Supreme Court of India
UNITED INDIA INSURANCE CO. LTD.versusM/S PAYARELAL NIRNAJAN LAL
- Citation
- 2009 INSC 285
- Decided
- 27 February 2009
- Disposal
- Appeal(s) allowed
- Bench
- ARIJIT PASAYAT
Holding
The ex‑parte order is set aside and the appeal is restored for fresh hearing because the appellant had no knowledge of the listing owing to its counsel’s non‑communication.
Summary
The insured, Payarelal Nirnajan Lal, paid a premium cheque to United India Insurance for a marine transit policy, but the insurer rejected the claim alleging no contract existed. The insured filed a complaint before the Rajasthan State Consumer Disputes Redressal Commission, which dismissed it, leading to an appeal before the National Consumer Disputes Redressal Commission (NCDRC). No representative of the insurer appeared when the NCDRC heard the matter, and it passed an ex‑parte order partially in favor of the insured. The insurer sought to set aside that order, contending that its earlier counsel had returned the case briefs and failed to inform it of the hearing date, so the insurer had no knowledge of the listing. The NCDRC rejected the application, prompting the insurer to appeal to the Supreme Court. The Supreme Court held that, given the counsel’s failure to communicate, the insurer was unaware of the hearing and therefore set aside the ex‑parte order, restoring the appeal for fresh consideration on its merits.
Issues considered
- Whether an ex‑parte order passed by the National Consumer Disputes Redressal Commission can be set aside when the appellant was unaware of the hearing due to its counsel’s failure to convey notice.
Subjects
Consumer ProtectionInsuranceEx‑parte orderNoticeNational Consumer Disputes Redressal CommissionSupreme CourtContract of insuranceProcedural fairness
Judgment
[2009] 3 S.C.R. 730
A t
UNITED INDIA INSURANCE CO. LTD.
v.
M/S PAYARELAL NIRNAJAN LAL
(Civil Appeal No. 1329 of 2009)
FEBRUARY 27, 2009
B
[DR. ARIJIT PASAYAT AND ASOK KUMAR
GANGULY, JJ.]
Consumer Protection - Insurance - Complaint by
c respondent-insured dismissed by State Consumer
Commission - Appeal by respondent before National
Commission - No one appeared on behalf of appellant when
the matter was called - National Commission decided the
appeal ex-parte partially allowing the claim of respondent -
D Appellant filed application for setting aside the ex-parte order ·''
taking the plea that its earlier counsel had returned the briefs
and did not inform about the date of hearing - Application
rejected by National Commission - Justification of- Held: Not
justified, as notice had been served on the earlier counsel and
E appellant had no knowledge about listing of the case - Ex-
parte order of National Commission set aside - Direction to
National Commission, to dispose of the appeal afresh on
merits.
•
The complaint filed by respondent-insured was
F dismissed by the State Consumer Commission.
Respondent filed appeal before the National Commission.
No one appeared on behalf of appellant when the matter
was called. The National Commission decided the appeal
ex-parte partially allowing the claim of respondent.
G
Appellant filed application before the National
Commission for setting aside the ex-parte order taking the
plea that its earlier counsel had returned the briefs and
did not inform about the date of hearing. The application
H 730
'
"'\
UNITED INDIA INSURANCE CO. LTD. v. PAYARELAL 731
NIRNAJAN LAL
J was rejected by the National Commission. Hence the A
present appeal.
Allowing the appeal, the Court
HELD: In view of the undisputed factual position that
the notice had been served on the earlier counsel, B
obviously he was to appear when the matter was taken
-I up by National Commission. But the briefs had been
returned by the earlier counsel to the appellant-company.
Therefore, the appellant had no knowledge about the
listing of the case. It is not in dispute that the earlier c
counsel had not informed the appellant-company about
the date of hearing because he had returned the briefs.
In the peculiar circumstances, the impugned order of the
National Commission is set aside and the First Appeal
/; is restored for disposal on merits afresh. Let the parties D
appear before the National Commission without further
notice so that a date of hearing can be fixed by the
National Commission. [Paras 5 and 6] [734-B-E]
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
E
1329 of 2009.
From the Judgment and Order dated 18.4.2006 of the
_,.,_ National Consumer Disputes Redressal Commission, New
• Delhi in Misc. Application No. 69 of 2006.
F
A.K. Deo, Rajesh Dwivedi and Ashok K. Mahajan for the
Petitioner.
Shobha and J.B. Prakash for the Petitioner.
The Judgment of the Court was delivered by G
-J
DR. ARIJIT PASAYAT, J. 1. Leave granted.
2. Challenge in this appeal is to the order passed by the
National Consumer Disputes Redressal Commission, New
H
732 SUPREME COURT REPORTS (2009] 3-s.C.R.
A Delhi, (in short 'National Commission') refusing to accept the
prayer made by the present appellant to set aside the ex parte
order dated 30.11.2005.
3. Background facts, as projected by the appellant, are as
follows:
B
The respondent (hereinafter referred to as the 'insured')
gave a cheque for Rs.1451/- dated 8.10.86 to one
Development Officer of the appellant-Company for obtaining
Marine (Inland Transit Policy) for Rs.5,00,000/- for incoming
c goods from various States. On 9.10.1986 an oil tanker of the
respondent-insured bearing No.RND-9259 coming from District
Mehsana, Gujarat, met with an accident near Pali, Rajasthan.
On 11.10.1986 the insured informed the appellant about the
accident of its oil tanker. The cheque in question was received
D in the Divisional Office of the appellant on 13.10.1986 without •'
any cover note. On 19.1.1987 respondent submitted claim bill
to the appellant claiming certain amount in respect of the
accident of its oil tanker. On 23.3.1993 the claim was rejected
by the appellant informing the respondent as follows:
E
"1. Your cheque dated 8.10.96 Rs.1451/- against the
premium of the policy of insurance proposed to be issued
reached our office on 13.10.86 without a cover note in
absence where of any risk arising out of an accident was
neither covered nor could that be said to have been •
F covered as also for want of a concluded contract.
2. Besides that right from 8.10.86 till 13.10.86 the balance
in your account in the concerned bank was only a sum of
Rs.1259.21 only, wholly insufficient for clearance of your
G above cheque without which, mere issuance of the said
cheque did not result into a contract worth of being
honoured.
3. Your alleged accident took place at about 2 p.m. on
9.10.86, i.e. much prior to our even accepting the contract
H
UNITED INDIA INSURANCE CO. LTD. v. PAYARELAL 733
(
NIRNAJAN LAL [DR. ARIJIT PASAYAT, J.]
.....
' to cover the said risk for reasons given in para No.1 & 2
of this letter and hence we are not liable for the same.
A
Any correspondence made between us on your initiation
is also refuted as entirely irrelevant and off the subject and truth
no further correspondence on this subject from you will be taken B
cognizance of by us as the chapter for vacuum is closed hereby
once for all.
-l
The respondent filed a complaint before the State
Consumer Disputes Redressal Commission, Rajasthan
(hereinafter referred to as the 'State Commission') claiming c
compensation of Rs.4,30,350/-. The complaint was dismissed
by the State Commission by order dated 23.9.1996 holding that
no concluded contract of insurance came into existence on
8.10.1993 as there was rio acceptance of the proposal by the
1,
insurer since no cover note or any other customary note of D
contract had been issued.
An appeal was filed by the respondent before the National
Commission which was numbered as First Appeal No.666/96.
The matter was decided on 30.11.2005 ex parle partially E
allowing the claim of the respondent and directing the appellant
to pay Rs.1,41,794.45 along with interest@ 12% p.a. from
1.1.1987 till date of payment and cost of Rs.10,000/- was
,, awarded.
f
Appellant filed an application before the National F
Commission with the prayer to set aside the ex parle order by
explaining the reason as to why there was no appearance on
behalf of the appellant when the matter was called. It was
specifically pointed out that Mr. S.C. Sharda who was the earlier
counsel had returned all the briefs. The notice was handed over G
-J_ to Mr. Sharda who had not appeared. As no information was
given by Mr. Sharda, there was no appearance on behalf of the
present respondent before the National Commission when the
matter was taken up. By the impugned judgment the application
was rejected. It was observed that if there was any change in H
734 SUPREME COURT REPORTS [2009] 3 S.C.R. .
A counsel, the appellant should have been more vigilant.
( -'.Ill
4. Learned counsel for the appellant submitted that the
reason why there was no appearance was clearly indicated and
there was no dispute as to the factual assertions and, therefore,
the National Commission should have set aside the ex parte
B
order and heard the appeal on merits. Learned counsel for the
respondent supported the order.
)-
5. In view of the undisputed factual position that earlier Mr.
Sharda was appearing and notice had been served on him,
c obviously Mr. Sharda was to appear when the matter was taken
up by National Commission. But the briefs had been returned
by Mr. Sharda to the appellant-company. Therefore, the
appellant had no knowledge about the listing of the case. It is
not in dispute that Mr. Sharda had not informed the appellant-
.'
D company about the date of hearing because he had returned
the briefs.
6. In the peculiar circumstances, we set aside the
impugned order of the National Commission and restore First
E Appeal No.666/96 for disposal on merits afresh. To avoid
unnecessary delay, let the parties appear before the National
Commission without further notice on 16.3.2009 so that a date
of hearing can be fixed by the National Commission. As the
r
matter is pending since long, we request the National
Commission to explore the possibility of early disposal of the
F appeal. We make it clear that we have not expressed any '
opinion on the merits of the case.
7. The appeal is allowed to the aforesaid extent.
G B.B.B. Appeal allowed.
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