[2008] 1'~1 S.C.R. 309 PUNJ LLOYD LIMITED … "' v. CORPORATE RISKS INDIA PVT. LTD. (Civil Appeal No.1026 of 2007) DECEMBER 11, 2008 [T ARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.]
-· -r 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 _JI
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.
Allo~ing the appeal and remitting the matter, the Court 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 (2008] 17 S.C.R. 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 th~refrom u~til and unless both sides place their respective cases before the 0 Commission. At that stage , 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] 1.2. Every complaint of the consumer is related to a
dispute and wilf raise di~puted questions and contentions .. If there was no dispute, then there would be 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 r~jection 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 …. -t PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA
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 Case Law Reference: (2002) 2 sec 1 (2003) 1 sec 233 Referred to Relied on Para 10 Para 15 (2002) 6 SCC 635 Relied on Para 15 CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1026 of 2007. . From the final Judgment and Order dated 14.9.2006 of the National Consumer _Disputes Redressal Commission in Consumer Complaint No. 81 of 2006. 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. 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 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. 2. The relevant facts as emerging from the case made out by the appellant have been mentioned in a nutshell: 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 process in the project. There are pnly 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 E Insurance Regulatory and Develdpment 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- F 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
1dated 17th of August, 2005, conveyed to the appellant that it had short-listed the Oriental Insurance Company Ltd. and th~ premium for the requisite G insurance would be US $ 1,369, 128.5 (one million three
hundred sixty-nine thou·sand one hundred twenty eight dollars and fifty cents}; equivalent to apRroximately Rs. 6.16 crores, plus service tax. . 4. On 19th of August, 2005 the appellant had written to the ..,_
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA PVT. LTD. [TARUN CHATTERJEE, J.] 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 t'
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
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 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, t~e complainant wrote to the resP.ondent on 25th of Octoper 2005, bringing to the r~spondent'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
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. 5. Being aggrieved by th~ order of the Commission, the
appellant has preferred this statutory appeal before this Court F under the Act. · 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. 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: PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA PVT. LTD. [TARUN CHATTERJEE, J.] "Considering the disputed questions and the contentions A
r-<1 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 B 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 c 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 E 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 F 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 G decision in the light of the plead.ings 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 H [2008) 17 S.C.R. A 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 B 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. · C 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 0 require a detailed and complic~ted 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 SCC 1]. E 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 F 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 [(20d2) 6 SCC 635]. Accordingly, he G 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.
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 PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA
PVT. LTD. [TARUN CHATTERJEE, J.] hereinabove, we are of the opinion that the submissions ,of Mr. A. r … 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 c 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 D considered by Two-Judge Bench of this Court in CCI Chambers case (supra) in detail and after considering the aforesaid two -4-
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 E 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 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 ·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 1of 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. 11 (Emphasis supplied) 13. Again in paragraph 7 of the aforesaid decision, it was ct-·~ c observed:
"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. ….. 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
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
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, 1 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 ca 1se (supra), this Court, dealing with the contention that compli?ated questions of fact cannot -'f' PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA
PVT. LTD. [TARUN CHATTERJEE, J.] 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 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 _J 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 F 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 G 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 H (2008] 17 S.C.R. 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 B questions 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
c be 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 D 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 ~isputed questions of fact for which the complainant should be relegated to the Civil Court E for 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
1rejecting 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 G 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.
-"f N.J. Appeal partly, allowed Matter remitted back. .,;;._