Saturday, 25 December 2021

Whether court can direct plaintiff to amend his pleading permitting defendant to file additional written statement?

The party which moves the forum is dominus litis and is entitled to decide whether or not to amend the pleading or to pursue the complaint, as it stands. 

11 To recapitulate, in the situation as it stands at present, the appellant could take recourse to either of three courses of action, namely:

(i) pursue the complaint as it stands; or

(ii) amend the complaint to challenge the letter of repudiation; or

(iii) withdraw the existing complaint with liberty to institute a fresh complaint to challenge the letter of repudiation.

12 The error in the order of the NCDRC was to compel the appellant to amend the complaint, as a consequence of which, it granted permission to the first respondent to file a written statement to the amended complaint. The effect of this would be to deprive the appellant of the benefit of urging that written statement cannot be filed at this stage in view of the judgment of the Constitution Bench in Hilli Multipurpose Cold Storage Private Limited (supra). The deprivation of the right to set up such a plea is a matter of prejudice to the appellant which is a result of the impugned order of the NCDRC. We clarify that we have not expressed any opinion on whether the respondent can file a written statement since this does not form the subject matter of the present appeal. We hold that the appellant could not have been directed to amend the complaint to challenge the repudiation of the contract of insurance.

The appellant has stated that it does not wish to do so. This is a decision which has to be taken by the appellant and it cannot be compelled to amend the complaint.

 Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal Nos 4476-4477 of 2021

M/s Acme Cleantech Solutions Private Limited  Vs M/s United India Insurance Company Limited 

Author: Dr Dhananjaya Y Chandrachud, J

Dated: December 09, 2021

1 These appeals arise from an order of the National Consumer Disputes Redressal

Commission1 dated 11 March 2021 in IA 3463 of 2020 and IA 1346 of 2021.

2 The appellant instituted a consumer complaint before the NCDRC on 28

September 2019, being Consumer Complaint No 1934 of 2019. Briefly stated,

the grievance of the appellant was that the first respondent had failed to settle

the insurance claim of the appellant arising out of the two alleged storms which

damaged the solar power plants of the appellants. The relief which was claimed

in the complaint is set out below, for convenience of reference:

“(i) Direct the Respondents to immediately settle the Claim

of the Complainant as per the Insurance Policy and make

payment of:

A. insurance claim towards material damage to the

tune of INR 13,91,78,987.75/- and

1 “NCDRC”

B. insurance claim towards business interruption to

the tune of INR 6,00,00,000/-

(ii) Direct the Respondents to pay interest @ 18% per

annum for the period of delay from 13.06.2016 being the date

when the Complainant intimated about the incident and claim,

till the date of actual payment of the Claim of the Complainant;

and

(iii) Direct the Respondents to pay compensation to the tune

of INR 1,00,00,000/- on account of harassment, mental agony,

fraud & deception, hardship and inconvenience caused to the

Complainant due to acts of deficiency in services, negligence

and unfair trade practices on part of the Respondents; and

(iv) Direct the Respondents to pay INR 5,00,000/- towards

litigation expenses.”

3 On 17 October 2019, the NCDRC passed the following order:

“Heard.

Complaint is admitted subject to just exceptions.

Issue notice of the complaint to the opposite party under

Section 13(2) of the Consumer Protection Act, 1986 making it

clear that if opposite party wishes to file its written statement,

it may do so within 30 days from the date of service of the

notice of the complaint, failing which right to file the written

statement may be closed.”

4 Notice of the complaint was served on the first respondent on 5 November 2019.

The first respondent did not file its written statement within the period stipulated

by Section 13(1) of the Consumer Protection Act 19862. On 6 March 2020, the

first respondent filed IA 3463 of 2020 seeking the dismissal of the consumer

complaint on the ground that it was premature. In paragraph 10 of the

application, the averment was to the following effect:

“10. It is stated that the non-cooperative attitude of the

Complainant has caused hindrance to the insurer in

examining the claim and therefore the progress of

verifying and scrutinizing the documents including the

survey report is under progress and therefore the instant

Complaint is premature and deserves to be dismissed on

2 “Act”

this ground alone.”

5 No reference was made in the IA to the repudiation of the claim. On the same

day, 6 March 2020, the first respondent issued a letter repudiating the claim of

the appellant. In the meantime, the appellant sought copies of the final survey

report. In its response to IA 3463 of 2020, the appellant, inter alia, raised the

plea that the right to file the written statement had been barred in view of the

judgment of the Constitution Bench of this Court in New India Assurance

Company Limited v Hilli Multipurpose Cold Storage Private Limited3.

6 The appellant filed IA 1346 of 2021 on 11 February 2021 seeking production of

the final survey report. Both IA 3463 of 2020 filed by the first respondent and IA

1346 of 2021 filed by the appellant were heard by the NCDRC and, by an order

dated 11 March 2021, have been disposed of. The NCDRC has directed the

appellant to file an amended complaint and has granted an opportunity to the

first respondent to file a written statement. The appellant has accordingly

challenged the order to the extent that it directs the appellant to file an

amended complaint and allows the first respondent to file a written statement to

the amended complaint on the ground that this is contrary to the provisions of

Section 13(2) read with Section 22 of the Act.

7 On behalf of the appellant, the submission which has been urged by Counsel is

that the first respondent failed to file the written statement within the outer limit

which is prescribed by Section 13(1) (as made applicable to the NCDRC by the

provisions of Section 22). Consequently, it has been urged that the procedure

which has been adopted by the NCDRC of requiring the appellant to amend the

complaint and granting an opportunity to the first respondent to file a written

statement to the amended complaint would deprive the appellant of a right

which has accrued by the failure of the first respondent to lodge the written

3 (2020) 5 SCC 757

statement within the time stipulated by the statute. In this context, reliance has

been placed on the judgment of the Constitution Bench in Hilli Multipurpose

Cold Storage Private Limited (supra).

8 On the other hand, the submission which has been urged on behalf of the first

respondent is that the relief which was sought in the complaint was for the

insurer to settle the claim by making the payment of the claim. It has been

submitted that while it is true that there was no written statement by the insurer

within the prescribed period as set out in Section 13(1), the insurer having

repudiated the claim on 6 March 2020, the relief which was sought in the

complaint worked itself out and it would, hence, be the submission of the insurer

that the complaint has been rendered infructuous. In this backdrop, it was

submitted that the NCDRC was justified in issuing a direction that the appellant

should amend the complaint. Moreover, once the complaint is amended, a right

would accrue to the insurer to file a written statement to the amended

complaint.

9 While assessing the merits of the rival submissions, it is necessary to state, at

the outset, that no written statement was filed by the insurer within the period

prescribed in the statute. The judgment of the Constitution Bench in Hilli

Multipurpose Cold Storage Private Limited (supra) has held the period

provided in Section 13 of the Consumer protection Act, 1986 (thirty days with a

further condonation of up to fifteen days) to be mandatory. However, the

decision has been given prospective effect. The complaint filed by the appellant,

as it stands, requires the insurer to settle the claim and to make payment. The

insurer repudiated the claim on 6 March 2020. There is merit in the contention

of Counsel for the appellant that the appellant cannot be compelled to amend

the complaint. Whether the pleading in the nature of a plaint in a civil suit or a

complaint before the consumer forum should be amended is a matter for the

plaintiff or, as the case may be, the complainant to determine. The party which moves the forum is dominus litis and is entitled to decide whether or not to amend the pleading or to pursue the complaint, as it stands. We may note at

this stage that it is the contention of the appellant that the relief which has been

sought in the complaint is not only for the settlement of the complaint, but also,

in addition for the payment of the amount due and hence, the complaint has not

been rendered infructuous. According to the appellant, the belated repudiation

of the claim beyond a reasonable period has no consequence. On this aspect,

we need not dilate any further since the issue has to be decided by the NCDRC

in the pending proceedings.

10 Be that as it may, it is for the appellant to decide as to whether the complaint

should be amended or whether it would pursue the option of proceeding with the

pleadings as they stand. It is for the appellant to decide as to whether instead

of pursuing the complaint, as it stands, it should either:

(i) amend the complaint to challenge the repudiation of the insurance claim;

or

(ii) withdraw the existing complaint with liberty to file a fresh complaint

challenging the repudiation of the claim.

11 To recapitulate, in the situation as it stands at present, the appellant could take

recourse to either of three courses of action, namely:

(i) pursue the complaint as it stands; or

(ii) amend the complaint to challenge the letter of repudiation; or

(iii) withdraw the existing complaint with liberty to institute a fresh complaint to challenge the letter of repudiation.

12 The error in the order of the NCDRC was to compel the appellant to amend the complaint, as a consequence of which, it granted permission to the first respondent to file a written statement to the amended complaint. The effect of this would be to deprive the appellant of the benefit of urging that written statement cannot be filed at this stage in view of the judgment of the Constitution Bench in Hilli Multipurpose Cold Storage Private Limited (supra). The deprivation of the right to set up such a plea is a matter of prejudice to the appellant which is a result of the impugned order of the NCDRC. We clarify that we have not expressed any opinion on whether the respondent can file a written statement since this does not form the subject matter of the present appeal. We hold that the appellant could not have been directed to amend the complaint to challenge the repudiation of the contract of insurance.

The appellant has stated that it does not wish to do so. This is a decision which has to be taken by the appellant and it cannot be compelled to amend the complaint.

13 For the above reasons, we are of the view that the NCDRC was in error in issuing

a direction to the appellant to amend the complaint and in permitting the first

respondent to file its written statement to the amended complaint, subject to the

payment of costs. Essentially, the IA which was filed by the first respondent was

on the basis that the complaint was premature since the process of verifying the

claim was still to be completed. Now, that the claim has been repudiated,

according to the first respondent, the IA would not survive. We, however, clarify

that we have not expressed any view on the effect or the consequence of the

alleged act of repudiation by the insurer since the matter is still to be urged

before the NCDRC. All the rights and contentions of the parties in that regard

are kept open. Accordingly, the impugned order of the NCDRC dated 11 March

2021 to the extent that it decides IA 3463 of 2020 is set aside. We clarify that

the appellant could be at liberty to follow either of the three courses of action, as

indicated in the earlier part of this order, namely:

(i) to pursue the complaint as it stands without any amendment; or

(ii) to seek an amendment to the complaint; or

(iii) to withdraw the complaint with liberty to file a fresh complaint to

challenge the alleged act of repudiation.

14 In the event that the appellant exercises option (ii) above, the first respondent

would be at liberty to file a written statement to the amended complaint within

the stipulated period. In the event that the appellant exercises option (iii),

namely, to institute a fresh complaint, the first respondent would be at liberty to

file a written statement in accordance with law.

15 The appeals are accordingly disposed of.

16 Pending application, if any, stands disposed of.

…………...…...….......………………........J.

[Dr Dhananjaya Y Chandrachud]

…..…..…....…........……………….…........J.

[Surya Kant]

…..…..…....…........……………….…........J.

[Vikram Nath]

New Delhi;

December 09, 2021




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