Case: Punj Lloyd Limited Vs. Corporate Risks India Pvt. Ltd

The appellant is an engineering construction company serving customers in the hydrocarbon and infrastructure sectors 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 of India obliged the appellant to arrange for insurance covering risks during the construction process in the project. There are only a few insurers and re-insurers competent and willing to undertake such risks according to the knowledge of the appellant3. 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 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 tax4. 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, 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 Companys 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 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 Companys 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 Companys 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 respondents 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 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 respondents 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 Commission5. Being aggrieved by the order of the Commission, the appellant has preferred this statutory appeal before this Court under the Act.

Court's reasoning:
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 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 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. Merchants case (Supra) were duly considered by Two-Judge Bench of this Court in CCI Chambers case (supra) in detail and after considering the aforesaid two 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 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 CommissionAt 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 be relegated to the Civil Court. Every complaint of the consumer is related to a dispute and will raise disputed questions and contentions. 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 in rejecting the complaint only on this ground. In any view of the matter, it is not evident from the order of the Commission that it had considered the nature of disputed questions of fact for which the complainant should be relegated to the Civil Court for decision. In view of our discussions made hereinabove and relying on the principles enunciated by this Court in the aforesaid decisions, we are, therefore, of the view that the Commission was not justified in rejecting the complaint merely by stating that the complicated nature of facts 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, in our opinion, cannot be said to be decisive.