Punj Lloyd Ltd. Vs.
Corporate Risks India Pvt. Ltd. [2008] INSC 2135 (11 December 2008)
Judgment
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
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.
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 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, 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 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
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 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
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. 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 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 State Bank of Bikaner & Jaipur and Others
[(2002) 2 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 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.
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 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 12 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 is 13 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 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 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.
........................J.
[Tarun Chatterjee]
........................J.
New
Delhi;
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