Limitation Of Article 136: The Jurisdiction Of The Supreme Court To Grant Special Leave To Appeal Can Be Invoked In Very Exceptional Circumstances

Case title:

M/S Universal Sompo General Insurance Co. Ltd. vs. Suresh Chand Jain & Anr.

Date of Order:

July 26, 2023

Bench:

Hon’ble Justice J. B. Pardiwala and Hon’ble Justie Manoj Misra

Parties:

Petitioner(S)- M/S Universal Sompo General Insurance Co. Ltd.

Respondent(S)- Suresh Chand Jain & Anr.

SUBJECT

• This petition is being filed under Article 136 of the Constitution on behalf of M/s Universal Sompo General Insurance Company Limited. The company was the original appellant in First Appeal No. 376 of 2016 before the National Consumer Disputes Redressal Commission (NCDRC). Unfortunately, the NCDRC dismissed their appeal, thereby upholding the State Consumer Disputes Redressal Commission (SCDRC) of Delhi's ruling. 
• The SCDRC had concluded that the complainant (respondent No. 1) was entitled to receive the claim amount and compensation for the stolen goods from both the petitioner and its joint venture partner, Allahabad Bank (respondent No. 2).
• Hon’ble court disposes the petition, granting the petitioner the liberty to approach the jurisdictional High Court and challenge the order passed by the NCDRC, following the appropriate legal procedures. The Court clarifies that it has not expressed any opinion on the merits of the case, which will be examined by the jurisdictional High Court.

IMPORTANT PROVISIONS

Article 136 of the Constitution of India.

Section 21(a) of the ‘Jurisdiction of the National Commission’ Act 1986 further The Consumer Protection Act: 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; ….”

OVERVIEW

• The respondent Bank issued two insurance policies, one for fire and special perils and another for burglary, in favor of the complainant. The policies covered a sum of Rs. 50 lakh and were valid from 25.11.2011 to 24.11.2012. 
• The complainant informed the Bank that he had shifted his stock to a new premises and requested them to inform the petitioner (Universal Sompo General Insurance Company Limited). A theft occurred at the new premises on 29.06.2012, and an FIR was lodged. The complainant also reported a fire incident on 18.10.2012 and filed claims for both the theft and fire amounting to Rs. 49 lakh. However, the petitioner rejected the theft claim and closed the fire claim due to non-submission of documents.
• Feeling aggrieved by the petitioner's inaction, the complainant approached the State Consumer Disputes Redressal Commission (SCDRC) seeking processing of the claim along with compensation. 
• The SCDRC partially allowed the complaint, holding both the petitioner and the respondent Bank jointly liable for deficiencies in service. The complainant was granted compensation for the stolen goods and mental agony, while the fire claim was directed to be finalized.
• The petitioner, dissatisfied with the SCDRC's ruling, decided to contest it by filing First Appeal No. 376 of 2016 before the NCDRC under Section 19 of the Act 1986. The petitioner requested the NCDRC to overturn the SCDRC's order through its appellate jurisdiction and also sought costs to be awarded in their favor against the complainant.

ISSUES RAISED

Whether Court should entertain this petition seeking special leave to appeal under Article 136 of the Constitution directly against the order passed by the NCDRC in exercise of its appellate jurisdiction or relegate the petitioner to avail the remedy of filing a writ petition under Article 226 of the Constitution or a petition invoking supervisory jurisdiction of the jurisdictional High Court under Article 227 of the Constitution?

ARGUMENTS ADVANCED BY THE APPELLANT

(a) A petition under Article 227 of the Constitution is not permissible against the order of NCDRC; only an appeal can be filed as per the provisions of the Consumer Protection Act. 

(b) The High Court should not have entertained the petition under Article 227 of the Constitution without first exhausting the appellate remedy. 

(c) The High Court should not have stayed the order of NCDRC using the limited jurisdiction available under Article 227 of the Constitution.

ARGUMENTS ADVANCED BY THE RESPONDENT

(a) Since the provisions of the Act 2019 do not include appeal provisions against NCDRC orders made in the exercise of appellate/revisional jurisdiction, a writ petition under Article 226 or a petition under Article 227, as applicable, is permissible before the High Court to challenge the NCDRC's order.

(b) To support this argument, the respondent referred to the following judgments:

• Associated Cement Companies Ltd. v. P. N. Sharma, reported in AIR 1965 SC 1595
• L. Chandra Kumar v. Union of India, reported in (1997) 3 SCC 261.

JUDGEMENT ANALYSIS

• A simple analysis of the mentioned provisions in the Act 1986 and Act 2019 indicates that the right to appeal to this Court is applicable only to orders issued by the NCDRC under Section 21(a)(i) of the Act 1986 and 58(1)(a)(i) or 58(1)(a)(ii) of the Act 2019. 
• In other words, both Acts allow appeals to this Court only for orders made by the NCDRC in its original jurisdiction or as the first-instance court (original orders), and there is no provision for further appeal against orders made by the NCDRC in its appellate or revisional jurisdiction.
• Under Section 23 of the Act 1986, if anyone feels dissatisfied with an order issued by the NCDRC based on its powers conferred by Section 21(a)(i), they have the option to appeal to this Court. 
• Therefore, an appeal to this Court is only valid when the order is made by the NCDRC in the exercise of its powers under Section 21(a)(i) of the Act 1986. No further appeal is allowed to this Court for orders made by the NCDRC under Section 21(a)(ii) of the Act 1986.
• In the case of Pritam Singh v. State, reported in 1950 SCC 189: 1950 SCR 453 at p. 459, the court established that special leave to appeal will not be granted unless exceptional and unique circumstances are demonstrated, and there has been a substantial and grave injustice, warranting a review of the appealed decision. 
• It was also clarified that once an appeal has been admitted by special leave, the appellant cannot freely contest all the findings of fact and raise every point that could have been raised in the High Court. Only those points raised at the preliminary stage when seeking leave to appeal can be argued during the final hearing of the appeal. 
• This principle, initially stated in a criminal case, holds equal significance in civil cases, as seen in Murtaza and Sons and Another v. Nazir Mohd. Khan and Others, reported in (1970) 3 SCC 876.
• The decisions of this Court make it evident that the Supreme Court's jurisdiction to grant special leave to appeal can only be invoked in highly exceptional circumstances. The case must involve a question of law of significant public importance or a decision that deeply concerns the conscience of the Court to qualify for special leave. 
• Article 136 of the Constitution does not impose any specific limitations on the Court's power to grant special leave, but when the aggrieved party has an alternative remedy available, such as approaching the High Court under its writ or supervisory jurisdiction, the Supreme Court should not entertain a petition seeking special leave, thereby bypassing the prescribed legal procedure. 
• The limitations, although not explicitly stated, are inherent in the nature and essence of this exceptional and overriding power. As it is a rare and powerful authority, it should be exercised sparingly and with caution, reserved only for truly exceptional situations. The Court will utilize this power to uphold the cause of justice, adhering to well-established principles that govern the exercise of such overriding constitutional powers.
• In the case of State of Bombay v. M/s Ratilal Vadilal and Bros., reported in (1961) 2 SCR 367, Justice M. Hidayatullah expressed the following observation:
• "We have frequently observed that appellants often do not exhaust all available remedies before approaching this Court. Typically, this Court does not condone the bypassing of the High Court in this manner, and it is proper for an appellant to utilize all remedies before seeking the jurisdiction of this Court under Article 136."

CONCLUSION

• In the case of Ibrat Faizan (supra), this Court ruled as follows that an appeal to this Court can be filed against an order passed by the National Commission only if it falls under the powers conferred by Section 58(1)(a)(i) or Section 58(1)(a)(ii) of the 2019 Act. 
• However, there is no provision for a further appeal to this Court for orders passed by the National Commission under Section 58(1)(a)(iii) or Section 58(1)(a)(iv) of the 2019 Act. In such cases, the aggrieved party's remedy would be to approach the relevant High Court, exercising its jurisdiction under Article 227 of the Constitution of India. 
• When exercising the powers under Article 227, the High Court must adhere to the limitations imposed by Article 227, ensuring that its jurisdiction is exercised within the prescribed parameters.
• Based on the aforementioned reasoning, the courts have concluded that they should not adjudicate this petition on its merits. Instead, they direct the petitioner to first approach the jurisdictional High Court either by filing a writ application under Article 226 of the Constitution or invoking the supervisory jurisdiction of the High Court under Article 227 of the Constitution. After the High Court reaches a final decision, either party may file a special leave petition before this Court seeking leave to appeal under Article 136 of the Constitution. 
• The Court acknowledges a stay of the impugned judgment and order, provided 50% of the awarded amount is deposited in this Court, as per the order dated 29.03.2023.
• However, it is essential to consider the office report dated 03.07.2023, which indicates that the complainant was unable to withdraw the deposited amount made by the petitioner, and the amount is still with the Court's Registry. Since the Court is not entertaining the petition on its merits, they direct the Registry to refund the amount to the petitioner after proper verification.
• As a result, the petition is disposed of, granting the petitioner the liberty to approach the jurisdictional High Court and challenge the order passed by the NCDRC, following the appropriate legal procedures. The Court clarifies that it has not expressed any opinion on the merits of the case, which will be examined by the jurisdictional High Court.