Delhi District Court
Klj Plasticizers 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
DLCT010063752023
CS (COMM.) No. 779/2023
CNR No.DLCT010063752023
K.L.J Plasticizers 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
Digitally
signed by
RAJESH
question is/are covered under the Insurance policy(s)
RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2025.07.30
16:56:44
+0530
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 1 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
or not ? Further, in most of the cases, the evidence
led by the parties, arguments and contentions are
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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 2 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
best to consider the documents as relied upon by the
parties for adjudicating the dispute effectively
between them.
3. Vide this judgment, I shall dispose of the
present suit for recovery of Rs 37,86,606/- (Rs Thirty
Seven Lakhs Eighty Six Thousand Six Hundred and
Six 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 manufacturing of plasticizers and
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
losses or damages during transit, plaintiff company
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 3 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
had obtained insurance covers from the defendant
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 the consignments by
providing covers 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.
325611 272200/21/2015/28
2015/284 272200/21/2015/284
327289 272200/21/2014/1169
324571 & 324572 272200/21/2014/863 & 869
325617 272200/21/2015/394
323667 272200/21/214/782
7. It is stated that the aforesaid cover notes and
insurance policies were issued by the defendant
company in respect of the following consignments:
Invoice No. Dated Quantity Ship Name Delivery
Port
8895803993 23.04.2014 518.579 ORIENTAL MUMBAI
MT MARGUERIT
E
8895804594 23.06.2014 524.991 ORIENTAL MUMBAI
MT FREESTA
8895803356 12.02.2014 500.040 ORIENTAL MUMBAI
MT CLEMATISM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 4 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
3005007504 28.11.2013 1500.538 ORIENTAL MUMBAI
MT NADESHIKO
92028812 22.07.2014 500.713 FAIRCHEMC KANDLA
MT OLT
92026849 27.10.2013 400.578 FAIRCHEM KANDLA
MT COLT
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
to the plaintiff company, the unloading of the
consignments were done under the supervision of the
Insurance Surveyors; defendant company after
obtaining the reports of first surveyor, had deputed
second surveyor for the same losses and had obtained
another reports; 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 Short
Report Surveyor Quantity Intimatio Bill quantity
Ref. No. report n Letter
Ref. No. to Ins.
Co.
SGS 09.06.2014 NA 5.574 28.07.201 28.07.20 5.574
INDIA- MT 4 14 MT
IN/MUM/
OGC/201
4/00699
SGS 14.08.2014 NA 4.186 03.09.201 03.09.20 4.186
INDIA- MT 4 14 MT
IN/MUM
OGC/201
4/00863
SGS 28.03.2014 NA 3.987 18.07.201 18.07.20 3.987
INDIA- MT 4 14 MT
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 5 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
IN-
MUM/OG
C/2014/00
373
SGS 07.01.2014 SK Chak- 10.417 03.01.201 27.12.20 10.417
INDIA- SKC/HO/ MT 4 13 MT
IN/MUM/ SUR/863
OGC/201 7/13-14
3/01623
JB Boda- 26.08.2014 NA 2.717 05.08.201 04.09.20 2.717
KDL/176 MT 4 14 MT
4/14/AA
NA NA JB Boda- 4.297 18.11.201 17.12.20 4.297
KDL/032 MT 3 13 MT
27/13/AA
9. The plaintiff company is said to have lodged its
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 the
reminders having been sent by the plaintiff company
and instead rejected the claims of the plaintiff
company on the ground that under the insurance
policies, 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 materialM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 6 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 entire 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 are 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 theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 7 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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. 29.10.2014 till 30.04.2023 to the
extent of Rs 19,12,811/-. According to the plaintiff
company a total amount of Rs 37,86,606/- (Rs
18,73,795/- as Principal + Rs 19,12,811/- 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;
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 8 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
the DLSA has released a non-starter report dated
11.04.2023.
16. Summons of the suit were issued to the
defendant company. The defendant company made
the appearance and has filed the written statement.
17. In the written statement, the defendant company
has taken certain preliminary objections to the effect
that this court does not have territorial or pecuniary
jurisdiction; 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 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 29.10.2014, 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.
18. On the merits, the defendant company has not
denied that the plaintiff company had taken the
insurance policies in question but the stand of the
defendant company is that the claims of the plaintiffM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 9 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
company are not payable as the alleged losses of
quantities reported by the plaintiff company neither
comes 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.
19. 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 cover for ordinary leakage, ordinary losses,
weight or volume and ordinary wear and tear of theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 10 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
subject matter insured.
20. 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.
21. The defendant company has filed an affidavit of
admission and denial of the documents along with the
written statement.
22. 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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 11 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
23. After completion of pleadings, vide order dated
18.10.2023, following issues were framed by the Ld.
Predecessor of this Court:-
1. Whether this court has no territorial Jurisdiction as
well as Pecuniary Jurisdiction to try the present suit, as
alleged by defendant in the written statement ( Para 1-
Preliminary Objections)? (OPD)
2. 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)
3. 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)
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, different assessment of loss, as alleged by the
defendants in the written statement ( Para 2-
Preliminary Objections)? (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
24. Vide order dated 28.11.2023, 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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 12 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
25. The Ld. Court Commissioner has already
submitted his report to this court.
26. In support of its case, the plaintiff company has
examined two witnesses i.e. PW1 Ashok Kumar
Maharshi, an officer 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.
27. The defendant company has examined one Smt
Renuka Chaudhary, Manager, as DW1, who has filed
her evidence by way of affidavit and Sh.S.K
Chakraborty, surveyor as DW2. No other witness was
examined by the defendant company and the
defendant’s evidence was closed.
28. PW1 Ashok Kumar Maharshi 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 copy of board
resolution dated 10.11.2022 ExPW1/1,Copy of
Memorandum and Articles of Association of the
plaintiff company ExPW1/2, Copy of Final Order
dated 24.03.2017 of the Consumer Complaint filed by
plaintiff Ex PW1/3 (Colly), Copy of Status Report
and order dated 05.04.2019 of the Consumer Appeal
filed by plaintiff before State Commission Delhi Ex
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 13 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
PW1/4 (Colly), Copy of Order dated 09.02.2022 of
the Consumer District Commission Ex PW1/5
(Colly), Copy of Complaint with supporting affidavit
in Policy No. 272200/21/2015/28 Filed By Plaintiff
Co. before Consumer Forum, Central, Delhi Ex
PW1/6 (Colly), Copy of Board Resolution dated
27.08.2015 Filed By Plaintiff Co. before Consumer
Forum, Central, Delhi Ex PW1/7, Copy of Insurance
Cover note no. 325611 Ex PW1/8, Copy of Insurance
Policy 272200/21/2015/28 Ex PW1/9 (Colly), Copy
of Invoice No. 8895803993 Dated 23.04.2014, Ex
PW1/10 (Colly), Copy of Bill of Lading No. B/L NO.
OM/EVO/2PH/01 & 02, Dated 21.10.2012, Ex
PW1/11 (Colly) Copy of warehouse bill Ex PW1/12
SGS Survey report dated 09.06.2014 Ex PW1/13
(Colly) Copy of letter dated 19.07.2014 sent by
plaintiff to Allied Shipping Agent Ex PW1/14, Copy
of Letter dated 28.07.2014 along with claim bill sent
by plaintiff to defendant Ex PW1/15 (Colly), Copy of
Letter dt 08.09.2014 sent by defendant to plaintiff Ex
PW1/16, Copy of letter dated 25.09.2014 sent by
plaintiff to defendant Ex PW1/17, Copy of
repudiation letter dt. 29.10.2014 received by the
plaintiff from the defendant Ex PW1/18, Copy of
Written Statement filed by defendant before consumer
forum Ex PW1/19 (Colly), Copy of Order dated
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 14 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
09.02.2022 of the Consumer District Commission Ex
PW1/20 (Colly), Copy of Complaint with supporting
affidavit in Policy No. 272200/21/2015/284 Filed By
Plaintiff Co. before Consumer Forum, Central, Delhi
Ex PW1/21(Colly), Copy of Board Resolution dated
27.08.2015 Filed By Plaintiff Co. before Consumer
Forum, Central, Delhi Ex PW1/22 Copy of Insurance
Policy 272200/21/2015/284 Ex PW1/23 (Colly),
Copy of Invoice No. 8895804594 Dated 23.06.2014
& bill of landing Ex PW1/24 (Colly), Copy of
Lehnkering Survey report dated 23.06.2014 Ex
PW1/25 (Colly), Copy of warehouse bill of entry Ex
PW1/26, Copy of email dated 12.08.2014 sent by
plaintiff to defendant Ex PW1/27 (Colly), Copy of
SGS Survey report dated 23.06.2014 Ex PW1/28
(Colly), Copy of letter dated 14.08.2014 sent by
plaintiff to Allied Shipping Agent Ex PW1/29, Copy
of Letter dated 03.09.2014 along with claim bill sent
by plaintiff to defendant Ex PW1/30 (Colly), Copy of
Letter dated 09.09.2014 sent by defendant to plaintiff
Ex PW1/31, Copy of Letter dated 25.09.2014 sent by
plaintiff to defendant Ex PW1/32, Copy of
repudiation letter dt. 29.10.2014 received by the
plaintiff from the defendant Ex PW1/33, Copy of
Written Statement filed by defendant before consumer
forum Ex PW1/34 (Colly), Copy of Order dated
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 15 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
09.02.2022 of the Consumer District Commission Ex
PW1/35 (Colly), Copy of Complaint with supporting
affidavit in Policy No. 272200/21/2014/1169 Filed By
Plaintiff Co. before Consumer Forum, Central, Delhi
Ex PW1/36 (Colly), Copy of Board Resolution dated
27.08.2015 Filed By Plaintiff Co. before Consumer
Forum, Central, Delhi Ex PW1/37, Copy of Insurance
Cover note no. 327289 dated 28.01.2014 Ex PW1/38
(Colly), Copy of Insurance Policy
272200/21/2014/1169 Ex PW1/39 (Colly), Copy of
Invoice No. 8895803356 Dated 12.02.2014 Ex
PW1/40 (Colly), Copy of Bill of Lading No. B/L NO.
OC/EVO-2PH/01 to 02, Dated 12.02.2014 Ex
PW1/41 (Colly), Copy of warehouse bill of entry Ex
PW1/42, SGS Survey report dated 28.03.2014 Ex
PW1/43 (Colly), Copy of letter dated 08.04.2014 sent
by plaintiff to Allied Shipping Agent Ex PW1/44,
Copy of Letter dated 18.07.2014 along with claim bill
sent by plaintiff to defendant Ex PW1/45 (Colly),
SGS Survey report dated 04.04.2014 Ex PW1/46,
Copy of Letter along with claim bill sent by plaintiff
to defendant Ex PW1/47 (Colly), Copy of Letter
dated 08.09.2014 sent by defendant to plaintiff Ex
PW1/48, Copy of Letter dated 25.09.2014 sent by
plaintiff to defendant Ex PW1/49, Copy of
repudiation letter dt. 29.10.2014 received by the
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 16 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
plaintiff from the defendant Ex PW1/50, Copy of
Written Statement filed by defendant before consumer
forum Ex PW1/51 (Colly), Copy of Order dated
09.02.2022 of the Consumer District Commission Ex
PW1/52 (Colly), Copy of Complaint with supporting
affidavit in Policy No. 272200/21/2014/863 & 869
Filed By Plaintiff Co. before Consumer Forum,
Central, Delhi Ex PW1/53 (Colly), Copy of Board
Resolution dated 27.08.2015 Filed By Plaintiff Co.
before Consumer Forum, Central, Delhi Ex PW1/54,
Copy of Insurance Cover note no. 324571 & 324572
dated 12.11.2013 & 14.11.2013 Ex PW1/55 (Colly),
Copy of Insurance Policy 272200/21/2014/863 & 869
Ex PW1/56 (Colly), Copy of Invoice No.
3005007504 Dated 28.11.2013 Ex PW1/57 (Colly),
Copy of Bill of Lading No. B/L NO. ON/INAKDL/01
to 06, Dated 28.11.2013 Ex PW1/58 (Colly), Copy of
Lehnkering Survey report dated 28.11.2013 and S.K.
Chakraborty Surveyor report dated 04.12.2012 Ex
PW1/59 (Colly), Copy of warehouse bill of entry
dated 28.11.2013 Ex PW1/60, SGS Survey report
dated 07.01.2014 and S.K. Chakraborty Surveyor
report dated 18.01.2014 Ex PW1/61 (Colly), Copy of
letter dated 16.01.2014 sent by plaintiff to Allied
Shipping Agent Ex PW1/62, Copy of Letter dated
27.01.2014 along with claim bill sent by plaintiff to
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 17 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
defendant Ex PW1/63 (Colly), Copy of claim form
sent by plaintiff to defendant Ex PW1/64 (Colly),
Copy of Letter dated 24.03.2014,24.07.2014 & email
dated 05.09.2014 sent by plaintiff to defendant Ex
PW1/65 (Colly), Copy of Letter dated 08.09.2014 sent
by defendant to plaintiff Ex PW1/66, Copy of
Letter dated 25.09.2014 sent by plaintiff to defendant
Ex PW1/67, Copy of repudiation letter dt. 29.10.2014
received by the plaintiff from the defendant Ex
PW1/68, Copy of Written Statement filed by
defendant before consumer forum Ex PW1/69
(Colly), Copy of Order dated 09.02.2022 of the
Consumer District Commission Ex PW1/70 (Colly),
Copy of Complaint with supporting affidavit in Policy
No. 272200/21/2015/394 Filed By Plaintiff Co. before
Consumer Forum, Central, Delhi Ex PW1/71 (Colly),
Copy of Board Resolution dated 27.08.2015 Filed By
Plaintiff Co. before Consumer Forum, Central, Delhi
Ex PW1/72, Copy of Insurance Cover note no.
325617 dated 04.07.2014 Ex PW1/73, Copy of
Insurance Policy 272200/21/2015/394 Ex PW1/74
(Colly), Copy of Invoice No. 92028812 Dated
22.07.2014 Ex PW1/75, Copy of Bill of Lading No.
B/L NO. 513 & 513-A B, Dated 21.07.2014 Ex
PW1/76 ( Colly), Copy of warehouse bill of entry
dated 21.07.2014 Ex PW1/77, Copy of email dated
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 18 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
20.08.2014 sent by plaintiff to defendant Ex
PW1/78 , Copy of letter dated 05.08.2014 sent by
plaintiff to defendant Ex PW1/79, J.B. BODA Survey
report dated 26.08.2014 Ex PW1/80 (Colly), Copy of
letter dated 22.08.2014 sent by plaintiff to J.M. Baxi
Shipping Agent Ex PW1/81, Copy of Letter dated
08.09.2014 along with claim bill sent by plaintiff to
defendant Ex PW1/82 (Colly), Copy of Letter dated
08.09.2014 sent by defendant to plaintiff Ex PW1/83,
Copy of Letter dated 25.09.2014 sent by plaintiff to
defendant Ex PW1/84, Copy of repudiation letter dt.
29.10.2014 received by the plaintiff from the
defendant Ex PW1/85, Copy of Written Statement
filed by defendant before consumer forum Ex PW1/86
(Colly), Copy of Order dated 09.02.2022 of the
Consumer District Commission Ex PW1/87 (Colly),
Copy of Complaint with supporting affidavit in Policy
No. 272200/21/2014/782 Filed By Plaintiff Co. before
Consumer Forum, Central, Delhi Ex PW1/88 (Colly),
Copy of Board Resolution dated 27.08.2015 Filed By
Plaintiff Co. before Consumer Forum, Central, Delhi
Ex PW1/89, Copy of Insurance Cover note no.
3323667 dated 18.10.2013 Ex PW1/90, Copy of
Insurance Policy 272200/21/2014/782 Ex PW1/91
(Colly), Copy of Invoice No. 92026849 Dated
27.10.2013 Ex PW1/92, Copy of Bill of Lading No.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 19 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
B/L NO. 552(A) & B Dated 28.10.2013 Ex PW1/93
(Colly), Copy of warehouse bill of entry dated
28.10.2013 Ex PW1/94 (Colly), Copy of email dated
18.11.2013 sent by plaintiff to defendant Ex PW1/95
(Colly), J.B. BODA Survey report dated 29.11.23013
Ex PW1/96 (Colly), Copy of Ullage report dated
15.11.2013 Ex PW1/97 (Colly), Copy of letter dated
16.12.2013 sent by plaintiff to J.M. Baxi Shipping
Agent Ex PW1/98, Copy of Letter dated 17.12.2013
along with claim bill sent by plaintiff to defendant Ex
PW1/99 (Colly), Copy of Letter dated 25.03.2014,
24.07.2014 & email dated 05.09.2014 sent by plaintiff
to defendant Ex PW1/100 (Colly), Copy of letter
dated 08.09.2014 sent by defendant to plaintiff Ex
PW1/101, Copy of Letter dated 25.09.2014 sent by
plaintiff to defendant Ex PW1/102, Copy of
repudiation letter dt. 29.10.2014 received by the
plaintiff from the defendant Ex PW1/103, Copy of
Written Statement filed by defendant before consumer
forum Ex PW1/104 (Colly).
29. PW2 Satish Kumar is a summoned witness
from District Forum, Kashmere Gate, who produced
the original diary register of 10.09.2015 to 13.05.2016
and from 16.5.2016 to 29.12.2016 having reference
of 89/2016, 381/2016, 88/2016, 388/2016, 382/2016
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 20 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
and 387/2016 were filed on 04.03.2016, 26.10.2016,
04.03.2016. 26.10.2016, 26.10.2016 and 26.10.2016
respectively ExPW2/1 (colly) before the Ld. District
Forum.
30. PW2 Satish Kumar was not cross examined by
the Ld. Counsel for the defendant company despite
opportunity being given.
31. 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 statementfiled
by the defendant company. She has relied upon the
documents i.e Power of attorney ExDW1/1, the
Institute Cargo Clauses (A) is ExDW1/2.
32. DW1 Renuka Chaudhary was cross examined
on behalf of the plaintiff company.
33. DW2 S.K Chakraborty, Surveyor was also
examined by the defendant company who also filed
his evidence by way of affidavit ExDW2/A and has
relied upon Survey report dated 18.01.2014
ExDW2/1.
34. DW2 S.K Chakraborty was cross examined on
behalf of the plaintiff company.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 21 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
35. 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 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”.
36. 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.
37. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 22 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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
deciding the case at the time of final hearing.
38. Considering the request of both the parties and
no objection from their sides, 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.
39. 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.
40. Ld. Counsel for the plaintiff company has relied
upon the following judicial pronouncements:-
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 (NationalM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 23 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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
41. 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.
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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 24 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
42. 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.
Issue No.1
Whether this Court has no Territorial Jurisdiction
as well as Pecuniary Jurisdiction to try the
present suit, as alleged by defendant in the
written statement? (OPD)
43. During the arguments, on the query being raised
by this court to the Ld. Counsel for the defendant
regarding the issue of territorial jurisdiction, Ld.
Counsel for the defendant submitted that he is not
pressing the said issue and the same may be disposed
off accordingly.
44. The plaintiff company has filed the present suit
for recovery of Rs 37,86,606/- (Rs Thirty Seven
Lakhs Eighty Six Thousand Six Hundred and Six
only) against the defendant company, which is well
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 25 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
within the pecuniary jurisdiction of this court. Further,
the address of the defendant company, as per memo of
parties is of Asaf Ali Road, New Delhi 110002,
which falls within the jurisdiction of this court. There
is no dispute that cause of action also arose within the
jurisdiction of this court. Although, the Ld. Counsel
for the defendant has not pressed this issue, however,
even otherwise also, as discussed herein above, this
court has the territorial and pecuniary jurisdiction to
try and entertain the present suit. Hence, issue no.1 is
answered accordingly.
Issue no.2
Whether the present suit is not maintainable
being barred by Limitation, as alleged by the
defendant in the written statement? (OPD)
45. In the written statement, one of the objections
taken by the defendant company is that the suit filed
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 29.10.2014; 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 26 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 11.01.2023, therefore,
the protection as available u/s 14 of the Limitation
Act would not be available to the plaintiff company.
46. In reply to that Ld. Counsel for the plaintiff
company submitted that the claims of the plaintiff
company were repudiated while communications
dated 29.10.2014; plaintiff company filed the
complaint cases before the District Forum on
26.10.2016 which were finally returned on
09.02.2022. He further submitted that the copy of the
order of District Forum dated 09.2.2022 was received
by the plaintiff company on 07.03.2022, therefore, the
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 27 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
period from 26.10.2016 to 07.3.2022 spent before the
District Forum has to be excluded. 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.
47. 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 issueM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 28 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 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.”
48. 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:
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 29 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
(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.
49. Here I may refer to a few judgments 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 and 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.”
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 30 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
50. 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.”
51. 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
passed the order holding that since the Insurance
Company has repudiated the claims, 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, theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 31 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.”
52. 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, dismissed 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 theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 32 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.”
53. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 33 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
Department) & Ors, (2008) 7 SCC 169 and the case of
Sesh Nath Singh V. 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 toM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 34 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
applications under Section 7 of the Insolvency and
Bankruptcy Code, 2016 and the SARFAESI Act, it
was 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.”
54. 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 distinctionM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 35 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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, 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 36 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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”.
55. 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
order dated 24.3.2017 ExPW1/3. From the order dated
24.03.2017 ExPW1/3, it is evident that Ld. District
Forum observed that it has no pecuniary jurisdiction
to entertain the complaint 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
ExPW1/5 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 37 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
56. 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
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 Plasticizers 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 38 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
plaintiff company had tried its best to get its claim
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.
57. 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 prosecuti on 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 claim before the
District Forum.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 39 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
58. 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.
59. According to the plaintiff company, the claims
of the plaintiff company were repudiated by the
defendant company vide communications dated
29.10.2014 ExPW1/18, ExPW1/33, ExPW1/50,
ExPW1/68, ExPW1/85 and ExPW1/103. That being
so, the cause of action in the present case arose on
29.10.2014. Thus, the limitation period would start
from 30.10.2014 .
60. In ordinary circumstances, the period of
limitation for filing the present suit for recovery
would have expired on 29.10.2017.
61. 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
26.10. 2016. Meaning thereby, the plaintiff company
kept waiting during the period from 30.10.2014 to
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 40 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
26.10.2016. Even as per the case of the plaintiff
company, the complaints before the District Forum
were filed after One year, eleven months and Twenty
Six 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.
62. Pertinent to mention that during the argument,
Ld. Counsel for the plaintiff pointed out that although
the said order of the District Forum is dated 9.2.2022,
but it was prepared on 7.03.2022, therefore, the period
from 26.10.2016 to 07.03.2022, has to be excluded. I
do find support in the aforesaid contention of the Ld.
Counsel of the plaintiff as from the record it is evident
that the order dated 09.02.2022 appears to have been
made ready on 07.3.2022 and served on the plaintiff
company. Ld. Counsel for the defendant has not
disputed the same. That being so, the plaintiff
company has spent the time before the Consumer
Forum from 26.10.2016 to 07.03.2022 and that has to
be excluded in terms of section 14 of Limitation Act.
63. The limitation period started from 30.10.2014
and it stopped on 26.10.2016 at the time when the
plaintiff company preferred complaints before the
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 41 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
District Forum. The limitation would again start w.e.f.
8.3.2022 i.e. one day after the day when the
complaints were returned by the District Consumer
Forum and were received by the plaintiff company.
The present suit has been filed on 10.5.2023 i.e after
One year two months and three days. The total period
spent by the plaintiff company, excluding the period
spent before District Forum, would be One year,
eleven months and Twenty Six days + One year two
months and three days i.e Three years one Month and
Twenty nine 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.
64. We can understand it from another angle also.
There are three blocks of the time periods which are
relevant for calculating the period of limitation. The
first block would be from 30.10.2014 to 26.10.2016.
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 26.10.2016 to 7.3.2022. This time has to be
excluded and the third block would be the period from
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 42 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
8.3.2022 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 one Month and Twenty
nine Days.
65. 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 11.01.2023 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 also has to
be excluded. As noted herein above, the plaintiff
company took Three years one Month and Twenty
nine Days for filing the present case. After giving the
benefits of three months u/s 12 A of the Commercial
Court Act, the plaintiff company finally took Two
Years ten Months and twenty nine days time in filing
the present suit i.e Three years one Month and Twenty
nine Days- Three months. That being so, the present
suit is within the period limitation. Accordingly, issue
no.2 is decided in favour of the plaintiff company and
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 43 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
against the defendant company.
Issue No. 3
Whether the suit is bad for non-joinder of necessary
parties, as alleged by the defendant in the written
statement? OPD
66. 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.
67. Refuting the allegations of the defendant
company, Ld. Counsel for the plaintiff company
submitted that as per the insurance policies issued by
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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 44 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
68. 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 whose 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.”
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 45 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
69. 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.
70. 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 to 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 toM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 46 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.”
71. 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.
72. There was a separate contract of insurance
between the plaintiff company and the defendant
company and the consideration thereof was the
premium to be paid by the plaintiff company to the
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 47 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 policy. 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. 3
is decided in favour of the plaintiff company and
against the defendant company.
Issue No. 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)
73. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 48 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
74. 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.
75. 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 theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 49 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
same suit several causes of action against the
same defendant, or the same defendants jointly;
and any 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.”
76. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 50 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
which it is founded.
77. 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
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.
78. 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 alsoM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 51 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 of
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,M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 52 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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
is 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 53 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 54 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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
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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 55 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 56 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 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.
79. In the case of Carlsberg Breweries A/S. Versus
Som Distilleries and Breweries Ltd. , 2018 Scc OnLine
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 termsM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 57 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 to
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.”
80. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 58 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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 are the same. The grounds on which the claims
of the plaintiff company have been repudiated or
rejected are 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.5.
5. Whether the plaintiff is entitled to recovery of
the principal amount, as asked for in plaint? (OPP)
81. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 59 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
were actually short quantities in all the consignments
causing losses to the plaintiff company or not, the
moot question which is to be decided by this court is,
whether the said losses are covered under the
insurance policies or not?
82. 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.
83. 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 policies but has occurred only
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 60 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
because of handling operations of the shipment as
well 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.
84. Per contra, Ld. Counsel for the plaintiff
company vehemently refuted the defense as set up by
the defendant company and submitted that the policies
which were issued to the plaintiff company are “All
Risk Policy” and it covers in its ambit loss 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.
85. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 61 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
the plaintiff company. He further submitted that the
said clause of Institute Cargo Clause (A) would not be
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
communications dated 29.10.2014.
86. Here it is pertinent to refer to the proceedings
dated 06.05.2024. 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) 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.
87. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 62 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
88. Section 2 (e) of the Act defines ‘maritime
perils’. Broadly speaking, ‘maritime perils’ also called
as perils 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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 63 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
89. 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.
90. 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
by maritime perils.
91. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 64 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.
92. 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 .
93. 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
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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 65 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
would be referring to that part of their cross
examination which is relevant and is touching the
controversy between the parties and not otherwise.
94. 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(only those reports where final opinion is
there) are as under:
Sl. No Nature of document Exhibit
First Consignment
i. Insurance Cover note 325611 ExPW1/8
ii. Insurance Policy 272200/21/2015/28 ExPW1/9 (colly)
iii. SGS Surveyors Survey Report dated ExPW1/13 (colly)
09.6.2014
iv. Repudiation letter dated 29.10.2014 ExPW1/18
received by the plaintiff from the
defendant
Second consignment
i. Insurance Policy 272200/21/2015/284 ExPW1/23
ii. SGS Survey Report dated 23.06.2014 ExPW1/28 (colly)
iii. Repudiation Letter dated 29.10.2014 ExPW1/33.
received by the plaintiff from the
defendant
Third consignment
i Insurance Cover Note 327289 ExPW1/38 (colly)
ii Insurance Policy 272200/21/2014/1169 ExPW1/39 (colly)
iii SGS Surveyors Survey Report dated ExPW1/43 (colly)
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 66 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
28.03.2014
iv Repudiation Letter dated 29.10.2014 ExPW1/50.
received by the plaintiff from the
defendant
Fourth consignment
i Insurance Cover Note 324571 & 324572 ExPW1/55 (colly)
ii Insurance Policy 272200/21/2014/863 & ExPW1/56
869
iii SGS Survey report dated 07.01.2014 and ExPW1/61 (colly)
S.K Chakraborty Surveyor Report dated
18.01.2014
iv Repudiation Letter dated 29.10.2014 ExPW1/68.
received by the plaintiff from the
defendant
Fifth consignment
i Insurance Cover Note 325617 ExPW1/73
ii Insurance Policy 272200/21/2015/394 ExPW1/74
iii J B Boda Survey Report dated ExPW1/80
26.08.2014
iv Repudiation Letter dated 29.10.2014 ExPW1/85.
received by the plaintiff from the
defendant
Sixth consignment
i Insurance Cover Note 3323667 ExPW1/90
ii Insurance Policy 272200/21/2014/782 ExPW1/91 (colly)
iii J.B Boda Survey Report dated ExPW1/96
29.11.2013
iv Repudiation Letter dated 29.10.2014 ExPW1/103
received by the plaintiff from the
defendant
95. One of the terms and conditions as mentioned
in the insurance cover notes ExPW1/8, ExPW1/38
(colly), ExPW1/55 (colly), ExPW1/ 73 and
ExPW1/90 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’.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 67 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
96. In the Insurance Policies ExPW1/9 (colly),
ExPW1/23, ExPW1/39 (colly), ExPW1/56(colly),
ExPW1/74 and ExPW1/91 (colly) 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)
Institute Tpnd clause
Institute War Clause (Cargo)
Institute Strike Clauses (Cargo)”
97. In the evidence filed by way of affidavit by the
PW1 Ashok Kumar Maharshi, the reports of the
surveyors were given exhibit marks as ExPW1/13
(colly), ExPW1/28 (colly), ExPW1/43(colly),
ExPW1/61(colly), ExPW1/80 and ExPW1/96.
98. 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 but have not been
disputed by the defendant company also. Meaning
thereby, there is no dispute about these reports and
both the parties are placing reliance on these reports,
so the same are being considered.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 68 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
99. As per the surveyor report of SGS India Pvt.
ExPW1/13 in respect of the first consignment, the
surveyors remarks are as under:-
“a)The cause of shortage in our opinion could be
reasonably attributed to a combination of the
following: a) Adherence of the product to the metal
surfaces of the ship’s/barge/lorry tanks and lines.
b) Multiple handling/operational loss.
100. The remarks of the surveyor namely SGS India
Pvt. Ltd in respect of the second consignment as per
its survey report ExPW1/28 are as under:-
” The cause of shortage in our opinion could be
reasonably attributed to a combination of the
following: a) Adherence of the product to the
metal surfaces of the ship’s/barge/lorry tanks
and lines.
b) Multiple handling/operational loss
101. The report of another surveyor namely SGS
India Pvt. Ltd, ExPW1/43 (colly) in respect of the
third consignment concludes as under:-
“The cause of shortage in our opinion could be
reasonably attributed to a combination of the following:
a) Adherence of the product to the metal surfaces of the
ship’s/barge/lorry tanks and lines.
b) Multiple handling/operational loss
102. The report of another surveyor namely SGS
India Pvt. Ltd, ExPW1/61 (colly) in respect of the
fourth consignment is as under:-
Reason for short receipt of cargo in shore tank
against bill of Jading. The loss of 10.417 M.T.
(0.69%) could be due to the various
handling/multiple operation loss,M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 69 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
103. As per the surveyor report of J.B Boda Surveyors
ExPW1/80, in respect of the fifth consignment the
remarks are as under :-
The cause of shortage in our opinion could be
reasonably attributed to a combination of the
1. There was a difference of (-) 2.307 M/tons
SHORT, when the calculated quantity on board
on completion of Loading at Load Port Durban
was compared with the Bill of Lading quantity.
2. There was difference of (-) 2.126 M/tons
SHORT, when the calculated quantity on board
on arrival at discharge port Kandla was
compared with the Bill of Lading quantity.
3. Adherence of the product to the metal
surfaces of the ship’s tank’s and lines.
4. Operational loss.
104. As per the surveyor report of J.B Boda
Surveyors ExPW1/96, in respect of the sixth
consignment the remarks are as under :-
“As per shore tank ‘s out turn quantity, the receipt
quantity worked out to 396.281M/Tons, this quantity
when compared with the Bill of Lading Quantity
400.578 M/Tong shows a shortage of (-) 4.297
M/Tone, (1.073%)which could be attributed to
unloading loss.”
105. 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:-
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 70 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
” 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.”
106. Here it would be relevant to refer to the cross
examination of the witnesses examined by the parties.
During the cross examination, PW1 Ashok Kumar
Maharshi replied (Q.4 & 12) the loss in question
resulted due to Transit Operational Loss. Regarding
the nature of goods imported by the plaintiff
company, PW1 replied that it was in liquid form
(Q.5). 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.8).
107. 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 policy taken
by the plaintiff company was ‘All Risk Policy’;
Insurance Policy is not a named peril policy;
surveyors have not recommended repudiation of the
claim of the plaintiff company or they did not point
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 71 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
out any violation on the part of the plaintiff company;
the definition of ordinary loss or ordinary leakage has
not been provided in the policy and the term insured
peril has not been defined in the insurance policy etc.
108. DW1 Renuka Chaudhary during her cross
examination on being asked replied that shortage has
occurred during the transfer and nature of the product.
She further replied that in the repudiation
communications, the reason for shortage are deviation
of reference height or discrepancies in recording the
quantity and /or adherence loss or evaporation loss.
She categorically stated that the defendant company
was sure about the exact cause of loss and that is why
the claim was repudiated as per the surveyor report.
109. In addition to DW1 Reunka Chaudhary,
defendant company has examined S.K Chakraborty,
Surveyor as DW2 who has also filed his evidence by
way of affidavit ExDW2/A. During the cross
examination of DW2, the nature of questions put to
him was regarding preparation of the affidavit,
qualification of the witness, the obligation of the
surveyor to submit the report within 30 days, the
documents provided to him for carrying out the
survey by the defendant company and the fact that
DW2 had never visited the court physically etc.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 72 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
110. If the aforesaid testimonies of these witnesses
are 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 Ashok Kumar Maharshi. PW1
nowhere has stated that the losses occurred due to
marine peril. Thus, 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.
111. Additionally, the insurance cover notes, as
referred to previously, clearly indicate that the risks
have been insured subject to usual terms and
conditions of the company’s standard policy. The
terms and conditions have been duly reflected in the
insurance policies under consideration. 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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 73 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
112. 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 type of policy. 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 loss 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
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.
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 74 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
113. 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 loss in weight or
volume during the course of a voyage. Such ordinary
leakage or loss is 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 were
caused by the natural characteristics of the chemical
being transported without any external influence.
114. Having reached the said conclusion, the
plaintiff company cannot be allowed to say that the
Institute Cargo Clause (A) ExDW2/A document was
never supplied to them at the time when the policies
were 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 policies are covered as per the
clauses mentioned therein including Institute Cargo
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 75 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
Clause (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.
115. 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 losses/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
anywhere in India via Indian Port, India.” Therefore,
the losses as suffered by the plaintiff company were
not covered under the insurance policies and excluded
by the clause of Institute Cargo Clause (A)
ExDW2/A.
116. 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 76 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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).
117. In the present case, it is an admitted fact that the
claims of the plaintiff company were repudiated vide
communications dated 29.10.2014 ExPW1/18,
ExPW1/33, ExPW1/50, ExPW1/68, ExPW1/85 and
ExPW1/103. All the aforesaid communications are
identical, which read as under:-
“…… The file has been reconsidered & discussed
in details by the competent authority & it has
been observed that there was no evidence of any
Insured Marine Peril activated when the cargo
was pumped from shore tank to ship tank at the
port of loading & ship’s tank into the shore tank
at the port of discharge viz. breaking of lines,
overflowing of tanks, abnormal leakages etc
during the voyage. In that case, the quantity
brought by the vessel was fully pumped and
received in shore tank & it is confirmed that the
shortage was not due to any Insured Peril, hence
there is no liability under the Policy. The same
has been confirmed by the surveyors.
In view of above, we have repudiated this claim.
As such we have no liability under the policy,
which you please note. We sincerely regret theM/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 77 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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.”
118. The aforesaid repudiation communications are
making it clear that the claims of the plaintiff
company were scrutinized vis-a-vis terms and
conditions of the policies issued in addition to the
reports of the surveyors and 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. The
Institute Cargo Clause (A) ExDW2/A has been
pressed 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 are silent 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 policies. Therefore, the contention of the
Ld. Counsel for the plaintiff company would not help
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 78 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
him much and no benefit of the said judgment can be
extended to the plaintiff company.
119. 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 exclusion clause lies on the insurer;
appreciation of surveyors 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’
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
duly been 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 has discharged the burden placed on it.
120. 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 loss 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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 79 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)
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. 5 is 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).
121. In view of my findings on issue no. 5 , the
question of awarding any interest does not arise. This
issue is also disposed off accordingly.
Issue No.7. Relief
122. In view of my findings on the issues, no. 5, the
present suit of the plaintiff company is hereby
dismissed.
123. There is no order as to costs.
124. File be consigned to record room, as per rules.
RAJESH by
Digitally signed
RAJESH
KUMAR KUMAR GOEL
Date: 2025.07.30
GOEL 16:56:49 +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
M/s KLJ Plasticizers Limited Date of Judgment 30.07.2025 (Page 80 of 80 )
Vs Oriental Insurance Co. Ltd (779/2023)