National Consumer Disputes Redressal
M/S. Jiwan Spinners Pvt. Ltd. vs United India Insurance Co. Ltd. on 9 October, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 469 OF 2009 (Against the Order dated 30/10/2009 in Complaint No. 36/2008 of the State Commission Chandigarh) 1. M/S. JIWAN SPINNERS PVT. LTD. Through its Managing Director, Sh. Ashok Singla, Delhi-Sanauli Bye-Pass, Opposite Sector 25, HUDA PANIPAT HARYANA ...........Appellant(s) Versus 1. UNITED INDIA INSURANCE CO. LTD. Through its Regional Manager, Regional Office, SCO No. 123-124, Sector - 17 B CHANDIGARH ...........Respondent(s) FIRST APPEAL NO. 23 OF 2010 (Against the Order dated 30/10/2009 in Complaint No. 36/2008 of the State Commission Chandigarh) 1. UNITED INDIA INSURANCE CO. LTD. Regional Office-1,Kanchenjunga,
Barakhamba Road, NEW DELHI ...........Appellant(s) Versus 1. JIWAN SPINNERS PVT. LTD. Through its Director, Ashok Singla Opposite Sector 25,Delhi Sanoli Byepass PANIPAT HARYANA ...........Respondent(s) BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT FOR THE APPELLANT : FOR M/S JIWAN SPINNERS PRIVATE LTD. : MR. SUSHIL KAUSHIK, ADVOCATE FOR THE RESPONDENT : FOR UNITED INDIA INSURANCE CO. LTD. : MR. RAVI BAKSHI, ADVOCATE MS. SAYMA FEROZ, ADVOCATE MR. MANVENDRA PRATAP SINGH, ADVOCATE Dated : 09 October 2023 ORDER A. P. SAHI, J (PRESIDENT)
1. The present dispute involves an interesting question regarding the territorial jurisdiction of the State Consumer Disputes Redressal Commission at Chandigarh (hereinafter referred to as, 'State Commission') to entertain the claim regarding an incident that took place at Panipat which is in the State of Haryana. The contention on behalf of the Insurance company is that no part of the cause of action arose in Punjab or even in the Union Territory at Chandigarh so as to attract the jurisdiction of the State Commission at Chandigarh. First Appeal No. 23 of 2010 filed by the Insurance Company raises this contention urging that the State Commission, Chandigarh lacked patent jurisdiction.
2. The dispute was noticed earlier in the Order recorded on 28.08.2023 and then subsequently in the Order dated 22.09.2023. The Order dated 22.09.2023 is extracted here as under:
"In these two appeals which are cross appeals one by the complainant and the other by the Insurance Company. A common dispute which needs to be addressed at the outset is of the territorial jurisdiction of the State Consumer Disputes Redressal Commission, UT Chandigarh which according to the learned counsel for the Insurance Company did not have any cause before it to try the said complaint. It is submitted that the complainant was well aware of this territorial jurisdictional issue in as much as, even earlier when he had instituted claim petitions arising out of the insurance claims they were done either in the District Forums or the State Commission of the State of Haryana. Thus, this complaint was filed in Chandigarh with no cause of action having arisen so as to attract the jurisdiction of the Chandigarh State Commission.
This ground was raised by the Insurance Company as is evident from a perusal of the impugned order where in paragraph 14, the State Commission rebutted this argument of the Insurance Company on the ground that the surveyor had received telephonic instructions from the regional office on 28.11.2007 to assess the damage and loss suffered by the complainant and therefore it was apparent that the regional office of the Insurance Company at Chandigarh was directly concerned and linked with the settlement of the claim that was administered by the complainant.
Mr. Ravi Bakshi, learned counsel for the Insurance Company invited the attention of the bench to paragraph 7 and 10 of the judgment of the Apex Court in the case of "Sonic Surgical Vs. National Insurance Co. Ltd., (2010) 1 SCC 135" and submits that keeping in view the provisions of Section 17 (2) (b) mere existence of a branch office of the Insurance Company at Chandigarh or even receiving the telephonic message will not constitute even a part of the cause of action so as to attract the jurisdiction of the State Commission at Chandigarh. It is therefore urged that in the absence of any such nexus between the cause of action in the present case with the regional office at Chandigarh. The jurisdiction could not have been stretched so as to allow the State Commission to proceed with the claim petition. He contends that the judgment in the case of Sonic Surgical (supra) clearly answers this issue and hence the orders of the State Commission is coram non judice and the appeal filed by the Insurance Company namely, FA/23/2010 deserves to be allowed and the claim petition in its entirety should be dismissed setting aside the order of the State Commission for want of jurisdiction.
Learned counsel submits that this is a case of patent lack of jurisdiction which has been erroneously answered by the State Commission keeping in view the law laid down by the Apex Court and the statutory provisions referred to hereinabove. Hence the order of the State Commission is unsustainable. Learned counsel for the complainant submits that the appeal is entertainable in as much as, the regional office was very much directly involved that gave rise to the part of cause of action and hence the contention that this will amount to forum shopping is incorrect.
Learned counsel submits that he will assist the bench on this issue and seeks an adjournment.
Prima facie in the event the said issue is answered either way it will have a direct bearing on the progress of this appeal and therefore the request of the learned counsel for the complainant is accepted.
Since the arguments in this case are continued, let it be listed on 25.09.2023 at 2 p.m."
3. The State Commission while dealing with this issue has recorded the following findings:
"Before we go into the merits of the case, we consider it appropriate to settle the matter regarding territorial jurisdiction of this Commission to deal with the instant complaint as well as other objections raised by the OPs. In the context of territorial jurisdiction, it is clearly to mention that letter dated 24.2.08 written by the surveyors to the OP normally indicates that the surveyors had received telephonic instructions from the Regional Office on 28.11.07 to assess the loss/damaged suffered by the complainant. Thus, it is quite apparent that the Regional Office of OP, which is situated in Chandigarh, was directly concerned and linked with the settlement of the claim of the complainant. Therefore, we find that there is no merit in this preliminary objection taken by the OPs that the Commission does not have any territorial jurisdiction to deal with the present complaint. In this case, it is also pertinent to mention that Section 17(2) of Consumer Protection Act, 1986 is quite clear on this matter."
4. Mr. Ravi Bakshi, learned Counsel for Insurance company relying on the judgment passed by the Apex Court in the case of Sonic Surgical versus National Insurance Company Limited reported in (2010) 1 SCC 135 contends that merely because the Surveyor's engagement through a telephonic message was conveyed by the Regional Office of the Company at Chandigarh, such communication of engagement was neither under challenge nor was an issue or even a fact so as to give rise to a cause of action to the Complainant to lodge the Complaint at Chandigarh. His contention is that the place of suing is to be governed by the Provisions of Section 17(2)(b) of the Consumer Protection Act, 1986 and cannot be a forum convenience at the choice of the litigant. This very statutory provision was considered and interpreted in Sonic Surgical (Supra) by the Apex Court observing that if a Branch Office of an Insurance company located in an area is taken to be a ground to fix the cause of action, then all the State Commissions throughout the country within whose territorial jurisdiction a Branch Office of the Insurance company is situate, will derive jurisdiction. He therefore submits that this would be an absurd proposition to be accepted and if such a conclusion is drawn then the State Commission, Panchkula at Haryana will be denuded of its territorial jurisdiction with regard to Complaints the cause of action whereof is exclusively within that State.
5. The crucial document which has been relied on by the learned Counsel for the Complainant to locate the cause of action at Chandigarh is the letter dated 24.03.2008.
6. The said letter is from the Surveyor addressed to the Divisional Office of the Insurance Company at Panipat, Haryana. This communication informs the Divisional Office that telephonic instructions were received from the Regional Office (which is undisputedly the office located at Chandigarh) on 28.11.2007 whereafter the Surveyor contacted the insured for an appointment to carry out the Survey.
7. It is this document which the learned Counsel for the Complainant Mr. Sushil Kaushik emphasizes upon to contend that a part of the cause of action can be clearly located from the recital of this letter, as the Regional Office had dispatched telephonic instructions appointing the Surveyor to carry out the Survey. The contention therefore is that the exercise of survey was conducted at the instance of the Regional Office and according to the telephonic instructions that emanated from the Regional Office for commencing the work of survey. He submits that since the Surveyor Report which is the foundation of the assessment is an outcome of the said exercise of appointment of the Surveyor by the Regional Office, therefore this is clearly a fact which forms a sequence and forms a part of the bundle of facts taken together so as to construe a part of the same cause of action that can be safely presumed to have arisen at Chandigarh.
8. He then contends that this entire incident and the consequential claim is of the year 2007 and almost 16 years have passed by, as such this issue of territorial jurisdiction should not detain the National Commission to proceed to decide the matter on merits. The contention therefore appears to be that the issue of territorial jurisdiction as raised is not an issue of patent lack of jurisdiction, and even otherwise on facts, since the part of cause of action arose at Chandigarh, therefore the claim should not be negatived at this stage. His contention is that this will compel the Complainant to institute and face another round of litigation before a Forum which has the same jurisdiction as the State Commission at Chandigarh. To buttress his submission he cites the judgment of Ganesh Polytex Limited versus Transport Corporation of India Limited reported in (2000) 10 SCC 418 to urge that the Apex Court, in a case where an alternative remedy was suggested at a belated stage, interfered and set aside the Order of the National Commission relying on an earlier judgment in the case of Amar Jwala Paper Mills (India) versus State Bank of India reported in (1998) 8 SCC 387 . It is therefore the contention on behalf of the Complainant / Appellant that the Appeal filed by the Insurance Company namely First Appeal No. 23 of2010 which raises this issue should be dismissed and the Appeal filed by the Complainant / Appellant namely First Appeal No. 469 of 2009 deserves to be allowed.
9. Responding to the aforesaid submissions, Mr. Ravi Bakshi, learned Counsel for the Complainant submits that a telephonic instruction for the engagement to render services as a Surveyor is an internal arrangement of the Insurance company. He submits that Surveyors can be engaged from any part of the country keeping in view their availability, their expertise and their willingness to carry out the Survey which is not in any way a part of cause of action as the appointment or an engagement of the Surveyor is not in dispute. Even in this case the question is not of settlement of the claim by the Regional Office at Chandigarh which admittedly does not have a pecuniary or territorial jurisdiction to deal with the same. The amount claimed herein cannot be dealt with Regional Office at all. From a perusal of the letter dated 24.03.2008, the Divisional Office was informed by the Surveyor about a telephonic instruction having been received from the Regional Office. Neither any action nor any assessment or even a part of the said exercise was undertaken at the Regional Office.
10. Having heard learned Counsel for the parties, the first fact that emerges on record as pointed out by Mr. Ravi Bakshi, learned Counsel is that the cover note of the policy in a computerized format mentions the duration from 24.02.2007 to 23.02.2008 issued vide receipt dated 22.02.2007 by the Divisional Office (DO), LIC Building, Rajguru Market, Panipat. The premium has also been paid and received at Panipat. Thus the contract of insurance has been concluded at Panipat. The second fact is that the accident (fire) took place at Panipat and its fire report at Panipat. The third is the information sent by the Complainant about the accident vide letter dated 28.11.2007 is addressed to the Divisional Manager at the Divisional Office Panipat. The fourth is the Surveyor report dated 24.03.2008 on which reliance is placed by the Complainant. This letter simply recites that the Surveyor, M/s AK Govil and Associates had received telephonic instructions to contact the insured to proceed for carrying out the survey. There is nothing more so as to presume that the Regional Office had appointed him as a Surveyor, but even assuming that the Surveyor was engaged through the Regional Office, the same is a choice about which information was received by the Surveyor but he submits the report dated 24.03.2008 with this recital to the Divisional Office at Panipat where the claim was staked by the Complainant. The telephonic instruction referred to therein is nowhere a part of the decision making or assessment of loss process by the Regional Office so as to construe a cause of action for instituting the claim at Chandigarh. The fifth document is the letter dated 13.08.2008 written by the Complainant to the Regional Office on the premise as if the Regional Office Chandigarh had to be involved for the assessment. There is nothing on record to show that the said letter establishes a fact to have occurred at Chandigarh that may be construed to be a link in the transaction to give rise to a part of the cause of action.
11. Territorial jurisdiction is clearly ordained by the legislature that cannot be stretched beyond territorial limits through legal gymnastics. There is only one exception to Section 17(2)(b) of the 1986 Act, and that is the power of the National Commission to transfer a case under Section 22(B) (Section 62 in the Consumer Protection Act, 2019) from one State Commission to another, when the transferee Commission can assume jurisdiction to hear a case of a different territorial jurisdiction.
12. None of the documents referred to above and on record do even remotely suggest the existence of a single fact so as to attract the jurisdiction of the Chandigarh State Commission.
13. Coming to the pleadings, the preliminary objection in the written statement at Para 'A', Para 7 and Para 14 of the main Written Statement unequivocally state the issues and also that the Regional Office Opposite Party No.-1 does not have the pecuniary jurisdiction to deal with the complaint. The rejoinder nowhere has been able to contradict this with any evidence except for a bald denial and reiteration of its stand. Thus it is clear that the Regional Office did not even have an iota of contribution in the entire transaction that would give a clue for a cause having arisen within the territorial jurisdiction of the State Commission at Chandigarh. No other pleading or evidence worth the name has been made or adduced to arrive at a different conclusion.
14. There is an interesting argument by Mr. Ravi Bakshi, learned Counsel that the same Complainant for its other insurance disputes had approached the State Commission, Haryana at Panchkula and has produced the copy of the Order passed by the National Commission in Revision Petition No. 1032 of 2012 decided on 22.01.2013. He submits that the Complainant was clearly aware of the jurisdictional issue and inspite of that he has indulged in forum shopping. Be that as it may, the facts of this case leave no room for doubt that the entire cause of action was well within the exclusive jurisdiction of Haryana State Commission and the Complainant for reasons best known to it chose a forum that was coram non judice.
15. Coming to the Impugned Judgment of the State Commission, the finding on this issue is contrary to the law laid down in Sonic Surgical (Supra) which has been correctly dealt with by this Commission in First Appeal No. 1383 of 2017, M/s Medanta the Medicity and Ors. versus V. S. Tyagi decided on 11.08.2017. Learned Counsel for the Complainant relied on a judgment of a learned single judge of the Madras High Court in an Original Suit where a preliminary objection was raised on a somewhat similar dispute as is evident from Paragraph No. -2 of the judgment extracted here as under:-
"2. The applicant filed the written statement wherein a specific stand has been taken by the applicant to the effect that not a single cause of action arose within the jurisdiction of this Court and that the suit itself has been filed only on the basis of the location of one of the branch offices of the respondent in Chennai. Therefore, apart from defending the case on merits, the applicant has raised a preliminary objection regarding the territorial jurisdiction of this Court to try the suit.
16. The judgment of the Apex Court in Sonic Surgicals (Supra) was pressed into service as was noticed in Indian Performance Rights Society versus Sanjay Dalia (2015) 10 SCC 161. The case before the Madras High Court was dealing with a dispute on Trademark Act, 1999 and Copyright Act, 1951 under the relevant provisions of Section 134 and Section 62 respectively in the light of Section 20 CPC and the special provisions of Civil jurisdiction of a chartered High Court which has its letters Patent. While dealing with Sonic Surgicals (Supra), the High Court distinguished its applicability to the suit before it and held in Paragraph No. 21 as follows:
"21. Ultimately, the Hon'ble Supreme Court held that if the plaintiff wants to determine the jurisdiction based on the branch office, some cause of action should have arisen within the place where the branch office is situated. To give such a purposive interpretation, the Hon'ble Supreme Court took cue from Section 20, CPC. It is very clear from the judgment that the Hon'ble Supreme Court was not interpreting Section 134(2) of the Act and 62(2) of the Copyright Act qua Section 20, CPC. The Hon'ble Supreme Court was trying to find a solution in cases where the plaintiff only places reliance upon the branch office and nothing more. In such cases, the Hon'ble Supreme Court, by purposive interpretation held that there must be at least a part of the cause of action that should have arisen in the place where the branch office is situated."
17. Thus from any view of the matter in this case there was patent lack of jurisdiction, and not latent, hence the impugned order of the State Consumer Disputes Redressal Commission, Chandigarh cannot be sustained.
18. A last effort was made by the learned Counsel Mr. Sushil Kaushik by citing the judgment in the case of Ganesh Polytex Limited versus Transport Corporation of India Limited reported in (2000) 10 SCC 418. The said judgment is on applying the principles of alternative remedy of a suit, and not on the issue of complete lack of jurisdiction, hence the said judgment is of no aid to the Complainant.
19. Consequently, for all the reasons hereinabove, the Appeal filed by the Insurance company, namely First Appeal No. 23 of 2010 deserves to be allowed and First Appeal No. 469 of 2009 deserves to be dismissed.
20. Accordingly, First Appeal No. 23 of 2010 is allowed and the Impugned Judgment of the State Commission dated 30.10.2009 is set aside. First Appeal No. 469 of 2009 is dismissed without prejudice to the rights of the Complainant to approach the appropriate Forum as per law.
.........................J A. P. SAHI PRESIDENT