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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
M.B. Shah, President Rajyalakshmi Rao and Anupam Dasgupta, Members
NEW INDIA ASSURANCE CO. LTD. - Appellant
Versus
PAL SINGH - Respondent
Revision Petition No. 2405 of 2007
Decided on : 20-11-2007
Mr. Pramod Dayal, Mr. Nikunj Dayal, Advocates, for the Appellant; Mr. Devvrat, Advocate, for the Respondent
The court emphasized the importance of complying with interim relief/stay orders and upheld the entitlement of the complainant to recover the amount with interest as directed by the District Forum.
Headnote:
Insurance Company - Consumer Dispute - [Consumer Protection Act, 1986, Section 21] - The court discussed the provisions of the Consumer Protection Act, 1986, particularly Section 21, and interpreted the applicability of interest rates and penalties in consumer dispute cases. The court's decision was influenced by the interpretation of the relevant legal provisions and the compliance with the interim relief/stay order granted by the State Commission.
Fact of the Case:
The Insurance Company appealed against the District Forum's order to pay a sum of Rs. 1,90,000 with interest. The State Commission granted an interim relief/stay order directing the Insurance Company to deposit the entire amount. After the dismissal of the appeal, the complainant filed an execution application, and the District Forum directed the Insurance Company to pay a sum of Rs. 1,04,600 with a specific penal clause.
Finding of the Court:
The court found that the impugned order passed by the District Forum could not be justified due to the interim relief/stay order granted by the State Commission. The complainant was entitled to recover the amount with interest as directed by the District Forum, and the false and frivolous plea raised by the Insurance Company was rightly rejected.
Issues: Interpretation of the applicability of interest rates and penalties in consumer dispute cases, compliance with the interim relief/stay order, and the validity of the plea raised by the Insurance Company.
Ratio Decidendi: The court held that the complainant was entitled to recover the amount with interest as directed by the District Forum, and the false and frivolous plea raised by the Insurance Company was rightly rejected.
Final Decision: The Insurance Company was directed to pay a sum of Rs. 90,075 as interest amount and a sum of Rs. 10,000 as the cost of litigation within a period of four weeks.
ORDER
M.B. Shah, President - Heard the learned Counsel for the parties.
2. In complaint No. 191 of 1995, the District Forum by its order dated 21st April, 1998, directed the Insurance Company to pay a sum of Rs. 1,90,000 with interest @ 12% per annum from the date of the accident till the date of its payment. It also directed that in case the payment was not made within the aforesaid period, the rate of interest would be 18% per annum.
3. Against that order, the Insurance Company preferred an appeal No. 1293 of 1998 (S/C) before the State Consumer Disputes Redressal Commission, Uttar Pradesh on 14th May, 1998. On the stay application filed by the Insurance Company in the context of that appeal, the State Commission by its order dated 24th August, 1998 directed the Insurance Company to deposit the entire amount awarded by the District Forum.
4. The interim order is as under:
"Heard learned Counsel for the appellant and perused order dated 21st April, 1998 passed by District Forum, Lakhimpur Kheri in complaint case No. 191 of 1995.
Keeping in view of the facts of the case, it is directed that if the appellant complies with the order of the District Forum by depositing the entire amount within a period of six weeks from today by means of a FDR of a nationalized bank for a period three years in the name of the President of the District Consumer Forum then the operation of the above mentioned order shall remain stayed till the pendency of appeal. The warrant of arrest if issued shall also remain stayed."
Hence, on 17th September, 1998 Insurance Company deposited an FDR for Rs. 1,90,000. Thereafter the stay order continued.
5. Finally, the State Commission dismissed the appeal No. 1293 of 1998 (S/C) on 2nd August, 2005. After dismissal of the appeal, the complainant filed an execution application before the District Forum. The Insurance Company also preferred application in the said execution case, that the Insurance Company was entitled to recover Rs. 83,488 which had been paid in excess.
6. After hearing the parties, the District Forum, by its order dated 21st February, 2006 in Execution Case No. 242 of 1998, directed the Insurance Company to pay a sum of Rs. 1,04,600 with a specific penal clause, viz., in case the amount is not paid within one month, the complainant would be entitled to compoundable interest @ 18% per annum and legal action in accordance with law would be taken.
7. Against that order the petitioner-Insurance Company preferred Revision Petition No. 68 of 2006. That Revision Petition was dismissed without verifying the records, by the State Commission by its order dated 28th February, 2007.
8. Against that order, this Revision Petition is filed.
9. Learned Counsel appearing on behalf of the Insurance Company submitted that the State Commission has passed the order without verifying the facts and hence it is, on the face of it, erroneous. He submitted that against the original order passed by the District Forum on 21st April, 1998, the Insurance Company preferred an appeal. In that appeal, the Insurance Company had filed application for interim relief; that interim relief was granted by the State Commission by its order dated 24th August, 1998; and the Insurance Company was directed to deposit the amount awarded by the District Forum. In compliance with that order, a sum of Rs. 1,90,000 was deposited by way of FDR on 17th September, 1998. He, therefore, contended that there was no question of paying any interest after 17th September, 1998. He further submits that the directions to pay penal interest @ 18% would not survive in view of the stay order granted by the State Commission. He, therefore, contended that neither the District Forum nor the State Commission took into consideration the relevant facts and passed the impugned orders.
10. As against this, the learned Counsel appearing on behalf of the petitioner submitted that the petitioner was required to wait for the recovery of the amount for 11 years and, therefore, the im
