The Consumer Forum is unable to make decisions in absentia before the expiration of the 45-day period required for filing a written statement, according to the NCDRC.

The National Consumer Disputes Redressal Commission, chaired by AVM J. Rajendra, upheld an appeal by Cholamandalam General Insurance, ruling that lower courts cannot declare a party as ex parte before the expiration of the 45-day period allotted for filing a written statement.

Case Background

The complainant had taken a loan from a bank to purchase a tractor and trolley, both insured by Cholamandalam General Insurance. Subsequently, when the complainant’s husband attempted to use the tractor, it was found to have been damaged by unknown individuals. An FIR was filed, and a claim was submitted to the insurer for compensation, which was not settled. As a result, the complainant approached the District Forum, seeking Rs. 3,00,000 for service deficiency and Rs. 1,00,000 for mental distress.

The District Forum ruled in favor of the complainant, instructing the insurer to pay Rs. 2,66,743 for repairs with 8% interest. Additionally, the bank was directed to recover the loan amount from the complainant after deducting the subsidy. Both defendants were ordered to pay Rs. 5,000 each as litigation costs. Displeased with this decision, the insurer and the bank appealed to the State Commission of Orissa, which affirmed the District Forum’s ruling. Subsequently, the insurer and the bank filed a revision petition before the National Commission.

Arguments from the opposing party

The insurer was declared ex-parte due to non-appearance. Additionally, the bank contended that there was no deficiency in its service and urged for the dismissal of the complaint against it. The bank also asserted that it had disbursed the loan to the complainant in accordance with the terms and conditions of the loan agreement.

Observations of the National Commission

The National Commission noted that the central issue in this case revolved around whether the District Forum’s decision to proceed ex parte against the insurer was justified. It was established that the insurer had both received and acknowledged the notice. According to the regulations, the prescribed period for filing the Written Statement is 30 days from receipt of the notice, with an additional 15 days allowed. Despite the insurer appearing and requesting to overturn the ex parte order within this permissible timeframe, the District Forum proceeded ex parte prematurely and issued a final judgment without considering this plea. The State Commission also dismissed the insurer’s subsequent appeal.

The Commission referred to the Supreme Court’s rulings in cases such as New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Ltd & Ors. and Diamond Exports & Anr. vs. United India Insurance Company Ltd. & Ors., which clarified that Consumer Forums cannot extend the deadline for filing the Written Statement beyond 45 days unless specific conditions are met. The Commission emphasized that in this instance, the insurer had promptly requested to set aside the ex parte order and submit the written statement within the allowable timeframe. Therefore, the District Forum’s decision to proceed ex parte was deemed premature.

The Commission granted the review petition, set aside the decisions of the State Commission and District Forum, and referred the case back to the District Forum. This was to permit the insurer to file the Written Statement and adjudicate the complaint in accordance with the applicable legal provisions.

Case Title: Branch Manager Cholamandalam M. S. General Insurance Company Ltd. vs. Minati Dei
Case Number: R.P. No. 1947/2019

Posted and reproduced in Public Interest by

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