Read Time: 06 minutes

Synopsis

The Supreme Court has said a 'company' has been recognised as a 'person' under the Consumer Protection Act by the legislature in 2019 after removing the anomaly in the original law, so it can also file complaint for deficiency of services.

"The definition of ‘person’ as provided in the Act of 1986 is inclusive and not exhaustive. Consumer Protection Act being a beneficial legislation, a liberal interpretation has to be given to the statute," a bench of Justices B R Gavai and Sandeep Mehta said.

The court rejected a preliminary objection against filing of a consumer complaint M/s Kozyflex Mattresses Private Limited against SBI General Insurance Company Limited And Another.

"The very fact that in the Act of 2019, a body corporate has been brought within the definition of ‘person’, by itself indicates that the legislature realised the incongruity in the unamended provision and has rectified the anomaly by including the word ‘company’ in the definition of ‘person’," the bench said. 

The appellant challenged the National Consumer Disputes Redressal Commission's order of August 14, 2022 upholding repudiation of insurance claim of Rs 3.31 Cr made by it on March 3, 2014 for the fire accident and the losses suffered in the manufacturing unit in the incident on April 15, 2013. 

In the case, the surveyor submitted a final survey report on February 11, 2014 observing that the claim was fraudulent and was based on fabricated documents and accordingly recommended for the repudiation of the claim. 

The insurer respondent vehemently and fervently contended that the insured appellant being a body corporate is not a consumer within the meaning of Section 2(1)(m) of the Consumer Protection Act, 1986 as it would not be covered by the definition of consumer provided under the Act of 1986. 

The counsel contended that the definition of ‘person’ has been amended by the Consumer Protection Act, 2019 wherein, the word ‘company’ has been included and hence, it has to be presumed that company or body corporate was not covered under the definition of a ‘person’ under the Act of 1986. He also said the insurance policy for commercial purposes is not entitled to invoke the jurisdiction of forums established under the Consumer Protection Act. 

The bench said the insurance policy in the present case was taken under the title ‘Standard Fire and Special Perils Policy (Material Damage)’ and was covering the risk of these elements only and nothing else. The claim was also filed for indemnifying the insured-appellant for the damage caused in a fire accident at the insured premises. 

"Hence, this court has no hesitation in holding that both the preliminary objections raised by the counsel for the respondent are unsustainable," the bench said.

The court remitted the matter to the National Commission for considering and deciding the complaint afresh, by giving the appellant opportunity to file its rebuttal/rejoinder to the affidavit/reports submitted by the insurer-respondent.

Case Title: M/S. KOZYFLEX MATTRESSES PRIVATE LIMITED vs. SBI GENERAL INSURANCE COMPANY LIMITED AND ANR.