The National Consumer Disputes Redressal Commission New Delhi, vide order dated 28th August 2020  held that for determining the pecuniary jurisdiction of Consumer fora, the value of the goods/ services “paid” as consideration alone has to be taken and not the value of the goods/ services “purchased”.

The said order was passed in a complaint filed before the National Consumer Disputes Redressal Commission by one Pyaridevi Chabiraj Steels Pvt. Ltd., Howrah, West Bengal against National Insurance Company Ltd., Kolkata, West Bengal and three other parties.

The Complainant had taken Insurance Coverage from the National Insurance Company Limited, Kolkata, West Bengal under its Standard Fire and Special Perils Policy initially for a total sum of Rs.28,00,20,000/- (Rupees Twenty Eight Crores and Twenty Thousand Only) by paying a premium of Rs. 3,20,525/- (Rupees Three Lakh Twenty Thousand Five Hundred and Twenty Five Only). The Complainant further took an additional security coverage of Rs.13,00,00,000/- (Rupees Thirteen Crores Only) on 25 August, 2020 by paying a premium of Rs.1,23,037/- (Rupees One Lakh Twenty Three Thousand and Thirty Seven Only).

According to the Complainant, Howrah Region where the Factory Premises of the Complainant is situated was severely hit by heavy rainfall, storm and river water flooding causing considerable damage to Buildings, Plants and Machinery and Stocks of the Complainant after which the same was informed to the Insurance Company.

The Complainant stated that the Insurance Company had wrongly repudiated its insurance claim after which the present complaint was filed seeking the following reliefs:

  1. The sum of Rs. 9, 96, 50,500/- (Rupees Nine Crore Ninety Six Lakh Fifty Thousand and Five Hundred Only) for the restoration of damaged and tilted buildings.
  2. The sum of Rs. 73, 03,656/- (Rupees Seventy-Three Lakh Three Thousand Six Hundred and Fifty Six Only) for the expenditure already incurred in restoration and replacement of Plant and Machinery.
  3. The sum of Rs. 9,92,12,841/- (Rupees Nine Crore Ninety Two Lakh Twelve Thousand Eight Hundred and Forty One Only) for the loss of stocks.
  4. The sum of Rs.86,38,138/- (Rupees Eighty-Six Lakh Thirty Eight Thousand One Hundred and Thirty Eight Only) for restoration and replacement of plinth and foundation.
  5. The sum of approximately Rs. 6,75,00,000/- (Rupees Six Crore Seventy Five Lakh Only) for relief from NPA Other Reliefs and compensation sought.
  6. Interest at the rate of 18% from the date of occurrence of the event.
  7. Rs. 1,00,00,000/- (Rupees One Crore Only) for mental pain and agony of the stakeholders.
  8. Rs. 2,72, 00,000/- (Rupees Two Crore Seventy Two Lakh Only) (Approx.) towards compensation on account of loss of business. As prior to the incident the business of the Company was growing at the rate of 25% every year.
  9. An amount towards ante lite, pendent lite and future interest as the Hon’ble Commission deemed fit.
  10. Cost of the litigation as deemed fit by this Hon’ble Commission.

Counsel for the Complainant submitted that the National Commission has jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds Rs.10,00,00,000/- (Rupees Ten Crores Only). He further submitted that a liberal view should be taken as if “the word value of consideration paid” is taken to be the amount paid for the purchase of goods or services by a Consumer then even though Insurance Policy taken by the Consumer be above 10,00,00,000/- (Rupees Ten Crore Only), factually there will no instance of making payment by any Consumer premium of more than 10,00,00,000/- (Rupees Ten Crore Only) and if such a strict view is taken then the claims regarding Insurance will have to be necessarily filed either before the District Consumer Disputes Redressal Commission or before the State Consumer Disputes Redressal Commission and not before the National Consumer Disputes Redressal Commission, which will create great hardship to such consumers.

After hearing the facts of the present matter, Justice RK Agrawal (President) and Dr. SM Kantikar (Member) observed that while under Section 21(a)(i) of the Consumer Protection Act, 1986, the National Commission had the jurisdiction to entertain Complaints where the value of the good or services and compensation claimed exceeded Rs.1,00,00,000/- (Rupees One Crore Only) , under the new law however, the National Commission has jurisdiction to entertain Complaints where the “value of the goods or services paid” as consideration exceeds Rs.10,00,00,000/ (Rupees Ten Crore Only).

The Commission stated as follows, “From a reading of the aforesaid provisions it is amply clear that for determining the pecuniary jurisdiction of the District Commission, State Commission or National Commission the value of the goods or services paid as consideration alone has to be taken and not the value of the goods or services purchased/ taken. Therefore, we are of the view that the provision of Section 58 (1) (a) (i) of the Act of 2019 are very clear and does not call for any two interpretations”.

Therefore, the bench held that as the value of consideration paid by the Complainant is only Rs.4,43,562/- (Rupees Four Lakh Forty Three Thousand Five Hundred and Sixty Two Only), which is not above Rs.10,00,00,000/- (Rupees Ten Crore Only), the National Commission has no jurisdiction to entertain the said Complaint and it was accordingly dismissed as not maintainable.

Order: CONSUMER CASE NO. 833 OF 2020