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PETITIONER: C E OR & VICE CHAIRMAN, GUJARAT MARITIME BOARD

       Vs.

RESPONDENT: SHRI HAJI DAUD HAJI HARUN ABUAND TWO OTHERS

DATE OF JUDGMENT:       20/11/1996

BENCH: B.P. JEEVAN REDDY, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T B.P. JEEVAN REDDY. J.      This appeal  is perferred by the Gujarat Maritime Board against the  order dated  14th  June,  1996  passed  by  the National Consumer Dispute Redressal Commission rejecting the objections filed by the appellant.      The appellant  and provided finance to  one Shri Ramesh Chandra Gordhandas  Faldu for  purchasing a vessel, ’Chandra Vasa’. The  amount of  loan provided was Rs. 11,25,000/. The vessel was  mortgaged in  favour  of  the  appellant  (as  a successor to the  Director of Ports, Government of Gujarat). In the year 1982, Ramesh Chandra sold the said vessel to the first respondent Shri Haji Daud Haji Haran Abu, for a sum of Rs. 3,00,000/-.      In June  1987 the said vessel, on its voyage form Dubai to Bombay,  was caught  in a  hurricane and sank at sea. The vessel was  insured with  the United India Insurance Company Limited, the third respondent in this appeal. When Haji Daud laid a claim for the insurance amount, the insurance company refused to  pay the  amount to him on the ground that he has no insurable interest in the vessel, whereupon Haji Abu laid a complaint  before the  National Consumer  Commission.  The Commission recorded  the following  findings  in  its  order dated 12th January, 1995:      "Though the  complainant claims  to      have paid  the consideration of Rs.      3 lakhs  in full,  he was unable to      produce  the   stamped  receipt  in      token of  having paid  the  balance      consideration of Rs. 2 lakhs to the      owner of  the vessel was registered      with the  Gujarat  Maritime  Board,      Gujarat. According  to the Maritime      Board,  the   purchaser  Shri  Haji      Haroon    Abu     was    only    an      administrator of the vessel but not      the owner of the vessel.      The insured  had paid the amount of      consideration of  Rs.  3  lakhs  in      full: Rs.  1 lakhs as earnest money

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    deposit and  the balance  of Rs.  2      lakhs by way of bank draft.  He has      however, not  been able  to produce      the  receipt   in  support  of  the      payment  of   Rs.2  lakhs.  It  is,      however, not  clear to us as to how      the Opposite Part can maintain that      the complainant  had  no  insurable      interest in  the  vessel  and  that      therefore, no liability could arise      under the  policy of  insurance. it      was  the   duty  of  the  insurance      company to  have verified the title      of  the  insured  at  the  time  of      insuring the vessel and issuing the      policy of insurance. This was not a      matter in  the special  & exclusive      knowledge of  the insured only. The      proposer for  insurance could  have      easily asked  to produce  his title      to the  vessel which he was getting      insured by  payment of premium from      time to time.      The agreement  of sale  of  between      the registered  owner of the vessel      and   the   purchaser   i.e.,   the      complainant before  us. It  appears      that the title in this property was      not transferred  in the name of the      complainant   inasmuch    as    the      mortgagee* also  had an interest in      the property  along with purchaser.      The possession  of the  vessel  and      its   custody    was    with    the      complainant. In  fact  it  is  seen      from  the   communication  of  25th      September,  1992   by  the  Gujarat      Maritime  Board  to  the  insurance      company that  the  insured  **  was      considered   by    the   Board   as      insurance  amount  should  be  paid      only to the Maritime Board."           (emphasis supplied) *    The expression  "mortgagee"  obviously  refers  to  the appellant herein. **   The expression "insured" refers to Haji Abu.      (The appellant-Board was not a party to the proceedings at this stage.)      Having recorded  the said  findings, the Commission yet found that the complainant/insurer was "the defacto owner of the vessel" that he was in  possession of the vessel and had insured it  with the  third respondent  and  that  no  other person had  laid a  claim for  the insurance amount. On that basis, it concluded:      "From the  totality of these facts,      there  is   no   doubt   that   the      complainant has  insurable interest      in the property and the repudiation      or non-payment  of the claim on the      ground  that  the  insured  had  no      insurable interest was not correct,      fair  or  proper.  In  the  result,      there  has   been   deficiency   of      service  on   the   part   of   the      insurance  company.  We  therefore,

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    accept the petition and direct that      the  opposite   party  -  insurance      company shall  pay to  the  insured      the amount  due under the policy of      insurance viz.,  Rs. 13  lakhs with      interest @  18% p.a.  from the data      of expiry  of four  months from the      date on  which the claim was lodged      with the  insurer viz.,  the United      India  Insurance   Co.   Ltd.   The      complainant is  allowed Rs. 2,500/-      as costs."      When the  appellant- Board  came to  know of  the  said order, it filed an application before the Commission stating that inasmuch  as   it was the mortgagee and assignee of the said  vessel   to  the  knowledge  of  the  Commission,  the direction to  pay the entire insurance amount to Haji Abu is unsustainable in law. On the said application the Commission stayed (vide  order dated  30thts October, 1995) its earlier order  dated   12.1.95  and   issued  notice   on  the  said application to  the respondents  therein. On  June  14,1996, however, the  Commission passed a short order directing that the entire insurance amount be paid to Haji Abu, leaving the appellant to adopt such remedies as are open to it in law.      The first  order of  the Commission  dated January  12, 1995 clearly  shows that  the fact that the appellant had an interest in the vessel as a mortgagee was clearly brought to the notice  of the  Commission. Indeed,  the Commission also refers to a letter written by the appellant to the Insurance Company that  it alone  is entitled  to the entire insurance amount. Yet, it appears rather curious that it did not think it appropriate  to issue  a  notice  to  the  appellant  and directed the  entire insurance  amount to  be  paid  to  the complainant Haji  Abu. Even  when the appellant came forward with its  claim and  objections, the Commission affirmed its earlier order  observing that  the appellant  may adopt such remedies as are open to it in law.      Shri S.P.  Gussain, Chief  Executive Officer  and  vice Chairman of  the  appellant-Board  brought  to  our  notice, clause 10 of the Finance Agreement between the appellant and Ramesh Chandra. It reads:      "Immediately   on   mechanising   a      sailing vessel  the Borrower  shall      take  out   a  comprehensive   Risk      Insurance Policy for the mechanised      vessel as per Rule 23 of the Rules,      at his  cost and  shall assign  the      policy in favour of the Director of      Ports representing  the  Government      of Gujarat."      We have  also seen  the Insurance  Policy taken  out by Haji Abu.  It clearly  contains an  endorsement in  terms of clause (10)  of the  Finance Agreement.  In this view of the matter we  are of  the opinion  that the  Commission was not justified in  directing the  entire insurance  amount to  be paid to  the insurer and in directing the appellant to adopt such remedies  as are  open to  it in  law.  The  Commission should have  gone into the question whether the appellant is entitled to  the whole  or part  of the  insurance amount in terms of the aforesaid agreement and the Insurance Policy.      Mr.  Dushyant  Dave,  learned  counsel  for  the  first respondent raised  a doubt  whether the  Commission has  the jurisdiction to  go into  the decide the rival claims of the appellant and  Haji Abu  in  a  complaint  filed  under  the Consumer Protection  Act, 1986.  In our opinion such a power

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must  be  held  available  to  the  Commission  as  a  power incidental or  ancillary to  the substantive power conferred upon the  Commission by  the Act.  Section 21 deals with the jurisdiction of  the  National  Commission.  In  so  far  as relevant, it reads:      "21. Jurisdiction of  the  National      Commission. -  Subject to the other      provisions   of   this   Act,   the      National  Commission   shall   have      jurisdiction, -      (a)  to entertain,-      (i)  complaints where the values of      the   goods    or   services    and      compensation,   if   any,   claimed      exceeds rupees  (twenty lakhs]; and      ......."      This provision  has to  be read  alongwith  Section  22 which clothes  the Commission  with the  powers of  a  civil court specified  in sub-sections  (4),(5) and (6) of Section 13 and the several powers specified in clauses (a) to (i) of sub-section (1)  of Section  14. It  would be appropriate to read the aforesaid provisions here:      "[22.  Power   of   and   Procedure      applicable    to    the    National      Commission    -     The    National      Commission shall,  in the  disposal      of   any    complaints    or    any      proceedings before it have-      (a)  the powers of a Civil court as      specified in  sub-section (4),  (5)      and (6) of Section 13;      (b)  the power to issue an order to      the opposite party directing him to      do any  one or  more of  the things      refereed to in clause (a) to (i) of      sub-section (1) of Section 14;      and follow such procedure as may be      prescribed    by     the    Central      Government]"      "13(4) For purposes of the sections      the District  forum shall  have the      same powers  as are vested in Civil      Court  under   the  come  of  Civil      Procedure, 1908  (5 of 1908), while      trying a  suit in  respect  of  the      following matters, namely,-      (i)  the  summoning  and  enforcing      attendance  of   any  defendant  or      witness and  examining the  witness      on oath;      (ii) the  discovery and  production      of any  document or  other material      object producible as evidence;      (iii) the  reception of evidence on      affidavits;      (iv)  the   requisitioning  of  the      report of the concerned analysis or      test    from     the    appropriate      laboratory  or   from   any   other      relevant source;      (v) issuing  of any  commission for      the examination of any witness and      (vi) any  other matter which may be      prescribed.      (5)  Every  proceeding  before  the

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    District Forum  shall be  deemed to      the judicial  proceeding within the      meaning of Secs. 193 and 228 of the      Indian Penal Code (45 of 1860), and      the District  Forum shall be deemed      of Sec.  195, and  Chapter XXVI  of      the  Code  of  Criminal  Procedure,      1973 (2 of 1974)      [(6) Where  the  complainant  is  a      consumer referred  to in sub-clause      (iv) of  clause (b)  of sub-section      (1) of section 2, the provisions of      rule 8  of Order  I  of  the  First      Schedule  to   the  Code  of  Civil      Procedure, 1908 shall apply subject      to  the   modification  that  every      reference  therein  to  a  suit  or      decree  shall  be  construed  as  a      reference to  a  complaint  or  the      order   of   the   District   Forum      thereon]."      "14.  Finding   of   the   District      Forum.-   (1)    If,   after    the      proceeding conducted under Sec. 13,      the  District  Forum  is  satisfied      that the  goods complained  against      suffer that  the  goods  complained      against  suffer  from  any  of  the      defects specified  in the complaint      or  that  any  of  the  allegations      contained in  the  complaint  about      the services  are proved,  it shall      issue  an  order  to  the  opposite      party directing  him to [do] one or      more  of   the  following   things,      namely,-      (a)  to remove  defect pointed  out      by the  appropriate laboratory from      the goods in question;      (b)  to replace  the goods with new      goods of  similar description which      shall be free from any defect;      (c)  to return  to the  complainant      the price,  or, as the case may be,      the    charges    paid    by    the      complainant;      (d)  to pay  such amount  as may be      awarded by  it as  compensation  to      the consumer for any loss or injury      suffered by the consumer due to the      negligence of the opposite party.      (e)  to   remove  the   defects  or      deficiencies  in  the  services  in      question;      (f) to discontinue the unfair trade      practice or  the restrictive trades      practice or not to repeat them;      (g)  not  to  offer  the  hazardous      goods for sale;      (h) to withdraw the hazardous goods      from being offered for sale;      (i) to  provide for  adequate costs      to parties]."      It is  also relevant to notice that the Act defines the expressions  "complainant"   and  "consumer"   as  also  the

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expression "  consumer dispute"  and that Section 24 invests the orders of the Commission with finality.      The jurisdiction  of the  Commission to  entertain  and decide complaints  necessarily means that where plurality of person claim  the same relief, simultaneously disputing each other’s right  to claim  the said relief, the Commission has the necessary  power to  adjudicate  the  rival  claims  and decide the  said dispute  also. This  power flows from an is incidental and  ancillary to the substantive power conferred by Section  21 (a)  (i)   read with Section 22 which applies sub-sections (4) , (5) and (6) of Section 13 to the National Commission  as   well.  It  is  well-settled  that  where  a substantive power is conferred upon a court or tribunal, all incidental and  ancillary powers  necessary for an effective exercise of  the substantive  power have to be inferred. See Khyerbari Tea  Company Limited & Another v. State of Assam & others [A.I.R. (1964) S.C. 925 at 935]. The rule as quoted n Craies is "one of the first principles of law with regard to the effect  of an enabling act is that a legislature enables something to  be done,  it gives  power at  the same time by necessary   implication    to   do   everything   which   is indispensable for  the purpose  of  carrying out the purpose in view."      For the  above reasons,  this appeal  is  allowed,  the impugned orders  of the  Commission are  set aside  and  the matter is remitted to the Commission for a fresh disposal of the matter according to law. No order as to costs.      We make it clear that we may not be under stood to have expressed any  opinion on  the merits  of the case of either party. The  observations made  hereinabove merely constitute reasons for this order and not findings on the claims of the respective parties.