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Judgment
- THE Life Insurance Corporation of India, who was the respondent (opposite party) in a Complaint Petition No. C.D. 3 of 1989 on the file of the State Commission, Andhra Pradesh is the appellant before us. THE appeal is against the order dated April 20, 1990 passed by the State Commission rejecting the preliminary objections raised on behalf of the opposite party that the provision of facilities in connection with insurance does not fall within the definition of "service" and hence the Redressal Forums constituted under the Consumer Protection Act have no jurisdiction to adjudicate upon a dispute arising out of a policy of insurance. THE Insurance Corporation had raised a further contention also before the State Commission that since the Corporation had in exercise of the powers vested in it under the contract of insurance, repudiated the contract of insurance on the ground that there had been suppression of the material facts by the insurer at the time of taking the policy, the remedy, if any, for the insurer lies only in his approaching the ordinary Civil Court and no relief can be granted under the Consumer Protection Act. THEse contentions were overruled by the State Commission by a well considered order wherein all the relevant aspects have been fully discussed.
NOTWITHSTANDING, the earnest efforts made by the learned Advocate appearing on behalf of the appellant to persuade us to reach a contrary finding on the preliminary point of jurisdiction, we do not see any valid ground whatever for differing from the conclusion recorded by the State Commission. The first point of objection raised by the Insurance Company before the State Commission and reiterated before us namely is that no dispute arising out of a contract of insurance can be made subject matter of adjudication under the Consumer Protection Act. This contention cannot be sustained in view of the decision of this Commission dated July 28,1989 in Shri Umedilal Aggarwal v. United India Assurance Company Ltd. F.A. Nos. 3 and 4 of 1989 (Reported in I (1991) CPJ 3 (NC), wherein we have held as follows :- "We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the insurer to settle the claim of the insured within a reasonable time and the prayer for the grant of compensation in respect of such delay will not fall within the jurisdiction of the Redressal Forums constituted under the Consumer Protection Act. The provision of facilities in connection with insurance has been specifically included within the scope of the expression "service" by the definition of the said word contained in Section 2(i)(o) of the Act. Our attention was invited by Mr. Malhotra, learned Counsel for the Insurance Company to the decision of the Queen''s Bench in National Transit Insurance Company Ltd. v. Customs and Central Excise Commissioners, (1975) (1) All England Reports page 303). The observations contained in the said judgment relating to scope of the expression "insurance" occurring in the schedule of the enactment referred to therein are of no assistance at all to us in this case because the context in which the expression is used in the English enactment considered in that case is entirely different. Having regard to the philosophy of the Consumer Protection Act and its avowed object of providing cheap and speedy redressal to consumers affected by the failure on the part of persons providing "service" for a consideration, we do not and it possible to hold that the settlement of insurance claims will not be covered by the expression "insurance" occurring in Section 2(1)(d). Whenever there is a default or negligence in regard to such settlement of an insurance claim that will constitute a ''deficiency'' in the service on the part of the insurance company and it will be perfectly open to the concerned aggrieved consumer to approach the Redressal Forums under the Act seeking appropriate relief. We, accordingly, overrule the objection raised by the insurance company questioning the jurisdiction of the State Commission to adjudicate upon the complaint."
We have no hesitation to reaffirm the correctness of the legal position enunciated above. Accordingly, the point raised in the appeal will stand rejected.
The second contention raised on behalf of the appellant is that a contract of insurance is one entered into Uberimma Fides and since the insurance company had repudiated the contract of insurance in exercise of the powers reserved to it under the policy, the Redressal Forums constituted under the Act cannot entertain or adjudicate upon any claim put forward by the insurer. We do not see any substance in this plea. Any unilateral repudiated of the contract by the insurance company on the allegation that there had been a suppression of relevant material by the insurer at the time of taking the policy of insurance will not disentitle the policy holder from approaching the Redressal Forums constituted under the Act seeking an adjudication of the question whether the said repudiated was justified in law. In such a case the Consumer Disputes Redressal Forum has not only the jurisdiction but also a duty to investigate into the question whether the charge made by the insurance company on the basis of which the alleged repudiated was made is well founded in fact. In case it is found as a result of such investigation that the insurance company was justified in repudiating the contract, the complaint petition before the Forum will have to fail; if, on the other hand, the Forum comes to the conclusion that the charge levelled by the insurance company is not substantiated and hence there was no justification for its purported action repudiating the contract of insurance, the contract of insurance will be treated as subsisting and an enquiry will be conducted into the merits as to whether there was any ''deficiency'' in service on the part of the insurance company so as to entitle the complaint to grant of relief under the Act. Thus, it is clear that the jurisdiction of the statutory Redressal Forums to conduct an adjudication into the complaint is in no way affected by the unilaterial repudiation of the contract of insurance by the insurer. In the decision rendered by this Commission in the New India Assurance Company Ltd. v. M/s. Vipro Electronics Pvt. Ltd. Revision Petition No. 12 of 1990 (Reported in I (1991) CPJ 335 (NC) it has been held that the mere fact the insurer had repudiated, his liability in respect of the claim put forward by the insured does not operate to take away the jurisdiction of the Redressal Forums constituted under the Act to investigate into the complaint filed by the insured.
WE are in complete agreement with the following observations made by the State Commission in the impugned order : "It is urged by the learned Counsel that the redressal agency constituted under the Act does not have the jurisdiction to go into the question, whether the reputation of the policy is valid or not. Merely because the insurer had repudiated the policy unilaterally, we are unable to hold that the redressal agency under the Act will have no jurisdiction to deal with the matter. If such a contention is accepted, in every case where the policy has been repudiated, the jurisdiction of the redressal agency will be ousted, irrespective of the fact where the reputation is valid or not. The remedy provided under the Act is, in addition to and not in derogation of the provisions of any other law for the time being in force. If a consumer approaches the redressal forum constituted under the Act and satisfies it that a consumer dispute exists, the redressal forum would be quite justified in deciding the dispute and granting appropriate relief."
We do not also find any merit in the next objection raised on behalf of the appellant that since the claim of the complainant is one arising out of a policy of insurance, it is really a matter pertaining to alleged breach of contract and hence the proper remedy for the aggrieved party is only to institute a suit in the Civil Court. As has been pointed out by this Commission in the order passed in the case of Synco Textiles Pvt. Ltd. v. Economic Transport Organisation and Ors. F.A. No. 1 of 1990, every arrangement of "hiring of service" would invariably involve the creation of a contractual relationship between the parties and any claim for compensation put forward by the hirer on the ground that there was deficiency in the service rendered by the opposite party can be said to be one arising out of a breach of contract. But the Consumer Protection Act has specifically provided for adjudication of such claims filed by the consumers seeking recovery of compensation for alleged loss caused on account of "deficiency in service" by conferring on the Redressal Forums constituted under the statute the jurisdiction to adjudicate upon such disputes. It is very clear that the intention of the Act is that while parties may have a right to take recourse to the ordinary remedy by way of Civil Suit, ''consumers'' having a grievance that they have been put to loss on account of ''deficiency in service'' in respect of an arrangement of ''hiring of service'' for consideration could be provided with an alternative cheap, speedy and efficacious remedy before the statutory Redressal Forums. In the face of the express provisions contained in the Act providing for adjudication of such claims by the Forums constituted under it the contention that the matter is one arising out of breach of contract and the remedy can therefore be only way of Civil Suit cannot be countenanced. In Synco Textiles Pvt. Ltd. v. Economic Transport Organisation and Ors., this Commission dealt with an identical plea and held as follows :- "The mere fact that the default or deficiency on the part of the carrier may also amount to a breach of contract under the general law will not in any way effect the jurisdiction of the forums set up under the special law namely, the Consumer Protection Act (hereinafter called the Act). Once it is found that there is a hiring of service for consideration and that loss has been caused to the complainant on account of neglect and deficiency in rendering the service, the aggrieved consumer is entitled to seek his remedy under the Consumer Protection Act by approaching appropriate redressal forum. Every transaction of hiring of service may amount to a contract in the eye of law and any deficiency in rendering the service may be technically a breach of contract but merely for that reason the consumer cannot be denied the benefit of the protection conferred by the Act. While, ordinarily, claims arising out of breach of contract will have to be agitated before the regular civil Courts, grievance relating to loss or injury caused on account of negligence and deficiency in the performance of services which are hired for consideration have been classified for special protection under the Act and in such cases the aggrieved consumer is entitled to invoke the jurisdiction of redressal forums constituted under the Act, seeking relief as specified in the Act."
Applying the aforesaid dictum for the present case we have no hesitation to reject this contention raised by the appellant.
LASTLY, it was contended that since the matter cannot be decided without taking and considering documentary and oral evidence, the State Commission should have relegated the parties to pursue their remedy by way of suit. Dealing with a similar argument advanced before us in the case of S.K. Abdul Sukur v. State of Orissa and Ors. F.A. No. 96 of 1990, this Commission observed as follows : "The mere fact that witnesses may have to be examined and their cross-examination may also be necessary is not by itself a valid ground for refusing adjudication of the dispute before the Redressal Forums constituted under the Consumer Protection Act. It is to be remembered that the very purpose for which the statute has to be enacted is to provide a cheap and speedy remedy to aggrieved consumers by way of an alternative to the time consuming and expensive process of civil litigation. Section 13(4) of the Act (the provisions of which are made applicable to the State Commission by Section 18) specifically invests the Redressal Forums with the powers vested in a civil Court under the Code of Civil Procedure in respect of the summoning and enforcing attendance of witnesses and examining them on oath, the discovery and production of documents and other materials produceable as evidence, the reception of evidence on affidavits, the issuing of Commissions for the examination of any witness etc. The statute thus clearly contemplates that the Redressal Forums constituted under it are to decide cases filed before them after taking such oral and documentary evidence as the circumstances of any given case may require. Unless a redressal Forum constituted under the Act finds after a careful scrutiny of the pleadings and the documents etc. relied on by the parties that a satisfactory adjudication of the matter cannot be conducted by it in proceedings under the Act because of the exceptionally complicated nature of the factual and legal issues involved, it will not be just or proper to decline to adjudicate upon a complaint filed by an aggrieved consumer. The question whether or not there was negligence on the part of the opposite parties in relation to the performance of a particular item of service is not by itself too complicated to be determined by the Redressal Forums constituted under the Act on a consideration of the relevant oral and documentary evidence. If jurisdiction is declined by the special Redressal Forums set up under the Act in all such cases on the mere ground that examination and cross-examination of witnesses would be necessary, it would amount to unjust denial of the benefits of the Acts to the aggrieved consumer by erroneous abdication of its jurisdiction by the Forums. It is true that in M/s Special Machines v. Punjab National Bank and Ors. O.P. No. 32 of 1989, this Commission did decline to adjudicate upon the disputes brought before it and referred the complaint to the remedy by way of suit. But that was an exceptional case where transactions of borrowings from Banks extending over a long period of many years in different accounts were sought to be re-opened on allegations of fraud, misappropriation, manipulation of accounts, violation of banking norms etc. This Commission found after its preliminary examination of the case that the issues arising therein could not be satisfactorily adjudicated upon without elaborate scrutiny and rendition of accounts in relation to transactions of borrowing which the complainant had with the respondent Bank under different heads spread over a long period of many years. The observations contained in the order passed by this Commission in that case have to be understood against the background of the special facts relating thereto which were of an exceptional nature. The said decision is not to be understood as laying down any general preposition that in all cases where the examination and cross-examination of witnesses is involved the proper forum for adjudication of the dispute is only the Civil Court. Another important point that weighed with this Commission in M/s Special Machines case was that the subject matter of the complaint in that case was already sub-judice in suits pending before the Civil Court and there was a clear overlapping and intertwining of the questions arising for determination in the suits and those sought to be adjudicated in the complaint. It was under these special circumstances that the complaint therein was referred by this Commission to pursue his remedy by way of suit."
In the light of the legal position enunciated above, we have no hesitation to reject this plea put forward by the appellant. In the result, all the points raised on behalf of the appellant fail and this appeal will accordingly stand dismissed. Appeal dismissed.