NATIONAL INSURANCE COMPANY LIMITED vs M R N Spinner (P) Ltd

NATIONAL Insurance Company Limited-petitioner herein, which was the opposite party before the District Consumer Disputes Redressal Forum, Panipat (for short ''the District Forum'') has filed the present Revision Petition against Order dated 17.3.2006 passed by the State Consumer Disputes Redressal Commission, Haryana, Chandigarh (for short ''the State Commission'') wherein and whereunder the State Commission has dismissed the First Appeal filed by the petitioner. Briefly stated, the facts leading to the filing of the case are: Complainant/respondent is manufacturing shodi yarn out of woollen rags, etc. As per the averments made in the complainant, respondent obtained a Fire Insurance Policy bearing No. 3100294 for Rs. 20,50,000, covering existing stocks of shodi, acrylic and woollen rags kept in the godown of the respondent, for the period from 10.1.2000 to 9.1.2001 Respondent paid a premium of Rs. 9,289 for the said Policy on 10.1.2000. Due to short circuit of electric wires, fire broke out in the godown of the respondent on 6.4.2000 where 82969 kilogram of woollen rags and 14063 kilograms of shodi yarn were lying. That fire brigade was called to extinguish fire and the matter was reported to the Police. Thereafter, respondent reported the matter to the petitioner-Insurance Company. The Surveyor appointed by the petitioner inspected the godown and stocks and submitted inspection report. On the basis of the inspection report, petitioner-Insurance Company settled the claim of the respondent by assessing the total loss of the complainant to Rs. 9,53,800. Thus, being aggrieved, respondent/complainant filed the Complaint before the District Forum alleging that the petitioner-Insurance Company had wrongly calculated the total loss to the tune of Rs. 9,53,800 whereas the loss of the respondent comes to Rs. 16,17,650.80 and the respondent claims only Rs. 5,00,000 out of the balance claim amount of Rs. 6,63,850.

ON being served, Petitioner-Insurance Company filed its written Statement stating that the respondent had already received a sum of Rs. 9,53,800 vide cheque No. 347917 dated 31.8.2000 and, besides this, a sum of Rs. 16,809, was also paid to the respondent on account of fire fighting charges on 3.5.2001. That the respondent is not entitled to any other relief. That the District Forum has got no jurisdiction to try the Complaint and, if the respondent is aggrieved against the earlier settlement, then, he has a remedy for such relief by getting the Arbitrator appointed under the Terms and Conditions No. 13 of the Fire Insurance Policy held by it. That the claim of the respondent has rightly been assessed and paid to the respondent.

THUS, denying the allegations made in the Complaint, it was prayed that the Complaint be dismissed.

DISTRICT Forum, after taking into consideration, the pleadings as well as the evidence led by the parties, allowed the Complaint and directed the petitioner-Insurance Company to pay Rs. 5,00,000 to the respondent/complainant within a period of one month from the date of announcement of the Order.

AGGRIEVED by the Order passed by the District Forum, petitioner filed an Appeal before the State Commission which has been dismissed by the State Commission holding that the Appeal could not be entertained, i.e., could not be admitted to hearing as the petitioner had failed to make the deposit in terms of second proviso to Section 15 of the Consumer Protection Act, 1986 (for short, ''the Act'').

BEING aggrieved, petitioner-Insurance Company has filed the present Revision Petition.

THE Consumer Protection Act, 1986 was amended by Act 62 of 2002, which came into force w.e.f. 15.3.2003. The Appeal was filed on 23.6.2002. Second proviso to Section 15 reads as under: "Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited in the prescribed manner fifty per cent of that amount or twenty-five thousand rupees, whichever is less."

IT is not disputed that the petitioner did not make the deposit in terms of the requirement of second proviso of Section 15. The question, which falls for consideration is-as to what is the effect of non-compliance of the aforesaid provision? Second proviso to Section 15 provides that no Appeal, filed by a person, who is required to pay the amount in terms of the Order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited, in the prescribed manner, fifty per cent of the amount awarded by the District Forum or twenty-five thousand rupees, whichever is less. The word ''entertained'' was interpreted by Hon''ble the Supreme Court of India in Shyam Kishore and Others v. Municipal Corporation of Delhi and Another, reported in 48 (1992) DLT 277 (SC)=AIR 1992 SC 2279, to mean: "to deal with or attempt to consideration"

MEANING thereby that deposit was a pre-condition for entertaining or admitting the Appeal. In Shyam Kishore''s case (supra), it was observed as under: "In M/s. Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (Judicial) I, Sales Tax, Kanpur Range, Kanpur, AIR 1968 SC 488, the Supreme Court had occasion to construe the meaning of the word ''entertained'' in proviso to Section 9 of the UP Sales Tax Act, 1948 and the Court took the view that the word ''entertain'' means ''admit to consideration''. The Supreme Court while interpreting the word ''entertained'' continued in Section 9 of the U.P. Sales Tax Act, 1948 and the proviso thereto made a distinction between the expressions ''appeal'' and ''memorandum of appeal''. Section 9 contemplated that the appeal could not be entertained without the proof being given along with memorandum of appeal that the tax had been paid. While dealing with the meaning of the word ''entertained'' Hidayatullah, J. in paragraphs 7 and 10 of the judgment at pages 491 and 493 observed as under- "(7) To begin with it must be noticed that the proviso merely requires that the appeal shall not be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due. A question, thus, arises what is the meaning of the word ''entertained'' in this context? Does it mean that no appeal shall be received or filed or does it mean that no appeal shall be admitted or heard and disposed of unless satisfactory proof is available? The dictionary meaning of the word ''entertain'' was brought to our notice by the parties and both sides agreed that it means either ''to deal with or admit to consideration''. We are also of the same opinion. The question, therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it ''entertained'' when it is filed or is it ''entertained'' when it is admitted and the date is fixed for hearing or is it finally ''entertained'' when it is heard and disposed of? Numerous cases exist in the law reports in which the word ''entertained'' or similar cognate expressions have been interpreted by the Courts. Some of them from the Allahabad High Court itself have been brought to our notice and we shall deal with them in due course. For the present, we must say that if the Legislature intended that the word ''file or receive'' was to be used, there was no difficulty in using those words. In some of the statutes which were brought to our notice such expressions have in fact been used....."

"(10).....When the proviso speaks of the entertainment of the appeal, it means that the appeal such as was filed will not admitted to consideration unless there is satisfactory proof available of the making of the deposit of admitted tax."

[Emphasis supplied]

IN the present case, the Appeal had been filed after the coming into force of the second proviso of Section 15 of the Act and the same could not be entertained or admitted to hearing without deposit of either the fifty per cent of the amount awarded by the District Forum or twenty-five thousand rupees, whichever is less. Learned Counsel appearing for the petitioner had submitted before the State Commission as well as before us that no Rules had been framed by the State Government with regard to the manner in which the deposit of amount was to be made till 17.3.2004 and, for that reason, the petitioner was not required to make the deposit at the time of filing of the Appeal. This contention was overruled by the State Commission by observing as under: "There is considerable merit in the stand taken from the side of the respondents. It can be stated that the State Government of Haryana had framed Rules known as Haryana Consumer Protection Rules, 2004 (hereinafter referred to as the Rules) and in terms of the requirements of Rule 10(4), it has been prescribed that the appeal is to be accompanied by original challan or bank draft on the prescribed form by which the amount is required to be deposited under second proviso to Section 15 of the Act. As this rule has become operative from 17.3.2004 being the date of notification, therefore, deposit of the amount in terms of the requirements, of second provision to Section 15 could not be insisted upon prior to that date. In order to appreciate the submission made, notice has to be taken to the relevant provisions of the rules, which read as under- 10(4) "Every memorandum filed under this rule shall also be accompanied by original challan or bank draft along with duly filled up challan on prescribed form, by which the amount is required to be deposited under second proviso to Section 15 of the Act''. In Section 2(1)(n) the word ''prescribed'' has been defined to mean ''prescribed by rules made by the State Government or as the case may be by the Central Government under this Act''. No doubt, State Government has been vested with powers with regard to prescribe procedure with regard to the manner of the deposit of the amount in terms of the amended provisions brought on the statute book by the amended Act No. 62 of 2002 which was enforced w.e.f. 15.3.2003. Manifestly, these are the procedural provisions and do not govern the operation of the other provisions of Section 15 of the Act as sought to be contended from the side of the appellant. If the stand taken from the side of the appellant is accepted, even the appeal cannot be entertained in terms of Section 15 because under Section 15(1) it is also provided that the appeal can be filed within 30 days from the date of the order in such form and manner as may be prescribed. Where the rule making authority has not taken steps to prescribe procedure it is the responsibility of the appellate authority to deposit the amount received in terms of the second proviso to Section 15 of the Act either in the bank or in State treasury as the case may be. Till the rules prescribed the Commission would have discretion to get the amount deposited in the manner desired by it and after the enforcement of the above stated rules in the manner so prescribed in that rule. It cannot be construed that any right has been vested in the party filing the appeal, not to comply with the requirements of second proviso merely because the State Government has not chosen to prescribe the manner in which deposit of the amount required to be deposited. Therefore, if the construction put up by the learned Counsel for the appellant is accepted it would lead to anomalous position and make the second proviso non-workable and non-operative which approach would be against the law. It would tantamount to suspending the enforcement of the second proviso till the time the manner of deposit is prescribed by the State Government. Rather on the date of enforcement of the particular provision if a vacuum is left, it is duty of the State Commission while exercising appellate power to decide the matter in such a manner which would advance the making the provisions fulfilling the object for which the amended provisions were enacted by Amended Act of 2002. Thus, there is absolutely no merit in the stand taken from the side of the appellant."

WE agree with the view expressed by the State Commission and endorse the same.

THE Hon''ble Members, who constituted the Bench of the State Commission on 17.1.2004 and 27.2.2004, had directed the petitioner to deposit the amount in terms of the second proviso to Section 15 of the amended Act. Thereafter, the case was adjourned to different dates but the petitioner failed to comply with the direction given by the Bench and did not deposit the amount. Even, at the time when the Appeal was taken up for hearing for final disposal, the Counsel for the petitioner did not make an offer to deposit the amount. Even before us, the learned Counsel for the petitioner did not offer to deposit the amount even at this belated stage. Deposit, in terms of second proviso to Section 15, is a condition precedent for entertaining the Appeal and admitting them to hearing. Since the petitioner failed to deposit the amount in spite of several opportunities given, the Appeal has rightly been dismissed by the State Commission for non-compliance of the Orders passed by it.

THIS Commission in Revision Petition No. 1587 of 2005, decided on 28.2.2005, under similar circumstances, dismissed the Revision Petition filed by a person similarly situated by observing thus: "The learned Counsel for the petitioner finds himself in an embarrassing position when we put a question that by any stretch of non-compliance of order even after giving as well as 11 opportunities from 8.9.2004 to 28.2.2005 for depositing the amount as required under second proviso to Section 15 of the Act, 1986 could be disputed. The requisite amount was not deposited. In such circumstances, the State Commission was constrained to dismiss the appeal for non-compliance of the order under second proviso to Section 15 of the Act, 1986. We do not find any justification to take a view different from the view taken by the State Commission. Accordingly, the revision petition is dismissed."

TO the similar effect is the decision of this Commission dismissing the Revision Petition filed by Akash Ganga Courier Service titled as Revision Petition No. 2330 of 2005, Akash Ganga Courier Service v. Sumit Goel, in which it was observed as under: "Heard the Counsel for the petitioner. In our view the impugned order passed by the State Commission does not call for interference because an opportunity was given to the petitioner to deposit the amount. Apart from this assertion, the District Forum has properly considered the contention raised by the petitioner and has awarded a token sum of Rs. 20,000 for non delivery of the admission form to the Government Polytechnic. Hence, the revision petition is dismissed."

RESPECTFULLY following the view taken by this Commission in the aforesaid cases, we dismiss the Revision Petition on the ground that the petitioner had failed to comply with the provision of second proviso to Section 15 of the Act. Appeals could not be entertained in the absence of compliance of second proviso of Section 15 of the Act. The Revision Petition is, accordingly, dismissed. Revision Petition dismissed.