The Union ministry of consumer affairs spends huge amounts on advertisements aimed at educating consumers about their rights. The campaigns either do not send out the right messages or they do not reach those who need it the most. I refer here particularly to the time limit of two years provided under the Consumer Protection Act for consumers to file a complaint. Lack of awareness about this “limitation period” has led to consumers being denied the right to redress.

There’s another important aspect as far as the law of limitation is concerned. It pertains to what is known as the “cause of action” that gives rise to the complaint. Since the limitation period of two years is to be calculated from the date on which the cause of action arises, there is a lot of debate over what constitutes the cause of action.

In the case of Manipal Soubhagaya Nidhi Ltd vs Ms Prabhu, for example, the apex consumer court held that depositors filing complaints about non-refund of deposits should calculate two years from the date the deposits matured. The lower consumer courts on the other hand were of the view that if a person who receives the deposit fails to pay it back, it is a “recurring cause of action” for the depositor so long as the NBFC has not denied its liability to pay back the deposit.

Now, in the case of Laxmi Bai and Ors vs ICICI Lombard General Insurance Company and Ors (RP NO 3118 of 2010), the National Consumer Disputes Redressal Commission has rightly held that once a claim is made with the insurance company, the cause of action would continue till the claim is paid or rejected and where it is rejected the cause of action arises from the date of such rejection. Here the lower consumer courts had dismissed the complaints on the ground that the cause of action arose on the date of death and therefore the complaints were time-barred.

The complaints here pertained to insurance claims in respect of a scheme for BPL families launched by the Madhya Pradesh government and 140 claimants — mostly widows — had filed complaints before the consumer court against rejection of their claims by insurance companies. If only the consumers had been aware of the limitation clause, they would not have ended up wasting so much time and money in a long legal battle on the limitation period. Their cases will now be heard by the district forum on merits.