HARISH CHADHA vs NEW INDIA ASSURANCE CO. LTD.

-IN Revision Petition No. 2525 of 2006, the petitioner/complainant impugns the order dated 7.8.2006 of the State Consumer Disputes Redressal Commission, Delhi (hereafter, ''State Commission'') in Complaint Case No. 153 of 1998. This order of the State Commission''s is based on an application dated 2.7.2005 (for some reason, numbered in the State Commission''s order as Ex. 153 of 1998) of the complainant. IN this application, the complainant claimed interest @ 12% per annum on the awarded insurance claim of Rs. 3.60 lakh for the period April 1997 (date of accident to the vehicle in question) to February 2005 (date of realisation of payment). This application was, in turn, a sequel to the order dated 6.9.2004 of the State Commission in Complaint Case No. 153 of 1998 filed by the said petitioner. IN this order, the State Commission awarded the following reliefs to the complainant (petitioner herein): "IN view of the foregoing reasons we allow the complaint and direct OP No. 1 to pay to the complainant a sum of Rs. 3,60,000 as per settlement with the Surveyor together with interest @ 12% per annum and compensation of Rs. 50,000 for having caused mental agony and harassment to the complainant by repudiating his rightful claim and forcing him to approach this Commission."

THIS order of the State Commission does not, on the face of it, specify the period over which interest as ordered would accrue. In the Cross Revision Petition No. 4019 of 2006, filed by the New India Assurance Company Ltd., the petitioner (hereafter, the ''Insurance Company'') has also impugned the same order dated 6.8.2006 of the State Commission, allowing interest @ 12% per annum from the date of accident till the filing of the complaint by the respondent (Harish Chadha).

As the issues involved are identical, both these revision petitions are being disposed of by this common order.

THE undisputed facts are that the original complainant, a truck operator, purchased a light motor vehicle and got it insured for Rs. 4.25 lakh with the Insurance Company for the period 6.9.1996 to 5.9.1997. This vehicle met with an accident on 20.1.1997, i.e., during the said period. THE Surveyor appointed by the Insurance Company obtained a written consent of the complainant for full and final settlement at Rs. 3.60 lakh on total loss basis. THE Insurance Company repudiated the assessed and accepted claim of the complainant on the ground that at the time of the accident, the driver of the vehicle did not hold a valid and effective licence. THE State Commission settled this issue by holding that the licence of the driver of the insured vehicle was valid at the relevant time and that repudiation by the Insurance Company of the complainant''s claim for Rs. 3.60 lakh (as settled after assessment by the Surveyor appointed by the Insurance Company) was illegal. THE State Commission accordingly awarded to the complainant the reliefs already noted above. It is also an undisputed fact that the foregoing position notwithstanding, the State Commission passed, for some reason, another order dated 25.4.2005 on the same complaint (No. 153 of 1998 treating the matter de novo and granted the following reliefs to the same complainant: "In view of the foregoing reasons we allow the complaint by directing the OP No. 1 to pay Rs. 3,60,000 and Rs. 50,000 towards interest compensation on account of mental agony and harassment the complainant suffered. This will include the cost of the proceedings also. The aforesaid payment shall be made within one month."

IT is also a fact on record that the Insurance Company paid a sum of Rs. 4,14,310 to the petitioner/complainant in February 2005, by way of compliance of the State Commission''s order of 6.9.2004, treating the period of interest as that from the date of the said order to February 2005. Further notable fact is that the State Commission''s order dated 6.9.2004 was challenged by the Insurance Company in appeal No. 383 of 2004 before this Commission. By its order dated 22.11.2004, this Commission upheld the impugned order dated 6.9.2004 and dismissed the appeal at the stage of admission itself. Clearly, therefore, the State Commission''s order dated 6.9.2004 attained finality. However, taking advantage of the lack of clarity in the first order dated 6.9.2004 regarding the period of interest on the awarded insurance claim, the complainant filed an application dated 2.7.2005 claiming interest on Rs. 3.60 lakh for the period April 1997 (month of accident to the insured vehicle) to February 2005 (month of payment by the Insurance Company), citing a judgment of the Apex Court.

IN disposing of the said application dated 2.7.2005 (without any reference thereto), that State Commission passed the third order dated 7.8.2006, which has been impugned in both the revision petitions. It is worth reproducing the entire order, which is as under: "Respondent No. 1 has stated that they have paid the principal amount of Rs. 3,60,000 as compensation as per order dated 6.9.2004 passed by the Commission in Complaint Case No. C-153/98. We have also awarded interest @ 12%. The Counsel for the respondent states that period of interest is not in the aforesaid order. "IN view of the latest judgment of the Supreme Court in Life INsurance Corporation of INdia and Another v. S. Sindhu, VIII (2006) SLT 557=II (2006) CPJ 18 (SC), in such like (sic) cases the consumer is entitled for (sic) interest, if at all awarded, from the date of filing of the claim with the insurance company till the date of filing of the case. IN the instant case from the date of accident, i.e., in January 1997 till filing of the complaint (sic). Parties shall calculate the interest @ 12% on the amount of Rs. 3,60,000 w.e.f. February, 1997 till April 1998 i.e. till the date of filing the complaint. Re-list on 29.9.2006" (Emphasis supplied) Findings:

BEFORE us, the Insurance Company has rightly contended as under: (i) Section 17 of the Consumer Protection Act, 1986 (the Act) does not empower a State Commission to review or recall its own final order on a complaint. (ii) The State Commission, therefore, exceeded its jurisdiction in recalling/reviewing its own order dated 6.9.2004, which had attained finality in view of this Commission''s order dated 22.11.2004 in First Appeal No. 383 of 2004. (iii) Given the fact as at (i) above the State Commission had no jurisdiction at all to pass the impugned order dated 7.8.2006. (iv) The State Commission granting interest @ 12% per annum from the date of the accident to the insured vehicle to date of filing of the complaint was based on a completely wrong interpretation of the ratio of the decision of the Apex Court in the case of LIC of India and Another v. S. Sindhu (supra).

Clearly, there is glaring discrepancy between the order dated 6.9.2004 and that dated 25.4.2005 on the same Complaint Case No. C-153 of 1998, particularly in respect of award of interest. It is also abundantly clear that the State Commission''s order dated 6.9.2004 in Complaint Case No. 153 of 1998 attained finality after this Commission upheld it in First Appeal No. 383 of 2004. It is not necessary to go into the circumstances under which the State Commission passed its second order dated 25.4.2005 on the same complaint. Suffice it to observe that this second order is bad in law for want of legal jurisdiction.

The third order dated 7.8.2006 is equally bad in law because even if the application dated 2.7.2005 of the petitioner/complainant is treated as an Execution Application under Section 27 of the Act, the order dated 7.8.2006 can simply not go beyond the scope of the order dated 6.9.2004, which had become final and was the only legally valid order on the Complaint Case No. 153 of 1998. The reference to the Apex Court''s judgment (supra) is grossly misplaced - even a cursory look at the said judgment would settle the issue of its non-applicability to this case.

IN conclusion, we set aside the orders dated 25.4.2005 and 7.8.2006 of the State Commission and clarify that the interest on the awarded insurance claim of Rs. 3.60 lakh @ 12% per annum is payable from the date of the State Commission''s first order of 6.9.2004 till the date of realization of the payment, i.e., February 2005, which is what the INsurance Company has already paid to the complainant. The revision petitions are disposed accordingly. There shall be no order as to costs. Revision Petitions disposed of.