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Magma Fincorp Ltd., Kolkata v/s Oriental Insurance Co. Ltd., New Delhi & Others


Company & Directors' Information:- MAGMA FINCORP LIMITED [Active] CIN = L51504WB1978PLC031813

Company & Directors' Information:- THE ORIENTAL INSURANCE COMPANY LIMITED [Active] CIN = U66010DL1947GOI007158

Company & Directors' Information:- ORIENTAL CORPN PVT LTD [Active] CIN = U51909GJ1937PTC000133

Company & Directors' Information:- A M P FINCORP PRIVATE LIMITED [Active] CIN = U74120DL2014PTC266640

Company & Directors' Information:- I.N. INSURANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U67200DL1994PTC062554

    First Appeal No. 29 of 2019

    Decided On, 17 February 2020

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE V.K. JAIN
    By, PRESIDING MEMBER

    For the Appellant: Shweta Kapoor, Advocate. For the Respondents: R1 & R2, Kishore Rawat, L.K. Tyagi, Advocates, R3, Gajendra Singh, AR, R4, Anirudh Devraj, Manager.



Judgment Text


Oral:

1. This appeal is directed against the order of the State Commission dated 07.12.2018 whereby the consumer complaint filed by the appellant against OP Oriental Insurance Company Ltd. was dismissed solely on the ground that the State Commission did not have the pecuniary jurisdiction to entertain the consumer complaint.

2. The complainant/appellant had taken an insurance policy for a sum assured of Rs. 30,00,00,00,000/-+ Rs. 1,60,00,00,000/- from Oriental Insurance Company Ltd. by paying a premium of Rs.33,73,721/- to the said Company. A claim for Rs. 63,26,000/- was lodged by the complainant w9th the insurer. The claim having not been paid the appellant approached the concerned State Commission by way of a consumer complaint.

3. The issue involved in this appeal came to be considered by this Commission in Revision Petition No. 1794 of 2017 Maharani of India Vs. United India Insurance Co. Ltd. and the following view was taken:-

2. In terms of Section 11 of the C.P. Act, a District Forum possesses the pecuniary jurisdiction to entertain a consumer complaint where the value of the goods or services as the case may be and the compensation if any claimed does not exceed Rs.20 lakhs. The petitioner had claimed compensation only to the extent of Rs.987087/-, along with interest on that amount, in addition to compensation for mental agony quantified at Rs.2 lakhs and the aggregate of the same does not exceed Rs.20 lakhs.

3. The question which arises for consideration in this petition is as to what would be the value of the service hired or availed by the petitioner/complainant. In CC No.97 of 2016 Ambrish Kumar Shukla & Ors. Vs. Ferrous Infrastructure Pvt. Ltd. dated 7.10.2016, a three-Members Bench of this Commission observed that if for instance a person purchases a machine for more than 1 crore a manufacturing defect is found in the machine and the cost of removing the said defect is Rs.10 lakhs, it is the aggregate of the sale consideration paid by the consumer for the machine and compensation if any claimed in the complaint which would determine the pecuniary jurisdiction of the consumer forum. It was further observed that if, for instance, a house is sold for more than Rs.1 crore, certain defects are found in the house and the cost of removing those defects is Rs.5 lakhs, the complaint would have to be filed before this Commission, the value of the service itself being more than Rs.1 crore. Thus this Commission took the view that the consideration agreed to be paid by the consumers should be taken as the value of the goods or the services as the case may be and for the purpose of determining the pecuniary jurisdiction the amount of compensation as claimed in the complaint needs to be added to the agreed consideration.

4. When an insurance policy is taken by a person he pays a premium to the insurer for hiring or availing its services. It is the premium paid by the insured to the insurer and not the extent of the sum insured which constitutes the agreed consideration and therefore in my opinion, it is the premium paid to the insurer which when added to the compensation claimed in the complaint would determine the pecuniary jurisdiction of this Commission. The extent of the sum assured would have no bearing on determination of the pecuniary jurisdiction of a consumer forum.

4. In the present case if the premium paid by the complainant/appellant is added to the compensation claimed by it the aggregate does not come to more than Rs. 1,00,00,000/-. Therefore, the State Commission did possess the requisite pecuniary jurisdiction to entertain and decide the consumer complaint.

5. The learned counsel for the insurer submits that if the claim made in the complaint is more than the sum insured, the amount to be added to the premium, for the purpose of determining the pecuniary jurisdiction has to be restricted to the sum insured wherever the claim exceeds the sum insured. I am in agreement with the learned counsel for the insurer that since the liability of the insurer in such a case cannot exceed the sum insured by it therefore if the claim made in the consumer complaint exceeds

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the sum insured, it is the sum insured which will be added to the premium for the purpose of determining the pecuniary jurisdiction. However, in the case the claim is much much less than the sum insured. 6. For the reasons stated hereinabove, the impugned order is set aside and the complaint filed by the appellant is remitted back to the State Commission, for deciding the same on merits. The parties shall appear before the State Commission on 30.03.2020.
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