In a significant development, the Delhi High Court issued a ruling in the case involving Delhi Industrial Corporation and National Insurance Company Ltd, emphasizing the importance of pre-institution mediation for swift resolution of insurance claim disputes. The decision sheds light on the process of mediation in commercial cases, aiming to streamline legal proceedings and promote amicable resolutions. Stay informed on the key insights from this case.
Facts
- Plaintiff availed a Standard Fire and Special Peril Policy from National Insurance Company Ltd for the period 8th May, 2018 till 7th May, 2019.
- Allegation of deliberate delay by the Surveyor in submitting the report to the Defendant.
- Plaintiff stored goods in a godown in New Delhi and obtained the insurance policy to cover the risk.
- Surveyor failed to share loss assessment and survey report with the Plaintiff, leading to Plaintiff obtaining the information through RTI.
- Claim for recovery of Rs. 3,40,92,720/- including interest @ 15% p.a. filed by Delhi Industrial Corporation.
- Delay in processing the claim by the Defendant insurance company despite timely notification.
- Fire outbreak in a truck parked outside the Plaintiff’s godown causing substantial loss to stocked goods.
- Request for withdrawal of the suit to invoke pre-institution mediation as per Section 12A of the Commercial Courts Act, 2015.
- Section 12A of the Commercial Courts Act, 2015 utilized by the Plaintiff for the case.
- Plaintiff engaged in import and export of synthetic and natural rubber products.
- Submission of the surveyor’s report by the Plaintiff.
Analysis
- The Delhi High Court Legal Services Committee issued a report on 12 March, 2024 stating that the mediation had not progressed.
- The opposite party did not show willingness to participate in the pre-institution mediation despite multiple opportunities.
- The suit filed by the plaintiff is at risk of failure due to the lack of pre-suit mediation initiation.
- Permission is granted to the plaintiff to withdraw the suit, with the option to file a fresh suit on the same cause of action after engaging in pre-suit mediation as per Section 12A of the Act.
- The plaintiff’s exemption application for not filing dim copies of documents is granted considering the withdrawal of the suit and the possibility of refiling.
- The plaintiff is directed to receive a refund of 75% of the Court fees immediately.
- The coverage for exemption has been extended, subject to exceptions.
- The opposite party is not showing willingness to participate in the pre-institution mediation proceedings.
- This observation indicates a lack of cooperation or interest from the opposite party.
- The prima facie assessment suggests a reluctance on the part of the opposite party to engage in mediation.
Decision
- Pre-institution mediation file to be treated as non-starter as per notification dated 03.07.2018 by Department of Legal Affairs, Govt. of India.
- Replication by Plaintiff to be filed along with affidavit of admission/denial of documents of Defendant.
- Process Fee to be filed for issuance of summons to Defendant in the suit through all modes.
- Written statement to be filed within 30 days along with affidavit of admission/denial of Plaintiff’s documents.
- Parties allowed to seek and provide inspection of documents within timelines.
- Unjustifiable denial of documents may lead to imposition of costs on the denying party.
- Similar suit pending under CS(COMM) 358/2021.
- Application disposed of, cancelling next dates before the Court and Joint Registrar (Judicial).
Case Title: DELHI INDUSTRIAL CORPORATION Vs. NATIONAL INSURANCE CO LTD (2024:DHC:3716)
Case Number: CS(COMM)-359/2024
