IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7292 OF 2008 (Arising out of S.L.P. (C) No.18765 of 2007)

Oriental Insurance Co.Ltd.      ...Appellant(s)

Versus

M/s. Kala Emporium Pvt. Ltd.      ...Respondent(s)

O  R  D  E  R

1. Leave granted.

2. By an  order  dated  12th December,  2001,  passed  in  Complaint  No.17  of

2000, the State Consumer Disputes Redressal Commission, Chandigarh, [for short,

`the State Commission’] set aside the repudiation of the respondent’s claim by the

appellant-Insurance Company and directed it to assess the compensation payable to

the  former.   The  appellant  challenged  that  order  by  filing  an  appeal  before  the

National  Consumer  Disputes  Redressal  Commission  [for  short,  `the  National

Commission’], but the respondent did not do so.  The National Commission did not

advert to the merits of the case, but, by simply placing reliance upon two letters dated

11th June, 1999 and 25th November, 1999, allegedly written by the respondent to the

officers of the appellant, concluded that the Insurance Company had agreed to settle

the matter for a

....2/-

- 2 -  

sum  of  Rs.6,41,908/-  and,  accordingly,  set  aside  the  order  passed  by  the  State

Commission  and  directed  the  appellant  to  pay  a   sum  of  Rs.6,41,908/-  to  the

respondent  with  interest  @  9  per  cent  per  annum  from  the  date  of  filing  the

complaint.

3. Feeling aggrieved by the order of the National Commission, the appellant

has preferred this appeal by special leave.

4. We have heard learned counsel for the parties.

5. Undisputedly,  the  respondent  did  not  challenge  the  order  of  the  State

Commission.   Therefore,  in  the  appeal  preferred by the  Insurance  Company,  the

National Commission was not at all justified in directing payment of compensation by

relying upon two letters dated 11th June, 1999 and 25th November, 1999 said to have

been  written  by  the  respondent,  incorporating  the  factum  of  the  alleged  mutual

settlement.  Indeed,  no evidence was produced by the respondent  either before the

State Commission or the National Commission to show that the Insurance Company

had agreed to pay the sum of Rs.6,41,908/- by way of mutual settlement.  In this view

of  the  matter,  the  direction  given  by  the  National  Commission  for  payment  of

compensation to the respondent cannot be sustained.

6. Accordingly, the appeal is allowed, impugned order passed by the National

Commission is set aside and the one rendered by the State Commission is restored.

No costs.

......................J.       [B.N. AGRAWAL]

......................J.       [G.S. SINGHVI]

New Delhi, December 15, 2008.