Holding

A consumer complaint cannot be dismissed in limine without first issuing notice to the respondent and placing both parties' pleadings on record to determine the nature and scope of the enquiry.

Summary

Punj Lloyd Limited, an engineering contractor, filed a consumer complaint against Corporate Risks India Pvt. Ltd., an insurance broker, alleging negligence that caused a loss of over Rs. 5.26 crore in securing insurance for a pipeline project. The National Consumer Disputes Redressal Commission dismissed the complaint in limine, stating that the matter involved disputed questions and contentions beyond its jurisdiction, without issuing notice to the respondent. The Supreme Court held that the Commission was premature in its dismissal because it had not served notice or placed the pleadings of both parties on record, which is essential to determine whether the issues can be decided by a summary enquiry. The Court emphasized that the presence of disputed questions does not automatically preclude the Commission’s jurisdiction, and that the nature of the complaint must be examined before relegating it to a civil court. Consequently, the Court set aside the Commission’s order and remitted the complaint back to the Commission for fresh hearing with due notice to the respondent. The appeal was partly allowed and the matter was sent back to the Commission.

Issues considered

The National Consumer Disputes Redressal Commission's power to dismiss a consumer complaint in limine without issuing notice to the respondent.
Whether the presence of disputed questions and contentions automatically bars the Commission's jurisdiction under the Consumer Protection Act, 1986.
Whether the Commission must first place pleadings of both parties on record before deciding if the matter requires detailed investigation beyond its summary procedure.

Legislation cited

Consumer Protection Act, 1986s. 12, s. 21

Subjects

consumer protectioncomplaint dismissalin liminejurisdictionsummary proceedingsnoticedisputed questionscivil courtNational Consumer Disputes Redressal Commission

Judgment

[2008] 1'~1 S.C.R. 309

PUNJ LLOYD LIMITED A
... "' v.
CORPORATE RISKS INDIA PVT. LTD.
(Civil Appeal No.1026 of 2007)
DECEMBER 11, 2008 B
[TARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.]

-· -r Consumer Protection Act, 1986 - ss. 21 and 12 -
Complaint under - Dismissal in limine - National
Commission relegating complainant to approach civil court c
before issuing notice to respondent and without prima facie.
going into meiits of the case - Grounds for rejection being
contentious disputes and questions in the CO!J1plaint -
Justification of - Held: Not justified - Decision of Commission
was premature - It ought to have issued. notice to respondent o·
and placed pleadings on record and then form opinion as to
~-
nature and scope of enquiry - Thus, order of Commission set
_JI
aside.
The question which arose for consideration in this
appeal is whether the National Consumer Disputes E
Redressal Commission was justified in dismissing the
complaint in limine without issuing any notice to the
!._,
respondent and prima facie going into the merits of the
case on the ground that the appellant had raised disputed
questions and contentions which were beyond the F
-. purview of the Commission.
+-

Allo~ing the appeal and remitting the matter, the
Court
HELD: 1.1. The decision arrived at by the
G
Commission is premature. The Commission ought to
-._,
have issued notice to the respo'ndent .and placed the
pleadings on record. When pleadings of both the parties
• " were made available before the Commission, only then
• 309 H
310 SUPREME COURT REPORTS (2008] 17 S.C.R.
• I

A the Commission should have formed an opinion as to the
nature and scope of enquiry, i.e., whether the facts which
arose for decision on the basis of the pleadings of the
parties required a detailed and complicated investigation
of facts which was incapable of being undertaken in a
B summary and speedy manner, then only the Commission
should have justifiably formed an opinion on the need of
relegating the complaint to a civil court. That apart, in
view of the admitted fact that the respondent was never
served with any notice and not present before the
c Commission, therefore, it was not known to the
Commission, what would be the defence and
contentions of the respondenf and what questions and
disputes would really arise th~refrom u~til and unless
both sides place their respective cases before the
Commission. At that stage it is difficult for the
1

0
,

ComR1ission also to hold whett1er the disputed questions
and contentions could not be decided by the Commission
and the same must be relegated to the Civil Court. [Para
15] [319-F-H; 320-A-C]
E 1.2. Every complaint of the consumer is related to a
dispute and wilf raise di~puted questions and
contentions.. If there was no dispute, then there would be
. I
no complaint. From a look at the statements made in the ....'
complaint, it would be difficult to say that the complaint
1

F has disclosed complicated questions of fact which cannot
be gone into by the Commission and the same can. only
be gone into by the Civil C9urt before bringing the
respondent on record and asking him to file his defence.
Therefore, the ground for r~jection of the complaint
G namely, "it arises disputed questions and contentions"
was definitely irrelevant. In any', view of the matter, it is not
evident from the order of the Commission that it had
considered the nature of dis~uted questions of fact for
which the complainant should be relegated to the Civil
Court for decision. Thus, the Commission was; not
H
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 311
PVT. LTD.

justified in rejecting the complaint merely by stating that A
the complicated nature of fact and law did not warrant
any decision on its part before even issuing notice to the
respondent and directing the filing of his defence, which
cannot be said to be decisive. The decision of the
Commission is set aside and the complaint is sent back B ·
to the Commission to be heard afresh. [Paras 15 and 16]
(319-F-H; 320-A-F]
CCI Chambers Coop. HSG, Soci~ty Ltd. vs.
Development Credit Bank Ltd. (2003) 7 SCC 233 and Dr. J.J.
Merchant and others vs. Shrinath Chaturvedi (2002) 6 SCC C
635, Relied on
Synco Industries vs State Bank of Bikaner & Jaipur and
Others (2002) 2 SCC 1, Referred to
I

Case Law Reference: D
(2002) 2 sec 1 Referred to Para 10
(2003) 1 sec 233 Relied on Para 15
(2002) 6 SCC 635 Relied on Para 15
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1026 of 2007.
. From the final Judgment and Order dated 14.9.2006 of the
National Consumer _Disputes Redressal Commission in
Consumer Complaint No. 81 of 2006. F '
P.S. Narasimha, Ashish Aggarwal, L. Roshmani,
Mandakini Sharma and Vinoo Bhagat for the Appellant.
Ranjit Kumar, Bimal Roy Jad, B.K. Khurana and Sunita
Pandit for the Respondent. G,
The Judgment of the Court was delivered by
TARUN CHATTERJEE, J. 1. This appeal is directed
against the final order dated 14th of September, 2006 of the
National Consumer Disputes Redressal Commission
(hereinafter referred to as the "Commission") at New Delhi in H

-t
312 SUPREME COURT REPORTS [2008] 17 S.C.R.

A Consumer Complaint No 81 of 2006 whereby, the Commission
had dismissed the complaint in limine without giving notice to
the respondent on the ground tha.t the appellant had raised
disputed questions and contentions which were beyond the
purview of the Commission. -
B 2. The relevant facts as emerging from the case made out
by the appellant have been mentioned in a nutshell:
The appeOant is an engineering construction company
serving customers in the hydrocarbon and infrastructure sectors
C in the global markets, delivering projects and services in
pipelines, tankage etc. The appellant was awarded a contract
in the Uran - Trombay Pipeline Project with the Oil and Natural
Gas Corporation of India. The contract of the appellant with the
Oil and Natural Gas Corporation o~ India obliged the appellant
to arrange for insurance covering risks during the construction
0 process in the project. There are pnly a few insurers and re-
insurers competent and willing to undertake such risks
according to the knowledge of the :appellant.
3. The respondent is a company registered with the
E Insurance Regulatory and Develdpment Authority· and is an
insurance and re-insurance broker which had approached the
appellant in August 2005, explaining that it had the competence
and expertise to arrange the specialized and high-priced
insurance and re-insurance cover _required for the Uran-
F Trombay Pipeline Project. The appellant thereupon based upon
the assurance of the respondent, appointed it as its insurance
broker for arranging the desired insurance/re-insurance for the
1

project. The respondent, by a letter dated 17th of August, 2005,
conveyed to the appellant that it had short-listed the Oriental
Insurance Company Ltd. and th~ premium for the requisite
G insurance would be US $ 1,369, 128.5 (one million three
hundred sixty-nine thou·sand one hundred twenty eight dollars
and fifty cents}; equivalent to apRroximately Rs. 6.16 crores,
plus service tax. ~-
. 4. On 19th of August, 2005 the appellant had written to the
H

..,_
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 313
PVT. LTD. [TARUN CHATTERJEE, J.]

Oriental Insurance Company Ltd. admitting that the premium A
amount would be paid to it. Thereafter on 25th of August 2005,
the appellant confirmed the appointment of the Oriental
Insurance Company as its lead insurer through a letter
addressed to the same. The Insurance Company then replied
back on the same date stating that the quote submitted by it B
was valid only till 26th of August, 2005 and that the premium to
be paid must be remitted without delay. The appellant received
the said letter on 29th of August, 2005, three days after the
t'
expiry of the quote and hence immediately communicated the
lapse of the insurance company to the respondent. The c
respondent then came to the office of the appellant on 29th of
August, 2005, and assured the appellant that the quote was still
valid, in turn, asking· the appellant to ·forward a letter to the
Oriental Insurance Company mentioning about the acceptance
of its offer along with the provisional premium. The appellant
D
immediately handed over the Oriental Insurance Company's
letter dated 25th of August 2005, and another letter dated 29th
of August 2005 on behalf of the appellant to the insurance
company along with a cheque bearing No. 367340 towards the
provisional premium of Rs. 25 lacs thereby reconfirming its
mandate, to the Director of the respondent company for
E
submission to the Oriental Insurance Company. The
Respondent, by its letter dated 31st of August 2005, informed
the appellant that it had forwarded the letter dated 29th of
August 2005, written by the appellant for the insurance
company along with the premium, to the said insurance F
company. On 1st of September 2005, the appellant received
~
a letter from the Oriental Insurance Company informing them
that the policy had been rejected as the given deadline had not
been adhered to and that the sum of Rs.25 lacs was held by
the insurance company as a deposit and not as a premium. G
Consequent upon the expiry of the Oriental Insurance
Company's quote, the appellant had to set out for obtaining a
fresh quote. The best quote available at that moment was the
one that was offered to them by ICICI Lombard General
H
314 SUPREME COURT REPORTS [2008] 17 S.C.R.

A Insurance Company Ltd. but at a: much higher premium. The
appellant had no other option but to take the quote offered at
Rs. 11,4004967. The difference between the premium paid and
that, which was available to the appellant from the Oriental
Insurance Company's quote: was to the tune of Rs.
B 5,26,70,654. Thus aggrieved, t~e complainant wrote to the
resP.ondent on 25th of Octoper 2005, bringing to the
r~spondent's notice of its breaches and the resultant losses and
therefore seeking due fulfillment of these losses within a period
of 30 days. There was no response on the part of the
c respondent and, therefore, the appeHant again forwarded a
letter to the respondent on 1st of December 2005, seeking a
clarification whether the respondent had notified a claim under
its professional indemnity policy. The appellant received no
response to this letter either. LJltimately the appellant filed a
complaint under section 12 and section 21 of the Consumer
0
Protection Act, 1986 (herein after referred to as the "Act")
before the Commission pertaining to loss suffered on account
of the respondent's negligence, incompetence and deficiency
in sel'Vice. The Commission, by its impugned order dated 14th
of September, 2006, dismissed the complaint of the appellant
E in limine on the ground that it involved disputed questions and
contentions which were beyond the purview of the Commission.
5. Being aggrieved by th~ order of the Commission, the
appellant has preferred this statutory appeal before this Court
F under the Act.
· 6. T~e pivotal qLJ_estion that needs to be decided while
dealing with this appeal is, ,whether the Commission was
justified in· dismissing the complaint in limine on the ground that
the case involved disputes and questions which were
G contentious before issuing ahy notice to the respondent and
without even prima facie gok1g into the merits of the case.
7. Before we proceed .'further to decide the aforesaid
question,.it would be appropriate to quote the impugned order
of the Commission which is as follows:
H
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 315
. PVT. LTD. [TARUN CHATTERJEE, J.]
"Considering the disputed questions and the contentions A
r-<1 which are sought to be raised by the complainant, in our
opinion, this complaint is not required to be dealt with
under the Consumer Protection Act, 1986. Hence, the
complaint is not entertained.
However, it is made clear that it would be open to the B
complainant to approach the Civil Court or any other
Authority for redressal of their grievances, as advised.
~ ~ We make it clear that this complaint was filed on
24.8.2006 before this Commission and some time was c
taken for deciding the same. If there is any delay, it would
be open to the complainant to file proper application for
condonation of delay on the basis that the matter was
pending before this Commission. The complaint stands
disposed of accordingly." (Emphasis supplied)
D
8. We have heard the learned counsel appearing on behalf
of the parties and perused the materials on record. In our view,
~ .. the Commission was not justified in rejecting the complaint of
the appellant in limine without issuing notice to the respondent
and before allowing him to place his defence before it. Reasons E
are stated as under :-
9. Mr. P.S. Narasimha, learned counsel appearing for the
complainant-appellant submitted, relying on a judgment of this
Court in the case of CCI Chambers Coop. HSG. Society Ltd.
Vs. Development Credit Bank Ltd. [(2003) 7 SCC 233), that F
the decision arrived at by the Commission was pre-mature in
.. view of the fact that before issuing any notice to the respondent
and before taking pleadings of both the parties on record, the
Commission could not have formed an opinion as to the nature
and scope of the enquiry, i.e., whether the questions arising for G
decision in the light of the plead.ings of the parties required a
detailed and complicated investigation into the facts which were
"! incapable of being undertaken in a summary and speedy
manner. Mr. Narasimha further argued that the Commission
ought to have justifiably formed an opinion on the need of driving H
316 SUPREME COURT REPORTS [2008) 17 S.C.R.

A away the complainant to the civil court which could only be done
after the pleadings of both the parties were placed before the
Court. Accordingly, Mr. Narasimha contended that the matter
must be sent back to the Commission to issue notice on the
respondent to place their defence before it and thereafter to
B form an opinion as to whether the Commission would be
justified in entertaining the complaint of the appellant.
10. This submission of the learned counsel for the
appellant was seriously disputed by Mr. Ranjit Kumar, learned
senior counsel appearing for the respondent. According to Mr.
·C Ranjit Kumar, the Commission was fully justified in relegating
the appellant to approach the civil court on consideration of the
disputes raised by the appellant in the complaint itself. He
further submitted that the disputes raised by the appellant
would show that the nature and scope of the complaint would
0 require a detailed and complic~ted investigation into the facts,
which was incapable of being ;undertaken in a summary and
speedy manner. In support of this submission, he relied on two
decisions of this Court one of' which is Synco Industries Vs.
State Bank of Bikaner & Jaipur and Others ((2002) 2 SCC 1].
E Relying on this decision of this Court, learned senior counsel
· for the respondent contended that even before issuing ·any
notice, it was open to the Commission to look into the
statements made in the complaint for the purpose of coming
to a finding that pleadings made in the complaint would require
F thorough investigation of facts for which evidence had to be led
which could not be decided in a summary manner and for which
civil court should be approached.
I
The other decision relied on
by him, is the decision reported in Dr. J.J. Merchant and others
Vs. Shrinath Chaturvedi [(20d2) 6 SCC 635]. Accordingly, he
G contended that this Court may not interfere with the impugned
order of the Commission even in.the exercise of .its statutory
power under the Act.
1 t. Having considered the rival .submissions of the counsel
appearing for the parties and after goirig through the complaint
H in detail and after taking into consideration the decisions noted
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 317
PVT. LTD. [TARUN CHATTERJEE, J.]
hereinabove, we are of the opinion that the submissions ,of Mr. A.
r ... Narasimha must be accepted.
12. In our view, as already observed, the Commission was
not justified in relegating the complainant/appellant to approach
the civil court for decision only on the ground that the complaint-
disclosed disputed questions and contentions which is not B
required to be dealt with under the Act. For this purpose, we
have looked into the statements made in the complaint in detail
~· .. and in depth. From a look at the statements. made in the
complaint, it would be difficult to say that the complaint has
disclosed complicated questions of fact which cannot be gone c
into by the Commission and the same can only. be gone into
by the Civil Court before bringing the respondent on record and
asking him to file his defence. The decisions, relied on by Mr.
Ranjit Kumar and noted namely, Synco Industries' case (supra)
and the decision in Dr. J.J. Merchant's case (Supra) were duly D
considered by Two-Judge Bench of this Court in CCI Chambers
case (supra) in detail and after considering the aforesaid two
• -4- Three-Judge Bench decisions of this Court, as mentioned
herein above, and after explaining the same, Lahoti, CJ, (as
His Lordship then was), held that the nature of averments made E
in the complaint was not by itself enough to arrive at a
conclusion that the complaint raised such complicated
questions as could only be determined by the Commission.
While coming to this conclusion, Lahoti CJ, (as his Lordship
then was), in paragraph 6 of the aforesaid case in page no. F
236 observed as follows:
"It cannot be denied that fora at the national level, the State
level and at the district level have been constituted under
the Act with the avowed object of providing summary and
speedy remedy in conformity with the principles of natural G
justice, taking care of such grievances as are amenable
to the jurisdiction of the fora established under the Act.
" These fora have been established and conferred with the
jurisdiction in addition to the conventional courts. The
principal object sought to be achieved by establishing such H
318 SUPREME COURT REPORTS [2008] 17 S.C.R.

A ·fora is to relieve the conventional courts of their burden
which is ever-increasing with the mounting arrears and
whereat the disposal is delayed because of the
technicalities. Merely because recording of evidence is
required, or some questions of fact and law arise which
1

8 would need to be investigated and determined, cannot
be a ground for shutting the doors
I
of any forum under the
11
Act to the. person aggrieved. (Emphasis supplied)
I

13. Again in paragraph 7 of the aforesaid decision, it was ct-·~
observed: '
c "A three-Judge Bench of this Court recently in Dr. JJ.
Merchant Case, (2002) 6 SCC 635,. specifically dealt with
the issue as to the guidelines which would determine the
_ matter being appropriately dealt with by a forum under the
Act or·_ being left to be heard or decided by a Civil Court.
D
..... The decisive test is not the complicated nature of
questions of fact and law arising for de9i~ion. The anvil
on which entertainability of a complaint by a forum under .+- -
the Act is to be determined is whether the questions,
though complicated they may be, are capable of being
E determined by summary enquiry i.e. by doing away with
the need of a detailed and complicated method of
- recording evidence. It has to be remembered that the fora
under the Act at every leve! are headed by experienced
persons.
•
The National Commission
I
is headed
.
by a person
. •
F who is or has been a Judge of the Supreme Court. The
State Commission is headed by a person who_ is or· has
been a Judge of a High Court. Each District Forum is
- headed by a person who is, or has been, or is qualified to
1

_ be a District Judge. We do not think that mere
G complication either of facts, or of law can be a ground for
the denial of hearing by a forum under the Act. 11
1

(Emphasis supplied).
I -'f'

- 14. In Dr. JJ Merchant's ca se (supra), this Court, dealing
1

with the contention that compli?ated questions of fact cannot
H
PUNJ LLOYD LIMITED v. CORPORATE RISKS INDIA 319
• PVT. LTD. [TARUN CHATTERJEE, J.]

be decided in summary proceedings, also held as under:- A
.,. ...
"It was next contended that such complicated questions of
fact cannot be decided in summary proceedings. In our
view, this submission also requires to be rejected
because under· the Act, for summary or speedy trial,
exhaustive procedure in conformity with the principles of B
natural justice is provided. Therefore, merely because it
is_ mentioned that the Commission or Forum is required
~~
to have summary trial, would hardly be a ground for
directing the consumer to approach the civil court. For
the trial to be just and reasonable, long-drawn delayed c
procedure, giving ample opportunity to the litigant to
harass the aggrieved other side, is not necessary. It
should be kept in mind that the legislature has provided
alternative, efficacious, simple, inexpensive and speedy
remedy to the consumers and that should not be curtailed D
on such ground. It would be a totally wrong assumption
_J that because summary trial is provided, justice cannot be
done when some questions of facts are required to be
dealt with or decided. The Act provided sufficient
safeguards." (Emphasis supplied). E
15. Following the aforesaid observations of this Court as
quoted herein-above, in the aforesaid decision of CCI
Chamber's case (supra) and also the observations in Dr. JJ
Merhant's Case (supra) which have been noted herein-above,
we are of the view that the decision arrived at by the F
Commission is premature. The Commission ought to have
issued notice to the respondent and placed the pleadings on
record. When pleadings of both the parties were made
available before the Commission, only then the Commission
should have formed an opinion as to the nature and scope of G
enquiry, i.e., whether the facts which arose for decision on the
'¥ basis of the pleadings of the parties required a detailed and

- complicated investigation of facts which was incapable of being
undertaken in a summary and speedy manner, then only the
Commission should have justifiably formed an opinion on the H
A
320 SUPREME COURT REPORTS (2008] 17 S.C.R.

need of relegating the complaint to a civil court. That apart, in
- '

).. "-.!'
view of the admitted fact that the respondent was never served
with any notice and not present before the Commission,
therefore, it was not known to the Commission, what would be
the defence and contentions of the respondent and what
B questions and disputes would really arise therefrom until and
unless both sides place their r~spective cases before the
Commission. At that stage, it is ,difficult for the Commission
also to hold whether the disputed questions and contentions ~ ....
could not be decided by the Commission and the same must
c be relegated to the Civil Court. Every complaint of the consumer
is related to a dispute and will raise disputed questions and
CC?ntentions. If there was no dispute, then there would be no
complaint. Therefore, the ground for rejection of the complaint
namely' "it arises disputed questions and contentions" was
definitely irrelevant. Therefore, the Commission was not justified
D
in rejecting the complaint only on 'this ground. In any view of the
I

matter, it is not evident from the order of the Commission that
it had considered the nature.of ~isputed questions of fact for
~

which the complainant should be relegated to the Civil Court
for decision. In view of our discussions made hereinabove and
E relying on the principles en'unciated by this Court in the
aforesaid decisions, we are, therefore, of the view that the
Commission was not justified in rejecting the complaint merely
1

by stating that the complicated·nature of facts and law did not
warrant any decision on its part before even issuing notice· to
F the respondent and directing the filing of his defence, which, in
our opinion, cannot be said to be decisive. +
I

16. The appeal is, therefore, allowed to the extent indicated
above. The decision of the commission is set aside. The
complaint is sent back to the Commission to be heard afresh
G
in consistent with the observations made above. There will be
no order as to costs.
-"f
N.J. Appeal partly, allowed Matter remitted back.
--
.,;;._