Insurance broker's alleged negligence caused higher premium loss; National Commission dismissed complaint as involving disputed questions beyond its purview. Supreme Court held dismissal premature; notice should have been issued and pleadings considered before relegating complainant to civil court.
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[2008] 1'~1 S.C.R. 309
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PUNJ LLOYD LIMITED
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CORPORATE RISKS INDIA PVT. LTD.
(Civil Appeal No.1026 of 2007)
DECEMBER 11, 2008
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[T ARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.]
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Consumer Protection Act, 1986 - ss. 21 and 12 - Complaint under - Dismissal in limine - National Commission relegating complainant to approach civil court c before issuing notice to respondent and without prima facie. going into meiits of the case - Grounds for rejection being contentious disputes and questions in the CO!J1plaint - Justification of - Held: Not justified - Decision of Commission was premature - It ought to have issued. notice to respondent o· and placed pleadings on record and then form opinion as to nature and scope of enquiry - Thus, order of Commission set aside.
The question which arose for consideration in this appeal is whether the National Consumer Disputes E Redressal Commission was justified in dismissing the complaint in limine without issuing any notice to the respondent and prima facie going into the merits of the case on the ground that the appellant had raised disputed questions and contentions which were beyond the F purview of the Commission.
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Allo~ing the appeal and remitting the matter, the Court
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HELD: 1.1. The decision arrived at by the G Commission is premature. The Commission ought to have issued notice to the respo'ndent .and placed the pleadings on record. When pleadings of both the parties were made available before the Commission, only then
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SUPREME COURT REPORTS
(2008] 17 S.C.R.
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A the Commission should have formed an opinion as to the nature and scope of enquiry, i.e., whether the facts which arose for decision on the basis of the pleadings of the parties required a detailed and complicated investigation of facts which was incapable of being undertaken in a B summary and speedy manner, then only the Commission should have justifiably formed an opinion on the need of relegating the complaint to a civil court. That apart, in view of the admitted fact that the respondent was never served with any notice and not present before the c Commission, therefore, it was not known to the Commission, what would be the defence and contentions of the respondenf and what questions and disputes would really arise threfrom util and unless both sides place their respective cases before the 0Commission.Atthatstage 1 , it is difficult for the ComR1ission also to hold whett1er the disputed questions and contentions could not be decided by the Commission and the same must be relegated to the Civil Court. [Para 15] [319-F-H; 320-A-C]
E 1.2. Every complaint of the consumer is related to a dispute and wilf raise diputed questions and contentions . .. If there was no dispute, then there would be I no complaint. From a look at the statements made in the complaint, it would be difficult 1 to say that the complaint F has disclosed complicated questions of fact which cannot be gone into by the Commission and the same can. only be gone into by the Civil C9urt before bringing the respondent on record and asking him to file his defence. Therefore, the ground for rjection of the complaint G namely, "it arises disputed questions and contentions" was definitely irrelevant. In any', view of the matter, it is not evident from the order of the Commission that it had considered the nature of dis~uted questions of fact for which the complainant should be relegated to the Civil Court for decision. Thus, the Commission was; not
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PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 311 PVT. LTD.
justified in rejecting the complaint merely by stating that A the complicated nature of fact and law did not warrant any decision on its part before even issuing notice to the respondent and directing the filing of his defence, which cannot be said to be decisive. The decision of the Commission is set aside and the complaint is sent back B · to the Commission to be heard afresh. [Paras 15 and 16] (319-F-H; 320-A-F]
CCI Chambers Coop. HSG, Soci~ty Ltd. vs. Development Credit Bank Ltd. (2003) 7 SCC 233 and Dr. J.J. Merchant and others vs. Shrinath Chaturvedi (2002) 6 SCC C 635, Relied on
Synco Industries vs State Bank of Bikaner & Jaipur and Others (2002) 2 SCC 1, Referred to
I Case Law Reference: D (2002) 2 sec 1 Referred to Para 10 (2003) 1 sec 233 Relied on Para 15 (2002) 6 SCC 635 Relied on Para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1026 of 2007.
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. From the final Judgment and Order dated 14.9.2006 of the National Consumer _Disputes Redressal Commission in Consumer Complaint No. 81 of 2006.
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P.S. Narasimha, Ashish Aggarwal, L. Roshmani, Mandakini Sharma and Vinoo Bhagat for the Appellant.
Ranjit Kumar, Bimal Roy Jad, B.K. Khurana and Sunita Pandit for the Respondent.
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The Judgment of the Court was delivered by
TARUN CHATTERJEE, J. 1. This appeal is directed against the final order dated 14th of September, 2006 of the National Consumer Disputes Redressal Commission (hereinafter referred to as the "Commission") at New Delhi in H
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A Consumer Complaint No 81 of 2006 whereby, the Commission had dismissed the complaint in limine without giving notice to the respondent on the ground tha.t the appellant had raised disputed questions and contentions which were beyond the - purview of the Commission.
The appeOant is an engineering construction company serving customers in the hydrocarbon and infrastructure sectors C in the global markets, delivering projects and services in pipelines, tankage etc. The appellant was awarded a contract in the Uran - Trombay Pipeline Project with the Oil and Natural Gas Corporation of India. The contract of the appellant with the Oil and Natural Gas Corporation o~ India obliged the appellant to arrange for insurance covering risks during the construction 0 process in the project. There are pnly a few insurers and reinsurers competent and willing to undertake such risks according to the knowledge of the :appellant.
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. 4. On 19th of August, 2005 the appellant had written to the
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PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 313 PVT. LTD. [TARUN CHATTERJEE, J.]
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Oriental Insurance Company Ltd. admitting that the premium A amount would be paid to it. Thereafter on 25th of August 2005, the appellant confirmed the appointment of the Oriental Insurance Company as its lead insurer through a letter addressed to the same. The Insurance Company then replied back on the same date stating that the quote submitted by it B was valid only till 26th of August, 2005 and that the premium to be paid must be remitted without delay. The appellant received the said letter on 29th of August, 2005, three days after the expiry of the quote and hence immediately communicated the lapse of the insurance company to the respondent. The c respondent then came to the office of the appellant on 29th of August, 2005, and assured the appellant that the quote was still valid, in turn, asking· the appellant to ·forward a letter to the Oriental Insurance Company mentioning about the acceptance of its offer along with the provisional premium. The appellant D immediately handed over the Oriental Insurance Company's letter dated 25th of August 2005, and another letter dated 29th of August 2005 on behalf of the appellant to the insurance company along with a cheque bearing No. 367340 towards the provisional premium of Rs. 25 lacs thereby reconfirming its E mandate, to the Director of the respondent company for submission to the Oriental Insurance Company. The Respondent, by its letter dated 31st of August 2005, informed the appellant that it had forwarded the letter dated 29th of August 2005, written by the appellant for the insurance F company along with the premium, to the said insurance company. On 1st of September 2005, the appellant received a letter from the Oriental Insurance Company informing them that the policy had been rejected as the given deadline had not been adhered to and that the sum of Rs.25 lacs was held by the insurance company as a deposit and not as a premium.G Consequent upon the expiry of the Oriental Insurance Company's quote, the appellant had to set out for obtaining a fresh quote. The best quote available at that moment was the one that was offered to them by ICICI Lombard General
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[2008] 17 S.C.R.
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A Insurance Company Ltd. but at a: much higher premium. The appellant had no other option but to take the quote offered at Rs. 11,4004967. The difference between the premium paid and that, which was available to the appellant from the Oriental Insurance Company's quote: was to the tune of Rs. B 5,26,70,654. Thus aggrieved, te complainant wrote to the resP.ondent on 25th of Octoper 2005, bringing to the rspondent's notice of its breaches and the resultant losses and therefore seeking due fulfillment of these losses within a period of 30 days. There was no response on the part of the c respondent and, therefore, the appeHant again forwarded a letter to the respondent on 1st of December 2005, seeking a clarification whether the respondent had notified a claim under its professional indemnity policy. The appellant received no response to this letter either. LJltimately the appellant filed a complaint under section 12 and section 21 of the Consumer 0 Protection Act, 1986 (herein after referred to as the "Act") before the Commission pertaining to loss suffered on account of the respondent's negligence, incompetence and deficiency in sel'Vice. The Commission, by its impugned order dated 14th of September, 2006, dismissed the complaint of the appellant E in limine on the ground that it involved disputed questions and contentions which were beyond the purview of the Commission.
· 6. T~e pivotal qLJ_estion that needs to be decided while dealing with this appeal is, ,whether the Commission was justified in· dismissing the complaint in limine on the ground that the case involved disputes and questions which were G contentious before issuing ahy notice to the respondent and without even prima facie gok1g into the merits of the case.
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PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA PVT. LTD. [TARUN CHATTERJEE, J.]
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"Considering the disputed questions and the contentions which are sought to be raised by the complainant, in our opinion, this complaint is not required to be dealt with under the Consumer Protection Act, 1986. Hence, the complaint is not entertained.
However, it is made clear that it would be open to the complainant to approach the Civil Court or any other Authority for redressal of their grievances, as advised.
We make it clear that this complaint was filed on 24.8.2006 before this Commission and some time was taken for deciding the same. If there is any delay, it would be open to the complainant to file proper application for condonation of delay on the basis that the matter was pending before this Commission. The complaint stands disposed of accordingly." (Emphasis supplied)
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appellant was seriously disputed by Mr. Ranjit Kumar, learned senior counsel appearing for the respondent. According to Mr.
1 t. Having considered the rival .submissions of the counsel appearing for the parties and after goirig through the complaint H in detail and after taking into consideration the decisions noted
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PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA PVT. LTD. [TARUN CHATTERJEE, J.]
hereinabove, we are of the opinion that the submissions ,of Mr. A. Narasimha must be accepted.
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"It cannot be denied that fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural G justice, taking care of such grievances as are amenable to the jurisdiction of the fora established under the Act. These fora have been established and conferred with the jurisdiction in addition to the conventional courts. The principal object sought to be achieved by establishing such H
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"A three-Judge Bench of this Court recently in Dr. JJ. Merchant Case, (2002) 6 SCC 635,. specifically dealt with the issue as to the guidelines which would determine the _ matter being appropriately dealt with by a forum under the Act or·_ being left to be heard or decided by a Civil Court. D ..... The decisive test is not the complicated nature of questions of fact and law arising for de9i~ion. The anvil on which entertainability of a complaint by a forum under the Act is to be determined is whether the questions, though complicated they may be, are capable of being E determined by summary enquiry i.e. by doing away with the need of a detailed and complicated method of - recording evidence. It has to be remembered that the fora under the Act at every leve! are headed by experienced F who is persons. The National Commission is headed by a person • or has been a Judge I of the Supreme Court. The . . • State Commission is headed by a person who_ is or· has been a Judge of a High Court. Each District Forum is - headed by a person who is, 1 or has been, or is qualified to _ be a District Judge. We do not think that mere G complication either of facts, or of law can be a ground for the denial of hearing by a forum under the Act. 11 (Emphasis supplied). 1 I
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PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 319 PVT. LTD. [TARUN CHATTERJEE, J.]
be decided in summary proceedings, also held as under:-
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"It was next contended that such complicated questions of fact cannot be decided in summary proceedings. In our view, this submission also requires to be rejected because under· the Act, for summary or speedy trial, B exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that the Commission or Forum is required to have summary trial, would hardly be_ a ground for directing the consumer to approach the civil court. For the trial to be just and reasonable, long-drawn delayed c procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that the legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed D on such ground. It would be a totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of facts are required to be dealt with or decided. The Act provided sufficient safeguards." (Emphasis supplied). E
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320 SUPREME COURT REPORTS
(2008] 17 S.C.R.
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A need of relegating the complaint to a civil court. That apart, in view of the admitted fact that the respondent was never served with any notice and not present before the Commission, therefore, it was not known to the Commission, what would be the defence and contentions of the respondent and what Bquestions and disputes would really arise therefrom until and unless both sides place their r~spective cases before the Commission. At that stage, it is ,difficult for the Commission also to hold whether the disputed questions and contentions could not be decided by the Commission and the same must cbe relegated to the Civil Court. Every complaint of the consumer
is related to a dispute and will raise disputed questions and CC?ntentions. If there was no dispute, then there would be no complaint. Therefore, the ground for rejection of the complaint namely' "it arises disputed questions and contentions" was Ddefinitely irrelevant. Therefore, the Commission was not justified in rejecting the complaint only on 'this ground. I In any view of the matter, it is not evident from the order of the Commission that it had considered the nature.of ~isputed questions of fact for which the complainant should be relegated to the Civil Court Efor decision. In view of our discussions made hereinabove and relying on the principles en'unciated by this Court in the aforesaid decisions, we are, therefore, of the view that the Commission was not justified in 1 rejecting the complaint merely by stating that the complicated·nature of facts and law did not warrant any decision on its part before even issuing notice· to F the respondent and directing the filing of his defence, which, in our opinion, cannot be said to be decisive.
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N.J. Appeal partly, allowed Matter remitted back.
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1 issue framed by the court
Whether the National Commission could dismiss a consumer complaint in limine on the ground of disputed questions without issuing notice to the respondent or prima facie examining merits.
Colour shows how this judgement treated each authority
CCI Chambers Coop. HSG. Society Ltd. vs. Development Credit Bank Ltd.Relied on¶15
(2003) 7 SCC 233 · Who else cites this
Dr. J.J. Merchant and others vs. Shrinath ChaturvediRelied on¶15
(2002) 6 SCC 635 · Who else cites this
Synco Industries vs State Bank of Bikaner & Jaipur and OthersReferred¶10
(2002) 2 SCC 1 · Who else cites this
2 provisions across 1 enactments
Punj Lloyd Limited
Corporate Risks India Pvt. Ltd.
Tarun Chatterjee
Harjit Singh Bedi
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
