Punj Lloyd Ltd vs Corporate Risks India Pvt. Ltd

2. The relevant facts as emerging from the case made out by the appellant have been mentioned in a nutshell:

3. The respondent is a company registered with the Insurance Regulatory and Development 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 2 the Uran-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 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 the premium for the requisite insurance would be US $ 1,369,128.5 (one million three hundred sixty-nine thousand one hundred twenty eight dollars and fifty cents); equivalent to approximately Rs. 6.16 crores, plus service tax.

4. On 19th of August, 2005 the appellant had written to the Oriental Insurance Company Ltd. admitting that the premium 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 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, 3 2005, three days after the expiry of the quote and hence immediately communicated the lapse of the insurance company to the respondent. The 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 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 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 company. On 1st of September 2005, the appellant 4 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. 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 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. 5,26,70,654. Thus aggrieved, the complainant wrote to the respondent on 25th of October 2005, bringing to the respondent'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 respondent and, therefore, the appellant again forwarded a letter to the 5 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. Ultimately the appellant filed a complaint under section 12 and section 21 of the Consumer 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 service. The Commission, by its impugned order dated 14th of September, 2006, dismissed the complaint of the appellant in limine on the ground that it involved disputed questions and contentions which were beyond the purview of the Commission.

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 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 decision in the light of the pleadings 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 away the complainant to the civil court which could only be done after the pleadings of both the 8 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 form an opinion as to whether the Commission would be justified in entertaining the complaint of the appellant.

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 in consistent with the observations made above. There will be no order as to costs.