M/S ACME CLEANTECH SOLUTIONS PRIVATE LIMITED versus M/S UNITED INDIA INSURANCE COMPANY LIMITED & ANR on 9 December 2021

1. These appeals arise from an order of the National ConsumerDisputes Redressal Commission[1] dated 11 March 2021 in IA 3463 of2020 and IA 1346 of 2021.B

2. The appellant instituted a consumer complaint before theNCDRC on 28 September 2019, being Consumer Complaint No 1934 of2019. Briefly stated, the grievance of the appellant was that the firstrespondent had failed to settle the insurance claim of the appellant arisingout of the two alleged storms which damaged the solar power plants ofCthe appellants. The relief which was claimed in the complaint is set outbelow, for convenience of reference:

“(i) Direct the Respondents to immediately settle the Claim of theComplainant as per the Insurance Policy and make payment of:

DA. insurance claim towards material damage to the tune ofINR 13,91,78,987.75/- and

B. insurance claim towards business interruption to the tune ofINR 6,00,00,000/-

(ii) Direct the Respondents to pay interest @ 18% per annum forEthe period of delay from 13.06.2016 being the date when theComplainant intimated about the incident and claim, till the date ofactual payment of the Claim of the Complainant; and

(iii) Direct the Respondents to pay compensation to the tune ofINR 1,00,00,000/- on account of harassment, mental agony, fraudF& deception, hardship and inconvenience caused to theComplainant due to acts of deficiency in services, negligence andunfair trade practices on part of the Respondents; and

(iv) Direct the Respondents to pay INR 5,00,000/- towards litigationexpenses.”

G3. On 17 October 2019, the NCDRC passed the following order:

“Heard.

Complaint is admitted subject to just exceptions.

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Issue notice of the complaint to the opposite party under Section13(2) of the Consumer Protection Act, 1986 making it clear that ifopposite party wishes to file its written statement, it may do sowithin 30 days from the date of service of the notice of thecomplaint, failing which right to file the written statement may beclosed.”

4. Notice of the complaint was served on the first respondent on5 November 2019. The first respondent did not file its written statementwithin the period stipulated by Section 13(1) of the Consumer ProtectionAct 1986[2]. On 6 March 2020, the first respondent filed IA 3463 of 2020seeking the dismissal of the consumer complaint on the ground that itwas premature. In paragraph 10 of the application, the averment was tothe following effect:

“10. It is stated that the non-cooperative attitude of theComplainant has caused hindrance to the insurer in examining theclaim and therefore the progress of verifying and scrutinizing thedocuments including the survey report is under progress andtherefore the instant Complaint is premature and deserves to bedismissed on this ground alone.”

5. No reference was made in the IA to the repudiation of theclaim. On the same day, 6 March 2020, the first respondent issued aletter repudiating the claim of the appellant. In the meantime, the appellantsought copies of the final survey report. In its response to IA 3463 of2020, the appellant, inter alia, raised the plea that the right to file thewritten statement had been barred in view of the judgment of theConstitution Bench of this Court in New India Assurance CompanyLimited v Hilli Multipurpose Cold Storage Private Limited[3].

6. The appellant filed IA 1346 of 2021 on 11 February 2021 seekingproduction of the final survey report. Both IA 3463 of 2020 filed by thefirst respondent and IA 1346 of 2021 filed by the appellant were heardby the NCDRC and, by an order dated 11 March 2021, have beendisposed of. The NCDRC has directed the appellant to file an amendedcomplaint and has granted an opportunity to the first respondent to file awritten statement. The appellant has accordingly challenged the orderto the extent that it directs the appellant to file an amended complaint 2 “Act”

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Aand allows the first respondent to file a written statement to the amendedcomplaint on the ground that this is contrary to the provisions of Section13(2) read with Section 22 of the Act.

7. On behalf of the appellant, the submission which has been urgedby Counsel is that the first respondent failed to file the written statementBwithin the outer limit which is prescribed by Section 13(1) (as madeapplicable to the NCDRC by the provisions of Section 22). Consequently,it has been urged that the procedure which has been adopted by theNCDRC of requiring the appellant to amend the complaint and grantingan opportunity to the first respondent to file a written statement to theamended complaint would deprive the appellant of a right which hasCaccrued by the failure of the first respondent to lodge the writtenstatement within the time stipulated by the statute. In this context, reliancehas been placed on the judgment of the Constitution Bench in HilliMultipurpose Cold Storage Private Limited (supra).

8. On the other hand, the submission which has been urged onDbehalf of the first respondent is that the relief which was sought in thecomplaint was for the insurer to settle the claim by making the paymentof the claim. It has been submitted that while it is true that there was nowritten statement by the insurer within the prescribed period as set outin Section 13(1), the insurer having repudiated the claim on 6 MarchE2020, the relief which was sought in the complaint worked itself out andit would, hence, be the submission of the insurer that the complaint hasbeen rendered infructuous. In this backdrop, it was submitted that theNCDRC was justified in issuing a direction that the appellant shouldamend the complaint. Moreover, once the complaint is amended, a rightwould accrue to the insurer to file a written statement to the amendedFcomplaint.

9. While assessing the merits of the rival submissions, it isnecessary to state, at the outset, that no written statement was filed bythe insurer within the period prescribed in the statute. The judgment ofthe Constitution Bench in Hilli Multipurpose Cold Storage PrivateGLimited (supra) has held the period provided in Section 13 of theConsumer protection Act, 1986 (thirty days with a further condonationof up to fifteen days) to be mandatory. However, the decision has beengiven prospective effect. The complaint filed by the appellant, as it stands,requires the insurer to settle the claim and to make payment. The insurerHrepudiated the claim on 6 March 2020. There is merit in the contention

of Counsel for the appellant that the appellant cannot be compelled toamend the complaint. Whether the pleading in the nature of a plaint in acivil suit or a complaint before the consumer forum should be amendedis a matter for the plaintiff or, as the case may be, the complainant todetermine. The party which moves the forum is dominus litis and isentitled to decide whether or not to amend the pleading or to pursue thecomplaint, as it stands. We may note at this stage that it is the contentionof the appellant that the relief which has been sought in the complaint isnot only for the settlement of the complaint, but also, in addition for thepayment of the amount due and hence, the complaint has not beenrendered infructuous. According to the appellant, the belated repudiationof the claim beyond a reasonable period has no consequence. On thisaspect, we need not dilate any further since the issue has to be decidedby the NCDRC in the pending proceedings.

10. Be that as it may, it is for the appellant to decide as to whetherthe complaint should be amended or whether it would pursue the optionof proceeding with the pleadings as they stand. It is for the appellant todecide as to whether instead of pursuing the complaint, as it stands, itshould either:

(i) amend the complaint to challenge the repudiation of theinsurance claim; or

(ii) withdraw the existing complaint with liberty to file a freshcomplaint challenging the repudiation of the claim.

11. To recapitulate, in the situation as it stands at present, theappellant could take recourse to either of three courses of action, namely:

(i) pursue the complaint as it stands; or

(ii) amend the complaint to challenge the letter of repudiation;or

(iii) withdraw the existing complaint with liberty to institute afresh complaint to challenge the letter of repudiation.

12. The error in the order of the NCDRC was to compel theappellant to amend the complaint, as a consequence of which, it grantedpermission to the first respondent to file a written statement to theamended complaint. The effect of this would be to deprive the appellantof the benefit of urging that written statement cannot be filed at this AB

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Astage in view of the judgment of the Constitution Bench in HilliMultipurpose Cold Storage Private Limited (supra). The deprivationof the right to set up such a plea is a matter of prejudice to the appellantwhich is a result of the impugned order of the NCDRC. We clarify thatwe have not expressed any opinion on whether the respondent can file awritten statement since this does not form the subject matter of theBpresent appeal. We hold that the appellant could not have been directedto amend the complaint to challenge the repudiation of the contract ofinsurance. The appellant has stated that it does not wish to do so. This isa decision which has to be taken by the appellant and it cannot becompelled to amend the complaint.

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13. For the above reasons, we are of the view that the NCDRCwas in error in issuing a direction to the appellant to amend the complaintand in permitting the first respondent to file its written statement to theamended complaint, subject to the payment of costs. Essentially, the IAwhich was filed by the first respondent was on the basis that the complaintDwas premature since the process of verifying the claim was still to becompleted. Now, that the claim has been repudiated, according to thefirst respondent, the IA would not survive. We, however, clarify that wehave not expressed any view on the effect or the consequence of thealleged act of repudiation by the insurer since the matter is still to beEurged before the NCDRC. All the rights and contentions of the partiesin that regard are kept open. Accordingly, the impugned order of theNCDRC dated 11 March 2021 to the extent that it decides IA 3463 of2020 is set aside. We clarify that the appellant could be at liberty tofollow either of the three courses of action, as indicated in the earlierpart of this order, namely:F

(i) to pursue the complaint as it stands without any amendment;or

(ii) to seek an amendment to the complaint; or

(iii) to withdraw the complaint with liberty to file a freshcomplaint to challenge the alleged act of repudiation.

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14. In the event that the appellant exercises option (ii) above, thefirst respondent would be at liberty to file a written statement to theamended complaint within the stipulated period. In the event that theappellant exercises option (iii), namely, to institute a fresh complaint, theH

first respondent would be at liberty to file a written statement inaccordance with law.

15. The appeals are accordingly disposed of.

16. Pending application, if any, stands disposed of.

Devika Gujral

Appeals disposed of.

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