Can a company file a consumer complaint under Consumer Protection Act, 1986? SC clarifies

Supreme Court: In a civil appeal under Section 67 of the Consumer Protection Act, 2019 (‘Act of 2019’) by the Kozyflex Mattresses Private Limited (‘insured-appellant’) against the final decision of the National Consumer Disputes Redressal Commission (‘NCDRC’), rejecting the Consumer Case filed by the insured-appellant for a direction to the SBI General Insurance Company(‘SBI-insurance’) to indemnify it for the loss caused by fire in the manufacturing unit (‘insured premises’) of the insured-appellant company, the Division Bench of BR Gavai and Sandeep Mehta*, JJ. allowed the appeal and set aside the impugned decision. The matter was remitted to the NCDRC.

In the matter at hand, the insured-appellant is a Private Limited Company registered under the Companies Act, 1956, engaged in the business of manufacture and sale of coir foam mattresses, pillows, cushions and other coir by-products. The manufacturing unit/ insured premises of the insured-appellant was insured under a ‘Standard Fire and Special Perils Policy (Material Damage)’ (‘Policy’) for the period commencing from 28-03-2013 to 27-03-2014 for a sum of Rs. 1.25 crores on the plant and machinery and a sum of Rs.30,00,000/- on stock from the SBI insurance. By an endorsement dated 29-03-2013, the sum insured for stock was further enhanced to Rs. 1.55 crores and for building the sum insured was enhanced to Rs.20,00,000/-. A massive fire incident took place in the insured premises and immediate action was taken by informing the police and the fire service station. The insured-appellant submitted an insurance claim of Rs. 3.31 crores i.e. Rs.40,11,152/- for building, Rs.1,08,47,435/- for plant and machinery and Rs.1,87,72,489/- for stock. The said claim was repudiated on grounds of fraudulent claim.

When the representation before the Grievance Redressal Manager did not meet the desired result, the insured-appellant approached the NCDRC. The NCDRC dismissed the complaint and upheld the repudiation letter. Hence, the present appeal.

Regarding the maintainability of the complaint, there were two-fold objections:

1. The word ‘company’ is not covered within the definition of ‘person’ under Section 2(1)(m) of the Consumer Protection Act, 1986 (‘Act of 1986’).

2. That the insured-appellant having taken the policy for commercial purposes cannot invoke the jurisdiction of the NCDRC because the transactions leading to filing of the complaint cannot be termed to be lack of service/deficiency in service.

The Court said that the definition of ‘person’ as provided in the Act of 1986 is inclusive and not exhaustive. The Court said a liberal interpretation must be given to the statute in light of the Consumer Protection Act being a beneficial legislation. The Court explained that in the Act of 2019, a body corporate was brought within the definition of ‘person’, indicating that the legislature realized the incongruity in the unamended provision and rectified the anomaly by including the word ‘company’ in the definition of ‘person’.

Further, the Court said that in the matter at hand, the insurance policy 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 Court said that the insurance claim was also filed to indemnify the insured-appellant for the damage caused in a fire accident at the insured premises. Hence, the Court held that both the preliminary objections against the maintainability were unsustainable.

The Court noted that the insured-appellant did not receive the copies of the surveyor’s report and the investigators’ report timely and thus, the insured-appellant did not get proper opportunity to rebut the same. Hence, keeping in view the ends of justice, the Court directed that the insured-appellant shall be permitted to file the rebuttal/objections to the affidavit/reports submitted by the SBI insurance before the NCDRC. Therefore, the Court directed for the reconsideration of the complaint on merits after providing an opportunity to the insured-appellant. Thus, the Court set aside the impugned decision, and the matter was remitted to the NCDRC for consideration and deciding the complaint afresh in light of the above directions.