Gujarat High Court
Orchid - An Ecotel Hotel vs Rajendra J Doshi & 6 on 8 September, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, J.B.Pardiwala
C/SCA/10433/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 10433 of 2013
With
SPECIAL CIVIL APPLICATION NO. 15927 of 2013
With
SPECIAL CIVIL APPLICATION NO. 15928 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE J.B.PARDIWALA
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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ORCHID - AN ECOTEL HOTEL....Petitioner(s)
Versus
RAJENDRA J DOSHI & 6....Respondent(s)
================================================================
Appearance:
MR VISHWAS K SHAH, MASOOM K SHAH ADVOCATES for the Petitioner(s)
No. 1
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MR R.K.MANSURI, ADVOCATE for the Respondent(s) No. 6
MR. TIRTHRAJ PANDYA, ADVOCATE for the Respondent(s) No. 1 - 4
NOTICE SERVED for the Respondent(s) No. 1 - 5
NOTICE UNSERVED for the Respondent(s) No. 7
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 08/09/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. All these petitions involve common challenge to the vires of sections 10 and 16 of the Consumer Protection Act, 1986, (hereinafter referred to as "the said Act"). The factual background being different in each matter, we may briefly record them at this stage.
2. In Special Civil Application No.10433/2013, the petitioner is a company registered under the Companies Act and is engaged in the business of hospitality. The petitioner runs a chain of hotels in the name of Orchid an Ecotel hotel. Respondent nos. 1 to 4 had made the travel plans for flying abroad with the Emirates airlines respondent no.6. Such travel arrangements were through their travel agent respondent no.5 SOTC. The respondent nos. 1 to 4 had purchased return tickets for AhmedabadDubaiMauritius. Due to some reasons DubaiAhmedabad flight which the said respondents had to take on 17.11.2007 got cancelled. They were diverted to Mumbai airport. According to the Page 2 of 35 C/SCA/10433/2013 JUDGMENT said respondents, the Emirates airlines due to such disruption in the flight schedule and consequential delays, put them up in the petitioner's hotel at Mumbai where they complain of serious deficiency in service. On such premise, the said respondent nos. 1 to 4 lodged a complaint before the District Consumer Redressal Forum, Ahmedabad. (hereinafter referred to as "the District Forum") 2.1. In such proceedings, the petitioner filed an application and objected to continuation of such proceedings against the petitioner on the ground that the petitioner is not situated within the jurisdiction of the District Forum, Ahmedabad, and therefore, such proceedings qua the petitioner was not maintainable. Such application was allowed by the District Forum by an order passed on or around 1.9.2008. Against such order, the respondent nos. 1 to 4 preferred a revision petition before the Consumer Disputes State Commission (hereinafter referred to as "the State Commission"). The State Commission allowed the revision application in part by an order dated 22.4.2010. The order of the District Forum was set aside. The original complainants were granted permission to apply for joining the petitioner. Against such order of the State Commission, the petitioner preferred a revision petition before the National Consumer Disputes Redressal Commission (hereinafter referred to as "the National Commission). By an order dated 17.9.2010, such revision petition was dismissed.
2.2. The respondent nos. 1 to 4 thereupon, filed an Page 3 of 35 C/SCA/10433/2013 JUDGMENT application before the District Forum seeking such permission. Such application was allowed by the District Forum by an order dated 20.10.2012. The petitioner thereupon filed yet another revision petition before the State Commission which came to be dismissed by an order dated 3.5.2013 which is challenged in this petition. Besides the very constitution of the District Forum and the State Commission, the petitioner has also challenged the order of the State Commission on merits, contending that the same is without proper application of mind. The petitioner has no establishment within the jurisdiction of the District Forum. There was no privity of contract between respondents no. 1 to 4 and the petitioner.
3. In Special Civil Application No.15927/2013, brief facts are that one Hansaben A. Shah, the predecessorintitle of the present petitioners had undergone knee surgery at Metas Adventis Mission Hospital, Athwa Lines, Surat. For such purpose she was admitted on 31.10.2006 and discharged after operation on 5.11.2006. Her insurer, the New India Insurance Company (hereinafter referred to as "the insurance company") did not cover the cost of operation and other incidentals. She therefore, filed a complaint before the District Forum, Surat. During the pendency of such proceedings, she expired. Her legal heirs are therefore, prosecuting the claim. The District Forum allowed the claim of the claimants for a sum of Rs.1,60,211.60 to be recovered with costs and interest by an order dated 15.11.2010. Such order was challenged by the insurance company before the State Commission. Such Page 4 of 35 C/SCA/10433/2013 JUDGMENT appeal was allowed by the State Commission by the impugned judgement dated 23.3.2012. It was held that the insurance company was entitled to repudiate the claim. It is this order of the State Commission which the petitioners have challenged in this petition.
4. In Special Civil Application No.15928/2013, facts are similar. Here also Hansaben Shah had undergone another knee surgery at the same hospital for which she was admitted on 31.10.2007 and discharged on 26.11.2007. She claimed to have incurred costs of a total amount of Rs.2,27,544.60. When the insurance company refused to cover the costs, she filed complaint before the District Forum. The District Forum by an order dated 15.11.2010, directed the insurance company to pay a sum of Rs.1,96,250.60 with costs and interest. Such order was challenged by the insurance company before the State Commission. The State Commission reversed the order of the District Forum by impugned order dated 3.5.2012.
5. First concentrating on the question of vires of sections 10 and 16 of the Act, we wonder whether the petitioners of Special Civil Application Nos. 15927 and 15928 of 2013 could or would be allowed to challenge the same. As noted, they had approached the District Forum seeking certain compensation from the insurance company, which refused to cover the cost of medical treatments. If their challenge to validity of sections 10 and 16 is upheld, the very constitution of the District Forum before which they had lodged the claim would be rendered illegal. However, the question of constitutionality of such provisions is directly Page 5 of 35 C/SCA/10433/2013 JUDGMENT at issue in Special Civil Application No.10433/2013. We would therefore, like to deal with such challenge.
6. Inviting our attention to various provisions made under the said Act, the counsel for the petitioner raised following contentions with respect to vires of the statutory provisions under consideration.
1) The composition of the District Forum as well as the State Commission is opposed to the law laid down by the Supreme Court in case of L. Chandra Kumar v. Union of India and others reported in (1997) 3 Supreme Court Cases 261 and in case of Madras Bar Association v. Union of India reported in (2010) 11 Supreme Court Cases 1.
2) There is no provision for consultation of the Chief Justice before appointing any of the members. He submitted that looking to the provision of the Act, quiet often the President of the State Commission or the District Forum who would be a judicial member may be left in minority. Complex legal issues would thus be decided by members who are not judicial officers and are not well versed in law.
3) The District Forum as well as the State Commission receive funds from the Ministry of Consumer Affairs of the State Government. This is opposed to the observations of the Supreme Court in case of L. Chandra Kumar v. Union of India and others (supra).
4) In addition to placing heavy reliance on the decision
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of Supreme Court in case of L. Chandra Kumar v. Union of India and others (supra) and Madras Bar Association v. Union of India(supra), counsel also drew our attention to the decision in case of Municipal Corporation of Delhi v. Gurnam Kaur reported in (1989) 1 Supreme Court Cases 101, to contend that the decision of the Supreme Court in case of State of Karnataka v. Vishwabharathi House Building Coop. Society and others reported in (2003) 2 Supreme Court Cases 412, deciding the validity of the said Act was rendered sub silentio. Counsel contended that the decision in case of L. Chandra Kumar v. Union of India and others (supra) though noted, the ratio therein was not applied. The contention of the counsel was that certain legal aspects touching the vires of the said provisions which are raised in the present petition were not raised before the Supreme Court and the decision therefore, should be seen to have been rendered sub silentio.
5) Coming to the question of merits of the orders in challenge, counsel submitted that such decisions have been rendered in gross violation of the statutory provisions.
Availability of alternative remedy would not prevent this Court from entertaining the writ petitions. Particularly, in case of Special Civil Application No.10433/2013, it was argued that the petitioner has a strong case on merits. The petition therefore, should not be dismissed only on the ground of availability of alternative remedy.
7. On the other hand, learned Additional Solicitor General Shri Vyas opposed the petitions contending that the vires of the provisions contained in the said Act came up for Page 7 of 35 C/SCA/10433/2013 JUDGMENT consideration before the Supreme Court in case of State of Karnataka v. Vishwabharathi House Building Coop. Society and others(supra). The issue is therefore, no longer res integra. Our attention was drawn to paragraph nos. 15 and 16 of a recent judgement of this Court dated 24.4.2014 in Special Civil Application No.14908/2013 and connected petitions in case of Ionik Metallics & ors. v. Union of India & ors., to contend that merely because a new contention has been raised or canvassed, which was not specifically dealt by the Supreme Court, the question of vires would not be open to challenge again before the High Court. Likewise, Shri Shukla appearing for the respondents no. 1 to 4 also opposed the petition. He drew our attention to Division Bench judgement of this Court in case of Murtujakhan Joravarkhan Babi v. The Municipal Corporation of the City of Ahmedabad and others reported in AIR 1975 Gujarat 182, in which this Court had taken a similar view. He also urged that in view of the availability of alternative remedy, the petitioner's challenge to the order passed by the State Commission should not be entertained.
8. The said Act was enacted to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer councils and other authorities for the settlement of consumer disputes and all matters connected therewith. The statement of objects and reasons for the enactment of the Act makes it clear that the legislation seeks to provide for better protection of interests of consumers. The Act interalia seeks to promote and protect the rights of the consumers, Page 8 of 35 C/SCA/10433/2013 JUDGMENT such as, the right to be protected against marketing of goods which are hazardous to life and property, the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices, the right to be assured wherever possible, access to an authority of goods at competitive prices and so on. With such objections in mind, the legislature framed the said Act providing three tier dispute resolution mechanism. The District Forum at the lowest level, the State Commission which would have appellate as well as original power and at the Apex National Commission which would have the appellate as well as the original power. Section 10 which is under challenge pertains to composition of District Forum and reads as under :
"10. Composition of the District Forum.[(I) Each District Forum shall consist of,
(a) a person who is, or has been, or is qualified to be a District Judge, who shall be its President;
(b) two other members, one of whom shall be a woman, who shall have the following qualifications, namely :
(i) be not less than thirtyfive years of age,
(ii) possess a bachelor's degree from a recognized university,
(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry public affairs or administration:Page 9 of 35
C/SCA/10433/2013 JUDGMENT Provided that a person shall be disqualified for appointment as a member, if he
(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the State Government, involves moral turpitude; or
(b) is an undischarged insolvent; or
(c) is of unsound mind and stands so declared by a competent court; or
(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or
(e) has, in the opinion of the State Government, such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as a member; or
(f) has such other disqualifications as may be prescribed by the State Government;) [(IA) Every appointment under subsection (I) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely :
(i) the President of the State Commission - Chairman.
(ii) Secretary, Law Department of the State - Member.
(iii) Secretary, incharge of the Department Member.] dealing with consumer affairs in the State Provided that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Page 10 of 35 C/SCA/10433/2013 JUDGMENT Government may refer the matter to the Chief Justice of the High Court for nominating a sitting Judge of that High Court to act as Chairman) (2) Every member of the District Forum shall hold office for a term of five years or up to the age of sixtyfive years, whichever is earlier.
Provided that a member shall be eligible for reappointment for another term of five years or up to the age of sixtyfive years, whichever is earlier, subject to the condition that he fulfills the qualifications and other conditions for appointment mentioned in clause (b) of subsection (1) and such reappointment is also made on the basis of the recommendation of the Selection Committee.
Provided further that a member may resign his office in writing under his hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the qualifications mentioned in subsection (1) in relation to the category of the member who is required to be appointed under the provisions of subsection (1A) in place of the person who has resigned:
Provided also that a person appointed as the President or as a member, before the commencement of the Consumer Protection (Amendment) Act, 2002, shall continue to hold such office as President or member, as the case may be, till the completion of his term.
(3) The salary or honorarium and other allowances payable to, and the other terms and conditions of service of the members of the District Forum shall be such as may be prescribed by the State Government.
(Provided that the appointment of a member on wholetime basis shall be made by the State Government on the Page 11 of 35 C/SCA/10433/2013 JUDGMENT recommendation of the President of the State Commission taking into consideration such factors as may be prescribed including the work load of the District Forum)."
9. Section 15 pertains to appeal and provides that any person aggrieved by an order of the District Forum may prefer an appeal against such order to the State Commission within specified time. However, appeal could be entertained upon the Commission being satisfied of sufficient cause preventing the appellant from filing the same within the time prescribed.
10. Section 16 pertains to composition of the State Commission and reads as under :
"16. Composition of the State Commission.{ 1) Each State Commission shall consist of
(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President:
[Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court;]
(b) not less than two, and not more than such number of members, as may be prescribed, and one of who shall be a woman, who shall have the following qualifications, namely:
(i) be not less than thirtyfive years of age;
(ii) possess a bachelor's degree from a recognized university; and Page 12 of 35 C/SCA/10433/2013 JUDGMENT
(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:
Provided that not more than fifty per cent of the members shall be from amongst persons having a judicial background.
Explanation : For the purposes of this clause, the expression "persons having a judicial background" shall mean persons having knowledge and experience for at least a period of ten years as a presiding officer at the district level court or any tribunal at equivalent level:
Provided further that a person shall be disqualified for appointment as a member,if he -
(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the State Government, involves moral turpitude; or
(b) is an undischarged insolvent; or
(c) is of unsound mind and stands so declared by a competent court; or
(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or
(e) has, in the opinion of the State Government, such financial or other interest, as is likely to affect prejudicially the discharge by him of his functions as a member; or
(f) has such other disqualifications as may be prescribed by the State Government.) Page 13 of 35 C/SCA/10433/2013 JUDGMENT (1A) Every appointment under Subsection (1) shall be made by the State Government on the recommendation of a Selection Committee consisting of the following members, namely:
(i) President of the State Commission Chairman.
(ii) Secretary of the Law Department of the State Member.
(iii) Secretary, incharge of Department dealing with consumer affairs in the State Member.] Provided that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Government may refer the matter to the Chief Justice of the High Court for nominating a sitting Judge of that High Court to act as Chairman.
(1B) (i) The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof.
(ii) A Bench may be constituted by the President with one or more members as the President may deem fit.
(iii) If 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 or 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.) Page 14 of 35 C/SCA/10433/2013 JUDGMENT (2) The salary or honorarium and other allowances payable to, and the other terms and conditions of service 2[* * *] of, the members of the State Commission shall be such as may be prescribed by the State Government.
(Provided that the appointment of a member on wholetime basis shall be made by the State Government on the recommendation of the President of the State Commission taking into consideration such factors as may be prescribed including the work load of the State Commission.) [(3) Every member of the State Commission shall hold office for a term of five years or up to the age of sixtyseven years, whichever is earlier:
Provided that a member shall be eligible for reappointment for another term of five years or up to the age of sixtyseven years, whichever is earlier, subject to the condition that he fulfills the qualifications and other conditions for appointment mentioned in Clause (b) of SubSection (1) and such reappointment is made on the basis of the recommendation of the Selection Committee:
Provided further that a person appointed as a President of the State Commission shall also be eligible for re appointment in the manner provided in Clause (a) of Sub section (1) of this section:
Provided also that a member may resign his office in writing under his hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the qualifications mentioned in Subsection (1) in relation to the category of the member who is required to be appointed under the provisions of Subsection (1A) in place of the person who has resigned.
(4) Notwithstanding anything contained in subsection (3), Page 15 of 35 C/SCA/10433/2013 JUDGMENT a person appointed as President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]"
11. Section 19 pertains to appeal by an aggrieved person from an order passed by the State Commission in exercise of powers conferred under section 17 of the National Commission.
12. Since inception various provisions of the said Act have come up for consideration before the Supreme Court on several occasions. In case of Laxmi Engineering Works v. P.S.G. Industrial Institute reported in (1995) 3 Supreme Court Cases 583, the Court observed that the the quasijudicial bodies created under the Act known as District Forums, State Commissions and the National Commissions are not courts though invested with some of the powers of a civil court. They are quasi judicial tribunals brought into existence to render inexpensive and speedy remedies to consumers. They were not supposed to supplant but supplement the existing judicial system. The idea was to provide an additional forum providing inexpensive and speedy resolution of disputes arising between consumers and suppliers of goods and services.
13. In case of Indian Medical Association v. V.P. Shantha and others reported in (1995) 6 Supreme Court Cases 651, the Supreme Court in context of medical negligence and medical practitioners, held that a person effected would be a consumer and remedies under the said Page 16 of 35 C/SCA/10433/2013 JUDGMENT Act would be available. The contention of the counsel appearing for the medical professionals association to exclude the medical practitioners from the ambit of the Act on the ground that composition of the District Forum, the State Commission and the National Commission is such that they cannot fully appreciate the complex issues, was turned down making the following observations :
"33. Another contention that has been urged by learned counsel appearing for the medical profession to exclude medical practitioners from the ambit of the Act is that the composition of the District Forum, the State Commission and the national Commission is such that they cannot fully appreciate the complex issues which may arise for determination and further that the procedure that is followed by these bodies for determination of issues before them is not suitable for the determination of the complicated questions which arise in respect of claims for negligence in respect of the services rendered by medical practitioners. The provisions with regard to the composition of the District Forum are contained in Section 10 of the Act which provides that the President of the Forum shall be a person who is or who has been or is qualified to be a District Judge and the other two members shall be persons of ability, integrity and standing, having adequate knowledge or experience or, or having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration and one of them shall be a woman. Similarly, with regard to the composition of the State Commission, it is provided in Section 16 of the Act that the President of the Commission shall be a person who is or who has been a Judge of a High Court appointed by the State Government in consultation with the Chief Justice of the High Court and that the other two members shall be persons of ability, integrity and standing, having adequate Page 17 of 35 C/SCA/10433/2013 JUDGMENT knowledge or experience of, or having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, and one of them shall be a woman. The composition of the National Commission is governed by Section 20 of the Act which provides that the President of the Commission shall be a person who is or who has been a Judge of the Supreme Court to be appointed by the Central Government after consultation with the Chief Justice of India and four other members shall be persons of ability, integrity and standing having adequate knowledge or experience of, or having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration and one of them shall be a woman. It will thus be seen that the President of the District Forum is required to be a person who is or who has been or is qualified to be a District Judge and the President of the State Commission is required to be a person who is or who has been the judge of the High Court and the President of the national Commission is required to be a person who is or who has been a Judge of the Supreme Court, which means that all the Consumer Disputes Redressal Agencies are headed by a person who is well versed in law and has considerable judicial or legal experience. It has, however, been submitted that in case there is difference of opinion, the opinion of the majority is to prevail and, therefore, the President may be outvoted by the other members and that there is no requirement that the members should have adequate knowledge or experience in dealing with problems relating to medicine. It is no doubt true that the decisions of the District Forum as well as the State Commission and the National Commission have to be taken by majority and it may be possible in some cases that the President may be in minority. But the presence Page 18 of 35 C/SCA/10433/2013 JUDGMENT of a person well versed in law as the President will have a bearing on the deliberations of these Agencies and their decisions. As regards the absence of a requirement about a member having adequate knowledge or experience in dealing with the problems relating to medicine it may be stated that the persons to be chosen as members are required to have knowledge and experience in dealing with problems relating to various fields connected with the object and purpose of the Act, viz., protection and interests of the consumers. The said knowledge and experience would enable them to handle the consumer disputes coming up before them for settlement in consonance with the requirement of the Act. To say that the members must have adequate knowledge or experience in the field to which the goods or services, in respect of which the complaint is made, are related would lead to impossible situations. At one time there will be two members in the District Forum and they would have knowledge or experience in two fields which would mean that complaints in respect of goods or services relating to other fields would be beyond the purview of the District Forum. Similarly in the State Commission there may be members having knowledge or experience in fields other than the fields in which the members of the District Forum have knowledge or experience. It would mean that the goods or services in respect of which the District Forum can entertain a complaint will be outside the purview of the State Commission. Same will be the position in respect of the National Commission. Since the goods or services in respect of which complaint can be filed under the Act may relate to number of fields it cannot be expected that the members of the Consumer Disputes Redressal Agencies must have experties in the field to which the goods or services in respect of which complaint is filed, are related. It will be for the parties to place the necessary material and the knowledge and experience which the members will have in the fields indicated in the Act would enable them to arrive at their findings on the basis of that material. It Page 19 of 35 C/SCA/10433/2013 JUDGMENT cannot, therefore, be said that since the members of the Consumer Disputes Redressal Agencies are not required to have knowledge and experience in medicine, they are not in a position to deal with issues which may arise before them in proceedings arising out of complaints about the deficiency in service rendered by medical practitioners."
14. The issue of the validity of the said Act came up for consideration before the Supreme Court in case of State of Karnataka v. Vishwabharathi House Building Coop. Society and others(supra). The Court held in a detailed discussion that the Act is not ultra vires the Constitution. Various provisions including sections 10 and 16 of the Act came up for consideration. The contention of legislative incompetence was considered and repelled. It was reiterated that the rights of the parties have adequately been safeguarded under the Act. Although it provides for an alternative system of consumer jurisdiction on summary trial, they are required to arrive at a conclusion based on reasons. Assignment of reasons would exclude or at any rate minimize the chances of arbitrariness and the higher forums created under the Act can test the correctness of such findings. It was observed that the District Forum, the State Commission and the National Commission are not manned by lay persons. The President would be the person having judicial background and other members are required to have the expertise in the subjects such as economics, law, commerce, accountancy, industry, public affairs, administration etc. It was observed that by reason of provisions of the Act, the power of judicial review of the High Court, which is a basic feature of the Constitution, had not been taken away. It was reiterated Page 20 of 35 C/SCA/10433/2013 JUDGMENT that the remedies under the Act are not in derogation of those provided under other laws. The Act supplements and not supplants the jurisdiction of the civil courts or other statutory authorities. The decision in case of L. Chandra Kumar v. Union of India and others (supra), was noticed and followed. We would reproduce some of the relevant portions of the said judgement :
"40. The District Forum, the State Commission and the National Commission are not manned by lay persons. The President would be a person having judicial background and other members are required to have the expertise in the subjects such as economics, law, commerce, accountancy, industry, public affairs, administration etc. It may be true that by reason of subsection (2A) of Section 14 of the Act, in a case of difference of opinion between two members, the matter has to be referred to a third member and, in rare cases, the majority opinion of the members may prevail over the President. But, such eventuality alone is insufficient for striking down the Act as unconstitutional, particularly, when provisions have been made therein for appeal there against to a higher forum.
41. By reason of the provisions of the said Act, the power of judicial review of the High Court, which is a basic feature of the Constitution, has not been nor could be taken away. In Lucknow Development Authority v. M.K. Gupta, [1994] 1 SCC 243 this Court held (SCC p 251, para 2) "The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, 'a network of rackets' or a society in which, 'producers have secured power' to 'rob the rest' and the might of public bodies which are degenerating into store house of inaction where papers do not move from one desk to another as a matter of duty and responsibility Page 21 of 35 C/SCA/10433/2013 JUDGMENT but for extraneous consideration leaving the common man helpless, bewildered and shocked."
It has further been held: (SCC pp. 254 & 252, para 3) "The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services. It is a milestone in history of socioeconomic legislation and is directed towards achieving public benefit."
46. By reason of the provisions of Section 3 of the Act, it is evident that remedies provided thereunder are not in derogation of those provided under other laws. The said Act supplements and not supplants the jurisdiction of the civil courts or other statutory authorities.
47. The said Act provides for a further safeguard to the effect that in the event a complaint involves complicated issues requiring recording of evidence of experts, the complainant would be at liberty approach the civil court for appropriate relief. The right of the consumer to approach the civil court for necessary relief has, therefore, been provided under the Act itself.
49. The question as regards the applicability or otherwise of Articles 323A and 323B of the Constitution in the matter of constitution of such Tribunals came up for consideration before this Court in L. Chandra Kumar v. Union of India & Ors., reported in [1997] 3 SCC 261. This Court therein clearly held that the constitutional provisions vest Parliament and the State Legislatures, as the case may be, with powers to divest the traditional courts of a considerable portion of their judicial work. It was observed that the Parliament and the State Legislature possess legislative competence to effect changes in the original jurisdiction of the Supreme Court and High Court apart from the authorization that flows Articles 323A and 323B in terms of Entries 77, 78, 79 and 95 of List I so far as the Parliament is concerned and in terms of Entry 65 of List II Page 22 of 35 C/SCA/10433/2013 JUDGMENT and Entry 46 of List III so far as the State Legislatures are concerned. It was further held that power of judicial review being the basic structure of the Constitution cannot be taken away.
We, therefore, are clearly of the opinion that the said Act cannot be said to be unconstitutional."
15. In view of the above decisions of the Supreme Court, in our opinion, the petitioner's challenge to the vires of the statutory provisions contained in the said Act must fail.
The contention of the counsel for the petitioner that certain aspects of the challenge to the vires were not presented before the Supreme Court and that therefore, it would be open for the petitioner to raise such contentions before this Court, cannot be accepted. In case of Murtujakhan Joravarkhan Babi v. The Municipal Corporation of the City of Ahmedabad and others(supra), Division Bench of this Court held and observed as under :
"17. The foregoing summary of the decisions of the Supreme Court in three cases and the decision of this Court in one case establishes beyond doubt that the challenge to the constitutional validity of the relevant provisions of the Act is not open. The decision in Maneklal's case, (AIR 1967 SC 1373) (supra) upheld the validity of the Act as a whole and, that decision was so read in Gupte's case, (AIR 19,68 SC 303) (supra). Still, however, in Gupte's case (supra) and' Shantilal's case (AIR 1969 SC 634) (supra) the validity of Ss. 9, 10, 11, 12, 13, 53 and 67 was again considered in the context of Articles 14, 19(1)(f) and 31 and upheld. In Mangeljibhai's case (1972) 13 Guj LR 649) (supra) the validity of Section 54 in Page 23 of 35 C/SCA/10433/2013 JUDGMENT the context of Article 14 came up for consideration and was upheld. The decision in Shantilal's case (supra) specifically covers, the second ground raised on behalf of the petitioner in the present petition. The decision in Mangaljibhai's case specifically covers the challenge based on ground III and ground IV (a) in the present petition. Ground IV (b), though not specifically raised in these cases, would be covered by the decision in Maneklal's case (supra) which, as stated earlier, upheld the validity of the Act as a whole after considering its entire scheme. We are, therefore, of the opinion that it is not open to the petitioner to challenge the validity of any of the sections of the Act on the ground that it infringes upon his fundamental rights.
18. Mr. K. S. Nanavati, however, contended that in none of the abovementioned cases the Court was called upon to determine the validity of Section 54 on the ground at IV (b) as formulated hereinabove and that, therefore, challenge to the said section on the said ground was res integra. The submission, in our opinion, is misconceived, Once the validity of the Act as a whole has been upheld after considering the various provisions of the Act and taking into account both the procedural as well as substantive aspects, it cannot possibly be urged that the validity of a particular section is still open to challenge because it has not been specifically considered. As observed in the majority decision in Sornawanti v. State of Punjab, AIR 1963 SC 151 the binding effect of a decision does not depend upon whether a particular argument was considered therein or not provided that the point with reference to which an argument was subsequently advanced was actually decided. Once it is found that the validity of the Act as a whole has been upheld, merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) was not expressly considered or a decision given thereon, it will not take away that the title of the petitioner in the land the binding effect of the said Page 24 of 35 C/SCA/10433/2013 JUDGMENT decision (see T. G. Mudaliar v. State of T. N., AIR 1973 SC 974 at p. 978). These observations were made with reference to a binding precedent of a Court of coordinate or concurrent jurisdiction and they will apply with greater force to the declaration of law made by the Supreme Court which binds us under Article 141."
16. Likewise in case of Ionik Metallics & ors. v. Union of India & ors.(supra), Division Bench of this Court in similar context made the following observations :
"15. It is now settled law that once, on consideration of the provisions contained in a statute, the apex Court has arrived at a finding that those are not ultra vires either the Constitution of India or any other statute, it is not open for the High Court in a subsequent petition to entertain a plea that a particular point relating to the selfsame provision was not considered by the Supreme Court or a specific point was not raised therein. In other words, in a subsequent petition before the High Court, a High Court cannot come to a contrary conclusion merely on the ground that in the previous matter before the Supreme Court, the matter was not properly argued by the learned counsel for the parties or attention of the Supreme Court was not drawn to a particular defect. In this connection, we may profitably refer to the following observations in the threejudgebench decision of the Supreme Court in the case of Director of Settlement, A.P vs. M. R. Apparao reported in AIR 2002 SC 1598 while elaborating the binding nature of the judgment of the Supreme Court:
So far as the first question is concerned, Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an Page 25 of 35 C/SCA/10433/2013 JUDGMENT essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has 'declared law' it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An 'obiter dictum' as distinguished from a ratio decidendi is an observation by Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a bind effect as a precedent, but it cannot be denied that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR 1970 SC 1002 and AIR 1973 SC 794(sic)). When Supreme Court decides a principle it would be the duty of the High Court or a subordinate Court to follow the decision of the Supreme Court. A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a decision of the High Court which had been set aside by the Supreme Court is a nullity. (See 1984 (2) SCC 402 and 1984 (2) SCC 324). We Page 26 of 35 C/SCA/10433/2013 JUDGMENT have to answer the first question bearing in mind the aforesaid guiding principles.
16. In the case of Ballabhdas Mathurdas Lakhani vs. Municipal Committee Malkapur reported in AIR 1970 SC 1002, another threejudgedecision, the Supreme Court made the following observations when a party wanted to avoid a decision of the Supreme Court on the ground that all the relevant provisions of law was not placed before the Supreme Court:
The first question is concluded by the judgment of this Court in Bharat Kala Bhandar's case, 19653 SCR 499 = (AIR 1966 SC 249). That case arose under the C. P. and Berar Municipalities Act, 1922. The right of a Municipality governed by that Act to levy under Section 66 (1) (b) a tax on bales of cotton ginned at the prescribed rate was challenged by a taxpayer. This Court held that levy of tax on cotton ginned by the taxpayer in excess of the amount prescribed by Article 276 of the Constitution was invalid, and since the Municipality had no authority to levy the tax in excess of the rate permitted by the Constitution, the assessment proceedings levying tax in excess of the permissible limit were invalid, and a suit for refund of tax in excess of the amount permitted by Article 276 was maintainable. The decision was binding on the High Court and the High Court could not ignore it because they thought that "relevant provisions were not brought to the notice of the Court". (Emphasis supplied by us).
17. The decision in case of L. Chandra Kumar v. Union of India and others (supra), was noticed and followed by the Supreme Court in case of State of Karnataka v.
Vishwabharathi House Building Coop. Society and others(supra). Nothing stated in the judgement in case of Page 27 of 35 C/SCA/10433/2013 JUDGMENT L. Chandra Kumar v. Union of India and others (supra), even otherwise, in our opinion, would further the case of the petitioners. It was a seven Bench judgement rendered in context of constitution of Central Administrative Tribunal under the Administration Tribunals Act. The said statute was enacted by the Parliament in exercise of powers under Article 323A. The vires of the Administrative Tribunal's Act and the constitution of Administrative Tribunals were upheld by the Supreme Court in a five judge Bench judgement in case of S.P. Sampath Kumar v.
Union of India and others reported in AIR 1987 Supreme Court 386. Issue was placed before larger Bench. While upholding the constitution of Tribunals, the Supreme Court in case of L. Chandra Kumar v. Union of India and others (supra) further held that such Tribunals would be competent to entertain a challenge to the statutory provisions except those creating the Tribunal itself. The Supreme Court reiterating that judicial review is one of the basic features of the Constitution, opined that the decision of such Tribunals would be open to challenge before the High Court within whose jurisdiction, the Tribunal is localed. While doing so, the Supreme Court provided that the High Court shall not entertain a petition at the first instance and further that the decision of the Tribunal would be placed before a Bench consisting of two Judges of Page 28 of 35 C/SCA/10433/2013 JUDGMENT the High court. For variety of reasons, such decision would have no bearing insofar as vires of sections 10 and 16 are concerned, To begin with, the Consumer Disputes Fora are not created under an Act enacted in exercise of powers under Article 323A or 323B of the Constitution. Articles 323A and 323B of the Constitution envisage creation of Tribunals which would exclude the jurisdiction of all Courts, except the jurisdiction of the Supreme Court under Article 136 with respect to the disputes of matters falling within the jurisdiction of such Tribunal. The Consumer Fora do not seek to oust the jurisdiction of any Court including the ordinary civil Courts. As held by State of Karnataka v. Vishwabharathi House Building Coop.
Society and others(supra), they provide for alternative dispute resolution mechanism in cases where consumers are concerned, they do not oust the jurisdiction of normal civil Courts or other authorities. In any case, nothing stated in the said Act impinges the basic feature of the constitution of judicial review. Likewise, the decision in case of Madras Bar Association v. Union of India (supra), also would not render the said sections ultra vires. In the backdrop of constitution of National Company Law Tribunal the said decision was rendered. Again such Tribunal was being created by the Parliament in exercise of powers under Articles 323A/323B of the Constitution.
Page 29 of 35C/SCA/10433/2013 JUDGMENT The constitution of the Tribunal would oust the jurisdiction of the High Court under Article 226 of the Constitution to entertain a writ petition directly. Vested with such wide powers, the Supreme Court in the said decision formed an opinion that in the manner and method of constitution of the Tribunal and in appointment of the members, certain safeguards would be necessary, It was in this background that the Supreme Court gave the following directions :
"56. We may now tabulate the corrections required to set right the defects in Parts IB and IC of the Act :
(i) Only Judges and Advocates can be considered for appointment as Judicial Members of the Tribunal. Only the High Court Judges, or Judges who have served in the rank of a District Judge for at least five years or a person who has practiced as a Lawyer for ten years can be considered for appointment as a Judicial Member. Persons who have held a Group A or equivalent post under the Central or State Government with experience in the Indian Company Law Service (Legal Branch) and Indian Legal Service (Grade1) cannot be considered for appointment as judicial members as provided in subsection 2(c) and (d) of Section 10FD. The expertise in Company Law service or Indian Legal service will at best enable them to be considered for appointment as technical members.
(ii) As the NCLT takes over the functions of High Court, the members should as nearly as possible have the same position and status as High Court Judges. This can be achieved, not by giving the salary and perks of a High Court Judge to the members, but by ensuring that persons who are as nearly equal in rank, experience or competence to High Court Judges are appointed as members.
Therefore, only officers who are holding the ranks of Page 30 of 35 C/SCA/10433/2013 JUDGMENT Secretaries or Additional Secretaries alone can be considered for appointment as Technical members of the National Company Law Tribunal. Clauses (c) and (d) of subsection (2) and Clauses (a) and (b) of subsection (3) of section 10FD which provide for persons with 15 years experience in Group A post or persons holding the post of Joint Secretary or equivalent post in Central or State Government, being qualified for appointment as Members of Tribunal are invalid.
(iii) A `Technical Member' presupposes an experience in the field to which the Tribunal relates. A member of Indian Company Law Service who has worked with Accounts Branch or officers in other departments who might have incidentally dealt with some aspect of Company Law cannot be considered as `experts' qualified to be appointed as Technical Members. Therefore Clauses (a) and (b) of subsection (3) are not valid.
(iv) The first part of clause (f) of subsection (3) providing that any person having special knowledge or professional experience of 20 years in science, technology, economics, banking, industry could be considered to be persons with expertise in company law, for being appointed as Technical Members in Company Law Tribunal, is invalid.
(viii) Instead of a fivemember Selection Committee with Chief Justice of India (or his nominee) as Chairperson and two Secretaries from the Ministry of Finance and Company Affairs and the Secretary in the Ministry of Labour and Secretary in the Ministry of Law and Justice as members mentioned in section 10FX, the Selection Committee should broadly be on the following lines:
(a) Chief Justice of India or his nominee Chairperson Page 31 of 35 C/SCA/10433/2013 JUDGMENT (with a casting vote); (b) A senior Judge of the Supreme Court or Chief Justice of High Court Member; (c) Secretary in the Ministry of Finance and Company Affairs Member; and (d) Secretary in the Ministry of Law and Justice Member.
(xii) The administrative support for all Tribunals should be from the Ministry of Law & Justice. Neither the Tribunals nor its members shall seek or be provided with facilities from the respective sponsoring or parent Ministries or concerned Department.
(xiii) TwoMember Benches of the Tribunal should always have a judicial member. Whenever any larger or special benches are constituted, the number of Technical Members shall not exceed the Judicial Members."
18. Such observations and directions of the Supreme Court in the background of National Company Law Tribunal which, as we noted, was a creation of a statute framed under Article 323A/323B and which essentially would substitute the High Court in writ jurisdiction under Article 226 of the Constitution, (without impinging on judicial review by High Court under Articles 227 of the Constitution as held in case of L. Chandra Kumar v. Union of India and others (supra),), would stand on completely different footing as compared to a District Forum or a State Commission under the said Act. They are meant to provide speedy and inexpensive remedy to consumers which is an alternative and not an exclusive remedy concerning such Page 32 of 35 C/SCA/10433/2013 JUDGMENT issues.
19. Coming to the question of merits of the order under challenge, we are of the opinion that the petitioners have an alternative appellate remedy provided under the statute itself. There is nothing extraordinary which would enable us to entertain the challenge directly in a writ petition. It is true that by virtue of orders passed by the District Forum and the State Commission in Special Civil Application No.10433/2013, the petitioner is made an opponent in the complaint filed before the District Forum. It is true that the petitioner does not have establishment within the jurisdiction of the said Forum. However, we cannot lose sight of the fact that the complaint of respondent nos. 1 to 4 is a composite one. They complain about deficiency in service by the airline, travel agent and the hotel where the airline directed the passenger due to disruption of the flight schedule. Proviso to clause(b) of subsection(2) of section 11 authorises the District Forum and enables a complainant with the permission of the District Forum to bring in proceedings against opposite parties who do not reside or carry on business or have a branch office or personally work for gain. It may be that the petitioner has grievance on merit about the order passed by the District Forum and upheld by the State Commission, but it cannot Page 33 of 35 C/SCA/10433/2013 JUDGMENT be stated that the order of the District Forum is without jurisdiction.
20. Likewise in Special Civil Application Nos. 15927 and 15928 of 2013, the orders passed by the District Forum were challenged by the insurance company before the State Commission. The State Commission reversed the orders on merits holding that the insurance company was not liable to cover the medical expenditure. Detailed reasons have been given for such conclusions.
21. Under the circumstances, in view of the statutory alternative remedy available to the petitioners in each of these petitions, the orders under challenge passed by the State Commission are not examined on merits. Having said that, we cannot leave the petitioners without a remedy. We cannot nonsuit the petitioners on the ground of availability of alternative remedy and leave such remedy uncertain. This is in response to the reaction of Shri Shukla, learned advocate for respondents no. 1 to 4 that if the petitioners now approach the National Commission, they should be allowed to oppose the delay condonation application that the petitioner may file. Considering the fact that the petitioners were bona fide pursuing the remedies before this Court in the present petitions, it is Page 34 of 35 C/SCA/10433/2013 JUDGMENT provided that if the appeal or appeals are filed latest by 10.10.2014, along with the applications for condonation of delay, the appeals would be decided on merits.
22. With the above observations, all the petitions are disposed of. Interim relief vacated.
23. At this stage, counsel for the petitioners requested that the protection earlier granted be continued for a reasonable period. Such request is refused.
(AKIL KURESHI, J.) (J.B.PARDIWALA, J.) raghu Page 35 of 35