National Consumer Disputes Redressal
Bhanuben V Patel vs Magma Fincorp Ltd. Earlier Known As Ge ... on 6 November, 2025
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
REVISION PETITION NO. NC/RP/154/2022
(Against the Order dated 27th July 2021 in Appeal 1305/2013 of the State Consumer Disputes
Redressal Commission Gujarat)
WITH
NC/IA/1621/2022 (PLACING ADDL. DOCUMENTS)
NC/IA/1620/2022 (CONDONATION OF DELAY)
NC/IA/3863/2022 (EXCEMPTION OF FILE TYPED COPIES OF DOCUMENTS)
BHANUBEN V PATEL
PRESENT ADDRESS - R/O 9, KADAMBAPPARTMENT OPP. VISHWA BHARTI SCHOO ,
AHMADABAD , GURUKUL ROAD, MEMNAGAR , AHMADABAD,GUJARAT.
.......Petitioner(s)
Versus
MAGMA FINCORP LTD. EARLIER KNOWN AS GE MONEY HOUSING FINANCE & ANR.
PRESENT ADDRESS - MAGMA FINANCE LOANS BRANCH, 1ST 2ND FLOOR, SUNCITY
HOUSE, ALSO AT 4B, 4TH FLOOR, BD PATEL HOUSE, NARANPURA ROAD, , AHMEDABAD ,
GUJARAT , AHMADABAD,GUJARAT.
M/S. MAX LIFE INSURANCE CO. LTD.
PRESENT ADDRESS - 8TH AND 9TH FLOOR, REMBRANDT, OPP. ASSOCIATED ,
AHMADABAD , PETROL PUMP, CG ROAD, , AHMADABAD,GUJARAT.
.......Respondent(s)
BEFORE:
HON'BLE MR. JUSTICE A. P. SAHI , PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA , MEMBER
FOR THE PETITIONER:
MR PRAVEEN MAHAJAN, ADV MR KUNAL NEMA, ADV MS RUCHI MAHAJAN, ADV
FOR THE RESPONDENT:
MR ABHISHRUT SINGH, ADV FOR R-2 SERVICE NOT COMPLETE FOR R-1
DATED: 06/11/2025
ORDER
Heard learned counsel for the parties.
The revision petition has been reportedly filed with some delay. The impugned order, we find from the office report, was issued and received by the petitioners during the Covid period.
Keeping in view the law laid down by the Apex Court in the case of Suo Motu Writ Petition (Civil) No(s). 3 of 2020 in re: Cognizance for Extension of Limitation and the orders passed therein, we condone the delay and entertain the revision petition on merits. The delay condonation application NC/IA/1620 is accordingly allowed.
The respondent no.2/Insurance Company repudiated the death claim raised by the petitioner/complainant after the death of her husband in respect of a Credit Shield Insurance Policy. The repudiation letter dated 21.04.2010 recorded that the claim was not admissible as the insured had suppressed the fact of the previous ailment of Hypertension.
The said repudiation came to be challenged in CC/781/2010 before the DCDRC Ahmedabad City (for short the District Commission). The same was dismissed on 09.04.2013.
Aggrieved, the petitioner/complainant filed an appeal being First Appeal No.1305/2013 before the SCDRC Gujarat (for short the State Commission) and the State Commission came to the conclusion that the District Commission had committed an error in rejecting the complaint, inasmuch as Hypertension was merely a lifestyle disease and therefore relying on certain orders of this Commission proceeded to set aside the order of the District Commission and allowed the appeal as well as the complaint. While allowing the appeal, the State Commission directed a payment of Rs.9,41,185/-, which, according to Mr. Mahajan, learned counsel for the petitioner/complainant, was a calculation that was made in respect of the amount as claimed on the date of the filing of the complaint.
His submission on behalf of the petitioner/complainant is that the State Commission did not award any interest on the said amount and therefore this error in the failure to exercise discretion should be entertained in the exercise of revisional jurisdiction by this Commission and interest should also be awarded in addition to the aforesaid amount.
Responding to the said submission, learned counsel for the Insurance Company has urged that the petition cannot be entertained unless there is a jurisdictional error and consequently this issue of fact may not be entertained by this Commission while exercising powers under Section 21(b) of the Consumer Protection Act, 1986 (for short the 1986 Act). We have mentioned the provisions of the 1986 Act as this is a complaint arising out of the provisions of the old 1986 Act.
Having considered the submissions raised, we find that the Insurance Company has not questioned the correctness of the order passed by the State Commission whereby the amount as indicated above was awarded. Thus, deficiency in service stands established and the same has not been questioned but the argument advanced is that the revisional jurisdiction cannot be exercised to award interest.
The provisions of 21(b) of the 1986 Act are extracted hereunder:
"21. Jurisdiction of the National Commission. - Subject to the other provisions of this Act, the National Commission shall have jurisdiction -
(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity."
The issue as to what would be the powers exercisable by this Commission is no longer res integra and has been settled by the Apex Court in the cases of Ruby (Chandra) Dutta Vs. United India Insurance Co. Ltd. (2011) 11 SCC 269 and Sunil Kumar Maity Vs. State Bank of India and Anr. 2022 SCC OnLine SC 77.
A perusal of the aforesaid judgments read with Section 21(b) of the 1986 Act would leave no room for doubt that where there is a failure to exercise jurisdiction on a question of law already settled by the Apex Court, namely the award of interest, the revisional jurisdiction can be exercised for interfering with the impugned order.
Further, the Apex Court in the case of Sovintorg (India) Limited versus State Bank of India, New Delhi reported in (1999) 6 SCC 406 in Paragraph No. - 6 dealt with this issue as follows:
"6. Relying upon the province of Section 34 of the Civil Procedure Code, the learned counsel for the appellant submitted that the appellant was entitled to the payment of interest at the rate at which moneys are lent or advanced by Nationalised Banks in relation to commercial transactions. Referring to IA No. 2 filed in this Court and Banking Law and Practice in India issued in 1991, she had contended that the appellant was entitled to the payment of interest minimum at the rate of 19.4 per cent per annum. The general submission made in this behalf cannot be accepted in view of the provision of Section 14 of the Act. There was no contract between the parties regarding payment of interest on delayed deposit or on account of delay on the part of the opposite party to render the services. Interest cannot be claimed under Section 34 of the Civil Procedure Code as its provisions have not been specifically made applicable to the proceedings under the Act. We, however, find that the general provision of Section 34 being based upon justice, equity and good conscience would authorise the Redressal Forums and Commissions to also grant interest appropriately under the circumstance of each case. Interest may also be awarded in lieu of compensation or damages in appropriate cases. The interest can also be awarded on equitable grounds as was held by this Court in Satinder Singh v. Umrao Singh [AIR 1961 SC 908 : (1961) 3 SCR 676] . Referring to the province of the Interest Act of 1839, in relation to the compulsory acquisition of land where no specific provision is made for grant for awarding the interest, the Court held:
"In this connection we may incidentally refer to Interest Act, 1839 (XXXII of 1839). Section 2 of this Act confers power on the court to allow interest in cases specified therein, but the proviso to the said section makes it clear that interest shall be payable in all cases in which it is now payable by law. In other words, the operative provisions of Section 1 of the said Act do not mean that where interest was otherwise payable by law court's power to award such interest is taken away. The power to award interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to Section 1. This question was considered by the Privy Council in Bengal Nagpur Rly Co. Ltd. v. Ruttanji Ramji [(1937-38) 65 IA 66 : AIR 1938 PC 67] . Referring to the proviso to Section 1 of the Act the Privy Council observed 'this proviso applies to cases in which the court of equity exercises its jurisdiction to allow interest'. We have already seen that the right to receive interest in lieu of possession of immovable property taken away either by private treaty or by compulsory acquisition is generally regarded by judicial decisions as an equitable right; and so, the proviso to Section 1 of the Interest Act saves the said right. We must accordingly hold that the High Court was in error in rejecting the claimants' case for the payment of interest on compensation amount, and so we direct that the said amount should carry interest at 4% per annum from the date when Respondent 2 took possession of the claimants' lands to the date on which it deposited or paid the amount of compensation to them."
To the same effect is the judgment in Laxmichand v. Indore Improvement Trust [(1975) 1 SCC 565 : AIR 1975 SC 1303] . The State Commission as well as the National Commission were, therefore, justified in awarding the interest to the appellant but in the circumstances of the case we feel that grant of interest at the rate of 12% was inadequate as admittedly the appellant was deprived of the user of a sum of Rs one lakh for over a period of seven years. During the aforesaid period, the appellant had to suffer the winding-up proceedings under the Companies Act, allegedly on the ground of financial crunch. We are of the opinion that awarding interest at the rate of 15 per cent per annum would have served the ends of justice." Another judgment of the Apex Court in a matter arising out of an Arbitration award made similar observations in Paragraph No. - 3 in the case of Jagdish Rai and Brothers versus Union of India reported in (1999) 3 SCC 257 extracted herein under:
"3. ......The courts have taken the view that the award of interest under Section 34 CPC is a matter of procedure and ought to be granted in all cases when there is a decree for money unless there are strong reasons to decline the same.."
In another decision of the Apex Court in the case of LIC of India and Anr. versus S. Sindhu reported in (2006) 5 SCC 258 the provisions of the Interest Act, 1978 were considered and the observations made in Paragraph No. 12 - 15 are as follows:
"12. Where a statute provides for payment of interest, such interest will have to be paid in accordance with the provisions of such statute. Admittedly there is no enactment, or rules made under any enactment, either relating to contracts in general or insurance in particular, which provides for payment of interest in regard to the amount payable under such a policy.
13. Let us now consider the provisions of the Interest Act, 1978 ("the Act" for short) which deals with payment of interest up to the date of suit/claim. The Act was enacted to consolidate and amend the law relating to the allowance of interest in certain cases. The objects and reasons state that the Act was enacted to prescribe the general law of interest in a comprehensive and precise manner, which becomes applicable in the absence of any contractual or statutory provision specifically dealing with interest. Sub-section (1) of Section 3 of the Act provides that in any proceedings for the recovery of any debt or damages, or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say--
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings;
(b) if the proceedings do not relate to any such debt, then, from the date mentioned in that regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings.
14. Sub-section (3) of Section 3 makes it clear that nothing in Section 3 shall apply in relation to any debt or damages upon which interest is payable as of right, by virtue of any agreement, or any debt or damages upon which payment of interest is barred, by virtue of an express agreement. Clause (a) of Section 2 of the Act defines "court" as including a tribunal and an arbitrator; clause (c) of Section 2 defines "debt" as any liability for an ascertained sum of money and includes a debt payable in kind but does not include a judgment debt; and clause (b) defines "current rate of interest". Sub-section (1) of Section 4 of the Act provides that notwithstanding anything contained in Section 3, interest shall be payable in all cases in which it is payable by virtue of any enactment or other rule of law or usage having the force of law. Sub-section (2) of Section 4 provides that notwithstanding what is stated in Section 3 or Section 4(1) of the Act, in the cases of money deposited as security for performance of an obligation, interest is payable from the date of deposit; and in the case of money payable by virtue of a fiduciary relationship, money/property obtained/retained by fraud and money due as dower/maintenance, interest is payable from the date of cause of action. A claim for interest on the amounts of premium paid, from the respective dates of payment of premium to date of settlement of claim, does not find support from any of the provisions of the Act.
15. Even assuming that interest can be awarded on grounds of equity, it can be awarded only on the reduced sum to be quantified and paid from the date when it becomes due under the policy (that is on the date of death of the assured) and not from any earlier date. We do not propose to examine the question as to whether interest can be awarded at all, on equitable grounds, in view of the enactment of the Interest Act, 1978 making a significant departure from the old Interest Act (32 of 1839). The present Act does not contain the following provision contained in the proviso to Section 1 of the old Act: "interest shall be payable in all cases in which it is now payable by law". How far the decisions of this Court in Satinder Singh v. Amrao Singh [(1961) 3 SCR 676 : AIR 1961 SC 908] and Hirachand Kothari v. State of Rajasthan [1985 Supp SCC 17] and the decision of the Privy Council in Bengal Nagpur Rly. Co. Ltd. v. Ruttanji Ramji [(1937-38) 65 IA 66 : AIR 1938 PC 67] holding that interest can be awarded on equitable grounds, all rendered with reference to the said proviso to Section 1 of the old Interest Act (Act of 1839), will be useful to interpret the provisions of the new Act (Act of 1978) may require detailed examination in an appropriate case."
The Apex Court while dealing with the claim of interest and taking notice of the Interest Act, 1978 in matters of medical negligence has directed a payment of interest at the rate of 6% per annum. Paragraph No. 131 of the decision in the case of Balram Prasad versus Kunal Saha reported in (2014) 1 SCC 384 is extracted herein under:
"131. Therefore, the National Commission in not awarding interest on the compensation amount from the date of filing of the original complaint up to the date of payment of entire compensation by the appellant doctors and AMRI Hospital to the claimant is most unreasonable and the same is opposed to the provision of the Interest Act, 1978. Therefore, we are awarding the interest on the compensation that is determined by this Court in the appeal filed by the claimant at the rate of 6% per annum on the compensation awarded in these appeals from the date of complaint till the date of payment of compensation awarded by this Court. The justification made by the learned Senior Counsel on behalf of the appellant doctors and AMRI Hospital in not awarding interest on the compensation awarded by the National Commission is contrary to law laid down by this Court and also the provisions of the Interest Act, 1978. Hence, their submissions cannot be accepted as the same are wholly untenable in law and misplaced. Accordingly, the aforesaid point is answered in favour of the claimant."
Consequently, applying the ratio of the above judgments we find that the contention raised on behalf of the petitioner/complainant by Mr. Mahajan is correct and the State Commission has omitted to award interest and has therefore committed an illegality by not awarding any interest on the amount awarded by it.
Having heard learned counsel for the parties, we are satisfied that in the interest of justice as well as keeping in view the nature of the case we find that 9% interest on the awarded amount would be just and adequate.
Accordingly, we allow the revision petition to the aforesaid extent and the interest on the said amount of Rs.9,41,185/- shall be payable with effect from the date of repudiation of the claim i.e. 21.04.2010 within three months from today. In the event of default of payment of the said amount, the interest shall stand enhanced to 12%.
The revision petition stands allowed accordingly. Pending applications, if any, also stand disposed off.
..................J A. P. SAHI PRESIDENT ..................
BHARATKUMAR PANDYA MEMBER