REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1026 OF 2007
Punj Lloyd Limited .....Appellant
Versus
Corporate Risks India Pvt. Ltd. ....
Respondent
JUDGMENT
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 Consumer
Complaint No 81 of 2006 whereby, the Commission
had dismissed the complaint in limine without giving
notice to the respondent on the ground that the
appellant had raised disputed questions and
contentions which were beyond the purview of the
Commission.
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2. The relevant facts as emerging from the case made out
by the appellant have been mentioned in a nutshell:
The appellant is an engineering construction company
serving customers in the hydrocarbon and infrastructure
sectors 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 of India obliged the appellant to arrange for
insurance covering risks during the construction process in
the project. There are only a few insurers and re-insurers
competent and willing to undertake such risks according to
the knowledge of the appellant.
3. The respondent is a company registered with the
Insurance Regulatory and Development Authority and is an
insurance and re-insurance broker which had approached
the appellant in August 2005, explaining that it had the
competence and expertise to arrange the specialized and
high-priced insurance and re-insurance cover required for
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the Uran-Trombay Pipeline Project. The appellant thereupon
based upon the assurance of the respondent, appointed it as
its insurance broker for arranging the desired insurance/re-
insurance for the project. The respondent, by a letter dated
17th of August, 2005, conveyed to the appellant that it had
short-listed the Oriental Insurance Company Ltd. and the
premium for the requisite insurance would be US $
1,369,128.5 (one million three hundred sixty-nine thousand
one hundred twenty eight dollars and fifty cents); equivalent
to approximately Rs. 6.16 crores, plus service tax.
4. On 19th of August, 2005 the appellant had written to
the Oriental Insurance Company Ltd. admitting that the
premium 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 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,
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2005, three days after the expiry of the quote and hence
immediately communicated the lapse of the insurance
company to the respondent. The 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
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 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 company along with the premium, to the said
insurance company. On 1st of September 2005, the appellant
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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. 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 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. 5,26,70,654. Thus
aggrieved, the complainant wrote to the respondent on 25th
of October 2005, bringing to the respondent’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 respondent and,
therefore, the appellant again forwarded a letter to the
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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. Ultimately the appellant filed a
complaint under section 12 and section 21 of the Consumer
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 service. The Commission, by its impugned
order dated 14th of September, 2006, dismissed the
complaint of the appellant in limine on the ground that it
involved disputed questions and contentions which were
beyond the purview of the Commission.
5. Being aggrieved by the order of the Commission, the
appellant has preferred this statutory appeal before this
Court under the Act.
6. The pivotal question 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
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contentious before issuing any notice to the respondent and
without even prima facie going into the merits of the case.
7. Before we proceed further to decide the aforesaid
question, it would be appropriate to quote the impugned
order of the Commission which is as follows:
“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)
8. We have heard the learned counsel appearing on behalf
of the parties and perused the materials on record. In our
view, the Commission was not justified in rejecting the
complaint of the appellant in limine without issuing notice to
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the respondent and before allowing him to place his defence
before it. Reasons are stated as under :-
9. Mr. P.S. Narasimha, learned counsel appearing for the
complainant-appellant submitted, relying on a judgment of
this Court in the case of CCI Chambers Coop. HSG.
Society Ltd. Vs. Development Credit Bank Ltd. [(2003) 7
SCC 233], that the decision arrived at by the Commission
was pre-mature in view of the fact that before issuing any
notice to the respondent and before taking pleadings of both
the parties on record, the Commission could not have
formed an opinion as to the nature and scope of the enquiry,
i.e., whether the questions arising for decision in the light of
the pleadings of the parties required a detailed and
complicated investigation into the facts which were
incapable of being undertaken in a summary and speedy
manner. Mr. Narasimha further argued that the
Commission ought to have justifiably formed an opinion on
the need of driving away the complainant to the civil court
which could only be done after the pleadings of both the
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parties were placed before the Court. Accordingly,
Mr.Narasimha contended that the matter must be sent back
to the Commission to issue notice on the respondent to
place their defence before it and thereafter to form an
opinion as to whether the Commission would be justified in
entertaining the complaint of the appellant.
10. This submission of the learned counsel for the
appellant was seriously disputed by Mr. Ranjit Kumar,
learned senior counsel appearing for the respondent.
According to Mr. Ranjit Kumar, the Commission was fully
justified in relegating the appellant to approach the civil
court on consideration of the disputes raised by the
appellant in the complaint itself. He further submitted that
the disputes raised by the appellant would show that the
nature and scope of the complaint would require a detailed
and complicated investigation into the facts, which was
incapable of being undertaken in a summary and speedy
manner. In support of this submission, he relied on two
decisions of this Court one of which is Synco Industries Vs.
State Bank of Bikaner & Jaipur and Others [(2002) 2
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SCC 1]. Relying on this decision of this Court, learned
senior counsel for the respondent contended that even
before issuing any notice, it was open to the Commission to
look into the statements made in the complaint for the
purpose of coming to a finding that pleadings made in the
complaint would require thorough investigation of facts for
which evidence had to be led which could not be decided in
a summary manner and for which civil court should be
approached. The other decision relied on by him, is the
decision reported in Dr. J.J. Merchant and others Vs.
Shrinath Chaturvedi [(2002) 6 SCC 635]. Accordingly, he
contended that this Court may not interfere with the
impugned order of the Commission even in the exercise of
its statutory power under the Act.
11. Having considered the rival submissions of the counsel
appearing for the parties and after going through the
complaint in detail and after taking into consideration the
decisions noted hereinabove, we are of the opinion that the
submissions of Mr. Narasimha must be accepted.
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12. In our view, as already observed, the Commission was
not justified in relegating the complainant/appellant to
approach the civil court for decision only on the ground that
the complaint disclosed disputed questions and contentions
which is not required to be dealt with under the Act. For this
purpose, we have looked into the statements made in the
complaint in detail and in depth. From a look at the
statements made in the complaint, it would be difficult to
say that the complaint 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 Court before
bringing the respondent on record and asking him to file his
defence. The decisions, relied on by Mr. Ranjit Kumar and
noted namely, Synco Industries’ case (supra) and the
decision in Dr. J.J. Merchant’s case (Supra) were duly
considered by Two-Judge Bench of this Court in CCI
Chambers case (supra) in detail and after considering the
aforesaid two Three-Judge Bench decisions of this Court, as
mentioned herein above, and after explaining the same,
Lahoti, CJ, (as His Lordship then was), held that the nature
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of averments made in the complaint was not by itself enough
to arrive at a conclusion that the complaint raised such
complicated questions as could only be determined by the
Commission. While coming to this conclusion, Lahoti CJ, (as
his Lordship then was), in paragraph 6 of the aforesaid case
in page no. 236 observed as follows:
“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 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 fora is to
relieve the conventional courts of their burden which is
ever-increasing with the mounting arrears and whereat
the disposal is delayed because of the technicalities.
Merely because recording of evidence is required, or
some questions of fact and law arise which would need
to be investigated and determined, cannot be a ground
for shutting the doors of any forum under the Act to the
person aggrieved.”(Emphasis supplied)
13. Again in paragraph 7 of the aforesaid decision, it was
observed:
“A three-Judge Bench of this Court recently in Dr. JJ.
Merchant Case, (2002) 6 SCC 635, specifically dealt
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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. …..The decisive test is not the
complicated nature of questions of fact and law arising
for decision. 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 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
level are headed by experienced persons. The National
Commission is headed by a person who is or has been
a Judge 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, or has been, or is qualified to be a District
Judge. We do not think that mere complication either of
facts or of law can be a ground for the denial of hearing
by a forum under the Act.”(Emphasis supplied).
14. In Dr. JJ Merchant’s case (supra), this Court, dealing
with the contention that complicated questions of fact
cannot be decided in summary proceedings, also held as
under :-
“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,
exhaustive procedure in conformity with the principles
of natural justice is provided. Therefore, merely because
it is mentioned that the Commission or Forum is13
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 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 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).
15. Following the aforesaid observations of this Court as
quoted herein-above, in the aforesaid decision of CCI
Chamber’s case (supra) and also the observations in Dr.
JJ Merhant’s Case (supra) which have been noted herein-
above, we are of the view that the decision arrived at by the
Commission is premature. The Commission ought to have
issued notice to the respondent and placed the pleadings on
record. When pleadings of both the parties were made
available before the Commission, only then 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
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the basis of the pleadings of the parties required a detailed
and complicated investigation of facts which was incapable
of being undertaken in a 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 Commission, therefore, it was not known
to the Commission, what would be the defence and
contentions of the respondent and what questions and
disputes would really arise therefrom until and unless both
sides place their respective 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 be
relegated to the Civil Court. Every complaint of the
consumer is related to a dispute and will raise disputed
questions and contentions. If there was no dispute, then
there would be no complaint. Therefore, the ground for
rejection of the complaint namely, “it arises disputed
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questions and contentions” was definitely irrelevant.
Therefore, the Commission was not justified in rejecting the
complaint only on this ground. In any view of the matter, it
is not evident from the order of the Commission that it had
considered the nature of disputed questions of fact for which
the complainant should be relegated to the Civil Court for
decision. In view of our discussions made hereinabove and
relying on the principles enunciated by this Court in the
aforesaid decisions, we are, therefore, of the view that the
Commission was not justified in 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 the respondent and directing the filing of
his defence, which, in our opinion, cannot be said to be
decisive.
16. The appeal is, therefore, allowed to the extent indicated
above. The decision of the commission is set aside. The
complaint is sent back to the Commission to be heard afresh
in consistent with the observations made above. There will
be no order as to costs.
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………
……………J.
[Tarun
Chatterjee]
New Delhi; ............
............J.
December 11, 2008 [Harjit Singh
Bedi]
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