SUPREME COURT EMPHASIZES THAT GRANTING OF SPECIAL LEAVE UNDER ARTICLE 136 OF THE CONSTITUTION IS ALLOWED ONLY IN EXCEPTIONAL CIRCUMSTANCES

A Two Judge Bench of the Supreme Court comprising of Justice J.B. Pardiwala and Manoj Misra in Special Leave Petition (Civil) No. 5263 of 2023 passed a Judgment dated 26-07-2023 in the matter of M/s Universal Sompo General Insurance Co. Ltd Vs. Suresh Chand Jain & Anr. made observations regarding the unsettled question as to whether the Supreme Court should entertain Special Leave to Appeal filed by the Petitioner directly against the Order passed by the NCDRC in exercise of its appellate jurisdiction under Article 136 of the Constitution or ask the Petitioner to avail remedy to file Writ Petition under Article 226 and Article 227 before the High Court.

INTRODUCTION:

In the present case M/s Universal Sompo General Insurance Company Limited (hereinafter referred as the Petitioner) filed a Special Leave to Appeal under Article 136 of the Constitution. The Appeal arises from Judgment of the National Consumer Disputes Redressal Commission (NCDRC) dismissing their original Appeal, First Appeal No. 376 of 2016. The NCDRC’s dismissal upheld the Order passed by the State Consumer Disputes Redressal Commission (SCDRC) of Delhi.

Facts:

1) The Allahabad Bank (hereinafter referred to as Respondent Bank / Respondent No. – 2) acted as an intermediary and issued a Standard Fire and Special Perils Policy on 05.12.2011 in favour of Suresh Chand Jain who is the Complainant in the present case (in this matter hereinafter referred as Respondent No. 1 / Complainant) through M/s Universal Sompo General Insurance Co. ( the Petitioner). Additionally, a Burglary Insurance Policy was issued on 08.12.2011. Both policies provided coverage for a sum of Rs. 50 lakh against the risk of fire and burglary and were valid from 25.11.2011 to 24.11.2012.

2) The Complainant informed the Respondent Bank / Respondent No. 2 that the construction of their new premises in Bawana, Delhi, was completed, and they had transferred their stock to this new location from the premises in Rajgarh Ext., Gandhi Nagar, Delhi, and Bhagirath Palace, Chandni Chowk, Delhi on 28.03.2012 The Complainant instructed the Bank to inform the Petitioner of these changes On 28.03.2012.

3) The Respondent Bank acknowledged the intimation and claimed to have informed the Petitioner through a letter dated 31.03.2012. Thereafter, a theft occurred at the Bawana premise on 29.06.2012, and the Complainant filed an FIR (FIR No. 213/2012) on 30.06.2012 at PS Bawana. Both the Petitioner and the Bank were informed about the theft.

4) A surveyor was appointed by the Petitioner to inspect the premises, and the Complainant lodged a formal complaint with the Petitioner on 01.07.2012.

5) Following the theft incident, the Complainant reported that a fire broke out at the Bawana premises on 18.10.2012. Subsequently, the Complainant filed claims for both theft and fire, amounting to Rs. 49 lakh. The Petitioner rejected the theft claim in a letter dated 22.08.2013, and the fire claim was closed due to the non-submission of documents by the Complainant.

6) After, being dissatisfied with the Petitioner’s inaction, the Complainant approached the SCDRC, Delhi, under Section 17 of the Consumer Protection Act, 1986, (Complaints to Authority) through Complaint No. 357/2013 on 03.06.2013. The Complainant sought the processing of their claim of Rs. 49 lakh, along with compensation of Rs. 20 lakh and interest at the rate charged by the Respondent Bank, as well as the Costs of the Complaint.The SCDRC partially allowed the Complaint, holding the Petitioner and the Respondent Bank jointly and severally liable for deficiencies in services.

7) Aggrieved by the SCDRC’s Order, the Petitioner filed the First Appeal No. 376 of 2016 before the NCDRC under Section 19 of the Consumer Protection Act, 1986 (Power of Central Authority to refer the matter for Investigation or to Other Regulator) and sought to set aside the SCDRC’s Order dated 18-03-2016 in the exercise of its appellate jurisdiction.

8) The NCDRC dismissed the First Appeal filed by the Petitioner on 16.01.2023, Aggrieved by the decision of NCDRC the Petitioner approached this Court in the present petition seeking special leave to appeal under Article 136 of the Constitution.

State Consumer Disputes Redressal Commission Observations:

a) The SCDRC, in its Order, found the Petitioner and the Respondent Bank jointly and severally liable for deficiencies in providing services to the Complainant. The SCDRC directed the Petitioner and the Bank to compensate the Complainant for the theft of goods and awarded interest at the rate of 12% per annum from the date of the claim.

b) Additionally, the Petitioner and the Bank were Ordered to pay Rs. 2 lakh to the Complainant as compensation for mental agony, harassment, and deficiency in services. The SCDRC also directed the Petitioner to finalize the fire claim of Rs. 4 lakh for the Complainant.

Aggrieved by the SCDRC’s Order dated 18-03-2016 the Petitioner filed an Appeal (First Appeal No. 376 of 2016) before the NCDRC.

National Consumer Disputes Redressal Commission Observations:

The NCDRC, in its Order dated 16.01.2023, dismissed the Petitioner’s Appeal, thereby affirming the findings of the SCDRC. The NCDRC ruled that both the Petitioner and the Respondent Bank are responsible for the poor quality of service, and that the Complainant has the right to receive compensation for the loss of stolen goods and fire damage.

Supreme Court Observations:

Aggrieved by the Order of the NCDRC dated 16-01-2023, the Petitioner filed Special Leave to Appeal (Civil) No. 5263 of 2023 before the Supreme Court under Article 136 of the Constitution. The Apex Court vide Order dated 26-07-2023 held as follows.

ISSUES:

(i) The main issue before the Supreme Court is to determine whether the Petitioner’s petition seeking special leave to appeal under Article 136 of the Constitution is maintainable directly against the Order passed by the NCDRC in the exercise of its appellate jurisdiction.

(ii) Whether the Petitioner should be directed to avail the remedy of filing a writ petition under Article 226 of the Constitution or a petition invoking the supervisory jurisdiction of the jurisdictional High Court under Article 227 of the Constitution.

(1) The Supreme Court, in its observations on the grant of special leave under Article 136 of the Constitution, emphasized the following main points:

Before we proceed to answer the aforesaid question, we must look into the few relevant provisions of the Act 1986. [1]

 “ Section 23 of the Act 1986 provides for an ‘Appeal’. The same reads thus:[2]

(2) Further the Apex Court held that the Consumer Protection Act, 1986 stood repealed on 20.07.2020 (Section 106, the Act 1986) and the Consumer Protection Act, 2019 (for short, ‘the Act 2019’) came into force. In the instant case, the complaints were instituted under the Act 1986. However, we must highlight the relevant provisions of the Act 2019, which are pari materia to the provisions of the Act 1986.[3]

(3) According to the Apex Court, it is clear from a reading of the Consumer Protection Act 1986 and the Consumer Protection Act 2019 that the option to Appeal to the Supreme Court is only available for Orders made by the NCDRC under Section 21(a)(i) of the 1986 Act or 58(1)(a)(i) or 58(1)(a)(ii) of the 2019 Act. This means that only original Orders made by the NCDRC as the court of first instance can be appealed to this Court, and there is no option to appeal against Orders made by the NCDRC in its appellate or revisional Jurisdiction.

(4) The Apex Court further noted that the NCDRC Appeal was filed against the Order passed by the SCDRC under Section 17(1)(a)(i) of the Act 1986. Such an appeal to the NCDRC is maintainable as provided under Section 21(a)(ii) of the Act 1986. According to Section 23 of the Act 1986, any person aggrieved by an Order made by the NCDRC in the exercise of its powers conferred by Section 21(a)(i) may prefer an appeal against such Order to this Court. Therefore, an appeal to this Court against the NCDRC’s Order would be maintainable only if the Order is passed by the NCDRC in the exercise of its powers conferred under Section 21(a)(i) of the Act 1986. There is no provision for filing any further appeal against the Order passed on the appeal filed against the Order of the SCDRC. In such circumstances, the Petitioner has wrongly approached this Court under Article 136 of the Constitution.

(5) After considering the various decisions of the Supreme Court, the Apex Court observed that its jurisdiction to grant special leave is not limited by any restriction, but it should not entertain petitions seeking special leave when the aggrieved party has an alternative remedy before the High Court under Article 226 or 227:-

5.1. The High Court can be approached under Article 227 of the Constitution in cases where an appeal is not maintainable before the Supreme Court against the Order passed by a tribunal, such as the NCDRC. Further, the remedy under Article 227 may be more accessible and cost-effective compared to the remedy of Special Leave Petition under Article 136.

5.2. Article 136 is an exceptional and overriding power, to be exercised sparingly and with caution, only in extraordinary situations, and to advance the cause of justice. Further, the special leave under Article 136 will not be granted unless exceptional circumstances exist, substantial and grave injustice has been done, and the case present warrants a review of the decision appealed against.

5.3. Further, the Apex Court noted that when an appeal is admitted by special leave, only the points fit to be urged at the preliminary stage when seeking leave to appeal can be raised at the final hearing, not all findings of fact or every point that could be raised in the High Court.

(6) Based on the aforementioned view of the matter, the Supreme Court did not entertain the petition on merits because an alternative remedy is available before the jurisdictional High Court under Article 226 or 227.

Conclusion:

The Supreme Court disposed of the Petition with liberty granted to Petitioner to pursue the matter before the High Court under Article 226 of the Constitution or by invoking the supervisory jurisdiction under Article 227 of the Constitution. After the High Court passes a final Order, either party can seek special leave to appeal under Article 136 of the Constitution before the Supreme Court. The Apex Court further clarified that it did not express any opinion on the merits of the case, as the High Court would examine those aspects in due course.

Editor’s Comments:

The law provides a remedy for the breach of legal rights. However, the remedy has to be exercised in the right manner and in the right procedure. Though Article 136 provides for special leave to appeal to the Supreme Court it can’t be exercised in all cases unilaterally. In the present case as there was an alternative remedy the Supreme Court dismissed the SLP refusing to exercise its special powers and asked the litigant to approach the appropriate court for its remedy.

Sakshi Raghuvanshi

Associate

The Indian Lawyer

Edited by

Sushila Ram Varma

Chief Consultant

The Indian Lawyer

 

[1] “ Section 21(a) of the Act 1986 is titled ‘Jurisdiction of the National Commission’. The same reads thus:

“21. Jurisdiction of the National Commission. – Subject to the other provisions of this Act, the National Commission shall have jurisdiction

(a)to entertain —

 (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore; and

 (ii) appeals against the Orders of any State Commission”

 

[2] “23. Appeal.- Any person, aggrieved by an Order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such Order to the Supreme Court within a period of thirty days from the date of the Order:

 Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:

 Provided further that no appeal by a person who is required to pay any amount in terms of an Order of the National Commission shall be entertained by the Supreme Court unless that person has deposited in the prescribed manner fifty per cent. of that amount or rupees fifty thousand, whichever is less.”

 

[3] “58. Jurisdiction of National Commission. – (1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction—

 (a) to entertain—

 (i) complaints where the value of the goods or services paid as consideration exceeds rupees ten crore:

Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;

(ii) complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees;

 (iii) appeals against the Orders of any State Commission;

(iv) appeals against the Orders of the Central Authority;

 

67. Appeal against Order of National Commission. –

 “Any person, aggrieved by an Order made by the National Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of section 58, may prefer an appeal against such Order to the Supreme Court within a period of thirty days from the date of the Order: Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:

 Provided further that no appeal by a person who is required to pay any amount in terms of an Order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty percent. of that amount in the manner as may be prescribed.” ^[3]