SHAKUN OVERSEAS LTD. vs National Insurance Co. Ltd.

THE complainant in case No. C. 112/92 on the file of the State Commission, Delhi, has preferred this appeal against the Order dated 17.7.1991 passed by the State Commission declining to investigate into the merits of the complaint and referring the complainant to seek his remedy by way of a suit in the ordinary civil court. In support of the view taken by the State Commission that the proper remedy to be resorted to by the complainant is the institution of a suit before a civil court, the State Commission has relied on certain observation made by us in Janta Machine Tools v. THE Oriental Insurance Co. I (1991) CPJ 234 (NC). After giving our careful consideration to all aspects of the case we are of opinion that the State Commission was in error in applying to the present case of the observations made by this Commission in the Janta Machine Tools case since the facts and circum stances which obtained in the latter case and against background of which those observations were made were wholly different and the said decision is therefore clearly distinguishable.

THE short facts that have given rise to the present appeal are that the complainant imported a consignment of raw silk weighing 1798.95 Kg. from M/s. Dollyxpo (Far East) Ltd., Hongkong. THE goods were despatched from Guaugzhou to Madras. THE complainant insured the consignment with the National Insurance Co. Ltd. (Respondent herein) for a sum of Rs. 22 lakhs against all risks such as war, strike, riot, civil commotion etc. during its transportation from Hongkong to anywhere in India via Madras port as per a cover note issued on 15th September, 1989. Subsequently this cover note was replaced by a regular policy bearing the same date. The consignment arrived safely at Madras. After completion of import and Customs formalities 10 bales were despatched from Madras to Delhi in soul conition as per Railway Receipt dated 18th November, 1989. The goods arrived at New Delhi Railway Station on 21st November, 1989. When the complainant went to the railway station in New Delhi to take delivery of the goods it was found that the goods had been damaged in a fire which it had occurred at the railway station on 21st November, 1989 at about 2.00 P.M. By a letter dated 21st November, 1989 the complainant informed the respondent about the fire accident and the damage caused to the goods. The respondent took immediate action to appoint a surveyor to assess the loss. The surveyor visited the New Delhi railway station on 22nd November, 1989 and examined the damaged bales. But his request for open delivery of the goods on the goods on that date was not agreed to. Subsequently, the goods were taken delivery of by the complainant on 4th December, 1989 in the presence of the surveyor appointed by the respondent and they were examined by the surveyor at the godown of the complainant to which place the goods were transported.

By his report dated 17th February, 1990 the surveyor assessed the loss at Rs. 72,141/-. The complainant requested the Insurance Company to make payment of his claim which he estimated at Rs. 74,391/- the said amount of being the aggregate of the loss estimated by the surveyor and sum of Rs. 2,250/- paid by the complainant by way of fees to the surveyor. All relevant papers available with the complainant were supplied to the respondent along with the letter containing the aforesaid request. Thereafter the complainant received a letter from the respondent offering only an amount of Rs. 23,916/- in full settlement of the claim based on the policy.

AGGRIEVED by the said reply received from the Insurance Company the complainant approached the State Commission seeking the relief of recovery of a sum of Rs. 1,07,781.38 which included interest at 18% per annum amounting to Rs. 13.390 on the amount of loss mentoined above from 28.4.1990 till the date of filing of the complaint and also an amount of Rs. 20,000/- claimed as compensation for willful negligence of the respondent in reasonably settling the claim. The Insurance Company remained exparte. before the State Commission. Thus the State Commission had no material whatever of funished to it by its Insurance Company as to why the assessment of loss made by its own surveyor at Rs. 72,141/- had been given a go by and only an amount of Rs. 23,916/- was offered to the insured as compensation . In such is situation one should have reasonably expected the State Commission to proceed to give its finding on the merits of the claim put forward by the complainant after a careful consideration of the materials produced in support of said claim. The counsel for the complainant had specifically invited the attention of the State Commission to our decision in New India Assurance Co Ltd. v. M/s Vipro Electronics Pvt. Ltd. I (1991) CPJ 335 (NC). In that case this Commission observed as follows. "We are not impressed with the contention raised by Shri S.K. Paul, learned counsel appearing on behalf of the Petitioner that merely because the insurer had totally repudiated his liability in respect of the claim. No proceeding could be validly initiated under the Consumer Protection Act by the insured. This contention squarely falls within the ruling given by this Commission in "Umedilal Agarwal v. United India Assurance Co. Ltd. (O.P. No. 3 and 4 of 1989 decided on 28.7.1989) (1991) CPJ 3. In that decision this Commission has observed that it is not possible to hold that the settlement of a disputed insurance claim will not be covered by the expression "service" occurring in Section 2(d) of the Act. it was laid down that whenever there is default or negligence in regard to service that will constitute "deficiency in service" on that part of the insurer and it is perfectly open to the aggrieved party of seeking appropriate relief under the Act.

The next point urged by the counsel for the Revision Petitioner is that under the terms of the policy the insurer in not liable to honour the claim in the present case, since according to him there is nothing to show that there was any house breaking in the premises of the Complainant which involved force or violence. This point has been duly discussed by the State Commission with reference to the definition on "house breaking" contained in the Indian Penal Code and it has been found by the State Commission that this was a clear case of house breaking satisfying the said definition. We do not find any reason to interfere with the conclusion of fact so arrived at by it. In the result, we refuse to interfere. In the result, the Revision Petition has no merits and is accordingly dismissed."

INSTEAD of following the dictum laid down in the said decision the State Commission preferred to rely on the observations made by us in the Janta Machine Tools v. The Oriental Insurance Co. case. Those observations were made by this Commission in the context of certain facts and circumstances which obtained in that case, namely, that the Insurance Company satisfied this Commission that it had fully investigated into the claim put forward by the complainant, got repeated surveys conducted and had finally come to the conclusion that the claim put forward by the complainant was false. This Commission after examining the papers on record was satisfied that there was a careful and detailed consideration of all relevant aspects and materials by the Insurance Company and thereafter a decision had been taken by it in good faith that the claim was false and hence it had to be repudiated. In the case before us the Insurance Company did not produce any materials before the State Commission and had remained ex parte. Obviously the Insurer cannot have a case that the complainant''s claim was false since the company itself had offered Rs. 23,968/- to the complainant as compensation. In such a situation the observations made in the Janta Machine Tools v. Oriental Insurance Co. do not at all get attracted and the proper course for the State Commission was to apply the dictum laid down by us in the New India Assurance Co. Ltd. v. M/s. Vipro Electronics Pvt. Ltd. and proceed to investigate on the merits the claim of the complainant. In more than one case decided recently by this Commission we have had occasion to point out that except in rare instances where the questions of facts and of law arising in the case are of such involved and complicated nature that it will not be possible to determine them satisfactorily in proceedings before the Consumer Redressal Forums it is not just correct or legal to decline to exercise jurisdiction in respect of a complaint merely on the ground that oral or documentary evidence will have to be adduced. In DM., L.I.C. of India Andhra Pradesh v. S.B. Sreenivas Reedy II (1991) CPJ 189 (NC) this Commission made the following observations: - "Lastly, it was contended that since the matter cannot be decided without taking an considering documentary and oral evidence, the State Commission should have relegated the partie to pursue their remedy by way of suit. Dealing with a similar argument advanced before-us in the case to 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 witness 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 Procedures in respect of the summoning and enforcing attendance of witness 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 forum 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 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 witness would be necessary, it would amount to unjust denial of the benefits of the Act of 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 & 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 reopened 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 witness 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 question arising for determination in the suits and those sought to be adjudicated in the complaint. It was under these special circumstances that the complainant therein was referred by this Commission to pursue his remedy by way of suit." The same principle has been subsequently reiterated by us in F.A. No. 78 of 1990 L.I.C. v. Uma Devi decided on 6th June, 1991.

IN the result we allow this appeal, set aside the order passed by the State Commission and remand Complaint Case No. C-l 12/91 to the State Commission for fresh disposal on the merits in accordance with law in the light of the observations contained herein. The appellant will get his costs fixed at Rs. 1,000/- from the respondent. Appeal allowed.