Supreme Court clarifies on Amendment of Consumer Complaints and Filing of Written Statements: Acme Cleantech Solutions vs. United India Insurance (2021)

Date of the Judgment: 09 December 2021
Citation: Civil Appeal Nos 4476-4477 of 2021
Judges: Dr Dhananjaya Y Chandrachud, J, Surya Kant, J, and Vikram Nath, J.

Can a consumer forum compel a complainant to amend their complaint, especially when the opposing party has failed to file a written statement within the stipulated time? The Supreme Court of India recently addressed this critical question in a case involving an insurance claim dispute. The court clarified the rights of a complainant regarding amending their complaint and the consequences of a respondent’s failure to file a timely written statement.

Case Background

M/s Acme Cleantech Solutions Private Limited (the appellant) filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) on 28 September 2019. The appellant’s grievance was that M/s United India Insurance Company Limited (the first respondent) failed to settle their insurance claim. The claim arose from damage to the appellant’s solar power plants due to two storms.

The appellant sought the following reliefs:

• Payment of INR 13,91,78,987.75 for material damage.
• Payment of INR 6,00,00,000 for business interruption.
• Interest at 18% per annum for the delay in settling the claim.
• Compensation of INR 1,00,00,000 for harassment and unfair trade practices.
• INR 5,00,000 towards litigation expenses.

The NCDRC admitted the complaint on 17 October 2019 and issued notice to the first respondent. The first respondent was required to file a written statement within 30 days as per Section 13(2) of the Consumer Protection Act, 1986.

Timeline

Course of Proceedings

The first respondent did not file a written statement within the 30-day period prescribed by Section 13(1) of the Consumer Protection Act, 1986. Instead, on 6 March 2020, they filed IA 3463 of 2020 seeking dismissal of the complaint, arguing it was premature because the claim verification was still in progress. On the same day, the first respondent also repudiated the appellant’s claim. The appellant, in response, argued that the first respondent’s right to file a written statement was barred, citing the Supreme Court’s judgment in New India Assurance Company Limited v Hilli Multipurpose Cold Storage Private Limited. The appellant also filed IA 1346 of 2021 seeking the final survey report.

The NCDRC, on 11 March 2021, directed the appellant to file an amended complaint and allowed the first respondent to file a written statement. The appellant challenged this order, arguing that it violated Section 13(2) read with Section 22 of the Consumer Protection Act, 1986.

Legal Framework

The case primarily revolves around Section 13 of the Consumer Protection Act, 1986, which outlines the procedure for handling complaints. Section 13(1) states that the opposite party must file a written statement within 30 days of receiving notice of the complaint. This period can be extended by a further 15 days, but no more. The Supreme Court in New India Assurance Company Limited v Hilli Multipurpose Cold Storage Private Limited, held that this time limit is mandatory. Section 22 of the Act applies the same procedure to the NCDRC.

The relevant provisions of the Consumer Protection Act, 1986 are:

• Section 13(1): “The District Forum shall, on receipt of a complaint, if it relates to any goods,- (a) refer a copy of the complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by it;”
• Section 13(2): “The District Forum shall, on receipt of a complaint, if it relates to any services,- (a) refer a copy of the complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by it;”
• Section 22: “The National Commission shall, in the disposal of any complaints or any proceedings before it, have- (a) the powers of a civil court as specified in sub-sections (4), (5) and (6) of section 13;”

Arguments

Appellant’s Submissions

• The first respondent failed to file a written statement within the statutory time limit as prescribed by Section 13(1) of the Consumer Protection Act, 1986.
• The NCDRC’s order compelling the appellant to amend the complaint and allowing the first respondent to file a written statement is against the law.
• The right to file a written statement was barred after the expiry of the prescribed time limit, as held in Hilli Multipurpose Cold Storage Private Limited.
• The appellant is the dominus litis and has the right to decide whether to amend the complaint or not.
• The relief sought was not only for settlement of the claim but also for payment of the amount due, so the complaint has not become infructuous.

First Respondent’s Submissions

• The complaint was for the insurer to settle the claim by making payment.
• Since the insurer repudiated the claim on 6 March 2020, the relief sought in the complaint was no longer valid, rendering the complaint infructuous.
• The NCDRC was justified in directing the appellant to amend the complaint.
• Once the complaint is amended, the insurer has a right to file a written statement to the amended complaint.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the primary issue before the court was:

1. Whether the NCDRC was correct in directing the appellant to amend the complaint and allowing the first respondent to file a written statement after the expiry of the statutory period.

Treatment of the Issue by the Court

Authorities

Cases

• New India Assurance Company Limited v Hilli Multipurpose Cold Storage Private Limited (2020) 5 SCC 757: The Supreme Court of India held that the time limit for filing a written statement under Section 13 of the Consumer Protection Act, 1986 is mandatory. The decision was given prospective effect.

Judgment

The Supreme Court held that the NCDRC erred in directing the appellant to amend the complaint and allowing the first respondent to file a written statement. The Court emphasized that the appellant, as the dominus litis, has the right to decide whether to amend the complaint. The Court also noted that the first respondent’s right to file a written statement was barred due to the expiry of the statutory period, as per the judgment in Hilli Multipurpose Cold Storage Private Limited.

The court clarified that it was not expressing any opinion on whether the respondent can file a written statement as that was not the subject matter of the present appeal. The court also clarified that it had not expressed any view on the effect or consequence of the alleged repudiation by the insurer.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• The mandatory nature of the time limit for filing a written statement under Section 13 of the Consumer Protection Act, 1986, as established in Hilli Multipurpose Cold Storage Private Limited.
• The principle of dominus litis, which grants the complainant the right to decide whether to amend their complaint.
• The need to uphold the statutory rights of the complainant, which were being prejudiced by the NCDRC’s order.

The court’s reasoning was primarily based on the legal principles and statutory provisions. The court emphasized the mandatory nature of the time limits and the right of the complainant to decide whether to amend the complaint. The court also considered the potential prejudice to the appellant if the NCDRC’s order was upheld.

The court considered the argument that the complaint had become infructuous due to the repudiation of the claim but did not express an opinion on it. It left this issue to be decided by the NCDRC in the pending proceedings. The court also considered the argument that the respondent should be allowed to file a written statement to the amended complaint, but the court rejected the argument.

The Court quoted from the judgment:

“Whether the pleading in the nature of a plaint in a civil suit or a complaint before the consumer forum should be amended is a matter for the plaintiff or, as the case may be, the complainant to determine.”

“The party which moves the forum is dominus litis and is entitled to decide whether or not to amend the pleading or to pursue the complaint, as it stands.”

“The deprivation of the right to set up such a plea is a matter of prejudice to the appellant which is a result of the impugned order of the NCDRC.”

The Supreme Court allowed the appellant to choose from the following courses of action:

• Pursue the complaint as it stands.
• Amend the complaint to challenge the repudiation.
• Withdraw the complaint and file a fresh complaint challenging the repudiation.

Key Takeaways

• A consumer forum cannot compel a complainant to amend their complaint.
• The complainant, as the dominus litis, has the right to decide whether to amend the complaint.
• The time limit for filing a written statement under Section 13 of the Consumer Protection Act, 1986 is mandatory.
• Failure to file a written statement within the prescribed time bars the respondent’s right to file it later.
• The Supreme Court’s decision reinforces the rights of consumers and ensures that statutory procedures are strictly followed.

Directions

The Supreme Court set aside the NCDRC’s order that directed the appellant to amend the complaint and allowed the first respondent to file a written statement. The appellant was given the liberty to choose from three options: (i) pursue the complaint as it is, (ii) amend the complaint, or (iii) withdraw the complaint and file a fresh one.

Development of Law

The Supreme Court reiterated the principle that the complainant is the dominus litis and has the right to decide whether to amend the complaint. The court also reaffirmed the mandatory nature of the time limit for filing a written statement under Section 13 of the Consumer Protection Act, 1986, as established in Hilli Multipurpose Cold Storage Private Limited. This decision clarifies the procedural rights of consumers and ensures that the statutory procedures are strictly followed by consumer forums.

Conclusion

The Supreme Court’s decision in this case clarifies the rights of a complainant in consumer disputes. The court held that a consumer forum cannot compel a complainant to amend their complaint and that the time limit for filing a written statement is mandatory. This decision reinforces the importance of adhering to statutory procedures and protects the rights of consumers. The court allowed the appellant to choose the course of action they wish to pursue, ensuring that their rights are not prejudiced.