REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1026 OF 2007

Punj Lloyd Limited …..Appellant

Versus

Corporate Risks India Pvt. Ltd.                    ….

Respondent  

J U D G M E N T

TARUN CHATTERJEE,J.

1. This  appeal  is  directed  against  the  final  order  dated

14th of  September,  2006  of  the  National  Consumer

Disputes Redressal Commission (hereinafter referred to

as  the  “Commission”)  at  New  Delhi  in  Consumer

Complaint  No  81  of  2006  whereby,  the  Commission

had dismissed the complaint in limine without giving

notice  to  the  respondent  on  the  ground  that  the

appellant  had  raised  disputed  questions  and

contentions  which  were  beyond  the  purview  of  the

Commission.

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2. The relevant facts as emerging from the case made out

by the appellant have been mentioned in a nutshell:

The  appellant  is  an  engineering  construction  company

serving  customers  in  the  hydrocarbon  and  infrastructure

sectors  in  the  global  markets,  delivering  projects  and

services  in  pipelines,  tankage  etc.  The  appellant  was

awarded a contract in the Uran – Trombay Pipeline Project

with  the  Oil  and  Natural  Gas  Corporation  of  India.  The

contract  of  the  appellant  with  the  Oil  and  Natural  Gas

Corporation  of  India  obliged  the  appellant  to  arrange  for

insurance covering risks during the construction process in

the project.  There are only a few insurers and re-insurers

competent and willing to undertake such risks according to

the knowledge of the appellant.  

3. The  respondent  is  a  company  registered  with  the

Insurance Regulatory and Development Authority and is an

insurance and re-insurance broker which had approached

the  appellant  in  August  2005,  explaining  that  it  had  the

competence  and  expertise  to  arrange  the  specialized  and

high-priced insurance and re-insurance  cover required for

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the Uran-Trombay Pipeline Project. The appellant thereupon

based upon the assurance of the respondent, appointed it as

its insurance broker for arranging the desired insurance/re-

insurance for the project. The respondent, by a letter dated

17th of August, 2005, conveyed to the appellant that it had

short-listed the Oriental  Insurance  Company Ltd.  and the

premium  for  the  requisite  insurance  would  be  US  $

1,369,128.5 (one million three hundred sixty-nine thousand

one hundred twenty eight dollars and fifty cents); equivalent

to approximately Rs. 6.16 crores, plus service tax.

4. On 19th of August, 2005 the appellant had written to

the  Oriental  Insurance  Company  Ltd.  admitting  that  the

premium amount would be paid to it. Thereafter on 25th of

August  2005,  the appellant confirmed the  appointment  of

the Oriental Insurance Company as its lead insurer through

a  letter  addressed  to  the  same.  The  Insurance  Company

then replied back on the same date stating that the quote

submitted by it was valid only till 26th of August, 2005 and

that the premium to be paid must be remitted without delay.

The  appellant  received  the  said  letter  on  29th of  August,

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2005,  three  days after  the expiry  of  the  quote  and hence

immediately  communicated  the  lapse  of  the  insurance

company to the respondent. The respondent then came to

the  office  of  the  appellant  on  29th of  August,  2005,  and

assured the appellant that the quote was still valid, in turn,

asking  the  appellant  to  forward  a  letter  to  the  Oriental

Insurance Company mentioning about the acceptance of its

offer  along  with  the  provisional  premium.  The  appellant

immediately handed over the Oriental Insurance Company’s

letter dated 25th of August 2005, and another letter dated

29th of  August  2005  on  behalf  of  the  appellant  to  the

insurance company along with a cheque bearing No. 367340

towards  the  provisional  premium  of  Rs.  25  lacs  thereby

reconfirming its mandate, to the Director of the respondent

company  for  submission  to  the  Oriental  Insurance

Company. The Respondent, by its letter dated 31st of August

2005, informed the appellant that it had forwarded the letter

dated 29th of August 2005, written by the appellant for the

insurance  company  along  with  the  premium,  to  the  said

insurance company. On 1st of September 2005, the appellant

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received  a  letter  from  the  Oriental  Insurance  Company

informing  them  that  the  policy  had  been  rejected  as  the

given deadline had not been adhered to and that the sum of

Rs.25 lacs was held by the insurance company as a deposit

and not as a premium. Consequent upon the expiry of the

Oriental Insurance Company’s quote,  the appellant had to

set out for obtaining a fresh quote. The best quote available

at that moment was the one that was offered to them by

ICICI  Lombard General  Insurance  Company Ltd.  but  at  a

much higher premium. The appellant had no other option

but  to  take  the  quote  offered  at  Rs.  11,4004967.  The

difference between the premium paid and that, which was

available  to  the  appellant  from  the  Oriental  Insurance

Company’s quote, was to the tune of Rs. 5,26,70,654. Thus

aggrieved, the complainant wrote to the respondent on 25th

of October 2005, bringing to the respondent’s notice of its

breaches and the resultant losses and therefore seeking due

fulfillment of these losses within a period of 30 days. There

was  no  response  on  the  part  of  the  respondent  and,

therefore,  the  appellant  again  forwarded  a  letter  to  the

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respondent on 1st of December 2005, seeking a clarification

whether  the  respondent  had  notified  a  claim  under  its

professional  indemnity  policy.  The  appellant  received  no

response to this letter either. Ultimately the appellant filed a

complaint under section 12 and section 21 of the Consumer

Protection Act, 1986 (herein after referred to as the “Act”)

before  the  Commission  pertaining  to  loss  suffered  on

account of  the respondent’s  negligence,  incompetence and

deficiency  in  service.  The  Commission,  by  its  impugned

order  dated  14th of  September,  2006,  dismissed  the

complaint of the appellant in limine on the ground that it

involved  disputed  questions  and  contentions  which  were

beyond the purview of the Commission.

5. Being aggrieved by the order of the Commission, the

appellant  has  preferred  this  statutory  appeal  before  this

Court under the Act.

6. The  pivotal  question  that  needs  to  be  decided  while

dealing  with this  appeal  is,  whether  the  Commission was

justified in dismissing the complaint in limine on the ground

that the case involved disputes and questions which were

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contentious before issuing any notice to the respondent and

without even prima facie going into the merits of the case.

7. Before  we  proceed  further  to  decide  the  aforesaid

question,  it  would  be  appropriate  to  quote  the  impugned

order of the Commission which is as follows:

“  Considering  the  disputed  questions  and  the   contentions  which  are  sought  to  be  raised  by  the complainant,  in  our  opinion,  this  complaint  is  not required to be dealt with under the Consumer Protection Act, 1986.  Hence, the complaint is not entertained. However, it is made clear that it would be open to the complainant to  approach  the Civil Court or  any other Authority for redressal of their grievances, as advised.

We make it clear that this complaint was filed on 24.8.2006 before this Commission and some time was taken for deciding the same.  If there is any delay, it would  be  open  to  the  complainant  to  file  proper application for condonation of  delay on the basis that the matter was pending before this Commission.  The complaint  stands  disposed  of  accordingly.”(Emphasis supplied)

8. We have heard the learned counsel appearing on behalf

of the parties and perused the materials on record. In our

view,  the  Commission  was  not  justified  in  rejecting  the

complaint of the appellant in limine without issuing notice to

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the respondent and before allowing him to place his defence

before it. Reasons are stated as under :-  

9. Mr. P.S. Narasimha, learned counsel appearing for the

complainant-appellant submitted, relying on a judgment of

this  Court  in  the  case  of  CCI  Chambers  Coop.  HSG.

Society Ltd. Vs. Development Credit Bank Ltd. [(2003) 7

SCC 233], that the decision arrived at by the Commission

was pre-mature in view of the fact that before issuing any

notice to the respondent and before taking pleadings of both

the  parties  on  record,  the  Commission  could  not  have

formed an opinion as to the nature and scope of the enquiry,

i.e., whether the questions arising for decision in the light of

the  pleadings  of  the  parties  required  a  detailed  and

complicated  investigation  into  the  facts  which  were

incapable  of  being  undertaken  in  a  summary  and speedy

manner.   Mr.  Narasimha  further  argued  that  the

Commission ought to have justifiably formed an opinion on

the need of driving away the complainant to the civil court

which could  only be  done  after  the  pleadings of  both the

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parties  were  placed  before  the  Court.   Accordingly,

Mr.Narasimha contended that the matter must be sent back

to  the  Commission  to  issue  notice  on  the  respondent  to

place  their  defence  before  it  and  thereafter  to  form  an

opinion as to whether the Commission would be justified in

entertaining the complaint of the appellant.  

10. This  submission  of  the  learned  counsel  for  the

appellant  was  seriously  disputed  by  Mr.  Ranjit  Kumar,

learned  senior  counsel  appearing  for  the  respondent.

According to Mr. Ranjit  Kumar, the Commission was fully

justified  in  relegating  the  appellant  to  approach  the  civil

court  on  consideration  of  the  disputes  raised  by  the

appellant in the complaint itself.  He further submitted that

the disputes raised by the appellant would show that the

nature and scope of the complaint would require a detailed

and  complicated  investigation  into  the  facts,  which  was

incapable  of  being  undertaken  in  a  summary  and speedy

manner.   In  support  of  this  submission,  he relied  on two

decisions of this Court one of which is Synco Industries Vs.

State Bank of Bikaner & Jaipur and Others  [(2002)  2

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SCC  1].   Relying  on  this  decision  of  this  Court,  learned

senior  counsel  for  the  respondent  contended  that  even

before issuing any notice, it was open to the Commission to

look  into  the  statements  made  in  the  complaint  for  the

purpose of coming to a finding that pleadings made in the

complaint would require thorough investigation of facts for

which evidence had to be led which could not be decided in

a  summary  manner  and  for  which  civil  court  should  be

approached.   The  other  decision  relied  on  by  him,  is  the

decision  reported  in  Dr.  J.J.  Merchant  and  others  Vs.

Shrinath Chaturvedi [(2002) 6 SCC 635]. Accordingly, he

contended  that  this  Court  may  not  interfere  with  the

impugned order of the Commission even in the exercise of

its statutory power under the Act.

11. Having considered the rival submissions of the counsel

appearing  for  the  parties  and  after  going  through  the

complaint in detail and after taking into consideration the

decisions noted hereinabove, we are of the opinion that the

submissions of Mr. Narasimha must be accepted.  

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12. In our view, as already observed, the Commission was

not  justified  in  relegating  the  complainant/appellant  to

approach the civil court for decision only on the ground that

the complaint disclosed disputed questions and contentions

which is not required to be dealt with under the Act. For this

purpose,  we have looked into the statements made in the

complaint  in  detail  and  in  depth.  From  a  look  at  the

statements made in the complaint, it would be difficult  to

say that the complaint has disclosed complicated questions

of fact which cannot be gone into by the Commission and

the same can only be gone into by the Civil  Court  before

bringing the respondent on record and asking him to file his

defence. The decisions, relied on by Mr. Ranjit Kumar and

noted  namely,  Synco  Industries’  case  (supra) and  the

decision  in  Dr.  J.J.  Merchant’s  case  (Supra) were  duly

considered  by  Two-Judge  Bench  of  this  Court  in  CCI

Chambers case (supra) in detail and after considering the

aforesaid two Three-Judge Bench  decisions of this Court, as

mentioned  herein  above,  and  after  explaining  the  same,

Lahoti, CJ, (as His Lordship then was), held that the nature

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of averments made in the complaint was not by itself enough

to  arrive  at  a  conclusion  that  the  complaint  raised  such

complicated questions as could only be determined by the

Commission. While coming to this conclusion, Lahoti CJ, (as

his Lordship then was), in paragraph 6 of the aforesaid case

in page no. 236 observed as follows:

“It cannot be denied that fora at the national level, the State level and at the district level have been constituted under  the  Act  with  the  avowed  object  of  providing summary  and  speedy remedy in  conformity with the principles  of  natural  justice,  taking  care  of  such grievances  as are  amenable  to the  jurisdiction  of  the fora established under the Act.  These fora have been established  and  conferred  with  the  jurisdiction  in addition to the conventional courts. The principal object sought to be achieved by establishing  such fora is to relieve the conventional courts of their burden which is ever-increasing with the mounting arrears and whereat the  disposal  is  delayed because  of  the  technicalities. Merely  because  recording  of  evidence  is  required,  or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any forum under the Act to the person aggrieved.”(Emphasis supplied)

13. Again in paragraph 7 of the aforesaid decision, it was

observed:

“A three-Judge Bench of this Court recently in  Dr. JJ. Merchant Case, (2002) 6 SCC 635, specifically dealt

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with  the  issue  as  to  the  guidelines  which  would determine the matter being appropriately dealt with by a  forum  under  the  Act  or  being  left  to  be  heard  or decided by a Civil Court. …..The decisive test is not the complicated nature of questions of fact and law arising for  decision.  The  anvil  on  which  entertainability of  a complaint by a forum under the Act is to be determined is whether the  questions, though complicated they may be,  are  capable  of  being  determined  by  summary enquiry i.e by doing away with the need of a detailed and complicated method of recording evidence. It has to be  remembered  that the fora under  the  Act at  every level are headed by experienced persons. The National Commission is headed by a person who  is or has been a Judge of the Supreme Court. The State Commission is headed by a person who is or has been a Judge of a High Court. Each District Forum is headed by a person who  is,  or  has been,  or  is  qualified  to  be  a  District Judge. We do not think that mere complication either of facts or of law can be a ground for the denial of hearing by a forum under the Act.”(Emphasis supplied).

14. In Dr. JJ Merchant’s case (supra), this Court, dealing

with  the  contention  that  complicated  questions  of  fact

cannot  be  decided  in  summary  proceedings,  also  held  as

under :-

“It was next contended that such complicated questions of fact cannot be decided in summary proceedings. In our view, this submission also requires to be rejected because under  the Act, for  summary  or  speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it  is  mentioned  that  the  Commission  or  Forum  is

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required  to  have  summary  trial,  would  hardly  be  a ground for directing the consumer to approach the civil court.  For  the  trial  to  be  just  and  reasonable,  long- drawn delayed procedure, giving ample opportunity to the  litigant to harass  the  aggrieved other  side,  is not necessary. It should be kept in mind that the legislature has  provided  alternative,  efficacious,  simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would be a totally wrong assumption that because summary trial is  provided,  justice  cannot  be  done  when  some questions  of  facts  are  required  to  be  dealt  with  or decided.  The  Act  provided  sufficient safeguards.”(Emphasis supplied).

15. Following the aforesaid  observations of  this  Court  as

quoted herein-above, in the aforesaid decision of         CCI

Chamber’s  case (supra) and also the observations in   Dr.

JJ Merhant’s  Case (supra) which have been noted herein-

above, we are of the view that the decision arrived at by the

Commission is premature. The Commission ought to have

issued notice to the respondent and placed the pleadings on

record.  When  pleadings  of  both  the  parties  were  made

available before the Commission, only then the Commission

should have formed an opinion as to the nature and scope of

enquiry, i.e., whether the facts which arose for decision on

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the basis of the pleadings of the parties required a detailed

and complicated investigation of facts which was incapable

of being undertaken in a summary and speedy manner, then

only  the  Commission  should  have  justifiably  formed  an

opinion on the need  of  relegating  the  complaint  to  a  civil

court.   That  apart,  in  view  of  the  admitted  fact  that  the

respondent  was  never  served  with  any  notice  and  not

present before the Commission, therefore, it was not known

to  the  Commission,  what  would  be  the  defence  and

contentions  of  the  respondent  and  what  questions  and

disputes would really arise therefrom until and unless both

sides place their respective cases before the Commission.  At

that  stage,  it  is  difficult  for  the  Commission  also  to  hold

whether the disputed questions and contentions could not

be  decided  by  the  Commission  and  the  same  must  be

relegated  to  the  Civil  Court.   Every  complaint  of  the

consumer  is  related  to  a  dispute  and  will  raise  disputed

questions and contentions.  If  there was no dispute,  then

there  would  be  no  complaint.   Therefore,  the  ground  for

rejection  of  the  complaint  namely,  “it  arises  disputed

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questions  and  contentions”  was  definitely  irrelevant.

Therefore, the Commission was not justified in rejecting the

complaint only on this ground.  In any view of the matter, it

is not evident from the order of the Commission that it had

considered the nature of disputed questions of fact for which

the complainant should be relegated to the Civil Court for

decision.  In view of our discussions made hereinabove and

relying  on  the  principles  enunciated  by  this  Court  in  the

aforesaid decisions, we are, therefore,  of the view that the

Commission  was  not  justified  in  rejecting  the  complaint

merely by stating that the complicated nature of facts and

law did  not  warrant  any decision  on  its  part  before  even

issuing notice to the respondent and directing the filing of

his  defence,  which,  in  our  opinion,  cannot  be  said  to  be

decisive.  

16. The appeal is, therefore, allowed to the extent indicated

above.  The  decision  of  the  commission  is  set  aside.  The

complaint is sent back to the Commission to be heard afresh

in consistent with the observations made above.  There will

be no order as to costs.

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                                                             ……… ……………J.

 [Tarun Chatterjee]

New Delhi;                       ………… …………J. December 11, 2008                       [Harjit Singh Bedi]

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