Consumer courts can't ignore basics

A proper notice is mandatory; uploading of the cause list on the website is not sufficient notice

Though technicalities have to be eschewed and the Evidence Act is not applicable to proceedings under the Consumer Protection Act, a consumer forum is required to observe the principles of natural justice. Judgment must also be delivered within a reasonable time after the case is heard and reserved for orders. This view has been expressed by the National Commission in a recent order of December 8, delivered by K S Chaudhari.

Mohd Jamiludin Khan had a standard fire and special perils policy, which covered his stock of goods hypothecated to Indian Overseas Bank. A fire occurred in which the stock was destroyed. Khan lodged an insurance claim but it was not settled. He, then, filed a complaint before the Uttar Pradesh State Commission. United India Insurance Company and Indian Overseas Bank.

The State Commission allowed the complaint and directed the insurance company to settle the claim of Rs 53,65,000 and pay interest amounting to Rs 1,12,000. This order was challenged by the company in an appeal before the National Commission. The main contention was that the State Commission had decided the complaint without notice to the insurance company, depriving it of the opportunity to produce evidence in its defence. The Commission went through the records of the State Commission, which showed the insurance company had filed its reply, disputing the allegations made in the complaint. The complaint was adjourned to enable all the parties to file their respective evidence.

Meanwhile, Khan made an application for grant of interim relief. The State Commission directed Khan to serve a notice on the insurance company intimating the date fixed for the hearing of this application. Khan did not comply and failed to intimate the insurance company. The hearing of the application got adjourned repeatedly, without any representation on behalf of the insurance company. The application and the matter were finally taken up for hearing. Overlooking the fact that notice had not been served, the State Commission proceeded to hear the matter, observing none had appeared on behalf of the insurance company despite the 'cause list' having been uploaded on its website. After hearing, judgment was reserved and delivered after six months.

The National Commission observed that the State Commission was duty-bound to issue a proper notice to the insurance firm. It was wrong on the part of the State Commission to proceed on the footing that uploading the cause list on its website would suffice as adequate notice. This lapse had deprived the insurance company of the opportunity of being heard. While deciding the appeal, the National Commission also expressed its displeasure about the judgment having been delivered after six months from the date of hearing. (The Consumer Protection Regulations, 2005 stipulate that the final order should invariably be passed within 15 days of the conclusion of the arguments.)

So, the National Commission set aside the order and remanded the matter back to the State Commission with a direction that the insurance company must be given the opportunity to file its evidence, after which all the parties should be given an opportunity of being heard, prior to deciding the complaint afresh.

This judgment is important, as it lays down that proper notice is mandatory, and uploading of a cause list on a website does not suffice as adequate notice. Also, the time taken for delivering a judgment after the hearing must be reasonable, so that the points argued are not forgotten.

The author is a consumer activist