Applicability of Provisions of Limitation Act 1963 on insurance claims

As you are aware that the maxim 'ignorantia juris non-excusat,' or 'ignorance of the law is no excuse,' implies that the Court presumes that every party is aware of the law and hence cannot claim ignorance of the law as a defense to escape liability. This Latin maxim and its wide legal spillovers belong to the common law system.

The law of limitation finds its root in the maxims "Interest Reipublicae Ut Sit Finis Litium" which means that in the interest of the state as a whole there should be a limit to litigation and "vigilantibus non dormientibus Jura subveniunt" which means the law will assist only those who are vigilant with their rights and not those who sleep upon it. The law of limitation specifies the statutory time frame within which a person may initiate a legal proceeding or a legal action can be brought. If a suit is filed after the expiry of the time prescribed it will be barred by the Limitation. It means that a suit brought before the Court after the expiry of the time within which a legal proceeding should’ve been initiated will be restricted.

IT MEANS THAT 

The period of limitation is three years for a suit on a policy of insurance when the Sum Assured is payable after proof of death has been given to or received by the insurers. The limitation runs from the date of death of the deceased , or where the claim on the policy is denied , either partly or wholly , the limitation starts from the date of such denial.

On maturity of insurance policy, the period of limitation shall also be three years from the date of maturity.

DEATH CLAIMS

Article 44(a) governs the period of limitation in case of death claims is three years and period will start from the date of death of the deceased or where claim on the policy is denied either partly or wholly the date of such denial.

THE COURT HAS INTERPRETED AS FOLLOWS’ " Time from which period begins to run", it is stated "the date of death of the deceased or where claim on policy is denied either partially or wholly , the date of such denial". An interpretation of the above clause put forward to the effect that irrespective of the date of intimation of the death , a fresh period of limitation will start from the date of repudiation of the claim.

Such interpretation will render the entire provision regarding limitation capable of circumvention and may lead to fraud. In a case where the claim can be squarely repudiated on ground of suppression of material facts, the claimant may deliberately delay lodging the claim so that investigation is rendered difficult and on denial he may get fresh period of limitation.

PLEASE NOTE THAT

The fundamental principle in regard to limitation is that it always implies an existing cause of action. Limitation does not begin to run unless the cause of action for suit has arisen.

Similarly, once time has begun to run , it would not be suspended for any reason other than those specified in the Act itself in Section 9 of Limitation Act, 1963.

SECTION 9- CONTINUOUS RUNNING OF TIME

Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it:

Provided that, where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues.

After expiry of period of limitation , the remedy is barred both by virtue of Section 3 of Limitation Act and Section 9 of Civil Procedure Code, 1908.

SECTION 3 OF LIMITATION ACT, 1963

Bar of limitation.—(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defense.

(2) For the purposes of this Act,—

(a) a suit is instituted,—

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and (iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted—

(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;

(ii) in the case of a counter claim, on the date on which the counter claim is made in court;

(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court.

SECTION 9 OF CIVIL PROCEDURE CODE, 1908

The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.

• Explanation I- A suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies.
• Explanation ll- For the purposes of this section, it is immaterial whether or not any fees are attached to the office referred to in Explanation I or whether or not such office is attached to a particular place.]

STATE AMENDMENTS

Maharashtra– After section 9 insert the following section 9A.

"9A. Where at the hearing of application relating to interim relief in a suit, objection to jurisdiction is taken such issue to be decided by the court as a preliminary issue:-

(1) Notwithstanding anything contained in this code or any other law for the time being in force, if at the hearing of any application for granting or setting aside an order granting any interim relief, whether by way of stay, injunction, appointment of a receiver or otherwise, made in any suit, on objection to jurisdiction of the court to entertain such suit is taken by any of the parties to the suit the court shall proceed to determine at the hearing of such application the issue as to the jurisdiction as a preliminary issue before granting for setting aside the order granting the interim relief. Any such application shall be heard and disposed of by the court as expeditiously as possible and shall not in any case be adjourned to the hearing of the suit.

(2) Notwithstanding anything contained in sub-section (1), at the hearing of any such application the court may grant such interim relief as it may consider necessary, pending determination by it of the preliminary issue as to the jurisdiction".

[Vide Maharashtra Act No. 65 of 1977, sec. 3 (w.e.f. 19-12-1977)].

CONCLUSION

The Act does not always fix the starting point of limitation from the time cause of action arises. In many articles it does not mentioned , but in many others, it gives different dates apart from the cause of action.

Under First Part of the Clause in Column 3 of Article 44(a) , the period of limitation (given three years) begins to run from the date of the deceased , and remedy is barred after the expiry of period of three years, subject to the latter part of the Column 3 , which would only mean that if the claim is pending before the remedy is barred by the first part, fresh period will starts from the date of repudiation or denial of the claim. The object of latter part cannot to be revival of claim , which is already barred by limitation but to but to extend the period of limitation of claims preferred before the expiry of the period prescribed by the first part. If not so , the first part will have not application in any case and it is devoid of any meaning , for a suit is always filed not on mere death of the life assured but only when the claim is denied.

As two parts of the clause will have to be so construed so as to be in harmony, the reasonable interpretation of the clause is that the latter part will not apply unless claim has been preferred before expiry of the period prescribed by the first part , namely , three years from the date of death, when once the claim is so preferred , and the claim is denied , say at the end of fours years , a fresh limitation will starts from the date of denial.