[Consumer Protection Act] Definition of ‘person’ as provided in the Act of 1986 is inclusive and not exhaustive, expounds SC, Read More

05 May 2024

The Hon’ble Supreme Court expounded that 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.

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 realized the incongruity in the unamended provision and has rectified the anomaly by including the word ‘company’ in the definition of ‘person’.

Brief Facts:

The present appeal has been preferred under the Consumer Protection Act, 2019 (‘CPA’) for challenging the order of the NCDRC vide which the consumer case was rejected in which a direction to the SBI General Insurance Company (‘insurer-respondent’) to indemnify it for the loss caused by fire in the insured premises being the manufacturing unit of the insured-appellant company was sought.

Brief Background:

It was claimed that a massive fire broke out in the manufacturing unit of the insured-appellant company. Immediate action by way of informing the police and the fire service station was taken and fire tenders were sent to the spot.

After inspection, the surveyor observed that the claim was fraudulent and was based on fabricated documents and accordingly recommended for the repudiation of the claim.

Contentions of the insured-Appellant:

It was submitted that queries raised by the investigators and surveyor were duly replied by the insured-appellant and the same forms part of the record before the NCDRC.

It was further submitted that neither the preliminary report nor the final report was provided to the insured-appellant to rebut.

Contentions of the insurer-Respondent:

It was argued that the insured- appellant being a body corporate is not a consumer within the meaning of Section 2(1)(m) of the CPA as it would not be covered by the definition of consumer under the Act of 1986.

Further, it was urged that the insured-appellant having taken the policy for commercial purposes cannot invoke the jurisdiction of the National Commission because the transactions leading to filing of the complaint cannot be termed to be lack of service/deficiency in service.

Observations of the Court:

It was noted that the definition of ‘person’ as provided in the Act of 1986 is inclusive and not exhaustive. CPA being a beneficial legislation, a liberal interpretation has to be given to the statute.

Hence, objection regarding ‘company’ not being covered by the definition of ‘person’ under Act of 1986 was rejected.

It was observed that 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. Therefore, the second objection was also dismissed.

The decision of the Court:

Accordingly, the Bench ordered for the matter to be re-heard by the NCDRC.

Case Title: M/S Kozyflex Mattresses Private v. Sbi General Insurance Company Limited

Citation.: 2024 Latest Caselaw 180 SC

Coram: Hon’ble Justice BR Gavai, Hon’ble Justice Sandeep Mehta