State Consumer Disputes Redressal Commission
Sh. Prashant Somani vs M/S Harsha Builtcom Pvt. Ltd. on 27 May, 2024
PRASHANT SOMANI V. M/S. HARSH BUILTCOM P. LTD. 27.05.2024 IA NO.1067/2023 IN EX. 39/2018 1.
IA No.1067/2023 has been filed by the Judgment Debtor seeking review of order dated 16.03.2023, seeking review of the order dated 16.03.2023 passed by this Commission, inter-alia, on the following grounds that there is an error apparent on the face of record as this Commission did not consider the IA No.62/2023 moved by the JDs seeking disposal of the execution petition by stating that entire conviction amount of Rs.30,52,000/- has been paid; this Commission has wrongly framed an issue as to 'whether the JD is required to pay updated interest for the period during which the matter was stayed by the High Court; this Commission failed to appreciate that the stay granted by the High Court vide order dated 13.02.2020 was vacated on 24.05.2022 and the JD was burdened with cost of Rs.30,000/- for the delay caused in the matter, which has admittedly been paid by the JD; the order is passed without taking into account the difference between a decretal amount and an amount; the reliance on the judgment reported as 2022 SCC Online SC 1770 is misconceived.
2. Brief facts as stated by the JD in the application are that vide order dated 27.01.2020, the Managing Director of JD No.1 was convicted under Section 27 of the Consumer Protection Act and sentenced to imprisonment of one year OR till the payment of entire amount. The said order was challenged before the Hon'ble High Court by filing a Crl. M.C. No.790/2020 and the operation of Page 1 of 11 the order dated 27.01.2020 was stayed vide order dated 13.02.2020 and the arrest of the JD No.3 was suspended. It is stated that the said interim order continued till 24.05.2022 when the petition filed by JD No.3 was dismissed with costs of Rs.30,000/-. Upon dismissal of the petition, the order of sentence came again into operation without any modification. Thereafter, the JD No.1 and 3 arranged the funds and paid the entire conviction amount of Rs.30,52,000/- to the DH alongwith costs of Rs.30,000/- as imposed by the Hon'ble High Court.
3. It is further stated that thereafter DH moved an IA No.779/2022 claiming interest over and above the conviction amount of Rs.30,52,000/- alongwith other costs. THE JD also moved an application being IA No.62/2023 seeking recall/discharge of the arrest warrant and sought disposal of the execution petition as satisfied. Both the IAs were disposed of vide order dated 16.03.2023, wherein this Commission held as under:
On a perusal of the aforesaid dictum, it is crystal clear that once the protection of the interim stay is vacated, the party is bound to pay the interest with retrospective effect from the time the suit was instituted till the final order is passed. It is to be noted that the Hon'ble Supreme Court has for once and all put rest to the controversy about the payment of interest accrued during the time an interim stay is in operation. In the light of the aforementioned dicta and the facts and circumstances of the present case, it is to be noted that though interim stay was granted when wrong forum was approached by the JD, the moment the stay was vacated or in the event of dismissal of the proceedings, the beneficiary of the interim order i.e. the JD in the present case shall have to pay interest on the amount withheld or not paid by virtue of the interim order.
Here, interest accumulated retrospectively from the date the interim stay was granted as if no interim stay was granted at all so, Page 2 of 11 the JD is under the obligation to pay the updated interest accrued during the time the matter was stayed by the Hon'ble High Court. Therefore, the JD is directed to pay interest @12% on principal amount of Rs.18,50,000/- from 27.01.2020 till the actual realization of the amount.
4. We have perused the record. The main grievance of the JDs is the direction of this Commission to pay interest @12% on principal amount of Rs.18,50,000/- from 27.01.2020 till the actual realization of the amount. Further, the question which falls for consideration is whether the JDs are liable to pay interest for the period during which the operation of the conviction order was stayed by the High Court and eventually when the writ petition was dismissed.
5. It is not disputed that in terms of the order dated 23.03.2018, the JDs were liable to refund the entire amount of Rs.18,50,000/- to the DH alongwith interest @12% alongwith Rs.2,00,000/- towards mental agony, pain and harassment. Upon filing of execution and at the time of the conviction of JD No.3 the said amount came to be Rs.30,52,000/-. Hon'ble High Court had granted an interim stay of the conviction vide its order dated 13.02.2020.
6. Admittedly, the petition was filed by the JDs challenging the conviction order dated 27.01.2020 and the JDs have obtained only interim order of staying the operation of the impugned conviction order dated 27.01.2020 and extension of interim suspension of sentence and the Hon'ble High Court vide its order dated 24.05.2022 had dismissed petition filed by the JDs against conviction order and had not quashed the conviction amount. The Page 3 of 11 petition was dismissed being not maintainable by imposing penalty of Rs.30,000/- by observing that the petition appears to be intended only to delay the execution. Further, once the proceedings, wherein a stay was granted, are dismissed, any interim order granted earlier merges with the final order.
7. Further, there was no prohibition for the JDs to make the payment of the conviction amount. It is settled proposition of law that a party who fails in the main proceedings cannot take benefit from the interim order issued during the pendency of such proceedings.
8. The difference between stay of operation of an order and quashing of an order has been explained by the Hon'ble Supreme Court in Shree Chamundi Mopeds Ltd. V. Church of South India Trust Association CSI CINOD Secretariat, Madras reported at (1992) 3 SCC 1, which reads as under:
"While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence."
9. Following the aforesaid decision, the Hon'ble Supreme Court in Kanoria Chemicals and Industries Ltd. and Others v. U.P. State Electricity Board and Others, reported at (l997) 5 SCC 772 has held that an order of stay which is granted during the pendency of a Page 4 of 11 writ petition/suit or other proceeding comes to an end with the dismissal of the substantive proceedings and it is the duty of the court in such cases to put the parties in the same position that they would have been in but for the interim order of the court. In that case, this Court rejected the contention that when the operation of the notification itself was stayed, no surcharge could be demanded upon the amount withheld. It was held thus:
"11 Holding otherwise would mean that even though the Electricity Board, who was the respondent in the writ petitions succeeded therein, yet deprived of the late payment surcharge which was due to it under the tariff rules/ regulations. It would be a case where the Board suffers prejudice on account of the orders of the court and for no fault of its. It succeeds in the writ petition and yet loses. The consumer files the writ petition, obtains stay of operation of the notification revising the rates and fails in his attack upon the validity of the notification and yet he is relieved of the obligation to pay the late payment surcharge for the period of stay, which he is liable to pay according to the statutory terms and conditions of supply which terms and conditions indeed form part of the contract of supply entered into by him with the Board. We do not think that any such unfair and inequitable proposition can be sustained in law.
xxx xxx xxx It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court. Any other view would result in the act or order of the court prejudicing a party (Board in this case) for no fault of its and would also mean rewarding a writ petitioner in spite of his failure. We do not think that any such unjust consequence can be countenanced Page 5 of 11 by the courts. As a matter of fact, the contention of the consumers herein, extended logically should mean that even the enhanced rates are also not payable for the period covered by the order of stay because the operation of the very notification revising/enhancing the tariff rates was stayed. Mercifully, no such argument was urged by the appellants. It is un-understandable how the enhanced rates can be said to be payable but not the late payment surcharge thereon, when both the enhancement and the late payment surcharge are provided by the same notification the operation of which was stayed."
10. Further, in view of the aforesaid, the contention of the JDs that prayer for disposal of the execution petition being satisfied do not stand on its leg, as amount is still to be paid by the JDs.
11. Be that as it may, the fact remains that the entire proceedings of the present case (i.e. CC No.122/2015 and Ex. No.39/2018) took place according to Consumer Protection Act, 1986 (Old Act). Therefore, it is imperative to ascertain whether the State Commission is vested with the power of review under the Old Act.
12. At the outset, it is appropriate to refer to Section (Section 107) of the Consumer Protection Act, 2019 (New Act) which reads as under:
"107. (1) The Consumer Protection Act, 1986 is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.Page 6 of 11
(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal."
13. We may also take the assistance of Section 6 (b) of the General Clauses Act, 1897, which has been reproduced below:
"6 Effect of repeal. : Where this Act, or any 1 [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder"
14. It is clear from the aforesaid provisions that the repeal of a law shall not affect the previous operation of any enactment i.e. the proceedings under Consumer Protection Act, 1986 shall continue for cases which had been filed prior to the implementation of Consumer Protection Act, 2019 on 20.07.2020. Moreover, unless the legislature explicitly provides that the amendment is retrospective in nature, it will be considered prospective. The aforesaid view has been taken by the Apex Court in the case of CIT v. Vatika Township (P) Ltd. reported in (2015) 1 SCC 1 wherein the Court discussed the proviso to Section 113 of the Income Tax Act, 1961 and held that it was prospective and not retrospective. While deciding the case, the Constitution Bench laid down certain general principles which have been reproduced as under:
Page 7 of 11"28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lexprospicit non respicit: law looks forward not backward. As was observed in Phillips v. Eyre [Phillips v. Eyre, (1870) LR 6 QB 1], a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law.
29. The obvious basis of the principle against retrospectivity is the principle of "fairness", which must be the basis of every legal rule as was observed in L'OfficeCherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. [L'OfficeCherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd., (1994) 1 AC 486 : (1994) 2 WLR 39 :
(1994) 1 All ER 20 (HL)] Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later."Page 8 of 11
15. Similarly, the Apex Court in Hitendra Vishnu Thakur vs State of Maharashtra reported in 1994 (4) SCC602, the court has culled out the ambit and scope of an amending Act, its retrospective operation and has held as under:
"26. The Designated Court has held that the amendment would operate retrospectively and would apply to the pending cases in which investigation was not complete on the date on which the Amendment Act came into force and the challan had not till then been filed in the court. From the law settled by this Court in various cases the illustrative though not exhaustive principles which emerge with regard to the ambit and scope of an Amending Act and its retrospective operation may be culled out as follows:
(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.
(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.
(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.Page 9 of 11
(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.
16. Taking into account the aforesaid discussion, we conclude that the Consumer Protection Act, 2019 is prospective in nature. Thus, the cases pending or adjudicated and rights/obligations created before the coming into effect of the Consumer Protection Act, 2019 will continue to be adjudicated under the Old Act.
17. So far as the provisions of the Consumer Protection Act, 1986 are concerned, it does not provide for the power of review to the State Commission. This position of law was settled in the case of Rajeev Hitendra Pathak and Ors. v. Achyut Kashinath Karekar and Anr. reported in (2011) 9 SCC 541 wherein the Apex Court held:
"36. On careful analysis of the provisions of the Act, it is abundantly clear that the Tribunals are creatures of the Statute and derive their power from the express provisions of the Statute. The District Forums and the State Commissions have not been given any power to set aside ex parte orders and power of review and the powers which have not been expressly given by the Statute cannot be exercised.
37. The legislature chose to give the National Commission power to review its ex parte orders. Before amendment, against dismissal of any case by the Commission, the consumer had to rush to this Court. The amendment in Section 22 and introduction of Section 22-A were done for the convenience of the consumers. We have carefully ascertained the legislative intention and interpreted the law accordingly.Page 10 of 11
38. In our considered opinion, the decision in Jyotsana's case laid down the correct law and the view taken in the later decision of this Court in New India Assurance Co. Ltd. is untenable and cannot be sustained.
39. In view of the legal position, in Civil Appeal No.4307 of 2007, the findings of the National Commission are set aside as far as it has held that the State Commission can review its own orders. After the amendment in Section 22 and introduction of Section 22A in the Act in the year 2002 by which the power of review or recall has vested with the National Commission only. However, we agree with the findings of the National Commission holding that the Complaint No.473 of 1999 be restored to its original number for hearing in accordance with law."
18. Having discussed the legal position of law in terms of the power of review with the State Commission, we hold that the proceedings in the present Ex. No.39/2018 (Complaint No.122/2015) will be governed by the Consumer Protection Act, 1986. We are therefore unable to recall/ review the order dated 16.03.2023.
19. Consequently, IA No.1067/2023 filed by the Applicant/JDs is disposed of as dismissed.
20. Re-list on 16.07.2024.
(Justice Sangita Dhingra Sehgal) President (Pinki) Member (Judicial) (J. P Agrawal) Member (General) Page 11 of 11