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? = 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.


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

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