M/S. Pyaridevi Chabiraj Steels Pvt. Ltd.

V/S

              .

National Insurance Company Ltd. & 3ors

 

Case No. 833 Of 2020

Decided on  : 28 Aug 2020

 

Law Point -Pecurniarry Jurisdiction of National Commission in the light of new provisions in the Act 2019

 

 

Bench -Hon'ble Mr. Justice R.K. Agrawal,President

Hon'ble Dr. S.M. Kantikar,Member

 

 

Facts of the case;

1.      Complainant had taken Insurance Coverage from National Insurance Company Limited, Kolkata, on 2nd June, 2016 under its Standard Fire and Special Perils Policy initially for a total sum of Rs.28,00,20,000/- (Rupees Twenty eight crores and twenty thousand only) by paying a premium of Rs.3,20,525/- (Rupees Three lac twenty thousand five hundred and twenty five only) only. The Complainant further took an additional security coverage of Rs.13,00,00,000/- (Rupees Thirteen crores only) on 25 th August, 2020 by paying a premium of Rs.1,23,037/- (Rupees One lac twenty three thousand and thirty seven only).

2.      According to the Complainant, the Factory Premises of the Complainant was severely hit by heavy rainfall,storm and river water flooding causing extensive water logging of Howrah Region for several days. Flood water had risen 4-5 feet inside the factory premises causing considerable damage to Buildings,Plants and Machinery and Stocks of the Complainant.

3.      The Complainant informed the National Insurance Company Limited, Kolkata on

05.09.2020 about the loss suffered and for making the payment of the loss suffered by estimating it.

4.      After exchange of correspondence and personal interaction the National Insurance

Company Limited, company vide letter dated 29.11.2018 repudiated the claim of the Complainant.

5.      Thereafter, the Complainant sought the Survey Report from the Opposite Party No.1 and finally in January, 2020, the Complainant through J Mukherjee & Associates, Advocates and Solicitors sent a notice to the National Insurance Company Limited calling upon the Insurance Company to withdraw the letter of Repudiation for making payments under the Insurance Policy.

6.      With no result to the legal notice the Consumer Complaint was sent via e mail on 31.07.2020. The NCDRC  Office had registered the Complaint on 05.08.2020. Therefore, this Complaint is to be considered under the provisions of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act of 2019”) which had come into force with effect from 20.07.2020/ 24.07.2020.

7.      In the present case a preliminary point arises as to how this Consumer Complaint is

maintainable before the National Consumer Disputes Redressal Commission because the value of the consideration paid in the present case i.e. premium paid for taking the Insurance Policies was only Rs.3,20,525/- and Rs.1,23,037/- the total of which comes to Rs.4,43,562/- (Rupees Four Lac forty three thousand five hundred and sixty two only), which is less than the consideration paid of more than Rs.10,00,00,000/- (Rupees Ten crores) as provided under Section 58 (1) (a) (i) of the Act of 2019.

 

Argument by the complainant

 

Mr. Joy Saha, learned Senior Counsel on behalf of the Complainant submitted that

 

!)  Under Section 21 (a) (i) of the Consumer Protection Act, 1986  the National Commission had the jurisdiction to entertain Complaints where the value of the good or services and compensation, if any, claimed exceeds Rs.1,00,00,000/- (Rupees One crore), whereas under Section 58 (1) (a) (i) of the Act of 2019 the National Commission has jurisdiction to entertain Complaints where the value of the goods or services paid as consideration exceeds Rs.10,00,00,000/- (Rupees Ten crores). According to the learned Senior Counsel, only the value of the compensation claimed has been omitted from Section 58 (1) (a) (i) of the Act of 2019 and the present Consumer Complaint is maintainable and this Commission will have the pecuniary jurisdiction to entertain the present Complaint.The insured value of the claim in this matter runs more than 41 crores  

 

!!)He further submitted that a liberal view should be taken of the word ‘value of consideration paid.”If it  is taken to be the amount paid for the purchase of goods or services by a Consumer then even though Insurance Policy taken by the Consumer be above 10,00,00,000/- (Rupees Ten crore), factually there will no instance of making payment by any Consumer premium of more than 10,00,00,000/- (Rupees Ten crore) and if such a strict view is taken then the claims regarding Insurance will have to be necessarily filed either before the District Consumer Disputes Redressal Commission or before the State Consumer Disputes Redressal Commission and not before the National Consumer Disputes Redressal Commission, which will create great hardship to such Consumers.

 

!!!)It is further contended that   law was laid down by a three Member Bench of this Commission in Ambrish Kumar Shukla & 21 Ors.Vs. Ferrous Infrastructure Pvt. Ltd, I (2017) CPJ I (NC) . That in the Act of 1986 it was “the value of the goods or services and the compensation claimed” taken into consideration while determining the pecuniary jurisdiction. For example, if a person has agreed to purchase a Flat/ Apartment/ Plot for about Rs.60,00,000/- and he is claiming refund as also compensation of Rs.50,00,000/- then the value will exceed Rs.1,00,00,000/-(one crore ) and the Consumer Complaint has to be filed before the National Commission. Similarly in the present case also compensation amount can be deleted as per the provisions of new act  and it  would be the case of taking Insurance Policy of above Rs.10,00,00,000/-(ten crore)  which in this case is more than 41 crore without adding compensation and therefore should be considered as a case fit for filing before the National Commission

 

Observations by the Commission -

 

While enacting the Act of 2019 the Parliament, was conscious of this fact and to ensure that Consumer should approach the appropriate Consumer Disputes Redressal Commission whether it is District, State or National only the value of the consideration paid should be taken into consideration while determining the pecuniary jurisdiction and not value of the goods or services and compensation, and that is why a specific provision has been made in

Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) providing for the pecuniary jurisdiction of the

District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal

Commission and the National Commission respectively.

 

 For ready reference the provisions of Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) of the

Act of 2019 are reproduced below:

 

“34. (1) Subject to the other provisions of this Act, the District Commission shall have

jurisdiction to entertain complaints where the value of the goods or services paid as

consideration does not exceed one crore rupees:”

 

“47. (1) Subject to the other provisions of this Act, the State Commission shall have

jurisdiction—

(a) to entertain—

(i) Complaints where the value of the goods or services paid as consideration, exceeds

rupees one crore, but does not exceed rupees ten crore:”

 

“58. (1) Subject to the other provisions of this Act, the National Commission shall

have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services paid as consideration exceeds

rupees ten crore:”

 

 “34. (1) Subject to the other provisions of this Act, the District Commission shall have

jurisdiction to entertain complaints where the value of the goods or services paid as

consideration does not exceed one crore rupees:”

 

From a reading of the aforesaid provisions it is amply clear that for determining the

pecuniary jurisdiction of the District Commission, State Commission or National Commission the value of the goods or services paid as consideration alone has to be taken and not the value of the goods or services purchased/ taken. Therefore, we are of the view that the provision of Section 58 (1) (a) (i) of the Act of 2019 are very clear and does not call for any two interpretations

“In view of the foregoing discussion, we are of the considered opinion that as the value of

consideration paid by the Complainant is only Rs.4,43,562/- (Rupees four lac forty three thousand five hundred and sixty two only), which is not above Rs.10,00,00,000/- (Rupees Ten crore), theNational Commission has no jurisdiction to entertain the present Consumer Complaint and it is accordingly dismissed as not maintainable.”

 

Now this is the final view in interpreting the clauses as explained which are further confirmed by the Hon’ble Supreme court also in its latest judgment in the matter of  Neena Aneja &Others-Vs-Jai Prakash Associates Ltd pronounced on 16^th March 2021

 

 

ORDER BY 

J. R.K. AGRAWAL ,PRESIDENT,.DR. S.M. KANTIKAR MEMBER

 

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