National Insurance Company Ltd. vs R.S. OIL And GENERAL MILLS (P) LTD.

-THE appellant, National Insurance Company Ltd., has preferred an appeal against the Order dated 21st August, 1991 passed by the State Commission of Haryana, Chandigarh in the complaint filed by the Respondent herein M/s. R.S. Oil & General Mills (P) Ltd., against the appellant

IN the complaint petition before the State Commission the appellant, INsurance Company, had resisted the complaint on merits as well as on the ground of preliminary objection with regard to the very maintainability of the complaint before Consumer Forum. The appellant, INsurance Company, had contended that the State Commission had no jurisdiction to try the complaint under Sec. 18 of the Consumer Protection Act, 1986 as the claim of the complainant had been rejected as not payable by the Respondent INsurance Company. It was contended by the appellant INsurance Company that "once the claim (Under the contract of INsurance) has been rejected by the Company this (State) Hon''ble Commission has no jurisdiction to decide the said case." As pointed out in the Order of the State Commission, this preliminary objection was strenuously pressed on behalf of the appellant, Insurance Company, and it was contended that both on principle as well as on precedent that once Insurance Company had rejected the claim of the insured party then the Redressal Forums under the Act have no jurisdiction. It was further stated that the competent authority of the appellant, Insurance Company, had categorically repudiated the claim of the complainant respondent and therefore, the only remedy for the insured respondent lay in approaching the Civil Courts and that no relief can be granted to him under the Consumer Protection Act, 1986.

The State Commission had confined itself and quite rightly to the preliminary objection about the maintainability of the complaint before the State Commission. After examining the legal position in the light of the case law, the State Commission came to the finding that a mere unilateral rejection of an insured party''s claim by an Insurance Company does not per se operate against the insured as a jurisdictional bar to seek redress before the forums under the Act. The State Commission has observed that whenever there is any delay or dilatoriness in finalising an insurance claim, the same would "tantamount to a deficiency in service and thus comes squarely within the ken of the Consumer Redressal Forums". The State Commission has further held that if an Insurance Company arbitrarily and wrongfully rejects the insured''s bona fide claim outright, it cannot by such fiat carry itself beyond the pale of redress before the Consumer Forums : a wrongful rejection of an insurance claim would certainly attract the jurisdiction of these forums. The State Commission elaborated that an harassed insured party can come to the Consumer Forum to seek redress for delay, default or dilatoriness and he cannot be cheated of seeking redress through the Consumer Protection Act by the simple subterfuge of rejecting the claim outrightly, and thus driving him to the tortuous and weary path of civil litigation. The State Commission emphasized that wrongful, arbitrary or mischievous rejection of an insurance claim would patently be a ''default'' within its larger meaning.

THE State Commission came to this finding after examining the law and the case law on the subject including the Orders of this Commission in Janta Machine Tools v. Oriental Insurance Company Ltd., I (1991) CPJ 234 (NC). This Commission is in full agreement with the view expressed by the State Commission that the mere unilateral rejection of an insured party''s claim by the insurer does not per se operate as jurisdictional bar to seek redress before the Forums under the Act. The said conclusion is in accord with the later pronouncement of this Commission in Divisional Manager, L.I.C. of India v. B.S. Reddy, 1991 MRTP Reports 263.

IN the appeal petition as well as during the course of oral hearing, the Counsel for the appellant sought to challenge the Order of the State Commission on merits viz. that the respondent complainant had failed to produce the non-delivery certificate from the carrier, that the claim was entirely false inasmuch as that they had no manufacturing mill nor were they manufacturing oil or oil cakes, that their factory was lying closed since long, that there was no proof of goods having been despatched and there was no proof that the said consignment did not reach the consignee, that there was no final report by the police in the F.I.R. filed by the respondent complainant These are questions of fact which would have to be gone into by the State Commission only after it had pronounced its Order on the preliminary objection on the maintainability of the complaint before the State Commission. It is in appropriate for the appellant herein to agitate these questions of fact along with question of jurisdiction in the appeal filed against the preliminary Order passed by the State Commission on the question of jurisdiction. After the State Commission had decided the preliminary objection regarding jurisdiction, the appellant should have proceeded with the trial of this case before the State Commission but it chose to appeal against the Order of the State Commission and as such our decision has necessarily to be limited to the issue of jurisdiction and the maintainability of the complaint petition before the State Commission. The appeal is dismissed. The Appellant will pay Rs. 2,000/- as costs to the Respondent Appeal dismissed.