Delhi District Court
M/S Klj Resources Limited vs Oriental Insurance Co Ltd on 30 July, 2025
IN THE COURT OF Sh. RAJESH KUMAR GOEL
District Judge (Commercial Court) -02,
Central, Tis Hazari
DLCT010067812023
CS (COMM.) No. 825/2023
CNR No.DLCT010067812023
M/S K.L.J Resources Limited
through its Director
At: 8A, Shivaji Marg,
Moti Nagar,
New Delhi, Delhi -110 015 ......Plaintiff
Versus
Oriental Insurance Co. Ltd
Through its Divisional Manager
A-25/27, Asaf Ali Road,
New Delhi - 110 002 ......Defendant
Date of filing of suit : 18.05.2023
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
Digitally signed
between the parties is whether loss of quantity(s) in
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
2025.07.30
GOEL 17:10:42
+0530KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 1 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
question is/are covered under the Insurance policy(s)
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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 2 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
the evidence. Be that as it may, this Court tried its best
to consider the documents as relied upon by the parties
for adjudicating the dispute effectively between them.
3. Vide this judgment, I shall dispose of the present
suit for recovery of Rs 6,69,783/- (Rs Six Lakhs Sixty
Nine thousand Seven Hundred and Eighty Three only)
filed by the plaintiff company against the defendant
company alleging that the defendant company has
wrongfully rejected the insurance claim of the plaintiff
company.
Factual Matrix
4. The brief facts of the case, as made out from the
plaint are that the plaintiff is stated to be a company
registered under the companies Act, 1956, and is
engaged in the trading of Chemicals/Petrochemicals &
allied items and also in import/export of various types
of chemicals/petrochemicals; as a matter of business
prudence, the plaintiff company would insure all its
consignments to be imported against the various
transit risk under ‘All Risk Insurance Policy’.
5. It is the case of the plaintiff company that in
order to protect its Chemicals/petrochemicals to be
imported by the plaintiff company against any kind of
loss or damage during transit, plaintiff company had
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 3 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
obtained insurance cover 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 note in respect of the
consignment by providing cover for all kind of transit
risks from Anywhere in the world to Anywhere in
India via any Indian Port on shore tank to shore tank
basis.
6. The details of the said cover note and insurance
policy issued by the defendant company are as under:
Cover Note No. Policy No.
327300 272200/21/2014/1242
7. It is stated that the aforesaid cover note and
insurance policy was issued by the defendant company
in respect of the following consignment:
Invoice No. Dated Quantit Ship Name Delivery
y Port
9000009270 8.03.2014 480.19 White Shark Kandla
5 MT
8. It is the further case of the plaintiff company
that the plaintiff company received a short quantity of
the consignment and has suffered loss. According to
the plaintiff company, the unloading of the
consignment was done under the supervision of the
Insurance Surveyors; defendant company after
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 4 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
obtaining the report of first surveyor, had deputed
second surveyor for the same loss and had obtained
another report; the surveyor in the report confirmed
the loss due to short quantities received by the plaintiff
company. The detail of the Surveyors report is as
under:
Surveyor Dated 2nd Short Claim Claim Bill Short
Report Surveyo Quantity Intimation Quantity
Ref. No. r report Letter to Ins.
Ref. No. Co.
KDL/ 27.03.2014 - 3.785MT 01.05.2014 23.06.2014 3.785MT
04797/13
/AA
9. The plaintiff company is said to have lodged the
claim 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 loss.
10. It is stated that the defendant company did not
settle the claim of the plaintiff company despite the
reminders having been sent by the plaintiff company
and instead rejected the claim of the plaintiff company
on the ground that under the insurance policy, the
defendant company has no liability as the same being
beyond the scope of insurance policy taken by the
plaintiff company.
11. According to the plaintiff company, the plaintiff
company had taken the insurance policy ” All RiskKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 5 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
Policy” covering all kind of loss without any
exception, therefore, the shortage of material would
come within the scope of insurance policy and the
defendant company is under statutory obligation to
indemnify the plaintiff company to the extent of loss
which has been suffered by the plaintiff company.
12. Another set of facts, as emanate from the plaint,
is that after rejection of the claim by the defendant
company, plaintiff company had approached District
Consumer Dispute Redressal Forum, Central, Delhi (
hereinafter referred to as “District Forum”); the claim
of the plaintiff company was 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 complaint was 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 claim/complaint filed
by the plaintiff company is not maintainable as it was
the business to business transaction and is not covered
under the Consumer Protection Act 1986; District
Forum is said to have been apprised of by the plaintiff
company that pursuant to the judgment of National
Commission, the claim was maintainable but despite
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 6 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
that the complaint of the plaintiff company was
returned.
13. It is also stated that the claim/complaint of the
plaintiff company was 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 claim of the plaintiff
company was 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 3,38,342/-. According to the plaintiff
company a total amount of Rs 6,69,783/- ( Rs
3,31,441/-/- as Principal + Rs 3,38,342/- as Interest) is
due and outstanding against the defendant company.
15. In compliance of the provision of section 12A of
the Commercial Courts Act, 2015, as amended to date,
the plaintiff company filed a pre-litigation mediation
application before the Delhi Legal Service Authority,
Central District, Tis Hazari Courts, Delhi, (in short
“DLSA”) against the defendant company; the DLSA
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 7 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
has released a non-starter report dated 11.04.2023.
16. Thereafter, Summons of the suit were issued to
the defendant company. The defendant company
made the appearance and has filed the written
statement.
17. Since, there was a delay of a few days in filing
the written statement, therefore, an application under
order VIII rule 1 CPC was moved on behalf of the
defendant company seeking condonation of delay,
which was allowed vide order dated 03.08.2023 by the
Ld. Predecessor of this Court and the written statement
filed by the defendant company was taken on record.
18. 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 suit of the plaintiff company is barred
by limitation as the loss was 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.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 8 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
19. On the merits, the defendant company has not
denied that the plaintiff company had taken the
insurance policy in question but the stand of the
defendant company is that the claim of the plaintiff
company is not payable as the alleged loss of
quantity reported by the plaintiff company neither
come within the scope of coverage under the insurance
policy 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 policy,
therefore the claim of the plaintiff company was
rejected.
20. It is stated that the plaintiff company has
wrongly claimed the loss of 9.110 MT under the
invoice and has not produced any assessment report to
substantiate the said loss.
21. It is the further stand of the defendant company
that the Marine Cargo Policy makes it crystal clear
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 9 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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 loss, weight or volume
and ordinary wear and tear of the subject matter
insured.
22. The defendant company has also referred to the
report of the surveyor and it was stated that the cause
of shortage is attributed to the transfer of goods from
shore tank to the ship’s tank at the port at the time of
loading and discharge. It is also stated that the alleged
shortage, as reported by the plaintiff company, is a
normal phenomenon in transit of chemicals by ship
and the actual shortage would be found to be an
ordinary leakage or ordinary loss in weight or volume,
which is as per the nature of the subject matter
insured. Hence the present suit of the plaintiff
company is liable to be rejected.
23. The defendant company has filed an affidavit of
admission and denial of the documents along with the
written statement.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 10 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
24. Thereafter, the plaintiff company filed the
rejoinder to the written statement of the defendant
company denying the allegations made by the
defendant company and reiterated the facts as
mentioned in the plaint. Along with the rejoinder , the
plaintiff company has also filed the statement of
admission and denial of documents.
25. 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 the 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 2-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 3- Preliminary Objections)? (OPD)
4. Whether the plaintiff is entitled to recovery of the
principal amount, as asked for in plaint? (OPP)
5. In case if issue no.4 is decided in affirmative, whether
the plaintiff is entitled for any interest, as asked for in
the plaint? (OPP).
6. Relief
26. Vide order dated 29.11.2023, the Schedule of
Second Case Management hearing was fixed by theKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 11 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
Ld. Predecessor of this court and Ld. Court
Commissioner was appointed to record the evidence
of both the parties.
27. The Ld. Court Commissioner has already
submitted his report to this court.
28. In support of its case, the plaintiff company has
examined two witnesses i.e. PW1 Ashok Kumar
Maharishi, 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.
29. The defendant company has examined one Smt
Renuka Chaudhary, Manager, as DW1, who has filed
her evidence by way of affidavit. No other witness was
examined by the defendant company and the
defendant’s evidence was closed.
30. PW1 Ashok Kumar Mahrishi has deposed on the
lines of the averments made in the plaint in his
evidence filed by way of affidavit Ex.PW1/A. He also
relied upon the documents i.e Board Resolution dated
14.11.2022 ExPW1/1, Copy of Memorandum and
Articles of Association ExPW1/2, Copy of Final Order
dated 27.03.2017 of the Consumer Complaint, already
placed on record with the Suit Ex PW1/3 (Colly),KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 12 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
Copy of Order dated 24.07.17 NCDRC, Copy of order
dt. 11.01.18, 12.01.18 of Consumer Commission,
Copy of order dt. 15.11.18 of State Commission, copy
of order dt. 18.12.18 of State Commission, copy of
order dt. 05.04.19 of State Commission and Final
order dt. 09.02.22 of Consumer Commission are
already placed on record with the Suit Ex
PW1/4(Colly), Copy of Complaint with supporting
affidavit in Policy No. 272200/21/2014/1242 along
with Board Resolution Filed By Plaintiff Co. before
Consumer Forum, Central, Delhi, already placed on
record with the Suit Ex PW1/5(Colly), Copy of
Insurance Cover note no. 327300, already placed on
record with the Suit Ex PW1/6, Copy of Insurance
Policy 272200/21/2014/1242, already placed on record
with the Suit Ex PW1/7 (Colly), Copy of Invoice No.
9000009270 Dated 08.03.2014, already placed on
record with the Suit Ex PW1/8, Copy of Bill of Lading
No. 8000008557 already placed on record with the
Suit Ex PW1/9 , Surveyor Report from Intertek, No.
ITSBU/H2007/2014-(B) Ex PW1/10 (Colly), Copy of
warehouse bill of entry, Email dt. 01.05.2014 to
defendant and Survey Report JB Boda, No.
KDL/04797/13AA dated 27.03.2014, already placed
on record with the Suit Ex PW1/11 (Colly), Copy of
Letter dt 26.03.2014 sent by plaintiff to shipping agentKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 13 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
is already placed on record with the Suit Ex PW1/12,
copy of Letter dt 23.06.2014 along with claim form,
claim bill sent by the plaintiff to defendant already
placed on record with the Suit Ex PW1/13(Colly),
Copy of Letter dt 21.07.2014 sent by the plaintiff to
defendant already placed on record with the Suit Ex
PW1/14, Copy of letter dt. 08.09.2014 received by the
plaintiff from the defendant, already placed on record
with the Suit Ex PW1/15, Copy of Letter dt
25.09.2014 sent by the plaintiff to defendant already
placed on record with the Suit Ex PW1/16, Copy of
Repudiation Letter dt.29.10.2014 received by the
plaintiff from the defendant, already placed on record
with the Suit Ex PW1/17, Copy of written statement
filed by defendant before the Distt. Commission Ex
PW1/18(Colly).
31. PW1 Ashok Kumar Maharshi was cross
examined by the Ld. Counsel for the defendant
company.
32. PW2 Satish Kumar is a summoned witness
from District Forum, who produced the original case
diary register from 16.05.2016 to 29.12.2016 having
reference of CC No.339/2016 ExPW2/1.
33. PW2 Satish Kumar was not cross examined by
the Ld. Counsel for the defendant company despiteKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 14 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
opportunity being given.
34. DW1 Renuka Chaudhary tendered her evidence
by way of affidavit ExDW-1/A and has deposed on the
lines of stand taken in the written statement filed by
the defendant company. She has relied upon the
documents i.e Power of attorney ExDW1/1 and the
Institute Cargo Clauses (A) is ExDW1/2.
35. DW1 Renuka Chaudhary was cross examined
on behalf of the plaintiff company.
36. Here, it is pertinent to mention that at the stage
when evidence of the defendant company has already
been recorded, the defendant company moved an
application under order 16 Rule (1) (3) r/w section 151
CPC making a request to summon additional witnesses
to be examined by the defendant company. Vide
aforesaid application, the defendant company wanted
to produce and prove “Institute Cargo Clauses (A) as
applicable to Marine Cargo- Single Voyage (Sea) Policy”.
37. The said application moved on behalf of the
defendant company was allowed by this Court vide
order dated 27.04.2024 subject to the cost whereby the
defendant company was allowed to summon the
concerned witness. Pursuant to the summons issued by
the court, one Sh. R.Pardha Saradhi appeared onKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 15 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
06.5.2024, and he was examined as DW2 in another
connected case bearing no. 763/2023. In that case, he
proved the Institute Cargo Clauses (A) as applicable to
Marine Cargo- Single Voyage (Sea) Policy as Ex
DW2/A.
38. Both the parties made a request to place the
copy of the said document ExDW2/A in each of the
files, including the present case and it was stated that
in that eventuality there would not be any need to
examine the witness Sh. R. Pardha Saradhi as one of
the defendant witnesses in each and every case. It was
also stated on behalf of both the parties that they do
not have any objection, if the said document
ExDW2/A is read and considered into evidence while
deciding the case at the time of final hearing.
39. Considering the request of both the parties and
no objection from their side, the copy of Institute Cargo
Clauses (A) as applicable to Marine Cargo- Single Voyage
(Sea) Policy ExDW2/A, was directed to be placed in
each of the cases pending between the parties
including the present one and it was directed that same
shall be read in evidence at the stage of final disposal
of the cases. Accordingly, the present case reached
the stage of final arguments.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 16 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
40. When the case was at the stage of final
arguments, the plaintiff company moved an
application under order 6 Rule 17 r/w section 151 CPC
seeking certain amendments in the plaint. By way of
the said application plaintiff company had made a
request to amend para 7 and 9 of the plaint which
basically is having the details of the consignments and
surveyor reports. It was stated on behalf of the plaintiff
company that there being 13 cases pending between
the parties, therefore, inadvertently, there are
typographical mistakes regarding the details of the
consignments and surveyor reports which need to be
corrected.
41. Ld. Counsel for the defendant company
submitted that he has no objection if the aforesaid
application of the plaintiff company is allowed with a
rider that it should not be presumed that the documents
relied upon by the plaintiff company stand proved as
the defendant company has already taken objections
regarding mode of proof of certain documents.
42. Vide order dated 20.7.2024, the aforesaid
application was allowed/disposed of subject to certain
conditions as mentioned therein. The defendant
company was given the liberty to file the written
statement and in case no amended written statement is
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 17 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
filed, the original statement filed on behalf of the
defendant company shall be considered and the case
again came to be adjourned for final argument.
Pertinent to mention that the defendant company has
not filed any amended written statement, therefore, the
written statement filed originally at the initial stage has
been considered.
43. Ld. Counsels for both the parties have filed the
written synopsis of arguments and have argued the
matter orally as well at length. Their arguments shall
be considered while giving the findings on the issues.
44. Ld. Counsel for the plaintiff company has relied
upon the following judicial pronouncements:-
a) M.P Steel Corporation Vs Commissioner of Central
Excise, (2015) 7 SCC 58
b) Saurashtra Chemicals Ltd vs National Insurance
Company Ltd , (2019) 19 SCC 70.
c) Bharat Watch Company Vs NIC (2019) 6 SCC 212.
d) National Insurance Company Ltd Vs Mangalagowri
Cashew Industries, II (2006) CPJ-32 (National
Commission)
e) Bajaj Allianz GIC Ltd vs G P Petroleums Ltd. (State
Commission Mumbai), Appeal No. A/16/2917
f) Texco Marketing Pvt Ltd vs Tata AIG Capital General
Insurance Company Ltd and Ors, IX (2022) SLT 144
g) Narsingh Ispat Ltd Vs OIC Capital, 2022 SCC
OnLine SC 535.
h) Mavji Kanji Jungi & Anrs vs Oriental Insurance
Company Ltd. I (2021) CPJA 435 ( National
Commission)KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 18 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
i) Mappie International Ltd Vs Oriental Insurance Co.
Ltd, (NCDRC, New Delhi ) CC N. 5 of 2015
j) Sri Venkaterswara Syndicate Vs. Oriental Insurance
Co. Ltd II (2010) SLT 664
45. Ld. Counsel for the defendant company has
relied upon the following judicial authorities:
a) House of Lords in case of British and Foreign Marine
Insurance Co. Ltd Vs. Gaunt ( 1921) 2 AC 41 (HL)
b) New India Assurance Co. Ltd Vs Hira Lal Ramesh
Chand and Ors, AIR 2008 SC 2620
c) Josita Antony vs New India Assurance Company Ltd,
II (2006) ACC 713
d) J.M.F Sea Foods, Alleppey and Ors vs National
Insurance Co. Ltd, Alleppey, AIR 1992 Ker 202.
e) Bajaj Allianz General Insurance Co. Ltd and Ors Vs
The State of Madhya Pradesh , AIR 2020 SC 2237.
f) General Assurance Society Ltd vs Chandumull Jain
and Anr. , 1966 (3) SCR 500
g) Consolidated Engineering Enterprises vs Principal
Secretary, Irrigation Department and Ors ( 2008) 7
SCC 169.
h) Ghasi Ram & Ors Vs Chait Ram Saini & Ors (1998) 6
SCC 200.
i) Maidi Bhikashmiah & Anrs Vs. Venugopalrao & Ors,
1958 SCC OnLine AP 206.
j) Hassan Chand & Sons Vs H.H Majaraja Shri Gaj
Singh, 1961 SCC OnLine Raj 125.
k) Sohan Singh Vs State of Rajasthan & Ors, 1977 WLN
(UC) 96.
l) Bihar Supply Syndicate Vs Asiatic Navigation
(1993) 2 SCC 639KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 19 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
m) Oriental Insurance Company Ltd Vs Peacock
Plywood (P) Ltd. 2004 SCC OnLine Cal 681.
46. I have gone through the material available on
record and heard the Ld. Counsel for both the parties. I
have also gone through the case laws cited at bar.
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)
47. During the arguments, on the query being raised
by this court to the Ld. Counsel for the defendant
regarding the issue of jurisdiction, Ld. Counsel for the
defendant submitted that he is not pressing the said
issue and the same may be disposed off accordingly.
48. Plaintiff company has filed the present suit for
recovery of Rs 6,69,783/- (Rs Six Lakhs Sixty Nine
Thousand Seven Hundred and Eighty Three only)
against the defendant company, which is well 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 20 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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)
49. 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 claim of the plaintiff company
was 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 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 21 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
Consumer Forum, Ld. Counsel for the defendant
company submitted that the complaint of the plaintiff
company was 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.
50. In reply to that Ld. Counsel for the plaintiff
company submitted that the claim of the plaintiff
company was repudiated vide communication dated
29.10.2014; plaintiff company filed the complaint case
before the District Forum on 16.09.2016 which was
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 period from 16.9.2016 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 complaint
before the Consumer Forum and there were repeated
rounds of litigations about the maintainability of the
complaint; the complaint was 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 22 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
51. It will be relevant to refer to Section 14 of the
Limitation Act, which reads as under:-
“14. Exclusion of time of proceeding bona fide in
court without jurisdiction.–(1) In computing the
period of limitation for any suit the time during
which the plaintiff has been prosecuting with due
diligence another civil proceeding, whether in a
court of first instance or of appeal or revision,
against the defendant shall be excluded, where the
proceeding relates to the same matter in issue and
is prosecuted in good faith in a court which, from
defect of jurisdiction or other cause of a like
nature, is unable to entertain it.
(2) In computing the period of limitation for any
application, the time during which the applicant
has been prosecuting with due diligence another
civil proceeding, whether in a court of first
instance or of appeal or revision, against the same
party for the same relief shall be excluded, where
such proceeding is prosecuted in good faith in a
court which, from defect of jurisdiction or other
cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2
of Order 23 of the Code of Civil Procedure, 1908
(5 of 1908), the provisions of sub-section (1) shallKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 23 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
52. Section 14 of the Limitation Act deals with
exclusion of time of proceeding spent bona fide in a
court without jurisdiction. On analysis of the said
section, it becomes evident that the following
conditions must be satisfied before Section 14 can be
pressed into service:
(1) Both the prior and subsequent proceedings are civil
proceedings prosecuted by the same party;
(2) The prior proceeding had been prosecuted with due
diligence and in good faith;
(3) The failure of the prior proceeding was due to defect
of jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding must
relate to the same matter in issue and;
(5) Both the proceedings are in a court.
53. Here I may refer to a few judgments touching
the controversy in question qua limitation. In the case
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 24 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
54. 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 caseKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 25 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
55. 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 claim, it declined to grant
the relief. Thus, an appeal was preferred before the
Hon’ble Supreme Court.:-
“2. Shri Harish Salve, the learned Senior Counsel
for the appellant, contended that in view of the
policy undertaken by the respondent, the
Commission could have granted the relief, instead
of relegating the appellant to a civil action. We
find no force in the contention. We have gone
through the stand taken by the respondent in the
repudiation. The very interpretation of the policy
itself is a subject-matter of the dispute. Under
these circumstances, the Commission rightly
relegated the parties to a civil action. It is true that
limitation has run out against the appellant during
the pendency of the proceedings. Therefore, the
time taken between the date of the filing of the
claim before the Commission and the date of its
disposal, namely, 28-9-1995 would be considered
by the civil court for exclusion under Section 14
of the Limitation Act, 1963. The appeal is
accordingly dismissed.”
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 26 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
56. 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 the
Consumer Forum diligently and bonafidely. In a
series of decisions, namely, Laxmi Engineering
Works; Saushish Diamonds Ltd.; M/s Deokar
Exports Pvt. Ltd. and Shangrilla Apartments Co-
Operative Housing Society ltd (Supra), it has been
held, that prosecution of a remedy before the
Consumer Forum, would be a legal and valid
ground, to invoke and apply the provisions of
Section 14 of the Limitation Act. There is no
reason whatsoever, why the same benefit, cannot
be granted to the plaintiff, specifically in light of
the fact, that the District Consumer Forum in fact
entertained the plea of the plaintiff and had
granted relief. It therefore cannot be said that
prosecution of the remedy by the plaintiff before
the authorities under the Consumer Protection Act
was either malafide, or with knowledge that theKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 27 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
57. In the case of Purni Devi Vs Babu Ram , 2024
INSC 259, by referring to the cases of Consolidated
Engg. Enterprises vs The Principal Secretary (Irrigation
Department) & Ors, (2008) 7 SCC 169 and the case of
Sesh Nath Singh 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 clearKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 28 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
that both the prior and subsequent proceedings
are civil proceedings prosecuted by the same
party. The prior proceeding had been prosecuted
with due diligence and in good faith, as has been
explained in Consolidated Engg. [(2008) 7 SCC
169] itself. These phrases only mean that the
party who invokes Section 14 should not be
guilty of negligence, lapse or inaction. Further,
there should be no pretended mistake
intentionally made with a view to delaying the
proceedings or harassing the opposite party.
49. ……. the expression “the time during
which the plaintiff has been prosecuting
with due diligence another civil
proceeding” needs to be construed in a
manner which advances the object sought
to be achieved, thereby advancing the
cause of justice.” (emphasis supplied)
35. The judgments in Consolidated Engg.
Enterprises (Supra) and M.P. Steel (Supra) have
been followed consistently by this Court. For
instance in Sesh Nath Singh v. Baidyabati
Sheoraphuli Coop. Bank Ltd. 5 (2-Judge Bench),
while holding Section 14 to be applicable to
applications under Section 7 of the Insolvency and
Bankruptcy Code, 2016 and the SARFAESI Act, it
was 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 substantiveKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 29 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
58. Here it would be relevant to refer to the
observation of the Hon’ble Supreme Court made in the
case of M.P. Steel Corporation (supra), which are as
under:-
” 34. It now remains to consider the decision of a
2-Judge Bench reported in P. Sarathy v. State
Bank of India, (2000) 5 SCC 355. This judgment
has held that an abortive proceeding before the
appellate authority under Section 41 of the Tamil
Nadu Shops and Establishment Act would attract
the provisions of Section 14 of the Limitation Act
inasmuch as the appellant in this case had been
prosecuting with due diligence another civil
proceeding before the appellate authority under the
Tamil Nadu Shops and Establishment Act, which
appeal was dismissed on the ground that the said
Act was not applicable to nationalized banks and
that, therefore, such appeal would not be
maintainable. This Court made a distinction
between “Civil Court” and “court’ and expanded
the scope of Section 14 stating that any authority or
Tribunal having the trappings of a Court would be
a “court” within the meaning of Section 14. It must
be remembered that the word “Court” refers only to
a proceeding which proves to be abortive. In this
context, 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 ofKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 30 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
justice – see: Shakti Tubes Ltd. v. State of Bihar,
(2009) 1 SCC 786 and the judgments cited therein.
Obviously, the context of Section 14 would require
that the term “court” be liberally construed to
include within it quasi-judicial Tribunals as well.
This is for the very good reason that the principle
of Section 14 is that whenever a person bonafide
prosecutes with due diligence another proceeding
which proves to be abortive because it is without
jurisdiction, or otherwise no decision could be
rendered on merits, the time taken in such
proceeding ought to be excluded as otherwise the
person who has approached the Court in such
proceeding would be penalized for no fault of his
own. This judgment does not further the case of
Shri Viswanathan in any way. The question that
has to be answered in this case is whether suits,
appeals or applications referred to by the
Limitation Act are to be filed in courts. This has
nothing to do with “civil proceedings” referred to
in Section 14 which may be filed before other
courts or authorities which ultimately do not
answer the case before them on merits but throw
the case out on some technical ground. Obviously
the word “court” in Section 14 takes its colour from
the preceding words “civil proceedings”. Civil
proceedings are of many kinds and need not be
confined to suits, appeals or applications which are
made only in courts stricto sensu. This is made
even more clear by the explicit language of Section
14 by which a civil proceeding can even be a
revision which may be to a quasi-judicial tribunal
under a particular statute”.
59. Coming back to the case at hand, it is not in
dispute that initially the complaint of the plaintiff
company was returned by the District Forum vide
order dated 27.3.2017 ExPW1/3. From the order dated
27.03.2017 ExPW1/3, it is evident that Ld. District
Forum observed that it has no pecuniary jurisdiction to
entertain the complaint filed by the plaintiff company.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 31 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
The matter landed before National Commission, then
before State Commission and finally vide order dated
09.02.2022, again the complaint of the plaintiff
company was returned by the District Forum vide
order dated 09.2.2022 ExPW1/4 (colly) 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 complaint of the plaintiff
company on the ground that the purpose of transaction
between the parties were commercial and the
complainant ( plaintiff company) is not a consumer
under section 2 (1) (d) of the Act. Meaning thereby,
the District Forum did not consider the complaint of
the plaintiff company on merits.
60. 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 proceeding before the District Forum was
between the same parties i.e M/s KLJ Resources Ltd
vs The Oriental Insurance Co. Ltd who are the plaintiff
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 32 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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 complaint with due
diligence and in good faith. Assailing the order of
District Forum before the Appellate Authority i.e State
Commission and National Commission indicates that
plaintiff company was diligent enough in prosecuting
its claim before the District Forum. The orders passed
by the District Forum, State Commission and National
Commission would make it further clear that the
plaintiff company had tried its best to get its 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 claim of the plaintiff company by
the defendant company is illegal.
61. 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 33 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
remedy before the Consumer Forum, would be a legal
and valid ground, to invoke and apply the provisions
of Section 14 of the Limitation Act. There is no reason
whatsoever why the same benefit cannot be granted to
the plaintiff company in the present case. It is
therefore cannot be said that prosecution of the remedy
by the Plaintiff company before the authorities under
the Consumer Protection Act, 2019 was either
malafide, or with knowledge that the same was not
maintainable. Thus, the plaintiff company is entitled to
exclusion of the time during which the plaintiff
company had prosecuted its claim before the District
Forum.
62. 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.
63. According to the plaintiff company, the claim of
the plaintiff company was repudiated by the defendant
company vide communication dated 29.10.2014
ExPW1/17 (colly). 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.
64. In ordinary circumstances, the period of
limitation for filing the present suit for recovery would
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 34 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
have expired on 20.10.2017.
65. 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 complaint to the District Forum on
16.09.2016. Meaning thereby, the plaintiff company
kept waiting during the period from 30.10.2014 to
16.09.2016. Even as per the case of the plaintiff
company, the complaint before the District Forum was
filed after One Year Ten Months and Eighteen Days.
As per the case of the plaintiff company, the last order
passed by the District Forum was of 09.02.2022 as the
complaint of the plaintiff company came to be
dismissed or returned on the ground of
maintainability.
66. 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 16.9.2016 to 07.03.2022, has to be excluded. I do
find support in the aforesaid contention of the Ld.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 35 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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 16.09.2016 to 07.03.2022 and that has to
be excluded in terms of section 14 of Limitation Act.
67. The limitation period started from 30.10.2014
and it stopped on 16.09.2016 at the time when the
plaintiff company preferred to file a complaint before
the District Forum. The limitation would again start
w.e.f. 8.3.2022 i.e. one day after the day when the
complaint was returned by the District Consumer
Forum. The present suit has been filed on 18.5.2023
i.e after One year two months and eleven days. The
total period spent by the plaintiff company, excluding
the period spent before District Forum, would be One
Year, Ten Months and Eighteen Days. + One year two
months and eleven days i.e Three years 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.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 36 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
68. 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 16.09.2016.
This is a period which was spent by the plaintiff
company and no claim was 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 16.09.2016 to 7.3.2022. This time has to be
excluded and the third block would be the period from
8.3.2022 to 18.5.2023. 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 and Twenty nine Days.
69. 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 37 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
excluded.
70. As noted herein above, the plaintiff company
took Three years 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 nine Months and
Twenty nine Days in filing the present suit i.e Three
years and Twenty nine Days- Three months. That
being so, the present suit is within the period of
limitation. Accordingly, issue no.2 is decided in
favour of the plaintiff company and 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
71. 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 claim,
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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 38 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
72. Refuting the allegations of the defendant
company, Ld. Counsel for the plaintiff company
submitted that as per the insurance policy issued by
the defendant company, it was not obligatory for the
plaintiff company to implead the shipping agent in
case of loss covered under the policy. He submitted
that the plaintiff company had lodged a protest on the
shipper therefore, preserving the rights to subrogation
and it cannot be expected from the plaintiff company
to indulge in litigation with the shipper to claim the
indemnity from the Insurer.
73. 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 39 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.”
74. 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.
75. Here I may refer to the case of Mumbai
International Airport (P) Ltd. v. Regency Convention
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 40 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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 to secure a
right/interest in a suit property, after the suit is
decided against the plaintiff, will not make such
person a necessary party or a proper party to the
suit for specific performance.”
76. In the present case, it is not in dispute that the
consignment belonging to the plaintiff company was
insured by the defendant company and for that
separate cover note and insurance policy was issued.
As such it is also not in dispute, rather it has come on
record that there was a loss of quantity of the goods
which were imported by the plaintiff company. The
bone of contention between the parties is whether the
loss, as detailed, is covered by the insurance policy or
not? It is also a matter of fact that the plaintiff
company is stated to have lodged the claim before the
Shipper also. There is nothing on record suggesting
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 41 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
that it was the pre-condition to accept the claim 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.
77. There was a separate contract of insurance
between the plaintiff and the defendant company and
the consideration thereof was the premium to be paid
by the plaintiff company to the defendant company
and defendant company was under obligation to make
the loss good in terms of the clauses of the insurance
policy 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 plaintiff is entitled to recovery of the
principal amount, as asked for in plaint? (OPP)
78. Before proceeding further, I may note certain
admitted facts. It is not in dispute that the consignment
in question was insured by the plaintiff company with
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 42 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
the defendant company and for that separate cover
note and insurance policy was issued. Without going
into the issue of whether there was actually short
quantity in the consignment causing loss to the
plaintiff company or not, the moot question which is
to be decided by this court is, whether the said loss is
covered under the insurance policy or not?
79. Ld. Counsel for the defendant company
submitted that no claim is payable qua the alleged loss
of quantity 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 policy 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 loss, 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 loss in
question is excluded from the Institute Coverage. He
further submitted that there was no evidence of insured
marine peril activated.
80. Ld. Defence Counsel vehemently argued that
loss of shortage volume and weight was neither due to
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 43 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
any peril nor it was due to unfortunate event covered
under the policy but has occurred only because of
handling operations of the shipment as well 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.
81. Per contra, Ld.Counsel for the plaintiff company
vehemently refuted the defense as set up by the
defendant company and submitted that the policy
which was issued to the plaintiff company is “All Risk
Policy” and it covers in its ambit loss of any kind
during the coverage/voyage period. He submitted that
the obligation of the plaintiff company ends once the
loss is reported to the defendant company and it was
the defendant company to prove that the loss is not
covered under the policy and mere denial on the part
of the defendant company would not be sufficient to
reject the claim of the plaintiff company.
82. 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 policy and it is during the
proceedings before the Consumer Courts that first time
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 44 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
the said document was brought to the notice of the
plaintiff company. He further submitted that the said
clause of Institute Cargo Clause (A) would not be
applicable as in the said clause nowhere it is
mentioned that the loss/damage must take place during
the course of transit/voyage; ‘All Risk Policy’ would
cover all type of loss 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.
83. 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) in the present case also makes 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.
84. Before diving deep into the sea of Marine
Insurance, it is imperative to understand the meaning
of “Marine Insurance” and “Perils of Sea”. Marine
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 45 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
insurance is defined under Section 3 of the Marine
Insurance Act, 1963 as an agreement whereby the
insurer undertakes to indemnify the insured, in the
manner and to the extent thereby agreed, against
marine losses, that is to say, the losses incidental to
marine adventure. In simple terms, marine insurance is
a contract which protects the insured against losses on
inland waters or any land risk that may be incidental to
any sea voyage. The nature of maritime insurance is
essentially a contract of indemnity meaning thereby
that the insurance company is liable only for the actual
loss or damages suffered by the insurer. However, the
insurer cannot be made liable for each and every loss.
Under the Act, the loss to an insurable property must
arise as a consequence of a maritime peril.
85. 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.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 46 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
86. 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.
87. Under the Marine Insurance Act, 1963, losses 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.
88. 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 47 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
89. 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 .
90. 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 48 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
would be referring to that part of their cross
examination which is relevant and is touching the
controversy between the parties and not otherwise.
91. This takes me to the real issue between the
parties. The consignment of the plaintiff company was
insured vide separate cover note and insurance policy.
When the loss was reported to the defendant company,
surveyors were appointed, who have already given
their reports. The details of the cover note, insurance
policy and the reports of the Surveyors(only those
reports where final opinion is there) are as under:
Sl. No Nature of document Exhibit
i. Insurance Cover note 327300 ExPW1/6
ii. Insurance Policy ExPW1/7
272200/21/2014/1242 (colly)
iii. J.B Boda Survey Report dated ExPW1/11
27.03.2014 (colly)
iv. Repudiation letter dated 29.10.2014 ExPW1/17
received by the plaintiff from the
defendant
92. One of the terms and conditions as mentioned in
the insurance cover note ExPW1/6 is “the insured
named above having this day proposed to affect the above
insurance and having paid the premium stated above the
risk is hereby insured, subject to the usual terms and
conditions of the Company’s Standard Policy’.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 49 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
93. In the Insurance Policy ExPW1/7(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)”
94. In the evidence filed by way of affidavit by the
PW1 Ashok Kumar Maharshi, the said report of the
surveyor was given exhibit marks as ExPW1/11
(colly).
95. During the arguments by referring to the said
reports, Ld. Counsel for the defendant company tried
to make out a case that the loss in question is not
covered by insurance policy. The report has been filed
by the plaintiff company but has not been disputed by
the defendant company also. Meaning thereby, there is
no dispute about the report and both the parties are
placing reliance on the said report, so the same is
being considered.
96. As per the surveyor report of J.B Boda
Insurance Surveyors report ExPW1/11 (colly), the
surveyors remarks are as under:-
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 50 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
” The cause of shortage in our opinion could be
reasonably attributed in a combination of the
following:
1. There was a difference of (-) 1.262 M/Tons
SHORT, when the calculated quantity on
board on completion of loading at Load Port
Bintulu was compared with the Bill of Lading
Quantity.
2. There was a difference of (-) 3.465 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 and lines
4. Operational Loss
97. The main cause of dispute between the parties
is the exclusion clause 4.2 of the Institute Cargo
Clause (A) ExDW2/A, which reads as under:-
” EXCLUSIONS
4. In no case shall this insurance cover
4.1…….
4.2 Ordinary leakage, ordinary loss in weight
or volume, or ordinary wear and tear of the
subject matter insured.”
98. 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 & 13 ) the loss in question
resulted due to Transit Operational Loss. Regarding
the nature of goods imported by the plaintiff company,
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 51 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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).
99. 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; surveyor has not
recommended repudiation of the claim of the plaintiff
company or they did not point out any violation on the
part of the plaintiff company; the definition of
ordinary loss or ordinary leakage has not been
provided in the policy and the term insured peril has
not been defined in the insurance policy etc.
100. 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.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 52 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
101. If the aforesaid testimonies of these witnesses
are scanned, there would be no difficulty in arriving at
a conclusion that whatever loss was suffered by the
plaintiff company, it was Transit Operational Loss
even as per PW1 Ashok Kumar Maharshi. PW1
nowhere has stated that the loss occurred due to
marine peril. Thus, whatever the loss was suffered by
the plaintiff company, it was operational loss during
the transit and no marine peril has taken place for
which the defendant company can be held responsible.
102. Additionally, the insurance cover note
ExPW1/6, as noted herein above clearly indicates that
the risk has 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 policy ExPW1/7 (colly). 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
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 53 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
the subject matter insured.
103. 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 loss and damage is 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 loss
suffered by it was 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
loss to the plaintiff was 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 loss with any of the marine
peril which the plaintiff company has miserably
failed to do so.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 54 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
104. 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 loss 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 loss in
the quantity of consignments was caused by the
natural characteristics of the chemical being
transported without any external influence.
105. 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 policy was
issued by the defendant company. In the cover note it
is specifically mentioned that the insured i.e plaintiff
company has agreed to take insurance policy subject to
the usual terms and conditions of the company’s
standard policy. It is categorically mentioned at page
no.2 under the Terms of Insurance that the Risk under
the police are covered as per the clauses mentioned
therein including Institute Cargo Clause A. Meaning
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 55 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
106. It is true that as per the cover note and the
insurance policy, the consignment was insured from
anywhere in India via any Indian Port (by sea) but at
the same time the insurance policy clearly states that it
agrees to insure the loss/damage 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 loss as suffered
by the plaintiff company was not covered under the
insurance policy and excluded by the clause of
Institute Cargo Clause (A)ExDW2/A.
107. During the argument, one of the contentions of
the Ld. Counsel for the plaintiff company was that the
defendant company cannot be allowed to travel
beyond the grounds as mentioned in the letter of
repudiation. According to the plaintiff company, if the
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 56 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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 claim of the plaintiff company. In this regard,
reliance was placed on the judgment passed in the case
of Saurashtra Chemicals Ltd. (Supra).
108. In the present case, it is an admitted fact that the
claim of the plaintiff company was repudiated vide
communication dated 29.10.2014 ExPW1/17 which
read as under:-
” …. Kindly refer to your letter dated 25.09.2014
regarding clarification in above mentioned claim
against our letter dt 08.09.2014. 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
surveyor.
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 the
inconvenience caused to you and assure you that
all care has been taken to arrive at the aboveKLJ Resources Ltd Date of Judgment 30.07.2025 (Page 57 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
conclusion, keeping the best Interest of clients and
the company in mind…”
109. The aforesaid repudiation communication
ExPW1/17 is making it clear that the claim of the
plaintiff company was scrutinized vis-a-vis terms and
conditions of the policy issued in addition to the report
of the surveyor and it was categorically stated that the
shortage was not due to marine peril hence, there is no
liability under the policy. 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 loss suffered by the plaintiff company was not
caused by any marine peril and ordinary leakage or
loss in weight or volume are excluded from the
Insurance Cover. It is true that the repudiation
communications ExPW1/17 is silent in referring to
theInstitute Cargo Clause (A) ExDW2/A explicitly but
in pith and substances the claim was repudiated by the
defendant company on the grounds that the loss was
not caused due to any marine peril and ordinary or
operational loss is not covered under the insurance
policy. Therefore, the contention of the Ld. Counsel
for the plaintiff company would not help him much
and no benefit of the said judgment can be extended to
the plaintiff company.
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 58 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
110. 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.
111. In view of my aforesaid discussion, I am of the
considered opinion that the defendant company has
been able to establish that the loss suffered by the
plaintiff company was merely an operational loss and
it was not caused due to any marine peril during the
voyage of the consignment and it might have occurred
due to the handing of the material for which the
defendant company cannot be held liable. Thus, this
Court does not find any fault in repudiating the claim
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 59 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)
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.
4 is answered accordingly.
Issue no. 5
In case if issue no. 4 is decided in affirmative,
whether the plaintiff is entitled for any interest, as
asked for in the plaint? (OPP).
112. In view of my findings on issue no 4 , the
question of awarding any interest does not arise. This
issue is also disposed off accordingly.
Issue No.6. Relief
113. In view of my findings on the issue no. 4, the
present suit of the plaintiff company is hereby
dismissed.
114. There is no order as to costs.
115. File be consigned to record room, as per rules.
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2025.07.30
17:10:46 +0530
(Rajesh Kumar Goel)
District Judge (Commercial)-02
Central, Tis Hazari Courts
30.07.2025
Announced in the Open Court
today i.e: 30.07.2025
KLJ Resources Ltd Date of Judgment 30.07.2025 (Page 60 of 60 )
Vs Oriental Insurance Co. Ltd (825/2023)