Andhra HC (Pre-Telangana)
Maytas Properties Limited, Rep. By Its ... vs A.P. State Consumer Disputes Redressal ... on 7 February, 2013
Equivalent citations: AIR 2013 ANDHRA PRADESH 93, (2013) 3 ANDHLD 561
Bench: G. Rohini, C.Praveen Kumar
THE HON'BLE Ms. JUSTICE G. ROHINI AND THE HON'BLE SRI JUSTICE C.PRAVEEN KUMAR WRIT PETITION Nos.2521OF 2013 and Batch 07.02.2013 Maytas Properties Limited, rep. by its Authorized Signatory C. Nagaiah, Maytas Hill County, Bachupally, Miyapur, Hyderabad-500 072. A.P. State Consumer Disputes Redressal Commission, Anandnagar, Khairatabad, Hyderabad, and 2 others. Counsel for the petitioners: Sri D.Prakash Reddy and Sri S.Nirajan Reddy Counsel for respondents: Sri Prabhakar Sripada (GIST: (HEAD NOTE: ? Cases cited: 1. (2012) 8 SCC 524 2. 2001 (6) ALD 35 = 2001 (5) ALT 610 3. (2005) 1 SCC 705 4. AIR 1995 SC 1428 5. AIR 2003 SC 1043 COMMON ORDER:
(Per G.Rohini, J) The short question that requires consideration in these writ petitions is as to whether the penal proceedings under Section 27 of the Consumer Protection Act, 1986 for failure to comply with an order of the State Commission can be maintained while the appeal against the order of State Commission is pending before the National Commission?
The petitioner in all the writ petitions is a company incorporated under the provisions of the Companies Act, 1956. It is stated that the said company is engaged in the business of property development and it had undertaken the development of a township called "The Hill County". The respondents in the writ petitions who claim to have purchased residential apartments in the above said township filed Complaints before the State Consumer Disputes Redressal Commission (for short, 'State Commission') alleging that the petitioner had failed to complete the said project and seeking a direction for refund of the amount advanced by them together with interest. The said Complaints (C.C.No.40 of 2011 & etc.) were allowed by the State Commission on different dates. Aggrieved by the same, the petitioner herein preferred appeals before the National Consumer Disputes Redressal Commission, New Delhi (for short, 'National Commission') which are pending.
While so, the respondents herein filed applications under Section 27 of the Consumer Protection Act, 1986 (for short, 'the Act') before the State Commission with a prayer to punish the writ petitioner for its failure to comply with the orders of the State Commission in spite of the fact that the time granted had expired long back. In the said applications (E.A.No.18 of 2012 & etc.) the State Commission had initially directed notice to the writ petitioner and subsequently bailable warrants were issued for ensuring the personal appearance of the writ petitioner. Challenging the said orders, the writ petitioner preferred Revision Petitions before the National Commission. By order dated 19.10.2012 the National Commission allowed the Revision Petitions, however it was observed that an order can be passed by the State Commission requiring the petitioner to be present in person if the presence of the petitioner was required. Thereafter the writ petitioner filed applications (E.A.No.2485 of 2012 & etc.) before the State Commission raising an objection as to the very maintainability of the proceedings under Section 27 of the Act and thus praying to reject all the applications filed under Section 27 as not maintainable. That apart, the petitioner filed W.P.No.34850 of 2012 & etc., seeking a Writ of Prohibition restraining the State Commission from continuing the proceedings under Section 27 of the Act contending that the State Commission had no jurisdiction to entertain the applications under Section 27 of the Act as the appeals against the orders of the State Commission in C.C.No.40 of 2011 are pending before the National Commission.
The said writ petitions were disposed of by this Court by a common order dated 14.11.2012 with a direction to the State Commission to dispose of E.A.I.A.No.2485 of 2012 & etc., in which the petitioner prayed for rejecting the applications filed under Section 27 of the Act as not maintainable, within three weeks. It was also directed that the personal appearance of the writ petitioner before the State Commission should not be insisted upon till such orders were passed.
In pursuance thereof, the State Commission after hearing both the parties dismissed E.A.I.A.No.2485 of 2012 & etc by common order dated 21.01.2013. Hence these writ petitions seeking Certiorari to call for the records relating to the said common order dated 21.01.2013 passed by the State Commission, and to quash the same being arbitrary, illegal and without jurisdiction. We have heard Sri D. Prakash Reddy, the learned Senior counsel representing Sri Avinash Desai and Sri S. Niranjan Reddy, the learned counsel for the writ petitioners and perused the material available on record. We have also heard Sri Prabhakar Sripada, the learned counsel for the respondents who appeared at the stage of admission and contested the writ petitions by making elaborate submissions on all the issues involved.
The learned counsel for the respondents at the outset raised an objection as to the maintainability of the writ petitions on the ground that an alternative remedy of appeal is available under Section 27-A of the Act. In the light of the said alternative statutory remedy, the learned counsel contended that the petitioners cannot invoke the jurisdiction of this Court under Article 226 of the Constitution of India. In support of his submission, the learned counsel relied upon the decision in CICILY KALLARACKAL v. VEHICLE FACTORY1. However, the learned Senior Counsel appearing for the writ petitioner, while submitting that the remedy of appeal under Section 27-A of the Act is available only against an order passed under Section 27 and such order has not yet been passed in the present case, contended that the remedy of appeal under Section 27-A of the Act cannot be availed by the petitioner at this stage. We find force in the submission of the learned Senior Counsel appearing for the writ petitioner. What is challenged in the present batch of writ petitions is only an order passed by the State Commission dismissing the interlocutory applications filed by the writ petitioner to reject the petitions filed under Section 27 of the Act on the ground that no such petitions can be maintained while the appeals preferred by the petitioner under Section 19 of the Act are pending before the National Commission. Since no final order as such is admittedly passed on the petitions filed by the respondents under Section 27 of the Act, the question of appeal under Section 27-A does not arise at all. Hence, the preliminary objection raised on behalf of the respondents as to the maintainability of the writ petitions on the ground of availability of alternative statutory remedy of appeal cannot be accepted. Coming to the merits of the case, the appeals preferred by the writ petitioner under Section 19 of the Act against the orders passed by the State Commission in C.C.No.40 of 2011 and etc., in exercise of its power conferred by Section 17 (a)
(i) are admittedly pending before the National Commission. Though the writ petitioner sought interim stay of all further proceedings pursuant to the order of the State Commission in C.C.No.40 of 2011 & etc., no orders have been passed so far and the said stay petitions are also pending before the National Commission. In the meanwhile, the respondents herein filed applications under Section 27 of the Act with a prayer to punish the writ petitioner for non- compliance with the order of the State Commission. The objection raised by the writ petitioner as to the maintainability of the said petitions was not accepted by the State Commission and thus the impugned order came to be passed directing appearance of the writ petitioner/JDR for the purpose of the trial in the petitions under Section 27 of the Act.
As we could see, the writ petitioner filed E.A.I.A.No.2485 of 2012 & etc., to reject the petitions filed by the respondents under Section 27 of the Act on the ground that the orders passed by the State Commission in C.C.No.40 of 2011 & etc., in exercise of its power conferred by Section 17 (a) (i) have not become final as provided under Section 24 of the Act since the appeals preferred against the said orders are pending before the National Commission. The State Commission rejected the said contention and dismissed E.A.I.A.No.2485 of 2012 & etc., holding that mere preferring of an appeal would not operate as stay of an order appealed against and therefore pendency of the appeals before the National Commission was no bar to proceed with the execution proceedings under Section 27 of the Act. A perusal of the order under challenge shows that the State Commission formulated two points for consideration namely (i) Whether the power under Section 27 has to be exercised as a last resort only after invoking and exhausting the remedy provided under Section 25 (3) of the Act and
(ii) Whether the contention that the order of the State Commission has not attained finality as laid down under Section 24 of the Act is sustainable. So far as Point No.1 is concerned, it was held by the State Commission that as there was no provision in the Act which contemplates that the remedy provided under Section 25 (3) should be exhausted in the first instance, the petitions under Section 27 are maintainable. The said conclusion being in accordance with the settled principle of law that the remedies under Section 25 and Section 27 are independent, the State Commission cannot be held to have committed any error while deciding Point No.1. In fact, the said conclusion has not been questioned before us by the writ petitioner.
However, so far as the conclusion on the Point No.2 is concerned, it is contended by Sri D. Prakash Reddy, the learned Senior Counsel appearing for the writ petitioners that the State Commission committed a grave error in holding that the petitions under Section 27 were maintainable even before the order of the Commission attained finality in terms of Section 24 of the Act. Relying upon a decision of the Full Bench of this Court in C.V. RATNAM v. UNION OF INDIA & ORS.2 the learned Senior Counsel submitted that the State Commission is competent to entertain the proceedings under Section 27 of the Act only when the order made under Section 17 (a) (i) becomes final as provided under Section 24 of the Act. The learned Senior Counsel further contended that the reliance placed upon by the State Commission on ATMA RAM PROPERTIES P. LTD. v. FEDERAL MOTORS P. LTD.3 which was rendered in the context of Order 41 Rule 5 of C.P.C. was misplaced.
On the other hand, the learned counsel for the respondents while placing reliance upon LAXMI ENGINEERING WORKS v. P.S.INDUSTRIAL INSTITUTE4 and STATE OF KARNATAKA v. VISHWABARATHI HOUSE BUILDING CO-OP. SOCIETY5, contended that the expression "finality of orders" in Section 24 of the Act cannot be interpreted as attaining finality after exhausting all the remedies provided under the Act. The learned counsel submitted that such interpretation would defeat the very object of the Act to provide speedy and simple redressal to consumer disputes. For proper appreciation of the above contentions, it is necessary to refer to Section 24, Section 25 and Section 27 of the Act which read as under:
24. Finality of orders: Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.
25. Enforcement of orders of the District Forum, the State Commission or the National Commission:- (1) Where an interim order made under this Act, is not complied with the District Forum or the State Commission or the National Commission, as the case may be, may order the property of the person, not complying with such order to be attached.
(2) No attachment made under sub-section (1) shall remain in forced for more than three months at the end of which, if the non-compliance continues, the property attached may be sold and out of the proceeds thereof, the District Forum or the State Commission or the National Commission may award such damages as it thinks fit to be complainant and shall pay the balance, if any, to the party entitled thereto.
(3) Where any amount is due from any person under an order made by a District Forum, State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Forum, the State Commission or the National Commission, as the case may be, and such District Forum or the State Commission or the National Commission may issue a certificate for the said amount to the Collector of the district (by whatever name called) and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue.
27. Penalties: (1) Where a trader or a person against whom a complaint is made ('or the complainant') fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person (or complainant) shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees or with both:
(2) Nothwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973.
(3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be.
Having carefully gone through the provisions of the Act and the decisions cited by the learned counsel in support of their respective submissions, we find it difficult to sustain the conclusion of the State Commission that the proceedings under Section 27 can be maintained even before the order of the State Commission attained finality in terms of Section 24 of the Act.
It is to be noticed that the scope of Section 25 & Section 27 of the Act in the context of Section 24 was considered by the Full Bench in C.V. RATNAM'S case (2 supra) in detail and it was held that the provision of Section 25 or Section 27 can be taken recourse to only when the order of the Forum or the Commission becomes final. While explaining the nature of power conferred under Section 25 of the Act, the Full Bench further held that Section 27 can be taken recourse to only by way of last resort and that it had been enacted for the purpose of dealing only with such defaulters who, despite several opportunities failed and/or negligent to comply with the directions.
No other decision is brought to our notice in which a contra view was expressed either by this Court or the Supreme Court.
In LAXMI ENGINEERING WORKS' case (4 supra) cited by the learned counsel for the respondents, the Supreme Court while dealing with the nature and powers of the authorities created by the Act held that the orders of the District Forum, State Commission and National Commission are final as declared in Section 24 and cannot questioned in a civil Court. The question whether the penal proceedings under Section 27 of the Act can be maintained while the appeal under Section 19 is pending before the National Commission was neither argued nor decided in the said case. Even in VISHWABARATHI HOUSE BUILDING CO-OP. SOCIETY'S case (5 supra) the question with regard to the finality of the orders with reference to Section 24 of the Act was not considered nor any ratio as such was laid down on the said issue.
On a plain reading of Section 27 of the Act, it is clear that it is penal in nature and is intended to empower the District Forum or the State/National Commission to punish not only the opposite party but also the complainant if it comes to the conclusion that the action on the part of the defaulter is dishonest and intentional. As explained in VISHWABARATHI HOUSE BUILDING CO-OP.
SOCIETY'S case (5 supra) and also in C.V. RATNAM'S case (2 supra), Section 27 is akin to Order XXXIX Rule 2-A of C.P.C. or the provisions of the Contempt of Courts Act or Section 51 read with Order XXI Rule 27 of C.P.C. It is no doubt true that the object of the Act is to provide speedy and simple redressal to consumer disputes and the procedure to be followed for settlement of consumer disputes is summary in nature. However, having regard to the fact that Section 27 is a penal provision under which non-compliance of the order of the District Forum or the State/National Commission would be punishable by way of imprisonment or fine, we are of the opinion that Section 27 cannot be equated with the other provisions of the Act providing for settlement of consumer disputes by the District Forum and State/National Commission. Therefore, the penal proceedings under Section 27 cannot be allowed to be taken recourse to even before the order of the District Forum or State/National Commission attains finality merely on the ground that the Act provides for speedy and simple redressal to consumer disputes. In fact, the language of Section 24 of the Act is plain and unambiguous and makes it clear that the order of a District Forum or State/National Commission shall be final only if no appeal has been preferred against such order. The law is well settled that the language employed in a statute is the determinative factor of legislative intent. Therefore, as held by the Full Bench in C.V.RATNAM'S case (2 supra) Section 27 can be taken recourse to only by way of last resort after the order attains finality as provided under Section 24 of the Act.
The reliance placed by the State Commission upon ATMA RAM PROPERTIES P. LTD.'S case (3 supra) while passing the impugned order in our considered opinion is misplaced. The decision in ATMA RAM PROPERTIES P. LTD.'S case (3 supra) was rendered in the light of Order 41 Rule 5 of C.P.C. which provides that an appeal shall not operate as a stay of proceedings under a decree or order appealed from except where execution of decree is stayed. Admittedly no such provision is available in the Act. On the other hand, it is expressly provided under Section 24 of the Act that the order of the District Forum or the State Commission shall be final if no appeal has been preferred against such order under the provisions of the Act. In the light of Section 24, it can be safely concluded that the penal proceedings under Section 27 of the Act cannot be entertained while an appeal is pending before the State/National Commission. For the reasons stated above, we are of the opinion that the petitions filed by the respondents under Section 27 of the Act cannot be entertained at this stage. Accordingly, we hold that the State Commission has no jurisdiction to entertain and proceed with E.A.No.18 of 2012 & etc., filed by the respondents under Section 27 of the Act. Therefore the impugned order passed by the State Commission being without jurisdiction is liable to be set aside on that ground alone.
Accordingly, the impugned order is hereby set aside and E.A.I.A.No.2485 of 2012 & etc., shall stand allowed.
In the result, all the Writ Petitions are allowed. No costs. Consequently the miscellaneous petitions, if any, pending in all the writ petitions shall stand closed.
_____________ G.ROHINI, J _______________________ C.PRAVEEN KUMAR, J