NCDRC Can Interfere With State Commission's Order If Commission Exercises Jurisdiction Not Vested In It By Law Or Fails To Exercise Jurisdiction: Supreme Court

The Supreme Court has observed that NCDRC can interfere with State Consumer Disputes Redressal Commission ("State Commission") order if it finds that the State Commission has exercised jurisdiction not vested in it by law, failed to exercise the same or has acted illegally or with material irregularity while exercising its jurisdiction.

The bench of Justices Hemant Gupta and V Ramasubramanian made this observation while considering a civil appeal assailing National Consumer Disputes Redressal Commission's ("NCDRC") order dated October 6, 2015.

On October 6, 2015 NCDRC while allowing the revision filed by National Insurance Company Ltd. ("the Insurance Company") had reduced the amount of compensation awarded by the State Commission from Rs. 7,59,660/- to Rs.4,06,125/-.

In the present matter, appellant sent a consignment of 800 Hercules mats at the cost of US $ 13.4 per mat and 1300 Competitor mats at the cost of US $ 9 per mat, to a consignee in United States of America (USA). However, the goods got damaged during transit. The Insurance Company appointed M/s Ewig International Marine Corporation, an authorized Surveyor and settling agent of the Insurance Company in the USA.

Considering the salvage value, the District Consumer Disputes Redressal Commission awarded a sum of Rs. 6,02,775/-.

On appeal before the State Commission, the Commission observed that the loss suffered by the appellant amounted to Rs. 7,59,660/-. Aggrieved, the Insurance Company filed two revisions before the NCDRC which was allowed by NCDRC while reducing the amount of compensation to Rs. 4,06,125/-.

The bench to adjudicate on the issue referred to section Section 21 of the Consumer Protection Act, 1986 and observed,

"The NCDRC could interfere with the order of the State Commission if it finds that the State Commission has exercised jurisdiction not vested in it by law or has failed to exercise its jurisdiction so vested, or has acted in exercise of its jurisdiction illegally or with material irregularity. However, the order of NCDRC does not show that any of the parameters contemplated under Section 21 of the Act were satisfied by NCDRC to exercise its revisional jurisdiction to set aside the order passed by the State Commission. The NCDRC has exercised a jurisdiction examining the question of fact again as a court of appeal, which was not the jurisdiction vested in it."

With this observation, the bench allowed the appeal and set aside NCDRC's order.

"The Insurance Company had deposited an amount of Rs. 10,78,881/- with the State Commission on 14.10.2011. The appellant will pay the amount awarded by the State Commission after adjusting the amount disbursed to the appellant in terms of the order of NCDRC, if any. The appellant shall be entitled to interest at the rate of 9% per annum from the date of filing the complaint till the date of deposit of the amount with the State Commission on 14.10.2011 and on the remaining amount with interest @ 9% per annum, if any, from the date of filing of the complaint till the date of payment," court further said.

Case Title: M/S Narendran Sons Versus National Insurance Co. Ltd. Middleton Street & Anr

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