Maintainability of writ petition against orders of
NCDRC
The Consumer
Protection Act 1986 was enacted with a view to provide access to consumer to
disputes against the defective goods availed of or against deficient service
provider, services whereof were availed of with due consideration. The Consumer
Protection Act 1986 as enacted has undergone periodically changes and several
amendments were carried out in the Act to cater to the needs that had arisen
with a view to give fillip to the objective. Subsequently, the Consumer
Protection Act is completely overhauled and a new Act is now enacted and known
as Consumer Protection Act 2019(hereinafter referred to as “2019 Act”).
The National
Consumer Disputes Redressal Commission is an apex body of consumer disputes.
The complaints before the National Commission could be filed in case the value
of goods or services availed of are more than Rs Ten (10) Crores as per the
2019 Act. In case, a party is aggrieved from the judgment of NCDRC passed in
original complaint, the recourse available to such aggrieved party is a
consumer appeal before hon’ble Supreme Court.
However as per the 2019 Act any order passed in First Appeal or in
revision petition by the National Commission shall not be appealable and writ
petition may lie before high courts under Article 227 of Constitution of India.
It is in this
backdrop that the hon’ble Supreme Court has to deal with the issue in a matter
reported as Ibrat Faizan v. Omaxe
Buildhome Private Limited 2022 LiveLaw (SC) 481. The Supreme Court has
settled the issue finally as regards whether writ shall lie before high courts
against such orders passed by NCDRC, which is not appealable and the grey area that
existed earlier is now set to rest.
The genesis of Ibrat Faizan (Supra) case needs analysis on a broad canvass. A writ
petition was entertained by Delhi High Court against the order passed by
National Commission in an appeal and interim order was passed. The petitioner feeling aggrieved and
dissatisfied with the order passed by the Delhi High Court holding that against
the order passed by the National Commission passed in an appeal under Section
58(1)(a)(iii) of the Consumer Protection Act, 2019. It was held that a writ
petition under Article 227 of the Constitution of India would be maintainable.
The original respondent before the High Court had preferred the appeal before
the hon’ble Supreme Court in Ibrat
Faizan (Supra) case.
FACTUAL
MATRIX
The Appellant in Ibrat Faizan (Supra) case, before the hon’ble Supreme Court had booked
a flat in the project floated by the respondent. According to the appellant
herein, despite the payment of sale consideration, the possession of the flat
was not handed over and therefore the appellant filed a consumer complaint
before the Delhi State Consumer Redressal Commission (‘State Commission’) on
the grounds of deficiency of service and unfair trade practice. By order dated
16.10.2020, the State Commission allowed the said complaint directing the
respondent herein to handover possession of the flat booked by the appellant
subject to their meeting the requirements. The State Commission also directed
the respondent herein to pay to the complainant – appellant compensation for
the delayed period in the form of simple interest at the rate of 9% per annum for
the period from the date of possession of the flat was due to be delivered till
the delivery of the possession.
The original complainant/appellant had filed an execution and contempt petition
before the State Commission and the State Commission had directed the decree
holder to place on record the details of the bank accounts or the properties of
the respondent which were to be attached
for not implementing the judgment and order dated 16.10.2020 passed by the
State Commission. The respondent-builder had thus preferred an appeal before
the National Commission. Vide order dated 30.03.2021, the National Commission
granted stay of the State Commission’s order, subject to deposit of the entire
cost of the flat along with 9% per annum interest on the amount paid till date
in the Registry of the State Commission or face the execution action by the
State Commission.
The respondent/builder
was now aggrieved and dissatisfied with the order dated 30.03.2021
passed by the National Commission and preferred a writ petition before the High
Court by way of Writ CM(M) No. 374/2021 under Article 227 of the Constitution
of India contending, inter alia, that
the National Commission ought not to have directed the builder to deposit the
entire cost of the apartment along with the compensation awarded by the State
Commission. The High Court had stayed the operation of the order of National
Commission dated 30.03.2021, subject to the builder depositing with the State
Commission 50% of the amount directed to be deposited by way of interest
towards compensation within four weeks. A further order came to be passed by
the High Court on 17.08.2021 in Writ CM (M) No. 374/2021. Thereafter, the
National Commission passed a final order in First Appeal No. 250/2021 vide
order dated 09.12.2021 and confirmed the order passed by the State Commission
dated 16.10.2020.
The respondent/ builder was again
dissatisfied with the final order dated 09.12.2021 passed by the National
Commission, confirming the order dated 16.10.2020 passed by the State
Commission, and again approached the Delhi High Court by way of writ petition
being CM(M) No. 1196/2021. The High Court vide interim order dated 22.12.2021
had stayed the operation of final order dated 09.12.2021 passed by the National
Commission in First Appeal No. 250/2021 till the next date of hearing. This
order of high court was impugned before the Supreme Court by the Appellant.
The Legal ANALYSIS
On 21.03.2022, the Supreme Court had passed the
following order:
“The jurisdiction of the High Court, under
Article 227 of the Constitution of India, against the order passed by the
National Consumer Disputes Redressal Commission (NCDRC) is the moot question
for consideration. As the matter is pending before the High Court and the next
date of hearing is reported to be 29.03.2022, we request the High Court to
decide the issue with respect to the jurisdiction of the High Court, under
Article 227 of the Constitution of India, against the order passed by the
National Consumer Disputes Redressal Commission (NCDRC) first which may be
decided on or before 18.04.2022. The decision of the High Court on the
jurisdiction shall be placed before this Court on or before the next date of
hearing”.
Accordingly, vide a further order dated
31.03.2022, the learned Single Judge of the High Court has decided on the
question of jurisdiction and it has held that against the order passed by the
National Commission dated 09.12.2021 passed in First appeal No. 250/2021,
impugned before it, a writ petition under Article 227 of the Constitution of
India would be maintainable.
The Appellant in the above perspective had
sought amendment, and that was allowed as necessitated owing to the subsequent
order dated 31.03.2022 passed by the high court and that was also challenged
before the Supreme Court in the matter in hand.
The appellant contended that against the
order passed by the National Commission, an appeal provided under Section
27A(1)(c) of the Consumer Protection Act, 1986 and without exhausting the said
remedy, the High Court ought not to have entertained the writ petition under
Article 227 of the Constitution of India, which was against the order passed by
the National Commission in First Appeal No. 250/2021.
It was also pleaded that assuming that the
writ petition under Article 227 of the Constitution of India against the order
passed by the National Commission, impugned before the High Court, was
maintainable, in that case also, in the limited jurisdiction available under
Article 227 of the Constitution of India, the High Court ought not to have
stayed the order passed by the National Commission dated 09.12.2021 passed in
first appeal No. 250/2021.
Per contra it is contended by the
respondent that as the appeal before the National Commission was under Section
58(1)(a)(iii) of the 2019 Act, there is no further appeal provided against the
order of the National Commission, as provided to the Supreme Court under
section 67 of the 2019 Act, against the order passed by the National Commission
under Section 58(1)(a)(iii) of the 2019 Act. Hence, a writ petition under
Article 227 of the Constitution of India would be maintainable. Reliance was
placed upon the decision of the Supreme Court in the case of Associated
Cement Companies Limited v. P.N. Sharma, AIR 1965 SC 1595
(paras 44 & 45), and the subsequent decision of the Supreme Court in the
case of L. Chandra Kumar v. Union of India, (1997)
3 SCC 261.
The short issue craving for answer before
the hon’ble Supreme Court was as under:
“whether, against the order passed by the
National Commission in an appeal under Section 58(1)(a)(iii) of the 2019 Act, a
writ petition before the concerned High Court under Article 227 of the
Constitution of India would be maintainable?”
Before delving in the issue the provisions
of Consumer Protection Act 2019 shall be of relevance. The relevant provisions are
as under:
“58.
Jurisdiction of National Commission.—(1) 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 paid as consideration
exceeds rupees Ten crores:
Provided
that where the Central Government deems it necessary so to do, it may prescribe
such other value, as it deems fit;
(ii)
complaints against unfair contracts, where the value of goods or services paid
as consideration exceeds ten crore rupees;
(iii)
appeals against the orders of any State Commission;
(iv)
appeals against the orders of the Central Authority; and
(b)
to call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any State Commission where it
appears to the National Commission that such State Commission has exercised a
jurisdiction not vested in it by law, or has failed to exercise a jurisdiction
so vested, or has acted in the exercise of its jurisdiction illegally or with
material irregularity.
(2) The
jurisdiction, powers and authority of the National Commission may be exercised
by Benches thereof and a Bench may be constituted by the President with one or
more members as he may deem fit:
Provided
that the senior-most member of the Bench shall preside over the Bench.
(3)
Where the members of a Bench differ in opinion on any point, the points shall
be decided according to the opinion of the majority, if there is a majority,
but if the members are equally divided, they shall state the point or points on
which they differ, and make a reference to the President who shall either hear
the point or points himself or refer the case for hearing on such point or
points by one or more of the other members and such point or points shall be
decided according to the opinion of the majority of the members who have heard
the case, including those who first heard it:
Provided
that the President or the other member, as the case may be, shall give opinion
on the point or points so referred within a period of two months from the date
of such reference.
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67. Appeal against order of National Commission.—Any person, aggrieved by an order made
by the National Commission in exercise of its powers conferred by sub-clause (i)
or (ii) of clause (a) of sub-section (1) of Section 58, may
prefer an appeal against such order to the Supreme Court within a period of
thirty days from the date of the order:
Provided
that the Supreme Court may entertain an appeal after the expiry of the said
period of thirty days if it is satisfied that there was sufficient cause for
not filing it within that period:
Provided
further that no appeal by a person who is required to pay any amount in terms
of an order of the National Commission shall be entertained by the Supreme
Court unless that person has deposited fifty per cent of that amount in the
manner as may be prescribed.”
It is observed by the hon’ble Supreme Court that the
appeal before the National Commission was against the order passed by the State
Commission under Section 47(1)(a) of the 2019 Act. Therefore, against the order
passed by the State Commission in a complaint in exercise of its powers
conferred under Section 47(1)(a) of the 2019 Act, an appeal to the National
Commission was maintainable, as provided under Section 58(1)(a)(iii) of the 2019
Act. As per Section 67 of the 2019 Act, any person, aggrieved by an order made
by the National Commission of its powers conferred by sub-clause (i) or (ii) of
clause (a) of sub-section (1) of Section 58, may prefer an appeal against such
order to the Supreme Court. Therefore, an appeal against the order passed by
the National Commission to the Supreme Court would be maintainable only in case
the order is passed by the National Commission in exercise of its powers
conferred under Section 58(1)(a)(i) or under Section 58(1)(a)(ii) of the 2019
Act. No further appeal to the Supreme Court is provided against the order
passed by the National Commission in exercise of its powers conferred under
Section 58(1)(a)(iii) or under Section 58(1)(a)(iv) of the 2019 Act. In that
view of the matter, the remedy which may be available to the aggrieved party
against the order passed by the National Commission in an appeal under Section
58(1)(a)(iii) or Section 58(1)(a)(iv) would be to approach the concerned High
Court having jurisdiction under Article 227 of the Constitution of India.
The next issue of pertinence was as to whether
national Commission could be construed to be or shall be akin to a “Tribunal” for
the purpose of exercise of powers under Article 227 of the Constitution of
India by the High Court is concerned, has been considered by a Constitution
Bench of the Supreme Court in the case of Associate Cement Companies
Limited (supra). The paragraphs
44 and 45 of the above judgment are reproduced below:-
“44. An authority other than a court may
be vested by statute with judicial power in widely different circumstances,
which it would be impossible and indeed inadvisable to attempt to define
exhaustively. The proper thing is to examine each case as it arises, and to
ascertain whether the powers vested in the authority can be truly described as
judicial functions or judicial powers of the State. For the purpose of this
case, it is sufficient to say that any outside authority empowered by the State
to determine conclusively the rights of two or more contending parties with
regard to any matter in controversy between them satisfies the test of an
authority vested with the judicial powers of the State and may be regarded as a
tribunal within the meaning of Article 136. Such a power of adjudication
implies that the authority must act judicially and must determine the dispute
by ascertainment of the relevant facts on the materials before it and by
application of the relevant law to those facts. This test of a tribunal is not
meant to be exhaustive, and it may be that other bodies not satisfying this
test are also tribunals. In order to be a tribunal, it is essential that the
power of adjudication must be derived from a statute or a statutory rule. An
authority or body deriving its power of adjudication from an agreement of the
parties, such as a private arbitrator or a tribunal acting under Section 10-A
of the Industrial Disputes Act, 1947, does not satisfy the test of a tribunal
within Article 136. It matters little that such a body or authority is vested
with the trappings of a court. The Arbitration Act, 1940 vests an arbitrator
with some of the trappings of a court, so also the Industrial Disputes Act,
1947 vests an authority acting under Section 10-A of the Act with many of such
trappings, and yet, such bodies and authorities are not tribunals.
45. The word “tribunal” finds place in
Article 227 of the Constitution also, and I think that there also the word has
the same meaning as in Article 136.”
The next issue of significance is whether National
Commission is a Tribunal within the meaning of Article 227 of Constitution of
India?
The hon’ble Supreme Court has thus held that National
Commission can be said to be a ‘Tribunal’ which is vested by Statute the powers
to determine conclusively the rights of two or more contending parties with
regard to any matter in controversy between them. It is further held that it
satisfies the test of an authority vested with the judicial powers of the State
and therefore may be regarded as a ‘Tribunal’ within the meaning of Article 227
and/or 136 of the Constitution of India. It is further observed by the Supreme
Court that in a given case, the Supreme Court may not exercise its powers under
Article 136 of the Constitution of India, in view of the remedy which may be
available to the aggrieved party before the concerned High Court under Article
227 of the Constitution of India, as it is appropriate that aggrieved party
approaches the concerned High Court by way of writ petition under Article 227
of the Constitution of India.
In another Constitution Bench decision of Supreme
Court i.e in L. Chandra Kumar (supra),
while dealing with the jurisdiction of the High Courts under Articles 226/227
of the Constitution of India in respect of powers of judicial review, it is
observed and held in para 90 as under:
“90. We may first address the issue of exclusion of
the power of judicial review of the High Courts. We have already held that in
respect of the power of judicial review, the jurisdiction of the High Courts
under Articles 226/227 cannot wholly be excluded. It has been contended before
us that the Tribunals should not be allowed to adjudicate upon matters where
the vires of legislations is questioned, and that they should restrict
themselves to handling matters where constitutional issues are not raised. We
cannot bring ourselves to agree to this proposition as that may result in
splitting up proceedings and may cause avoidable delay. If such a view were to
be adopted, it would be open for litigants to raise constitutional issues, many
of which may be quite frivolous, to directly approach the High Courts and thus
subvert the jurisdiction of the Tribunals. Moreover, even in these special
branches of law, some areas do involve the consideration of constitutional
questions on a regular basis; for instance, in service law matters, a large
majority of cases involve an interpretation of Articles 14, 15 and 16 of the
Constitution. To hold that the Tribunals have no power to handle matters
involving constitutional issues would not serve the purpose for which they were
constituted. On the other hand, to hold that all such decisions will be subject
to the jurisdiction of the High Courts under Articles 226/227 of the
Constitution before a Division Bench of the High Court within whose territorial
jurisdiction the Tribunal concerned falls will serve two purposes. While saving
the power of judicial review of legislative action vested in the High Courts
under Articles 226/227 of the Constitution, it will ensure that frivolous
claims are filtered out through the process of adjudication in the Tribunal.
The High Court will also have the benefit of a reasoned decision on merits
which will be of use to it in finally deciding the matter.”
Findings of Supreme Court:
It is held that against the order passed by the Tribunal,
the aggrieved party may approach the concerned High Court under Article 227 of
the Constitution of India. It is already held by the Supreme Court that
national Commission shall be a Tribunal.
The Supreme Court in State of Karnataka v. Vishwabarathi House Building Co-operative
Society, (2003) 2 SCC 412 had dealt with an issue with regard to the
Constitutional validity of the Consumer Protection Act, 1986. The validity of
the Act was challenged, inter-alia, on the ground that the Parliament, was not
empowered to establish a hierarchy of Courts, which would operate parallelly
with the Courts established under the Constitution. Upholding the validity of
the Act, this Court observed that the very fact that a given party could always
approach the High Court under Article 227, or the Supreme Court, as the case
may be, against an order of a Commission constituted under the Act, was itself
an adequate safeguard. The observations of Supreme Court therein to the effect
that a party aggrieved by an order of a Commission constituted under the Act,
could approach a High Court, or the Supreme Court, have been extracted as
under:
“52. The very fact that in a given case a
party under the said Act may approach upto the Supreme Court and or may
otherwise take recourse to the remedy of judicial review, the interest of the
parties must be held to have been sufficient safeguard”.
53. The provisions relating to power to
approach appellate court by a party aggrieved by a decision of the forums State
Commissions as also the power of High Court and thus Court under Article
226/227 of the Constitution of India and Article 32 of this Court apart from
Section 23 of the Act provide for adequate safeguards. Furthermore, primarily
the jurisdiction of the forum/commissions is to grant damages. In the event, a
complainant feels that he will have a better and effective remedy in a civil
court as he may have to seek for an order of injunction, he indisputably may
file a suit in an appropriate civil court or may take recourse to some other
remedies as provided for in other statutes.”
The hon’ble Supreme Court
went on to add that so far as the remedy which may be available under
Article 136 of the Constitution of India is concerned, it cannot be disputed
that the remedy by way of an appeal by special leave under Article 136 of the
Constitution of India may be too expensive and as observed in the case of L.
Chandra Kumar (supra), the said remedy can be said to be inaccessible
for it to be real and effective. Therefore, when the remedy under Article 227
of the Constitution of India before the concerned High Court is provided, in
that case, it would be in furtherance of the right of access to justice of the
aggrieved party, may be a complainant, to approach the concerned High Court at
a lower cost, rather than a Special Leave to Appeal under Article 136 of the
Constitution.
It was therefore held that the High Court has not
committed any error in entertaining the writ petition under Article 227 of the Constitution
of India against the order passed by the National Commission which has been
passed in an appeal under Section 58(1)(a)(iii) of the 2019 Act. However, while
exercising the powers under Article 227 of the Constitution of India, the High
Court subjects itself to the rigour of Article 227 of the Constitution and the
High Court has to exercise the jurisdiction under Article 227 within the
parameters within which such jurisdiction is required to be exercised. The
scope and ambit of jurisdiction of Article 227 of the Constitution has been
explained by the Supreme Court in the case of Estralla Rubber v. Dass Estate (P) Ltd., (2001)
8 SCC 97, which has been consistently followed by the Supreme Court and
even in the recent decision of the Supreme Court in the case of Garment Craft v. Prakash
Chand Goel, 2022 SCC OnLine SC 29). Therefore, while exercising the
powers under Article 227 of the Constitution, the High Court has to act within
the parameters to exercise the powers under Article 227 of the Constitution. While
considering the grant of interim stay/relief in a writ petition under Article
227 of the Constitution of India, the High Court has to bear in mind the
limited jurisdiction of superintendence under Article 227 of the Constitution.
Therefore, while granting any interim stay/relief in a writ petition under
Article 227 of the Constitution against an order passed by the National
Commission, the same shall always be subject to the rigour of the powers to be
exercised under Article 227 of the Constitution of India.
It was thus held that a writ petition under Article 227 of the
Constitution of India before the concerned High Court against the order passed
by the National Commission in an appeal under Section 58(1)(a)(iii) of the 2019
Act shall be maintainable. However, it is observed that while considering the
question of interim relief/stay, the High Court will bear in mind the rigour of
the powers to be exercised under Article 227 of the Constitution of India.
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Anil K Khaware
Founder & Senior Associate
Societylawandjustice.com
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