The Telangana State Consumer Disputes Redressal Commission has clarified that mere assertion of non-receipt of notice is insufficient to set aside an ex parte order under the Consumer Protection Act, 2019. The Commission emphasized strict adherence to procedural timelines while permitting limited participation to ensure fairness without compromising expeditious disposal.
Background & Facts
The Dispute
The dispute arose from a joint claim by three complainants - Bodagala Lava Kumar, his wife Mrs. Bodagala Anitha, and their daughter Miss Bodagala Yashaswini - against M/s Avanse Financial Services Limited (Opposite Party No.2) and M/s Pramerica Life Insurance Limited (Opposite Party No.1). The complainants sought relief concerning an educational loan and associated insurance policy taken by their deceased family member, Bodagala Vamshi Reddaiah, who died unexpectedly in the USA on 09.03.2023.
Key Facts
- Bodagala Vamshi Reddaiah applied for an educational loan of Rs. 26,30,064/- from Avanse Financial Services Limited on 27.02.2023
- Avanse required a co-applicant despite the loan being for educational purposes; the complainant No.3 (his father) became co-applicant
- Avanse introduced Pramerica Life Insurance Limited as the insurer for a mandatory policy
- A life insurance policy under the name "Avanse Protect" was issued on 01.03.2023 with a sum assured of Rs. 27,39,817/-, covering the period 27.02.2023 to 26.02.2033
- Premium of Rs. 40,283/- was paid by the borrower
- Vamshi Reddaiah departed for the USA on 01.03.2023 and died on 09.03.2023 due to heat stroke and complications during travel
- His last rites were performed on 13.03.2023 in Hyderabad
- The complainants submitted the death certificate to Avanse for claim settlement but received no response
- A legal notice was issued, followed by filing of Complaint Case No. 608/2024 before the District Consumer Commission, Ranga Reddy
Procedural History
- 27.02.2023: Educational loan sanctioned by Avanse Financial Services Limited
- 01.03.2023: Insurance policy issued under Avanse Protect
- 09.03.2023: Death of Bodagala Vamshi Reddaiah in USA
- 13.03.2023: Last rites performed in Hyderabad
- 25.11.2024: Notice served on Opposite Party No.1 (Pramerica Life Insurance)
- 26.11.2024: Notice served on Opposite Party No.2 (Avanse Financial Services) via registered post; postal track report filed in record
- 13.12.2024: District Commission recorded service of notice on Avanse
- 16.01.2025: District Commission passed ex parte order against Avanse for failure to file written version within 45 days of notice
- 16.01.2025: Avanse did not appear or file any response
- 24.03.2025: Avanse filed Revision Petition No. 50 of 2025 before the State Commission, claiming non-receipt of notice
- 24.03.2026: State Commission heard the revision petition and delivered judgment
The Parties' Positions
Complainants: Argued that Avanse was duly served on 26.11.2024, as evidenced by postal track report and acknowledgment. Their failure to appear was deliberate and without cause. The insurance policy was misrepresented as covering the borrower, and the refusal to settle the claim constituted unfair trade practice and deficiency in service.
Avanse Financial Services: Claimed it never received the notice, became aware of the complaint only through a separate civil suit (O.S. No. 80/2025) filed in the Civil Court on E-Jagriti portal. Asserted that its non-appearance was unintentional and due to administrative oversight.
Relief Sought
The complainants sought:
- Joint and several payment of Rs. 19,76,896/- towards outstanding loan balance with 12% p.a. interest from 09.03.2023
- Return of original title deeds and security documents
- Compensation of Rs. 5,00,000/- each to all three complainants for mental agony and hardship
- Costs of Rs. 50,000/-
The Legal Issue
The central question was whether an ex parte order passed under the Consumer Protection Act, 2019, can be set aside solely on the basis of an unsubstantiated claim of non-receipt of notice, where the record contains proof of service via registered post.
Arguments Presented
For the Appellant/Petitioner
The counsel for Avanse contended that the ex parte order was invalid because the company had no actual knowledge of the proceedings. It relied on the fact that it only became aware of the complaint through a separate civil suit filed in the Civil Court, and that the E-Jagriti portal showed the next hearing date as 19.05.2025, not the ex parte date. It argued that the absence was not willful and that setting aside the order would serve the ends of justice.
For the Respondent/State
The complainants argued that service was duly effected on 26.11.2024 via registered post, with postal track report duly filed in the record. The District Commission had followed the mandatory procedure under Section 35 of the Consumer Protection Act, 2019. The failure to file a written version within 45 days was a clear violation of statutory timelines. The plea of non-receipt was a mere assertion without documentary proof, and granting relief would encourage dilatory tactics.
The Court's Analysis
The Commission examined the service record and found that the notice was dispatched to Avanse’s registered office address on 26.11.2024, and the postal track report was annexed to the case file. The Commission noted that the burden of proving non-receipt lies on the party alleging it, and mere assertion without corroboration cannot override documented service.
"The plea of non-receipt of notice by the Revision Petitioner is only a bald assertion without any supporting material. The contention of non-receipt of notice is therefore not convincing and does not inspire confidence."
The Court reaffirmed that timelines under the Consumer Protection Act are mandatory and not directory. The failure to file a written version within 45 days of service is a ground for ex parte proceedings under Section 35(2). The Commission held that the District Commission acted within its jurisdiction and committed no error in setting Avanse ex parte.
However, recognizing that the matter involved a deceased individual and potential deficiency in service of insurance, the Commission exercised its revisional discretion to permit limited participation. It emphasized that this was not a reversal of the ex parte order but a procedural accommodation to ensure fairness without undermining the statutory framework.
The Verdict
The Revision Petition was dismissed in part. The ex parte order dated 16.01.2025 was not set aside. However, Avanse Financial Services Limited was permitted to participate in the proceedings before the District Commission in a limited manner: it may cross-examine witnesses, address oral arguments on questions of law, and make submissions, but it cannot file a written version, adduce evidence, or seek adjournments. It was directed to pay costs of Rs. 10,000/- to the complainants within two weeks. In default, the permission shall stand automatically vacated and proceedings shall continue ex parte.
What This Means For Similar Cases
Notice Service Must Be Documented, Not Assumed
- Practitioners must ensure that all notices sent to opposite parties are dispatched via registered post with acknowledgment due
- Postal track reports must be filed in the record as proof of service
- Mere verbal claims of non-receipt will not override documented service
Ex Parte Orders Are Not Automatic Grounds for Reversal
- Courts will not set aside ex parte orders merely because a party later claims ignorance
- The burden of proving non-receipt is on the party seeking relief
- Delayed awareness through unrelated litigation does not constitute sufficient cause
Limited Participation Is a Discretionary Tool, Not a Right
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Parties who miss statutory deadlines may be granted limited participation only if the matter involves substantial public interest or hardship
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Such permission is conditional and subject to costs and strict procedural limits
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No right to file written submissions or evidence is conferred
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Always verify service records before challenging ex parte orders
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File applications for setting aside ex parte orders within 30 days of becoming aware, with supporting affidavits
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Never assume that non-appearance will be excused without proof
