Forums must hear cases despite complexity


In a notable judgment by the Supreme Court of India in Punj Lloyd Ltd v Corporate Risks India (P) Ltd, it was held that a consumer forum could not reject a complaint merely because the complaint contains complicated facts of law.

The appellant company, Punj Lloyd, took out a high-priced insurance policy through the respondent, Corporate Risks. The Oriental Insurance Company agreed to issue the policy and Punj Lloyd issued a cheque towards payment of the premium to Corporate Risks. However, Corporate Risks was late sending the cheque to Oriental Insurance, which consequently refused to issue the policy.

Punj Lloyd subsequently purchased insurance through ICICI Lombard General Insurance at a higher premium. Afterwards, it filed a complaint against Corporate Risks before the National Consumer Disputes Redressal Commission (NCDRC), the apex forum for consumer disputes, alleging deficiency of service and seeking compensation. The NCDRC dismissed the complaint at the outset on the grounds that disputed and complicated questions were involved.

Punj Lloyd then appealed to the Supreme Court, which remanded the matter back to NCDRC, stating that the commission was not justified in sending the complainant to approach a civil court for a decision on the sole grounds that the complaint involved contentious disputes and questions.

The court maintained that NCDRC ought to have issued a notice to the respondent and placed the pleadings on record. Only when the pleadings of both parties were made available to the NCDRC should the commission have formed an opinion as to the nature and scope of the enquiry.

The court further held that the NCDRC’s decision to send the complaint to a civil court could be justified only if facts arising on the basis of the parties’ pleadings required a detailed and complicated investigation, which could not be undertaken by the commission itself.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at, or Readers should not act on the basis of this information without seeking professional legal advice.