MP High Court Revives Bajaj Life Insurance Appeal; Cites Pre-Deposit Default

Home / News updates "Not An Incurable Mistake": MP HC Revives Bajaj Life Insurance's Appeal Dismissed Over Pre-Deposit Default X MP High Court Sets Aside NCDRC Order, Says Insurer Wasn't Heard on Extension Plea in Consumer Case MP High Court sets aside NCDRC and SCDRC orders dismissing Bajaj Life Insurance's appeal over an insurance deficiency claim, holding the insurer was never given a hearing on its extension plea before the pre-deposit deadline. The Madhya Pradesh High Court's Indore Bench has set aside orders passed by the National Consumer Disputes Redressal Commission (NCDRC) and the State Consumer Disputes Redressal Commission (SCDRC), Bhopal, holding that an insurance company was denied a fair hearing after its plea for extension of time to deposit the pre-deposit amount was never placed before the State Commission before its appeal was dismissed. A Division Bench of Justice Subodh Abhyankar and Justice Alok Awasthi was hearing a petition by M/s Bajaj Life Insurance Limited, challenging the NCDRC's order affirming dismissal of its appeal by the SCDRC's Registrar for non-compliance with a pre-deposit direction. The dispute traces back to a consumer complaint filed by Varsha Sirwani, alleging deficiency in service by the insurance company following her husband's death. The District Consumer Forum, in its order dated October 6, 2022, had directed the insurer to pay the entire home loan amount, with interest, to Aavasa Finance Ltd, get the mortgaged property released, and pay the remaining sum to the complainant within a month, besides Rs 50,000 for mental trauma and Rs 10,000 as costs. The insurer appealed before the SCDRC but did not deposit the pre-deposit amount, prescribed under Section 41 of the Consumer Protection Act as 50 per cent of the awarded sum, at filing. The State Commission, on January 10, 2024, passed a peremptory order granting two weeks to remove the default, warning the appeal would "stand dismissed without reference to the Bench" if uncured. When the deposit was not made in time, the Registrar dismissed the appeal on January 30, 2024, again "without further reference to the Bench." The insurer's case was that it had, before the deadline lapsed, filed an application on January 24, 2024, seeking extension, explaining that a demand draft prepared for the purpose was lost in transit while being sent to its local advocate in Indore. This application, it contended, was never placed before the State Commission, and the Registrar dismissed the appeal citing only the earlier peremptory order. Appearing for the petitioner, Pratap Shanker, Swetank Shantanu, Bharti Arora, Ankit Kumar and Yash Jain, argued that Rs 18,00,742 had already been deposited before the District Forum, and that it was incumbent upon the Registrar to place the extension application before the Commission, not dismiss the appeal unilaterally. Shri Paresh Joshi, for the respondent, opposed the plea, submitting the petitioner had taken nearly eight adjournments to cure the defect, that the claim of the draft being lost in transit was false, and that the amount deposited fell short by Rs 1,50,000. Examining the record, the bench noted that Section 41 does not mandate deposit of 50 per cent of the awarded amount at filing itself, only before the appeal is entertained. It held the extension application "could not have been" barred from consideration had it been placed before the Commission. The bench observed that the NCDRC's order "did not address the grounds raised by the petitioner in the memo of appeal," and that the matter, being procedural, "should not have been prolonged," since a substantial amount, well over 50 per cent of the decretal sum, had already been deposited. The court also rejected the NCDRC's reasoning that the revision was liable to be dismissed for challenging the Registrar's ministerial order of January 30, 2024, instead of the SCDRC's original order of January 10, 2024, calling this "not... an incurable mistake" warranting