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NCDRC Can't Direct To Amend Pleadings As Complainant Is The 'Dominus Litis' : Supreme Court
Mehal Jain
23 Dec 2021 12:09 PM IST
Setting aside the NCDRC order for amendment of a complaint (seeking a direction to the insurer to settle the claim and make payment) to challenge the subsequent repudiation of the claim, the Supreme Court has affirmed that "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."The bench of...
Setting aside the NCDRC order for amendment of a complaint (seeking a direction to the insurer to settle the claim and make payment) to challenge the subsequent repudiation of the claim, the Supreme Court has affirmed that "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."
The bench of Justices D. Y. Chandrachud and A. S. Bopanna was hearing appeals against a 2020 order of the NCDRC. The appellant instituted a consumer complaint before the NCDRC on 28 September 2019, where the grievance 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- "(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; B. insurance claim towards business interruption to the tune of INR 6,00,00,000/-..."
On 17 October 2019, the NCDRC issued notice. The 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 1986. On 6 March 2020, the first respondent filed an IA seeking the dismissal of the consumer complaint on the ground that it was premature. No reference was made in the IA to the repudiation of the claim. On the same day, the first respondent issued a letter repudiating the claim of the appellant. In its response to the IA, 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 the Supreme Court in New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited. The appellant filed an IA on 11 February 2021 seeking production of the final survey report. Both IA filed by the first respondent and IA filed by the appellant were heard by the NCDRC and, by an order dated 11 March 2021, have been disposed off. 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.
"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," observed the bench of Justices Chandrachud and Bopanna.
The bench further asserted, "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...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"
"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 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", noted the bench.
"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," ordered the bench.
The bench further clarified that the appellant could be at liberty to follow either of the three courses of action, 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.
"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," added the bench.
Case Title: M/s Acme Cleantech Solutions Private Limited v. M/s United India Insurance Company Limited & Anr
Citation : LL 2021 SC 763
Click Here To Read/Download Judgment
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