Parso Bhagchand Mansukhani vs M/s Heritage Health Service Pvt. Ltd. & 2 Ors

Avm J. Rajendra, Avsm, Vsm (Retd.) Member

This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) has been filed by Mr. Parso Bhagchand Mansukhani (hereinafter referred to as the “Appellant” or “Complainant”), against the Impugned Order dated 26.04.2018 passed by the Ld. State Consumer Disputes Redressal Commission Maharashtra, (hereinafter to be referred to as “the State Commission”) in Consumer Complaint No. 485 of 2013.

There was a delay of 34 days in filing the present Appeal. For the reason stated in I.A. No.12763/2018 seeking condonation of delay, the same is condoned.

A subsequent application, IA/7490/2019, was submitted by the Appellant, seeking the deletion of Respondent No. 1 & 2 viz. M/s. Heritage Health Service Pvt. Ltd. and M/s. Karvat Travel Services Pvt. Ltd. respectively from the array of parties. Based on the reasons stated vide order dated 21.02.2022, the Respondent No. 1 & 2 were deleted from the Parties. Currently, only the National Insurance Company remains as Respondent. The Amended Memo of Parties has also been taken on record vide I.A. No.5288/2022.

The Ld. State Commission ruled in favor of the Appellant/ Complainant, based on the allegation of deficiency in service against the Respondents/OPs. The deficiency stemmed from the act of Respondents/OPs in repudiating Travel Medical Insurance Claim of Rs.13,73,001, on the grounds that there were pre-existing medical conditions/ailments declared or undeclared. For the sake of ready reference, the relevant portion of Impugned Order dated 26.04.2018 is reproduced below: -

“…..We also find that complainant is entitled to receive simple interest on the above said medical expenses of Rs.13,73,001 @ 9% p.a. for the period from the date of repudiation/rejection of the claim i.e. 29/08/2012 till date this complaint i.e.15/10/2013 from Opposite Part No.3. Hence, we pass the following order –

(i) The Consumer Complaint No.CC/13/485 is partly allowed.

(ii) Opposite Party Nos. 1, 2 & 3 are declared to be guilty of deficiency in service.

(iii) Opposite Party No.3 is directed to pay to Complainant Rs.13,73,001 towards medical expenses in Australia along with simple interest @ 9% p.a. for the period from 29/08/2012 up to 15/10/2013.

(iv) Opposite Party Nos. 1, 2 & 3 are jointly and severally directed to pay to Complainant Rs. 1,00,000 towards compensation for mental agony.

(v) The cost of this complaint is fixed at Rs.50,000 to be paid by Opposite Party Nos. 1, 2 & 3 jointly and severally to Complainant.”

Aggrieved by the Impugned Order of the State Commission, the Appellant/Complainant filed the present Appeal, primarily seeking interest payment on the granted amount. The grounds of appeal are outlined as follows:

(a)  The State Commission omitted to order payment of interest on the claim of Rs. 13,73,001 from 15.10.2013 to actual payment date.

(b)  It is evident from records that the delay in resolving the complaint was significantly due to the failure of OP No. 3 to file the reply, which was eventually allowed after a Revision Petition was granted by the Commission. Thus, it is fair to direct Respondent No. 3 to pay interest on the claim amount.

c)  The Appellant is a 76-year-old senior citizen with limited income post-retirement. His claim should have rightfully been disbursed by Respondent No. 3. This is especially significant as Respondent No. 3 acknowledged its liability in the Affidavit of Evidence and Written Argument, conceding to Rs. 13,39,620.

The Respondent has not filed any reply to the Appeal and submitted written synopsis highlighting the absence of any provision in the State Commission's Award or Judgment regarding the interest payable from the filing of the Consumer Complaint until the payment of the awarded amount. Respondent contends that the Consumer Protection Act, 1986 does not provide for granting of interest and that compensation is at the discretion of the Commission. Moreover, the Consumer Complaint was filed on 15.10.2023, and the application for amending the Consumer Complaint to include a request for interest was made only on 09.01.2016. The First Appeal lacks merit and should be dismissed.

The learned Counsel for Appellant/Complainant argued that this Appeal solely pertains to the Appellant's claim for interest on the sum of Rs. 13,73,001. This interest is sought for period of pendency of the complaint and till date of realization of the claim amount i.e., from 16.10.2013 till date of payment (21.09.2018). While acceding to the genuineness of the claim and granting partial relief, the State Commission did not pass any direction as regards the payment of interest on the claimed sum for the period during the Complaint's pendency and up to the payment date of Rs.13,73,001. He further emphasized that Respondent/OP-3 acknowledged the Order dated 26.04.2018 as regards its obligation to pay the Appellant/Complainant the sum of Rs. 13,73,001. This claimed amount was in fact paid by OP No. 3 to the Complainant on 21.09.2018. Consequently, due to the non-payment of interest during the pendency period (about 4 years and 11 months, from the date of filing the complaint 16.10.2013 to 21.09.2018), the Complainant/Appellant has suffered substantial loss and hardship, despite no fault on their part. He further asserted that the amount awarded, including compensation for mental agony and the costs of the complaint, as decided by the State Commission, are not being contested in this First Appeal. The focus of this appeal is solely on the interest claimed for the period during the complaint's pendency, i.e., from 16.10.2013 to 21.09.2018, calculated at a simple interest rate of 9% per annum which is computed for 4 years 11 months and 5 days @ 9% for Rs.13,73,001 is Rs.6,09,387.

Thus, Appellant sought that the Order of the learned State Commission dated 26.04.2018 be rectified to include the payment of interest on the claimed amount of Rs. 13,73,001 for the period during which the complaint remained pending. He asserted that the element of interest is legally and rightfully due and payable to the Appellant by OP-3/Respondent No. 3, in line with principles of equity, fair play, and natural justice.

On the other hand, the learned Counsel for the Respondent No. 3 countered the Appellant's claim, stating that the Consumer Protection Act, 1986 does not have any specific provision for ordering interest. He asserted that the discretion for grant of compensation lies within the Commission. To support this argument, he relied on M/s. Hi Plastic Vs. United India Insurance Co. Ltd. & Ors., First Appeal No. 882 of 2013, decided on 11.07.2018. He pointed that since there is no explicit provision for ordering interest in the Act, only compensation can be allowed under Section 14(1)(d) of the Act. He referred to the case of Ghaziabad Development Authority Vs. Balbir Singh, reported in 2004 (5) SCC 65, decided on 17.03.2004, where the Hon’ble Supreme Court has taken a view that interest is also in the form of compensation. He further argued that the State Commission erred in law by granting Rs.1,00,000 towards "Mental Agony" alongside the awarded interest. He relied on Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Limited v. D. S. Dhanda, (2020) 16 SCC 318, which clearly stated that once compensation in the form of interest had been awarded, the same on different heads should not be granted. Therefore, Simple interest @9% awarded by the State Commission was on a very high side and it ought to have been only 6%. The Consumer Complaint was filed on 15.10.2013, and Application for Amendment of Consumer Complaint was submitted for granting interest only on 09.01.2016. Thus, the First Appeal, being devoid merit, out to be dismissed.

We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned Counsels for both the Parties.

The primary issue for consideration is “whether the State Commission, erred in passing the Impugned Order of 26.04.2018 wherein interest on the claim amount Rs.13,73,001 @ 9% p.a. was awarded only for the period from the date of repudiation/rejection of the claim i.e., 29.08.2012 till date of this complaint i.e.15.10.2013. In this regard, the Appellant contended that the interest on the claim of Rs. 13,73,001 @ 9% per annum should have been calculated and granted from the next day of filing of the Complaint i.e. on 16.10.2013 till the date of payment on 21.09.2018. On the other hand, Respondent No. 3, argued that there is no specific provision for ordering interest in the Act. Compensation awarded is a matter of Commission’s discretion. Further, when once compensation in the form of interest is awarded, other compensation heads, such as "Mental Agony," should not be granted, and the awarded interest rate was too high. Therefore, the main issue revolves around the legitimacy and calculation of the interest amount awarded during the period of complaint pendency.

The Hon’ble Supreme Court in the case of Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor, in Civil Appeal No.6044 of 2019 decided on 7.4.2022, it was held as under:-

“We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts.  The Commission in the Order impugned has granted interest from the date of last deposit.  We find that this does not amount to restitution. Following the decision in DLF Homes Panchkula Pvt. Ltd. Vs. DS Dhanda and in modification of the direction issued by the Commission, we direct that the interest on the refund shall be payable from the dates of deposit. Therefore, the Appeal filed by purchaser deserves to be partly allowed. The interest shall be payable from the dates of such deposits.

At the same time, we are of the opinion that the interest of 9% granted by the Commission is fair and just.”

Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 held that multiple compensations for singular deficiency is unjustified. Thus, award of Rs.1,00,000 as Compensation by the State Commission towards “Mental Agony” is untenable.

In view of the above, the Appeal is consequently allowed in part to the extent of the compensation amount, the impugned Order is modified with the following directions: -

ORDER

I. The Respondent No. 3 is directed to pay to the Complainant interest @ 9% on claim of Rs.13,73,001 from the date of filing the Complaint on 15.10.2013 to till date of payment i.e., 21.09.2018, within a period of one month from the date of this Order. In the event of delay beyond one month, the amount payable shall carry interest @ 12% per annum for such period beyond one month, till realization of the entire amount.

II.The Respondent No.3 is also liable to pay costs of Rs.50,000 to the Appellant/Complainant within a period of one month, from the date of this Order.

III. The Order directing the Opposite Party Nos. 1, 2 & 3 to pay to Complainant Rs. 1,00,000 towards compensation for mental agony is set aside.

All pending Applications, if any, are disposed of accordingly.

Registry is directed to release the Statutory deposit amount, if any due, in favour of the Appellant, after compliance of this order.