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Monday, July 28, 2014

Sec.19 of Consumer Act - Whether the National Consumer Forum can grant stay orders at appeal stage - much more conditional Stay orders - Apex court held that It is not the case of any of the appellants that the Consumer Forum including State and National Commissions has no power to pass interim order of stay. If the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded, it is open to the National Commission to pass an appropriate interim order including conditional order of stay. Entertainment of an appeal and stay of proceeding pursuant to order impugned in the appeal stands at different footings, at two different stages. One (pre-deposit) has no nexus with merit of the appeal and the other (grant of stay) depends on prima facie case; balance of convenience and irreparable loss of party seeking such stay. In view of the finding recorded above, the interference with the impugned order dated 15th May, 2012 passed by the National Commission is not called for.=M/s Shreenath Corp. & Ors. … APPELLANT VERSUS Consumer Education & Research Society & ORS. … RESPONDENTS = 2014 – July. Part – http://judis.nic.in/supremecourt/filename=41748

    Sec.19 of Consumer Act - Whether the National Consumer Forum can grant stay orders at appeal stage - much more conditional Stay orders - Apex court held that It is not the case of any of the appellants that  the Consumer  Forum including State and National Commissions has no power to pass interim  order of stay. If the National Commission after hearing the appeal of the  parties in its discretion wants to stay the  amount  awarded,  it  is  open  to  the National  Commission  to  pass  an  appropriate  interim   order   including conditional  order  of  stay.   Entertainment  of  an  appeal  and  stay  of proceeding pursuant to order impugned in  the  appeal  stands  at  different footings, at two different stages.  One  (pre-deposit)  has  no  nexus  with merit of the appeal and the other (grant of stay)  depends  on  prima  facie case; balance of convenience and irreparable  loss  of  party  seeking  such stay. In view of the finding  recorded  above,  the  interference  with  the impugned order dated 15th May, 2012 passed by  the  National  Commission  is not called for.=

A number of complaints u/s 17(1) of the Consumer Protection Act,  1986
(hereinafter referred to as the, ‘Act’)  were  filed  by  different  persons
before the Consumer Disputes Redressal Commission, Gujarat State,  Ahmedabad
(hereinafter referred to as the, ‘State Commission’) against the  appellants
- opposite parties.
4.    The State Commission by order dated 30th  January,  2012  allowed  the
applications in part and directed the  appellants-opposite  parties  to  pay
certain amount with interest in favour of the complainants.
5.    Against  the  aforesaid  orders,  the  appellants  preferred  separate
appeals u/s 19 of the Act before the National Commission being First  Appeal
Nos.91-104  of  2012.   In  all   these   appeals   separate   interlocutory
applications for stay were filed by the appellants. The National  Commission
by impugned common order dated 15th May,  2012  passed  conditional  interim
order which reads as under:
            “Heard.
            Issue notice on main appeal as well as on stay  applications  to
the respondents, returnable on 22.11.2012.
            In the meanwhile, operation of the impugned order  shall  remain
stayed, till next date, subject to appellants depositing 50% of the  awarded
amount (principal amount), within three months from today,  with  the  State
Commission.
            On deposit of the amount, State Commission shall  put  the  same
in fixed deposit in a Nationalized Bank, initially for one year.
            Dasti.” =

This Court in State of  Haryana  v.  Maruti  Udyog  Ltd.  and  others,
(2000) 7 SCC 348, while dealing with case of waiver of “pre-deposit”  in  an
appeal under first proviso to Section 39(5) of  the  Haryana  General  Sales
Tax Act held:

“7…………….There cannot be any dispute that right of appeal is the creature  of
the statute and has to be exercised within the limits and according  to  the
procedure provided by law.  It  is  filed  for  invoking  the  powers  of  a
superior court to redress the error of the court below, if any. No right  of
appeal can be  conferred  except  by  express  words.  An  appeal,  for  its
maintainability, must have a clear authority  of  law.  Sub-section  (5)  of
Section 39 of the Act vests a  discretion  in  the  appellate  authority  to
entertain the appeal if it is filed within sixty days and the amount of  tax
assessed along with penalty and  interest,  if  any,  recoverable  from  the
persons has been paid. The aforesaid restriction is subject to  the  proviso
conferring discretion upon the appellate  authority  to  dispense  with  the
deposit of the amount only on proof of  the  fact  that  the  appellant  was
unable to  pay  the  amount.  Before  deciding  the  appeal,  the  appellate
authority affords an opportunity to the party concerned to  either  pay  the
amount or make out a case for the stay in terms of  proviso  to  sub-section
(5) of Section 39 of the Act.  Once  the  conditions  specified  under  sub-
section (5) of Section 39 are complied with, the appeal is  born  for  being
disposed of on merits after hearing both the sides.”

11.   The second proviso to Section 19 of the Act mandates  pre-deposit  for
consideration of an appeal before the National Commission. It  requires  50%
of the amount in terms of an order  of  the  State  Commission  or  35,000/-
whichever  is  less  for  entertainment  of  an  appeal  by   the   National
Commission. Unless the appellant has deposited the pre-deposit  amount,  the
appeal cannot be entertained by  the  National  Commission.   A  pre-deposit
condition to deposit 50% of the amount in terms of the order  of  the  State
Commission  or  Rs.35,000/-  being  condition  precedent  for   entertaining
appeal, it has no nexus with the order of stay, as such an order may or  may
not be passed by the  National  Commission.   Condition  of  pre-deposit  is
there to avoid frivolous appeals.
12.   It is not the case of any of the appellants that  the  Consumer  Forum
including State and National Commissions has no power to pass interim  order
of stay. If the National Commission after hearing the appeal of the  parties
in its discretion wants to stay the  amount  awarded,  it  is  open  to  the
National  Commission  to  pass  an  appropriate  interim   order   including
conditional  order  of  stay.   Entertainment  of  an  appeal  and  stay  of
proceeding pursuant to order impugned in  the  appeal  stands  at  different
footings, at two different stages.  One  (pre-deposit)  has  no  nexus  with
merit of the appeal and the other (grant of stay)  depends  on  prima  facie
case; balance of convenience and irreparable  loss  of  party  seeking  such
stay.
13.   In view of the finding  recorded  above,  the  interference  with  the
impugned order dated 15th May, 2012 passed by  the  National  Commission  is
not called for. In  absence  of  any  merit,  the  appeals  are  accordingly
dismissed. No costs.

2014 – July. Part – http://judis.nic.in/supremecourt/filename=41748



                                                            REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 9052 OF 2014
                  (arising out of SLP (C) No.21668 of 2012)

M/s Shreenath Corp. & Ors.                     … APPELLANT

                                   VERSUS

Consumer Education & Research
Society & ORS.                                … RESPONDENTS


WITH
Civil Appeal No. 9053 /2014 (@ SLP(C) NO.22442 of 2012)
Civil Appeal No. 9054/2014 (@ SLP(C) NO. 22452 of 2012)
Civil Appeal No. 9055/2014 (@ SLP(C) NO. 22511 of 2012)
Civil Appeal No. 9056/2014 (@ SLP(C) NO. 23047 of 2012)
Civil Appeal No. 9057/2014 (@ SLP(C) NO. 25741 of 2012)
Civil Appeal No. 9058/2014 (@ SLP(C) NO. 26119 of 2012)
Civil Appeal No. 9059/2014 (@ SLP(C) NO. 26683 of 2012)
Civil Appeal No. 9060/2014 (@ SLP(C) NO. 26687 of 2012)
Civil Appeal No. 9061/2014 (@ SLP(C) NO. 26699 of 2012)
Civil Appeal No. 9062/2014 (@ SLP(C) NO. 27433 of 2012)
Civil Appeal No. 9064/2014 (@ SLP(C) NO. 27434 of 2012)
Civil Appeal No. 9065/2014 (@ SLP(C) NO. 27435 of 2012)
Civil Appeal No. 9066/2014 (@ SLP(C) NO. 27436 of 2012)




                               J U D G M E N T

Sudhansu Jyoti Mukhopadhaya, J.


      Leave granted.

2.    These appeals are directed against common  interim  order  dated  15th
May, 2012 passed by the National  Consumer  Disputes  Redressal  Commission,
New Delhi  (hereinafter  referred  to  as  the,  ‘National  Commission’)  in
interlocutory applications for  stay  in  First  Appeals  preferred  by  the
appellants.
3.    The factual matrix of the case is as follows:-
      A number of complaints u/s 17(1) of the Consumer Protection Act,  1986
(hereinafter referred to as the, ‘Act’)  were  filed  by  different  persons
before the Consumer Disputes Redressal Commission, Gujarat State,  Ahmedabad
(hereinafter referred to as the, ‘State Commission’) against the  appellants
- opposite parties.
4.    The State Commission by order dated 30th  January,  2012  allowed  the
applications in part and directed the  appellants-opposite  parties  to  pay
certain amount with interest in favour of the complainants.
5.    Against  the  aforesaid  orders,  the  appellants  preferred  separate
appeals u/s 19 of the Act before the National Commission being First  Appeal
Nos.91-104  of  2012.   In  all   these   appeals   separate   interlocutory
applications for stay were filed by the appellants. The National  Commission
by impugned common order dated 15th May,  2012  passed  conditional  interim
order which reads as under:
            “Heard.
            Issue notice on main appeal as well as on stay  applications  to
the respondents, returnable on 22.11.2012.
            In the meanwhile, operation of the impugned order  shall  remain
stayed, till next date, subject to appellants depositing 50% of the  awarded
amount (principal amount), within three months from today,  with  the  State
Commission.
            On deposit of the amount, State Commission shall  put  the  same
in fixed deposit in a Nationalized Bank, initially for one year.
            Dasti.”

6.    Learned counsel for the appellant contended that the impugned  interim
order dated 15th May, 2012 passed by the National Commission is contrary  to
the provisions of Section 19 of the  Act.  It  was  further  contended  that
deposit of specific amount has been prescribed under the second  proviso  to
Section 19 of the Act, and, therefore, the National Commission  cannot  pass
an order asking the appellant before it to deposit an amount more  than  50%
of the amount awarded by the State Commission or  Rs.35,000/-  whichever  is
less. In support of  such  contention  learned  counsel  for  the  appellant
relied upon judgment of  Delhi  High  Court  in  Dr.(Mrs.)  K.  Kathuria  v.
National Consumer Disputes Redressal Forum, AIR 2007 Delhi 135.

7.    On the other hand, according  to  counsel  for  the  respondents,  the
impugned order is a conditional order  of  stay  and  is  not  passed  under
second proviso to Section 19 of the Act.

8.    After giving our careful consideration to the facts and  circumstances
of the case and submissions made by learned  counsel  for  the  parties,  we
find ourselves entirely in agreement with the submission made on  behalf  of
the respondents.

9.    Section 19 of the Consumer Protection Act,  1986  deals  with  appeals
against the order made by the State Commission  in  exercise  of  its  power
conferred by sub-clause (i) of  clause  (a)  of  Section  17  and  the  said
section reads as follows:-

      “19.Appeals.-Any person aggrieved  by  an  order  made  by  the  State
Commission in exercise of its powers conferred by sub-clause (i)  of  clause
(a) of Section 17 may prefer an appeal against such order  to  the  National
Commission within a period of thirty days from the  date  of  the  order  in
such form and manner as may be prescribed:

      Provided that the National Commission may entertain  an  appeal  after
the expiry of the said period of thirty days if it is satisfied  that  there
was sufficient cause for not filing it within that period:

      Provided further that no appeal by

a person, who is required to pay any amount in terms  of  an  order  of  the
State Commission, shall be entertained by  the  National  Commission  unless
the appellant has deposited in the prescribed manner fifty per cent  of  the
amount or rupees thirty-five thousand, whichever is less.”

On plain reading of aforesaid Section 19, we find that  the  second  proviso
to Section 19 of the Act relates to “pre- deposit” required  for  an  appeal
to be entertained by the National Commission.

10.   This Court in State of  Haryana  v.  Maruti  Udyog  Ltd.  and  others,
(2000) 7 SCC 348, while dealing with case of waiver of “pre-deposit”  in  an
appeal under first proviso to Section 39(5) of  the  Haryana  General  Sales
Tax Act held:

“7…………….There cannot be any dispute that right of appeal is the creature  of
the statute and has to be exercised within the limits and according  to  the
procedure provided by law.  It  is  filed  for  invoking  the  powers  of  a
superior court to redress the error of the court below, if any. No right  of
appeal can be  conferred  except  by  express  words.  An  appeal,  for  its
maintainability, must have a clear authority  of  law.  Sub-section  (5)  of
Section 39 of the Act vests a  discretion  in  the  appellate  authority  to
entertain the appeal if it is filed within sixty days and the amount of  tax
assessed along with penalty and  interest,  if  any,  recoverable  from  the
persons has been paid. The aforesaid restriction is subject to  the  proviso
conferring discretion upon the appellate  authority  to  dispense  with  the
deposit of the amount only on proof of  the  fact  that  the  appellant  was
unable to  pay  the  amount.  Before  deciding  the  appeal,  the  appellate
authority affords an opportunity to the party concerned to  either  pay  the
amount or make out a case for the stay in terms of  proviso  to  sub-section
(5) of Section 39 of the Act.  Once  the  conditions  specified  under  sub-
section (5) of Section 39 are complied with, the appeal is  born  for  being
disposed of on merits after hearing both the sides.”

11.   The second proviso to Section 19 of the Act mandates  pre-deposit  for
consideration of an appeal before the National Commission. It  requires  50%
of the amount in terms of an order  of  the  State  Commission  or  35,000/-
whichever  is  less  for  entertainment  of  an  appeal  by   the   National
Commission. Unless the appellant has deposited the pre-deposit  amount,  the
appeal cannot be entertained by  the  National  Commission.   A  pre-deposit
condition to deposit 50% of the amount in terms of the order  of  the  State
Commission  or  Rs.35,000/-  being  condition  precedent  for   entertaining
appeal, it has no nexus with the order of stay, as such an order may or  may
not be passed by the  National  Commission.   Condition  of  pre-deposit  is
there to avoid frivolous appeals.
12.   It is not the case of any of the appellants that  the  Consumer  Forum
including State and National Commissions has no power to pass interim  order
of stay. If the National Commission after hearing the appeal of the  parties
in its discretion wants to stay the  amount  awarded,  it  is  open  to  the
National  Commission  to  pass  an  appropriate  interim   order   including
conditional  order  of  stay.   Entertainment  of  an  appeal  and  stay  of
proceeding pursuant to order impugned in  the  appeal  stands  at  different
footings, at two different stages.  One  (pre-deposit)  has  no  nexus  with
merit of the appeal and the other (grant of stay)  depends  on  prima  facie
case; balance of convenience and irreparable  loss  of  party  seeking  such
stay.
13.   In view of the finding  recorded  above,  the  interference  with  the
impugned order dated 15th May, 2012 passed by  the  National  Commission  is
not called for. In  absence  of  any  merit,  the  appeals  are  accordingly
dismissed. No costs.



                                               …………………………………………………………………….J.
                                       (SUDHANSU JYOTI MUKHOPADHAYA)



                                                ………………………………………………………………….J.
                                            (V. GOPALA GOWDA)

NEW DELHI,
JULY 07, 2014.

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