Developments in the Domain of Consumer Protection Act, 1986: Supreme Court Renders Landmark Interpretation

Posted On - 11 April, 2024 • By - King Stubb & Kasiva


In a landmark moment for consumer protection law, the Supreme Court of India has provided an influential understanding of the Consumer Protection Act, 1986 in its ruling known as 2024 INSC 234. This judgement comes from Kozyflex Mattresses Private Limited and SBI General Insurance Company Limited,[1] in which the court handles a certain problem but also sets an important legal judgment that has wide effects for business bodies who look for solutions under the consumer protection laws.[2]

Historical Context and Legislative Framework:

The case’s background starts from the Consumer Protection Act, 1986. This law was made to protect the rights of consumers and handle issues like unfair trade methods, services that are not good enough or products which have defects in them. It is worth noting that in Section 2(1)(m) [3]of this Act, ‘consumer’ has been defined inclusively – it includes many types of people and organizations. This sets up a strong system for protecting consumers (Bhatnagar & Chakraborty).

Since the start of this Act, it has experienced different changes and improvements to match with how relationships between consumers and businesses are changing. One important development is the passing of Consumer Protection Act in year 2019. This brought about big changes which were focused on increasing benefits for consumers and making it easier to resolve disagreements between them and businesses involved in transactions.

The argument is about M/S. Kozyflex Mattresses Private Limited, which is a private limited company involved in making coir foam mattresses along with pillows and cushions. After a very big fire accident happened at their manufacturing unit located in Vizianagaram district, the insured-appellant asked to be compensated by SBI General Insurance Company Limited under the policy ‘Standard Fire and Special Perils Policy (Material Damage).[4]

Surveyor and Investigator Reports:

The surveyor’s report, given after careful study, found the claim from the insured-appellant to be false and made with fake papers. This caused the insurer-respondent to refuse paying for it. Also, separate investigators raised doubts about whether the transactions linked with purchasing machines and inventory by insured-appellant were real or not. Crucial for ending this argument were findings from chosen surveyor and separate investigators. The report of the surveyor was given after a detailed look at it and said that claim is a lie (fraud) made by insured appellant with false documents (fabricated). This led to refusal of claim by insurer-respondent. Not only this but also independent investigators have brought up questions on whether many transactions related to buying machinery as well as stock from insured appellant are genuine or not.

The National Consumer Disputes Redressal Commission (National Commission) accepted the insurer-respondent’s rejection of claim, which then led the insured-appellant to make an appeal in Supreme Court under Section 67 of Consumer Protection Act 2019. This way, the legal fight has reached up to the topmost judicial power within the country.[5]

Supreme Court’s Judgment:

Justice Mehta has written a precise judgment where the Supreme Court responded to two important initial objections from the insurer-respondent. First, it strongly rejected the argument that a company is not included in definition of ‘person’ within Section 2(1)(m) of Act by emphasizing how this definition includes all entities and drawing similar connection with recent laws made under Consumer Protection Act 2019.

Also, the Supreme Court strongly denied the view that insured-appellant’s claim, which is of commercial nature, is not under protection provided by consumer safeguarding laws. Making a clear difference from cases pointed out by respondent, it highlighted how corporate entities as consumers can be intrinsically vulnerable in some situations. In this way, they maintained broader aims of consumer safeguarding legislation.

Remittance to National Commission and Procedural Safeguards:

Recognizing the request of the insured-appellant about not receiving surveyor and investigator reports on time, the Supreme Court decided to give them a chance to present their counter-views before the National Commission. This procedural protection, based on natural justice values, shows that judiciary is dedicated in making sure an unbiased and just process of adjudication happens.[6]

Implications and Future Prospects:

The meaning of the Supreme Court’s judgement is many-sided, pointing to a new way of understanding and using laws that protect consumers in India. By confirming that companies can ask for solutions under the Consumer Protection Act of 1986, the judiciary has moved towards making sure all involved parties have fair access to justice in commercial world.


To conclude, the decision of the Supreme Court in M/S. Kozyflex Mattresses Private Limited vs. SBI General Insurance Company Limited is a turning point for consumer protection law understanding in India. The careful examination and commitment to fairness and justice by legal system show its duty as a protector of consumers’ rights, establishing a model for comprehensive understanding and use of laws related to consumer safeguarding in our land.

[1] Kozyflex Mattresses Private Limited and SBI General Insurance Company Limited 234 INSC 2024

[2] Consumer Protection Act, 1986, No. 68, Acts of Parliament, 1986 (India).

[3] Consumer Protection Act, 1986, § 2, No. 68, Acts of Parliament, 1986 (India).

[4] SBI General Insurance Policy

[5] Shrikant G. Mantri v. Punjab National Bank, (2022) 5 SCC 42.

[6] National Insurance Company v. Harsolia Motors and Ors., (2023) 8 SCC 362.

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