National Consumer Disputes Redressal
M/S. Nirmal Spinning Mills Pvt. Ltd. vs National Insurance Co. Ltd. on 17 November, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 879 OF 2021 (Against the Order dated 02/07/2021 in Complaint No. 16/2021 of the State Commission Chandigarh) 1. M/S. NIRMAL SPINNING MILLS PVT. LTD. NIRMAL SPINNING MILLS PVT. LTD. PLOT NO. 3, INDUSTRIAL AREA, BADDI, DISTRICT SOLAN HIMACHAL PRADESH - 173205 THROUGH ITS DIRECTOR SOLAN HIMACHAL PRADESH ...........Appellant(s) Versus 1. NATIONAL INSURANCE CO. LTD. CHANDIGARH REGIONAL OFFICE, SCO 332 TO 334, SECTOR 34A, THROUGH ITS REGIONAL MANAGER CHANDIGARH-160022 CHANDIGARH 2. NATIONAL INSURANCE CO. LTD. 4TH FLOOR, GRAND WALK MALL, FEROZEPUR ROAD, THROUGH ITS REGIONAL MANAGER LUDHIANA-141012 PUNJAB 3. NATIONAL INSURANCE CO. LTD. NEAR PASSPORT OFFICE, RANJEET AVENUE, THROUGH ITS REGIONAL MANAGER AMRITSAR-143001 PUNJAB 4. PROTECH INSURANCE SURVEYORS AND LOSS ASSESSORS #1334, SECTOR 80, THROUGH ITS REGIONAL MANAGER MOHALI PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER HON'BLE AVM J. RAJENDRA, AVSM VSM (Retd.),MEMBER FOR THE APPELLANT : FOR THE APPELLANT : MR. SALIL PAUL, ADVOCATE MR. SAHIL PAUL, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENTS : MR. VIKAS NAUTIYAL, ADVOCATE FOR R1-R3 R4-NEMO Dated : 17 November 2023 ORDER AVM J. RAJENDRA, AVSM, VSM (RETD.), MEMBER
1. The present First Appeal has been filed under Section 51(1) of the Consumer Protection Act, 2019 (hereinafter referred to as "the Act") against the Order dated 02.07.2021 passed by the State Consumer Disputes Redressal Commission, U.T. Chandigarh (hereinafter referred as "the State Commission"), in Consumer Complaint No. 16 of 2021, wherein the Complaint filed by the Appellant was dismissed in limine for want of jurisdiction.
2. For the sake of Convenience, the parties in the matter being referred to as mentioned in the Complaint before the State Commission. "M/s. Nirmal Spinning Mills Pvt. Ltd." is identified as the Complainant/Appellant. "National Insurance Co. Ltd. & Ors." are referred as the Respondents/Opposite Parties in this matter.
3. There was a delay of 127 days in filing the Appeal. The State Commission passed the impugned order on 02.07.2021. While the period for filing Appeal lapsed on 31.07.2021, the present Appeal was filed on 06.12.2021. In adherence to orders of the Hon'ble Supreme Court's Suo Motu Writ Petition (Civil) No. 3 of 2020 in re: Cognizance for Extension of Limitation the present Appeal is treated as having been filed within limitation.
4. Brief facts of the case as per the Complainant are that, the Complainant paid the premium of Rs.2,43,120/- for two insurance policies No.404400111810000146 and 404400111810000112 valid for the period from 25.03.2019 to 24.03.2020 towards insurance of plant & machinery and stocks for Rs.14 Crores and Rs.1.30 Crores respectively, kept in the premises of the insured where the Complainant was running the business. The stocks suffered damage and loss to the tune of Rs.70 to 80 Lakhs due to heavy rains as the insured premises was flooded on 18.08.2019 with about two feet height water. Later, the Complainant submitted revised claims for Rs.2,13,77,725 for loss of stocks; Rs.9,24,807 towards loss to machinery; and Rs.5,15,350.00 towards building loss on 16.10.2019. On receipt of the claim, the Insurer appointed M/s. Protech Insurance Surveyors & Loss Assessors to do the spot and final survey. The Complainant supplied relevant Stock statements, Fixed Assets Schedule, Quotations, ITRs, Sales Tax Returns etc. as required by the Opposite Parties. The Surveyor assessed the gross loss as Rs.1,70,01,649.75 and net loss as Rs.98,60,376.95. However, the OP issued an acceptance letter for a lessor amount than earlier being only Rs.88,69,700/- vide consent letter dated 02.07.2020.
5. The Ops declined to pay even the assessed/accepted amount on untenable grounds. Being aggrieved, the Complainant issued a legal notice dated 24.02.2021 claiming Rs.2,28,17,882 with interest and compensation for mental harassment. However, the OPs repudiated the claim vide letter dated 30.03.2021 citing non-submission of reply by the Complainant for its communication dated 11.02.2021. Being aggrieved, the Complainant filed the Complaint before the State Commission seeking the following:
(a) That the OPs be directed to pay the sum of Rs.2,28,17,882/- being the claimed loss amount or Rs.98,50,000/- the assessed/accepted claimable indemnification amount under the policies along with interest @ 18% per annum w.e.f. 18.08.2019 till payment.
(b) That the OPs be directed to pay Rs.15,00,000/- as compensation for the physical and mental harassment caused to the insured by deliberately not settling its claim as per the law of insurance and their own Insurance policy and delaying the claim inordinately and thus causing further business loss and loss of income.
(c) That the OPs be directed to pay a further sum of Rs.10,00,000/- as punitive damages for the unfair trade practice and UNFAIR CONTRACT adopted by them.
(d) That the Complaint be also allowed with further legal costs of Rs.1,10,000/-.
(e) Any other relief which this Court deems fit, may also be granted in favour of the complainant."
6. Vide the Impugned Order dated 02.07.2021, without issuing a notice to the Respondents/Opposite Parties, the learned State Commission dismissed the Complaint of the Complainant, the Appellant herein in-limine for want of jurisdiction.
7. Being aggrieved, the Appellant/Complainant filed the instant First Appeal with the following prayers:
"(i) The observations and findings made in Para No.7 of the impugned Judgment/Order dated 02.07.2021 passed by the Hon'ble State Consumer Disputes Redressal Commission, U.T. Chandigarh in Consumer Complaint No.16 of 2021 titled 'M/s. Nirmal Spinning Mills Pvt Ltd Vs National Insurance Co Ltd and Ors be expunged/set aside.
(ii) The observation and findings made in Para No.7 of the impugned Judgment/Order dated 02.07.2021 wherein it has been held that the consent letter dated 19.11.2019 given by the Appellant to the Respondent-Insurance Company is a one sided document not being an unfair contract is liable to be stuck down and liberty be granted to the Appellant before the District Forum to agitate the whole issue including as to whether the Consent Letter dated 19.11.2019 was obtained under coercion, pressure, undue influence and coupled with the extreme financial hardship or was voluntary executed depending upon the records placed before it and the evidence as lead.
iii. Such other or further order(s) as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case may also be passed."
8. The main ground advanced by the Appellant/Complainant in the present First Appeal is dismissal of the Complaint in-liminie and that the learned State Commission erred in observing in Para 7 of the impugned order that the consent letter dated 19.11.2019 given by the Appellant to the Respondent cannot be attracted to say that it is an unfair contract in respect to the provisions provided under Section 47(1)(a)(ii) of the Consumer Protection Act, 2019, while dismissing the Consumer Complaint in-limine for want of jurisdiction.
9. The Respondents/Opposite Parties have not filed any Reply/ Objections to the present Appeal.
10. The learned Counsel for the Appellant argued that the State Commission should have issued notice to the Respondents before dismissing it in-limine for want of jurisdiction. He cited M/s. Anjaneya Jewellery Vs. New India Assurance Co. Ltd. & Ors., Civil Appeal No.6878 of 2018 decided on 07.03.2019 wherein Hon'ble Supreme Court has held as under:
"5. We have perused the appellant's complaint so also the impugned order which resulted in its dismissal. Having gone through the same, we are of the considered opinion that notice of the complaint should have been issued to the respondent for being tried on merits.
6. In other words, we are of the view that the complaint filed by the appellant did not deserve its dismissal in "limine" but the complaint deserved admission for its disposal on merits after giving notice to the respondents (opposite party).
7. Learned counsel for the respondents, however, argued that since the impugned order contains reasons for the dismissal of the complaint and hence the impugned order does not call for any interference.
8. We do not agree with this submission. In our view, having regard to the nature of the dispute raised by the appellant in their complaint, the same prima facie needed a reply from the respondents and then its disposal on merits.
9. Learned counsel for the respondents then argued that Section 13 of the Act has undergone amendment w.e.f. 15.03.2003. Learned counsel pointed out that earlier Section 13 had the words "procedure on receipt of complaint". However, after 15.03.2003, in place of these words, the words "on admission of a complaint" were substituted.
10. It was, therefore, his submission that the Commission has now the jurisdiction to dismiss the compliant in limine and decline its admission without notice to the respondents (OP).
11. There is no dispute with the legal proposition urged by the learned counsel for the respondents in the light of amendment made in Section 13 of the Act.
12. In other words, the Commission does have the jurisdiction to dismiss the complaint in limine and decline its admission without notice to the opposite party. However, such jurisdiction to dismiss the complaint in limine has to be exercised by the Commission having regard to facts of each case, i.e., in appropriate case.
13. As held above, the facts of the case at hand do not appear to be of the nature, which deserved the dismissal of the appellant's complaint in limine.
14. In view of the foregoing discussion, we allow the appeal, set aside the impugned order, admit the appellant's complaint under Section 13 of the Act and grant one month's time to the respondents to file their reply to the complaint to enable the Commission to decide the complaint on its merits in accordance with law uninfluenced by any observations made in the impugned order as also in this order.
15. Indeed, having formed an opinion to remand the case in the light of our observation made supra, we did not consider it apposite to set out the facts in detail and nor consider it appropriate to make any observations on factual aspects else it would cause prejudice to the parties while prosecuting their case before the Commission on merits."
11. The Appellant/Complainant has also argued that if the point of jurisdiction is decided in favour of the Respondents against the Complainant/Appellant, the observation made in para 7 of the Impugned Order dated 02.07.2021 be expunged as the Complaint has been dismissed in limine for want of jurisdiction.
12. The learned Counsel for the Respondents No.1 to 3 argued in support of the impugned order passed by the State Commission and urged that the present First Appeal be dismissed with costs in view of the judgment of the National Commission in the case of M/s. Pyaridevi Chabiraj Steels Pvt. Ltd. Versus National Insurance Company Ltd., Complaint Case No.833 of 2020, decided on 28.08.2020.
13. We have examined the pleadings placed on record and the associated records and thoughtfully considered the arguments advanced by the learned Counsel for both the Parties.
14. The main issues for determination are whether the decision of the State Commission in relying on the consent letter and dismissing the complaint in limine for want of jurisdiction is legal? In this regard, pertinently, the Appellant filed the Complaint under Section 35 read with Section 47(1)(a)(ii) of the Consumer Protection Act, 2019 which has come into force with effect from 20.07.2020 on 24.05.2021. For ready reference the provisions of Section 34(1), 47(1)(a)(i) & 58(1)(a)(i) of the Act of 2019 are reproduced below:
"34. (1) Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees:"
"47. (1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction--
(a) to entertain--
(i) complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore:
Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;
(ii) complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees;"
"58. (1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction--
(a) to entertain--
(i) complaints where the value of the goods or services paid as consideration exceeds rupees ten crore:
Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;
(ii) complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees;"
Further, the above provision on jurisdiction was amended vide notification dated 30.12.2021 as under:
"3. Jurisdiction of District Commission.--Subject to the other provisions of the Act and in pursuance of proviso to sub-section (1) of section 34 of the Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed fifty lakh rupees. "
"4. Jurisdiction of State Commission.--Subject to the other provisions of the Act and in pursuance of proviso to sub-clause (i) of clause (a) of sub-section (1) of section 47, the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds fifty lakh but does not exceed two crore rupees."
"5. Jurisdiction of National Commission.--Subject to the other provisions of the Act and in pursuance of proviso to sub-clause (i) of clause (a) of sub-section (1) of section 58, the National Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds two crore rupees."
15. In the present case, it is an admitted position that the value of consideration paid by the Complainant was Rs.2,43,120/- towards the premium for obtaining the insurance policies from the Respondents/Opposite Parties. At the time of filing the Consumer Complaint before the State Commission, it had the pecuniary jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds one crore but does not exceed ten crore rupees. After the amendment on 30.12.2021, the pecuniary jurisdiction of the State Commission was in fact lowered so as to entertain complaints where the value of the goods or services paid as consideration exceeds fifty lakhs but does not exceed Rs. two crore. Thus, the State Commission has no pecuniary jurisdiction to entertain the complaint where the value of consideration paid was only Rs. 2,43,120/-. Thus, with due regard to the facts stated, the Complaint was dismissed in limine by the State Commission for want of jurisdiction. As the facts, law and admitted positions are clear, it did not consider the need any notice or reply from the Respondents/OPs.
16. In M/s. Anjaneya Jewellery Vs. New India Assurance Co. Ltd. & Ors, Civil Appeal No.6878/ 2018 decided on 07.03.2019 the Hon'ble Supreme Court has held that:
"12. ... However, such jurisdiction to dismiss the complaint in limine has to be exercised by the Commission having regard to facts of each case, i.e., in appropriate case."
17. It is not the intention of the Act wherein the Complaints with established and admitted facts that the value of consideration paid is clearly 'less than or more than' the pecuniary jurisdiction limits prescribed by the Act are to be admitted and notice has to be issued to the Opposite Party. The State Commission or, for that matter any such forum, can legally dismiss a Complaint in limine for clear want of pecuniary jurisdiction which goes into the roots of such consideration. Therefore, we are of the considered view that the learned State Commission had rightly dismissed the Complaint filed by the Appellant/Complainant in limine for want of jurisdiction. However, while dismissing the Complaint for want of jurisdiction, the learned State Commission should not have gone into facts and merits and expressed views as regards Consent Letter dated 19.11.2019, its implications etc. Therefore, the observation made in para 7 of the impugned order of the learned State Commission with respect to the Consent Letter dated 19.11.2019 is expunged.
18. With the above deliberations and decisions, the First Appeal No. 879 of 2021 is disposed of accordingly. The Appellant/ Complainant is granted liberty to approach appropriate forum to seek legal remedy in the matter.
19. There shall be no orders as to costs. All pending Applications, if any, stand disposed of accordingly.
...................................... SUBHASH CHANDRA PRESIDING MEMBER ................................................................................... AVM J. RAJENDRA, AVSM VSM (Retd.) MEMBER