Wednesday, February 1, 2023

NCDRC can interfere with State Commission order, if not in accordance with law: Supreme Court

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The Supreme Court has observed that the National Consumer Disputes Redressal Commission can interfere with the order of the State Commission, if it reaches the conclusion that the latter has exercised its jurisdictional power not in accordance with law or has miscarried in exercising its jurisdiction, if so vested in accordance with law. 

The Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian,  while allowing the appeal of M/s Narendran Sons and setting aside the order of NCDRC, found the judgement of NCDRC perverse, while noting down the fact that it has mis-exercised its jurisdictional power in contravention of Section 21 of Consumer Protection Act, 1986. Further, the Supreme court restored the State Commission order.

NCDRC has examined question of fact as a court of appeal which was not the jurisdiction vested in it, observations of the 2 judges of the apex court. 

The Bench disposed of the Special Leave Petition filed by Narendran Sons against National Insurance Co Ltd, 3 Middleton Street and Anr, while allowing the appeal of Narendran Sons, making the Appellant Narendra Sons entitled to pay the amount at rate of interest of nine percent per annum from date of filing the complaint till date of deposit of amount with State Commission on 14.10.2011.

The Apex Court fixed the rate of interest at nine percent per annum, if any, from date of filing of complaint till date of payment. 

The appeal was filed before the State Commission both by Insurance company and M/s Narendran Sons against the order of District Consumer Disputes Redressal Commission wherein the District forum awarded a sum of Rs. 6,02,775/- after considering the report filed by the Surveyor and upon on the salvage value calculated by Surveyor. 

The State commission came with the finding that the amount of sum comes to Rs. 7,59,660/- for the loss that M/s Narendran sons has suffered since the goods got damaged during transit.

The Insurance Company filed two revisions before the NCDRC. Such revisions were allowed and the amount of compensation reduced to Rs. 4,06,125/-


The fact of the case is this M/s Narendra Sons sent a consignment of 800 Hercules mats for the price of US $ 13.4 per mat and 1300 Competitor mats at the cost of US $ 9 per mat.

The total order of value was of US $ 22420 to a consignee in USA. 

Insurance company, soon thereafter appointed M/s Ewig International Marine Corporation, the surveyor and settling agent of Insurance Company in USA. 

The apex court made observations on the point of jurisdictional power of the NCDRCthat jurisdiction of NCDRC under Section 21(b) of the Consumer Protection Act, 1986 is sine qua non with the revisional jurisdiction conferred under the Code of Civil Procedure, 1908.

Section 21 of the Consumer Protection Act, 1986 

Jurisdiction of the National Commission –

Subject to the other provisions of this Act, the National Commission shall have jurisdiction —

(a) to entertain —

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore; and (ii) appeals against the orders of any State Commission;

and (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.”

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