that a
suit that may be bad for misjoinder of causes of
action is not one that could be got struck out or
rejected by a defendant as a matter of right and
the discretion vests with the court either to
proceed with the suit or to direct the plaintiff to
take steps to rectify the defect. In fact, the Privy
Council in that case noticed that the suit was
bad for misjoinder of causes of action. It further
noticed that the trial Judge had in spite of the
complications created thereby, tried and
disposed of the suit satisfactorily. Therefore,
there was no occasion for the court to dismiss
the suit on the ground of misjoinder of causes
of action at the appellate stage.
15. It is well understood that procedure is the
handmaid of justice and not its mistress. The
scheme of Order 1 and Order 2 clearly shows that
the prescriptions therein are in the realm of
procedure and not in the realm of substantive law
or rights. That the Code considers objections
regarding the frame of suit or joinder of parties
only as procedural, is further clear from Section 99
of the Code which specifically provides that no
decree shall be reversed in appeal on account of
any misjoinder of parties or causes of action or
non-joinder of parties unless a court finds that the
non-joinder is of a necessary party. This is on the
same principle as of Section 21 of the Code which
shows that even an objection to territorial
jurisdiction of the court in which the suit is
instituted, could not be raised successfully for the
first time in an appeal against the decree unless the
appellant is also able to show consequent failure of
justice. The Suits Valuation Act similarly indicates
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 54 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
that absence of pecuniary jurisdiction in the court
that tried the cause without objection also stands
on the same footing. The amendment to Section 24
of the Code in the year 1976 confers power on the
court even to transfer a suit filed in a court having
no jurisdiction, to a court having jurisdiction to try
it. In the context of these provisions with particular
reference to the rules in Order 1 and Order 2 of the
Code, it is clear that an objection of misjoinder of
plaintiffs or misjoinder of causes of action, is a
procedural objection and it is not a bar to the
entertaining of the suit or the trial and final
disposal of the suit. The court has the liberty even
to treat the plaint in such a case as relating to two
suits and try and dispose them of on that basis.
16. Order 7 Rule 11(d) speaks of the suit being
“barred by any law”. According to Black’s Law
Dictionary, bar means, a plea arresting a law suit
or legal claim. It means as a verb, to prevent by
legal objection. According to Ramanatha Aiyar’s
Law Lexicon, “bar” is that which obstructs entry
or egress; to exclude from consideration. It is
therefore necessary to see whether a suit bad for
misjoinder of parties or of causes of action is
excluded from consideration or is barred entry for
adjudication. As pointed out already, on the
scheme of the Code, there is no such prohibition or
a prevention at the entry of a suit defective for
misjoinder of parties or of causes of action. The
court is still competent to try and decide the suit,
though the court may also be competent to tell the
plaintiffs either to elect to proceed at the instance
of one of the plaintiffs or to proceed with one of
the causes of action. On the scheme of the Code of
Civil Procedure, it cannot therefore be held that a
suit barred for misjoinder of parties or of causes of
action is barred by a law, here the Code. This may
be contrasted with the failure to comply with
Section 80 of the Code. In a case not covered by
sub-section (2) of Section 80, it is provided in sub-
section (1) of Section 80 that “no suit shall be
instituted”. This is therefore a bar to the institution
of the suit and that is why courts have taken the
view that in a case where notice under Section 80
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 55 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
of the Code is mandatory, if the averments in the
plaint indicate the absence of a notice, the plaint is
liable to be rejected. For, in that case, the
entertaining of the suit would be barred by Section
80 of the Code. The same would be the position
when a suit hit by Section 86 of the Code is filed
without pleading the obtaining of consent of the
Central Government if the suit is not for rent from
a tenant. Not only are there no words of such
import in Order 1 or Order 2 but on the other hand,
Rule 9 of Order 1, Rules 1 and 3 of Order 1, and
Rules 3 and 6 of Order 2 clearly suggest that it is
open to the court to proceed with the suit
notwithstanding the defect of misjoinder of parties
or misjoinder of causes of action and if the suit
results in a decision, the same could not be set
aside in appeal, merely on that ground, in view of
Section 99 of the Code, unless the conditions of
Section 99 are satisfied. Therefore, by no stretch of
imagination, can a suit bad for misjoinder of
parties or misjoinder of causes of action be held to
be barred by any law within the meaning of Order
7 Rule 11(d) of the Code.
17. Thus, when one considers Order 7 Rule 11 of
the Code with particular reference to clause ( d), it
is difficult to say that a suit which is bad for
misjoinder of parties or misjoinder of causes of
action, is a suit barred by any law. A procedural
objection to the impleading of parties or to the
joinder of causes of action or the frame of the suit,
could be successfully urged only as a procedural
objection which may enable the court either to
permit the continuance of the suit as it is or to
direct the plaintiff or plaintiffs to elect to proceed
with a part of the suit or even to try the causes of
action joined in the suit as separate suits.
18. It cannot be disputed that the court has power
to consolidate suits in appropriate cases.
Consolidation is a process by which two or more
causes or matters are by order of the court
combined or united and treated as one cause or
matter. The main purpose of consolidation is
therefore to save costs, time and effort and to make
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 56 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the conduct of several actions more convenient by
treating them as one action. The jurisdiction to
consolidate arises where there are two or more
matters or causes pending in the court and it
appears to the court that some common question of
law or fact arises in both or all the suits or that the
rights to relief claimed in the suits are in respect of
or arise out of the same transaction or series of
transactions; or that for some other reason it is
desirable to make an order consolidating the suits.
(See Halsbury’s Laws of England, Vol. 37, para
69.) If there is power in the court to consolidate
different suits on the basis that it should be
desirable to make an order consolidating them or
on the basis that some common questions of law or
fact arise for decision in them, it cannot certainly
be postulated that the trying of a suit defective for
misjoinder of parties or causes of action is
something that is barred by law. The power to
consolidate recognised in the court obviously gives
rise to the position that mere misjoinder of parties
or causes of action is not something that creates an
obstruction even at the threshold for the
entertaining of the suit.
19. It is recognised that the court has wide
discretionary power to control the conduct of
proceedings where there has been a joinder of
causes of action or of parties which may embarrass
or delay the trial or is otherwise inconvenient. In
that situation, the court may exercise the power
either by ordering separate trials of the claims in
respect of two or more causes of action included in
the same action or by confining the action to some
of the causes of action and excluding the others or
by ordering the plaintiff or plaintiffs to elect which
cause of action is to be proceeded with or which
plaintiff should proceed and which should not or
by making such other order as may be expedient.
(See Halsbury’s Laws of England, Vol. 37, para
73.) Surely, when the matter rests with the
discretion of the court, it could not be postulated
that a suit suffering from such a defect is
something that is barred by law. After all, it is the
convenience of the trial that is relevant and as the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 57 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
Privy Council has observed in the decision noted
earlier, the defendant may not even have an
absolute right to contend that such a suit should
not be proceeded with.
91. In the case of Carlsberg Breweries A/S. Versus
Som Distilleries and Breweries Ltd. , 2018 SccOnLine
12912, it was held that:-
“27. Joinder of causes of action-dealt with in
Order II Rule 3 enables the plaintiff to ” unite in
the same suit several causes of action against the
same defendant, or the same defendants jointly;
and any plaintiffs having joinder of causes of
action in which they are jointly interested
against the same defendant or the same
defendants jointly may unite such joinder of
causes of action in the same suit .” Rule 3(2)
states that if there is such joinder of causes of
action “jurisdiction of the court as regards the
suit shall depend on the amount or value of the
aggregate subject-matters at the date of
instituting the suit.
************************************ 31.
An indisputable conclusion from the above
authorities is that there is no per se or threshold
bar to maintainability of suits, on the perceived
ground of misjoinder of causes of action. In
more senses than one, the subject of joinder of
causes of action is a mirror image of the issue of
joinder of parties. Prem Lata Nahata (supra)
clearly enunciates that “in a case where a plaint
suffers from the defect of misjoinder of parties
or misjoinder of causes of action either in terms
of Order I Rule 1 and Order I Rule 3 on the one
hand, or Order II Rule 3 on the other, the Code
itself indicates that the perceived defect does not
make the suit one barred by law or liable to
rejection.” The court later analyzed Order VII
Rule 11(b) and stated that an objection to the
frame of a suit, is at best a procedural one,
which cannot result in rejection of a plaint. The
court noticed that unlike Section 80 (of the
CPC) which enacted a clear substantive bar toKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 58 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
the entertainment of a suit unless a procedural
step is taken, there is no such bar-or one by
necessary implication which renders a suit
deemed improper (as to frame of suit for
misjoinder of causes of action), liable to
rejection. It was noticed, importantly that the
objection to joinder or misjoinder is an
insufficient ground for appeal, if not raised at
the earliest point. A very important conclusion
in Prem Lata Nahata (supra) (which has
nowhere been disapproved or distinguished from
in any subsequent ruling by the Supreme Court)
is that objection to misjoinder (of causes of
action) is procedural and that rejection of a suit
on that count cannot be resorted to:
“Thus, when one considers Order VII Rule
11 of the Code with particular reference to
Clause (d), it is difficult to say that a suit
which is bad for misjoinder of parties or
misjoinder of causes of action, is a suit
barred by any law. A procedural objection to
the impleading of parties or to the joinder of
causes of action or the frame of the suit,
could be successfully urged only as a
procedural objection which may enable the
Court either to permit the continuance of the
suit as it is or to direct the plaintiff or
plaintiffs to elect to proceed with a part of
the suit or even to try the causes of action
joined in the suit as separate suits.”
92. Adverting to the case at hand, it is not denied
that all the consignments belonged to the plaintiff
company and all the consignments have been insured
by the defendant company. Meaning thereby, the
parties are the same. The terms and conditions of the
insurance policies and cover notes of each of the
claims is the same. The ground on which the claims of
the plaintiff company have been repudiated or rejected
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 59 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
is also the same. The main bone of contention between
the parties in each of the claims is also identical and
similar therefore, in terms of order II rule 3 and in
view of the judgments as noted herein above, the
plaintiff company can club more than one cause of
action in a single suit and there is no such prohibition.
Only on this ground alone, the suit of the plaintiff
company cannot be rejected as the procedural law is
the handmaid of justice and not its mistress. Hence,
issue No.4 is also decided in favour of the plaintiff
company and against the defendant company .
Issue no.3 and 5.
3. Whether the claims of the plaintiff were rightly
repudiated by the defendant, as alleged by the
defendant in the written statement? (OPD)
5. Whether the plaintiff is entitled to recovery of the
principal amount, as asked for in plaint? (OPP)
93. Both these issues are interconnected therefore,
the same are being decided together.
94. Before proceeding further, I may note certain
admitted facts. It is not in dispute that the
consignments in question were insured by the plaintiff
company with the defendant company and for that
separate cover notes and insurance policies were
issued. Without going into the issue of whether there
were actually short quantities in all the consignments
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 60 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
causing losses to the plaintiff company or not, the
moot question which is to be decided by this court is,
whether the said loss is covered under the insurance
policies or not?
95. Ld. Counsel for the defendant company
submitted that no claim is payable qua the alleged loss
of quantities reported by the plaintiff company as it
neither comes within the scope of coverage nor
payable under the terms and conditions of the Marine
Cargo Single Voyage (Sea ) Policy and Institute Cargo
Clause (A). He has taken me to the clauses of said
insurance policies and submitted that as per the
exclusion clause 4.2 of the Institute Cargo Clause (A)
there was no insurance cover for ordinary leakage,
ordinary losses, no weight or volume and ordinary
wear and tear subject matter in short. He submitted
that above said clause makes it crystal clear that the
losses in question are excluded from the Institute
Coverage. He further submitted that there was no
evidence of insured marine peril activated.
96. Ld. Defence Counsel vehemently argued that
losses of shortage volume and weight was neither due
to any peril nor it was due to unfortunate event
covered under the policy but has occurred only
because of handling operations of the shipment as well
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 61 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
as the transfer of the material from commencement
port to the ship tank and then transfer of the material
from the ship to the destination shore tank.
97. Per contra, Ld. Counsel for the plaintiff
company vehemently refuted the defense as set up by
the defendant company and submitted that the policy
which was issued to the plaintiff company is “All Risk
Policy” and it covers in its ambit losses of any kind
during the coverage/voyage period. He submitted that
the obligation of the plaintiff company ends once the
losses are reported to the defendant company and it
was the defendant company to prove that the losses are
not covered under the policy and mere denial on the
part of the defendant company would not be sufficient
to reject the claims of the plaintiff company.
98. In reply to the contention of the defendant
company regarding the exclusion clause 4.2 of the
Institute Cargo (A), Ld. Counsel for the plaintiff
company submitted that no such document was ever
provided by the defendant company to the plaintiff
company alongwith policies and it is during the
proceedings before the Consumer Courts that first time
the said document was brought to the notice of the
plaintiff company. He further submitted that the said
clause of Institute Cargo Clause (A) would not be
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 62 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
applicable as in the said clause nowhere it is
mentioned that the losses/damages must take place
during the course of transit/voyage; ‘All Risk Policy’
would cover all type of losses including the present
one which was caused to the plaintiff company. He
further submitted that the defendant company cannot
be allowed to go beyond the grounds of rejection as
communicated to the plaintiff company vide
communication dated 07.03.2012.
99. Here it is pertinent to mention that during the
cross examination of PW1 Sh. Gopal Krishan Walia
on behalf of the defendant company, one objection
was raised regarding the reliance placed by the
plaintiff company on the Institute Cargo Clause (A)
on the ground that the said document had been filed by
the defendant company before the District Forum and
it was not supplied to the plaintiff company. It was
also stated that the said document does not have any
policy number or any other identification to co-relate
the same with the policy in question.
100. In this regard, I may mention that from the
proceedings dated 06.05.2024, it is evident that the
copy of the Institute Cargo Clause (A) ExDW2/A was
directed to be taken on record in the present case also
making it clear that Institute Cargo Clause (A)
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 63 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
ExDW2/A shall be read in evidence at the stage of
final disposal of the cases. Meaning thereby, now,
there is no dispute regarding the admissibility of the
said document Institute Cargo Clause (A) ExDW2/A
and its mode of proof.
101. Before diving deep into the sea of Marine
Insurance, it is imperative to understand the meaning
of “Marine Insurance” and “Perils of Sea”. Marine
insurance is defined under Section 3 of the Marine
Insurance Act, 1963 as an agreement whereby the
insurer undertakes to indemnify the insured, in the
manner and to the extent thereby agreed, against
marine losses, that is to say, the losses incidental to
marine adventure. In simple terms, marine insurance is
a contract which protects the insured against losses on
inland waters or any land risk that may be incidental to
any sea voyage. The nature of maritime insurance is
essentially a contract of indemnity meaning thereby
that the insurance company is liable only for the actual
loss or damages suffered by the insurer. However, the
insurer cannot be made liable for each and every loss.
Under the Act, the loss to an insurable property must
arise as a consequence of a maritime peril.
102. Section 2 (e) of the Act defines ‘maritime perils’.
Broadly speaking, ‘maritime perils’ also called as perils
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 64 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
of the sea include extraordinary forces of nature which
maritime ventures might need to face during the
voyage. It includes those accidents or casualties which
happen during the voyage by the act of god without
any human intervention. Some of the conditions which
cover the loss by the perils of the sea are clearly laid
down under Sections 55 to 58 of the Marine Insurance
Act, 1963.
103. Perils of the sea is defined in The Hague Visby
Rules12 which under Article 4(2) (c) defines ‘perils’
as ‘perils’ , dangers and accidents of the sea or other
navigable waters, and provides a defence for the
carrier from liability for loss or damage.
104. Under the Marine Insurance Act, 1963, loss or
damages which occur in the ordinary course of nature
or due to own default are not included in the category
of maritime perils. These include: Loss damage or
expense attributed to willful misconduct of the
insured, deliberate damage to / destruction of the
goods, ordinary leakage/ordinary loss in weight or
volume / ordinary wear and tear of the insured goods,
any loss proximately caused by delay, breakage,
inherent vice or nature of the subject-matter insured,
or for any loss proximately caused by rats or vermin,
or for any injury to machinery not proximately caused
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 65 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
by maritime perils.
105. Further, the doctrine of Proximate cause or
causa proxima is one of the principles of insurance. In
insurance law ‘causa proxima Non Remota Spectrum’
means the immediate and not the remote cause is to be
considered. For the purpose of claiming any insurance
policy the loss or injury caused must be as a result of
any one of the insured perils. Peril is basically the
cause of loss or the prime cause of what will give rise
to a loss. When the loss is caused by the perils of the
sea the maxim ‘causa proxima ‘is applicable to the
case of Marine Insurance.
106. Thus, once the predominant cause is determined
and it becomes clear that the causa proxima is covered
under the ‘insured peril’, the insurer is liable to
compensate and at that point the principle of
Indemnity will take place. However, the insurer is not
liable if the losses caused by the insured and the
excepted perils cannot be separated or distinguished
and also if it is caused by the negligent act of the
insured .
107. Before adjudicating the main controversy
between the parties, it would be relevant to weigh the
quality and quantity of the evidence adduced by the
parties. The primary witnesses of both the parties led
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 66 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
their evidence and have deposed by way of an
affidavit. A careful examination of their affidavit(s)
would reveal that the stand taken in the pleadings has
been reiterated in the said affidavit(s) as an
examination- in -chief of the witnesses. As noted
earlier, the witnesses have been cross examined by the
Ld. Counsel of the opposite party on certain aspects
including the facts which are not in dispute. Thus, I
would be referring to that part of their cross
examination which is relevant and is touching the
controversy between the parties and not otherwise.
108. This takes me to the real issue between the
parties. The consignments of the plaintiff company
were insured vide separate cover notes and insurance
policies. When the losses were reported to the
defendant company, surveyors were appointed who
had already given their reports. The details of the
cover notes, insurance policies and the reports of the
Surveyors are as under:
Sl. No Nature of document Exhibit
First Consignment
i. Insurance Cover note 308910 ExPW1/14
ii. Insurance Policy 272200/21/2012/992 ExPW1/15
iii. J.B. Boda Surveyors Survey Report dated ExPW1/20
05.12.2011
iv. Bhimani & Company Surveyors Survey ExPW1/21
Report dated 21.12.2011
v. Repudiation letter dated 07.03.2012 ExPW1/26
received by the plaintiff from the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 67 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
defendant
Second consignment
i. Copy of Insurance Cover Note No. ExPW1/33
308920
ii. Insurance Policy 272200/21/2012/1071 ExPW1/34
Iii. J.B. Boda Surveyors Survey Survey ExPW1/40
Report dated 12.12.2011
iv Bhimani & Company Surveyors Survey ExPW1/41
Report dated 21.12.2011
v. Letter dated 20.03.2014 received by the ExPW1/45.
plaintiff from the defendant
Third Consignment
i. Insurance Cover note 3089200 ExPW1/52
ii. Insurance Policy 272200/21/2012/1071 ExPW1/53
iii. J.B. Boda Surveyors Survey Report dated ExPW1/58
12.12.2011 ( Not referred to in the
amended plaint dated 31.5.2024 but
referred to in the evidence filed by way of
affidavit ExPW1/A)
iv. Bhimani & Company Surveyors Survey ExPW1/59
Report dated 21.12.2011 ( Not referred to
in the amended plaint dated 31.5.2024 but
referred to in the evidence filed by way of
affidavit ExPW1/A)
v. Repudiation letter dated 07.03.2012 ExPW1/64
received by the plaintiff from the
defendant
109. One of the terms and conditions as mentioned
in the insurance cover notes ExPW1/14, ExPW1/33
and ExPW1/52 is ” the insured named above having this
day proposed to affect the above insurance and having paid
the premium stated above the risk is hereby insured,
subject to the usual terms and conditions of the Company’s
Standard Policy’.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 68 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
110. In the Insurance Policies ExPW1/15, ExPW1/34
and ExPW1/53, under the heading ‘Term of Insurance’
it is stated as under:
” The risks under this policy are covered as per
the following clauses, current on date of sailing or
despatch and / or other conditions/warranties
otherwise stated herein and attached hereto:-
Institute Classification Clause
Institute Cargo Clauses (A)
InstituteTpnd clause
Institute War Clause (Cargo)
Institute Strike Clauses (Cargo)”
111. In the evidence filed by way of affidavit by the
PW1 Gopal Krishan Walia, the reports of the
surveyors were given exhibit marks as Ex PW1/20,
ExPW1/21, ExPW1/40, ExPW1/41, ExPW1/58 and
ExPW1/59. Ld. Counsel for the defendant company
took the objection to the aforesaid document’s
admissibility and mode of proof on the ground that
originals of these documents have not been produced
by the witness.
112. From the record, it is evident that only the
photocopies of the aforesaid reports have been placed
on record. No efforts have been made by the plaintiff
company either to produce the original or to summon
the witness from the office of Surveyor to prove the
said reports. The plaintiff company has miserably
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 69 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
failed to prove the aforesaid reports and the objection
of the defendant company has merits. However, during
the arguments by referring to the said reports, Ld.
Counsel for the defendant company tried to make out a
case that the losses in question are not covered by
insurance policies. These reports have been filed by
the plaintiff company, therefore, it would have no
objection to these reports. Since, Ld. Counsel for the
defendant company has referred to said reports,
therefore, these reports although not proved, can be
considered for effective adjudication of the dispute
between the parties, so, the same are being
considered.
113. As per the surveyor report ExPW1/20 (colly) the
surveyors remarks are as under:-
” It is apparent that the entire cargo quantity
as ascertained on arrival at Kandla Port
2003.358 M/Tons, was discharged from the
vessel, that vessel cargo tanks were certified
dry and there was no signs of leakage notice
or recorded during cargo discharge neither
from vessel nor at the shore tanks.
As per our attendance on board the vessel
and also at shore tanks, we are of the
opinion that difference of (-)15.310 M/Tons
between Bill of Lading Quantity 2000.641
M/Tons and shore out-tum quantity
1985.331 M/Tons, could be attributed to
following reasons:
1. Remnant of cargo to vessel pipelines.
2. Cling-age of cargo to shore pipeline and losses
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 70 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
occurred during liquid cargo operations.
3. Operation loss.
4: Product is highly volatile in nature.
114. As per the surveyor report ExPW1/21, the
conclusion is at page no. 6 under point 9.03, which is
for the sake of convenience is reproduced as under:-
” Shortage in our opinion could be due to :
1. Deviation of Reference Height of the
Shore Tank, rendering tank calibration
erroneous Reference Height.
2. Adherence Loss.
115. The remarks of the surveyor namely J.B Boda
Surveyors Pvt. Ltd in respect of the second
consignment as per its survey report ExPW1/40 are as
under:-
” As per shore tank’s out-turn, the receipt quantity
worked out to 2168.986 M/Tons, this quantity
when compared with bill of lading quantity of
2190.672 M/Tons shows a shortage of (-) 21.686
M/Tons, (0.990 %) which could be attributed to
unloading loss.”
116. The report of another surveyor namely Bhimani
and Company, ExPW1/41 in respect of the second
consignment concludes as under:-
” Shortage in our opinion could be due to :
1. Voyage loss between port of
loading viz. BIK, Iran & port of
discharging viz. Kandla ( India).
2. Deviation of Reference Height of
the Shore Tank, rendering tank
calibration erroneous Reference
Height.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 71 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
3. Adherence Loss.
117. The report of JB Boda ExPW1/58 (colly) in
respect of third consignment opined as under:-
“As per shore tank’s out-turn, the receipt quantity
worked out to 982.896 M/Tons, this quantity when
compared with bill of lading quantity of 1005.028
M/Tons shows a shortage of (-) 22.132 M/Tons,
(2.202 %) which could be attributed to unloading
loss.”
118. The report of Bhimani & Company ExPW1/59
(colly) concluded as under:-
” Shortage in our opinion could be due to :
1. Deviation of Reference Height of
the Shore Tank, rendering tank
calibration erroneous Reference
Height.
2. Adherence Loss.
119. The main cause of dispute between the parties
is the exclusion clause 4.2 of the Institute Cargo
Clause (A) ExDW2/A, which reads as under:-
” EXCLUSIONS
4. In no case shall this insurance cover
4.1…….
4.2 Ordinary leakage, ordinary loss in weight
or volume, or ordinary wear and tear of the
subject matter insured.”
120. Here it would be relevant to refer to the cross
examination of the witnesses examined by the parties.
During the cross examination, PW1 Gopal Krishan
Walia replied (Q.17) that the nature of loss in the
present insurance claim is Transit Operational Loss.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 72 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
When he was asked (Q.18), whether any peril
activated in the transit, he replied that he does not
know and it was a Transit Operational Loss. PW1
further replied that he understands what is a ‘Peril’ and
according to him ‘Peril’ are the risks for which the
insurance is taken like earthquake, terrorism ,
accidental loss (Q.19 & Q.20). Regarding the nature of
goods imported by the plaintiff company, PW1 replied
that it was chemical in liquid form (Q.9). He further
replied that the chemical products went under the
process of loading and unloading two times till final
measurement of volume of chemical (Q.32). When
PW1 was asked (Q.31) that shortage of quantity
without any peril is not covered under the insurance
policy, he simply stated he does not know.
121. Coming to the cross examination of DW1
Renuka Chaudhary, I may mention that even during
her cross examination plaintiff company failed to elicit
anything contrary to the stand of the defendant
company. DW1 also has deposed about certain facts
which are not in dispute like insurance policies taken
by the plaintiff company was ‘All Risk Policy’;
Insurance Policy is not a named peril policy; insurance
cover persists even during the transit; surveyors have
not recommended repudiation of the claims of the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 73 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
plaintiff company or they did not point out any
violation on the part of the plaintiff company; the
definition of ordinary loss or ordinary leakage has not
been provided in the policies; the term insured peril
has also not been defined in the insurance policies etc.
122. If the aforesaid testimonies of these witnesses is
scanned, there would be no difficulty in arriving at a
conclusion that whatever losses were suffered by the
plaintiff company, it was Transit Operational Loss
even as per PW1 Gopal Kishan Walia. PW1 nowhere
has stated that the losses occurred due to marine peril.
Not only that he has shown his ignorance about any
peril having been activated in the transit. According to
him also the peril are the risks like earthquake,
terrorism etc., for which the insurance is taken.
123. Meaning thereby, whatever the losses were
suffered by the plaintiff company, same were
operational losses during the transit and no marine
peril has taken place for which the defendant company
can be held responsible.
124. Additionally, the insurance cover notes
ExPW1/14, ExPW1/33 and ExPW1/52 as noted herein
above clearly indicate that the risk has been insured
subject to usual terms and conditions of the company’s
standard policy. The terms and conditions have been
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 74 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
duly reflected in the insurance policies ExPW1/15,
ExPW1/34 and ExPW1/53. Under the heading ‘Term
of Insurance’, it has been categorically mentioned that
the risks have been covered as per certain clauses
including Institute Cargo Clauses (A) ExDW2/A. The
said clause clearly says that Insurance Cover shall not
cover the ordinary leakage, ordinary loss in weight or
volume, or ordinary wear and tear of the subject matter
insured.
125. Further, even if it was ‘All Risk Policy’, there is
nothing on record suggesting that said clause is not
applicable. The term ” All Risk Policy”, no doubt, is
very wide but it has its own limitations. It does not
mean that all types of losses and damages are covered
under such types of policies. I am of the opinion that it
would not cover things that are inevitable or almost
certain to happen. Even under ‘All Risk Policy’, it was
the duty of the insured (plaintiff) to prove that the
losses suffered by it were fortuitous. In marine
insurance ‘fortuitous acts’ referred to unexpected and
accidental events that cause losses or damage to the
insured. The examples of ‘fortuitous acts’ are storms
or rough seas, collision of ships, stranding or sinking,
fire or explosion, lightning, earthquake, piracy etc.,
which is missing in the present case. Nothing has been
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 75 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
brought on record by the plaintiff company to show
that the losses to the plaintiff were caused due to any
of the fortuitous acts. Mere wear and tear in handling
the product would not come within the ambit of ‘
fortuitous acts’. The plaintiff company was under
obligation to connect the losses with any of the marine
peril which the plaintiff company has miserably failed
to do so.
126. It is pertinent to mention that certain types of
products, particularly the chemicals in liquid form,
which are there in the present case, would have a
natural tendency to leakage or losses in weight or
volume during the course of a voyage. Such ordinary
leakage or losses are expected to happen and the same
cannot be treated as fortuitous .The losses caused to
the plaintiff company in the present case even as per
the reports of the surveyors was basically an
operational loss or adherence loss. Meaning thereby,
the losses in the quantity of consignments was caused
by the natural characteristics of the chemical being
transported without any external influence.
127. Having reached the said conclusion, the plaintiff
company cannot be allowed to say that the Institute
Cargo Clauses (A) ExDW2/A documents were never
supplied to them at the time when the policies were
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 76 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
issued by the defendant company. In the cover notes it
is specifically mentioned that the insured i.e plaintiff
company has agreed to take insurance policies subject
to the usual terms and conditions of the company’s
standard policy. It is categorically mentioned at page
no.2 under the Terms of Insurance that the Risk under
the police are covered as per the clauses mentioned
therein including Institute Cargo Clauses (A)
ExDW2/A. Meaning thereby, the plaintiff company is
bound by all terms and clauses including the Institute
Cargo Clauses A ExDW2/A. That clause clearly
excludes the liability of the defendant company under
clause 4.2 which says that in no case shall this
insurance cover ordinary leakage, ordinary loss in
weight or volume, or ordinary wear and tear of the
subject-matter insured.
128. It is true that as per the cover notes and the
insurance policies, the consignments were insured
from anywhere in India via any Indian Port (by sea)
but at the same time the insurance policies clearly
states that it agrees to insure the loss/damages or
liability or expenses subject to the clauses, endorsed,
conditions, warranties contained in the schedule and
attached thereto. As per the schedule, the risk cover
was “from anywhere in the world (load port) to
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 77 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
anywhere in India via Indian Port, India.” Therefore,
the losses as suffered by the plaintiff company were
not covered under the insurance policy and excluded
by the clause of Institute Cargo Clauses (A)
ExDW2/A.
129. During the argument, one of the contentions of
the Ld. Counsel for the plaintiff company was that the
defendant company cannot be allowed to travel
beyond the grounds as mentioned in the letter of
repudiation. According to the plaintiff company if the
defendant company has not taken the plea of Institute
Cargo Clause (A)ExDW2/A in the repudiation, in that
eventuality it cannot do so later on for rejecting the
claims of the plaintiff company. In this regard, reliance
was placed on the judgment passed in the case of
Saurashtra Chemicals Ltd. (Supra).
130. In the present case, it is an admitted fact that the
claims of the plaintiff company were repudiated vide
communications dated 07.03.2012 ExPW1/26 and
ExPW1/64. Both the aforesaid communications are
identical, which reads as under:-
” Sub: Your Claim No. 272200/21/2012/000028
Under Policy No, 272200/21/2012/1071 A/c
1005.028 MT Base Oil SN 650, Vessel-DL
Diamond, B/L, DLD281111-05 DT 27.11.2011,
Cover note 308920 dt 08,11.11.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 78 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
Kindly refer to claim lodged by you under the
captioned subject malter On close scrutiny of the
papers submitted by you in support of your claim
vis-à-vis terms & condition of the policy issued &
Surveyor M/s Bhimani & Co. recommendations, we
regret to inform you that your claim is not tenable on
the following grounds.
1) Deviation of reference height of the shore tank,
rendering tank calibration erroneous reference
height.
2) Adherence Loss.
As per surveyor mail dt. 08.02.2012 17:59, the
shortage was not due to marine peril hence there is
“No Liability” under the policy.
In view of above we will treat the claim as ‘NO
CLAIM’. As such we have no liability under the
policy, which you please note. We sincerely regret
the inconvenience caused to you and assure you that
all care has been taken to arrive at the above
conclusion. keeping the best interest of clients and
the company in mind ”
131. The aforesaid repudiation communications
ExPW1/26 and ExPW1/64 are making it clear that
the claim of the plaintiff company was scrutinized
vis-a-vis terms and conditions of the policies issued in
addition to the report of the surveyor and one of the
grounds for repudiation was adherence loss. In the said
communication, it was categorically stated that the
shortage was not due to marine peril hence, there is no
liability under the policies. This is the stand of the
defendant company from the very beginning. Even the
Institute Cargo Clause AExDW2/A has been pressed
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 79 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
into service by the defendant company to show that
the losses suffered by the plaintiff company were not
caused by any marine peril and ordinary leakage or
loss in weight or volume are excluded from the
Insurance Cover. It is true that the repudiation
communications ExPW1/26 and ExPW1/64 are silent
in in referring to the Institute Cargo Clause (A)
ExDW2/A explicitly but in pith and substances the
claims were repudiated by the defendant company on
the grounds that the losses were not caused due to any
marine peril and ordinary or operational losses are
not covered under the insurance policy. Therefore, the
contention of the Ld. Counsel for the plaintiff
company would not help him much and no benefit of
the said judgment can be extended to the plaintiff
company.
132. I have also gone through the judicial authorities
as relied upon by the Ld. Counsels of both the parties.
There is no doubt about the proposition of law as laid
down in those judgments with regard to certain issues
i.e interpretation of section 14 of Limitation Act, the
burden to prove onus to prove exclusion clause lies on
the insurer, appreciation of survey reports, in case of
doubt of admissibility of claim, it has to be interpreted
in favour of the insured, the scope of ‘All Risk Policy’
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 80 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
and exclusion clause as contained in Institute Cargo
Clause (A)ExDW2/A, the value of second surveyor
report etc. and these principles as laid down have
been duly considered. However, the same would not
extend any benefit to the plaintiff company as the
defendant company has been able to prove its case and
also in discharging the burden within the said
parameters.
133. In view of my aforesaid discussion, I am of the
considered opinion that the defendant company has
been able to establish that the losses suffered by the
plaintiff company were merely operational losses and
were not caused due to any marine peril during the
voyage of the consignments and it might have
occurred due to the handing of the material for which
the defendant company cannot be held liable. Thus,
this Court does not find any fault in repudiating the
claims of the plaintiff company by the defendant
company and consequently the plaintiff company is
not entitled to recover the amount, as prayed for.
Hence, issue no. 3 and 5 are answered accordingly.
Issue no. 6
In case if issue no. 5 is decided in affirmative,
whether the plaintiff is entitled for any interest, as
asked for in the plaint? (OPP).
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 81 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)
134. In view of my findings on issue no.1, 3 and 5 ,
the question of awarding any interest does not arise.
This issue is also disposed off accordingly.
Issue No.7. Relief
135. In view of my findings on the issues, no.1,3 and
5, the present suit of the plaintiff company is hereby
dismissed.
136. There is no order as to costs.
137. File be consigned to record room, as per rules.
Digitally signed by
RAJESH RAJESH KUMAR
KUMAR GOEL
Date: 2025.07.30
GOEL 16:53:37 +0530
(Rajesh Kumar Goel)
District Judge (Commercial)-02
Central, Tis Hazari Courts
30.07.2025
Announced in the Open Court
today i.e: 30.07.2025
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 82 of 82 )
Vs Oriental Insurance Co. Ltd (776//2023)