Case BriefsSupreme Court

Supreme Court: The bench of Dr. DY Chandrachud* and MR Shah. JJ has held that the proceedings instituted before the commencement of the Consumer Protection Act 2019 on 20 July 2020 would continue before the fora corresponding to those under the Consumer Protection Act 1986 (the National Commission, State Commissions and District Commissions) and not be transferred in terms of the pecuniary jurisdiction set for the fora established under the Act of 2019.

Background

The material provisions of the Consumer Protection Act 2019 came into force on 20 July 2020. The appellants instituted a consumer case against real estate developers before the National Consumer Disputes Redressal Commission on 18 June 2020 under the Consumer Protection Act 1986 . The NCDRC by its order dated 30 July 2020 dismissed the consumer case on the ground that after the enforcement of the Act of 2019, its pecuniary jurisdiction has been enhanced from rupees one crore to rupees ten crores. The appellants’ review petition was also dismissed by the NCDRC on 5 October 2020. In the present case, the claim of Rs. 2.19 crores is below the enhanced pecuniary jurisdiction of the NCDRC.

This gave rise to the issue as to whether a complaint which was filed and registered under the Act of 1986, before the new Act of 2019 came into force, has to be entertained under the provisions of the erstwhile legislation. In anticipation of the enforcement of the Act of 2019, an administrative notice was issued by the NCDRC on 17 July 2020 to allow the functioning of its registry for fresh filings on 18 July 2020, since the new law was to come into force on 20 July 2020.

Analysis

Impact of a change in forum on pending proceedings and retrospectivity

After considering a number of precedents that have interpreted the impact of a change in forum on pending proceedings and retrospectivity, the following position of law emerged:

“a change in forum lies in the realm of procedure. Accordingly, in compliance with the tenets of statutory interpretation applicable to procedural law, amendments on matters of procedure are retrospective, unless a contrary intention emerges from the statute.”

Section 107 of the Act of 2019

  • Section 107(1) of the Act of 2019 repeals the Act of 1986.
  • Section 107 (2) has saved “the previous operation” of any repealed enactment or “anything duly done or suffered thereunder to the extent that it is not inconsistent with the provisions of the new legislation”.
  • Section 107(3) indicates that the mention of particular matters in sub-Section (2) will not prejudice or affect the general application of Section 6 of the General Clauses Act.

Section 6 of the General Clauses Act

Section 6 of the General Clauses Act provides governing principles with regard to the impact of the repeal of a central statute or regulation. These governing principles are to apply, “unless a different intention appears”. Clause (c) of Section 6 inter alia stipulates that a repeal would not affect “any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed”. The right to pursue a validly instituted consumer complaint under the Act of 1986 is a right which has accrued under the law which was repealed.

Clause (c) of Section 6 has the effect of preserving the right which has accrued. Clause (e) ensures that a legal proceeding which has been initiated to protect or enforce “such right” will not be affected and that it can be continued as if the repealing legislation has not been enacted. The expression “such a right” in clause (e) evidently means the right which has been adverted to in clause (c).

“The plain consequence of clause (c) and clause (e), when read together is twofold: first, the right which has accrued on the date of the institution of the consumer complaint under the Act of 1986 (the repealing law) is preserved; and second, the enforcement of the right through the instrument of a legal proceeding or remedy will not be affected by the repeal.”

However, considering that right to a forum is not an accrued right, the question whether the pending legal proceedings are required to be transferred to the newly created forum by virtue of the repeal would still persist.

While Section 6(e) of the General Clauses Act protects the pending legal proceedings for the enforcement of an accrued right from the effect of a repeal, this does not mean that the legal proceedings at a particular forum are saved from the effects from the repeal.

Object of the Act of 2019

There is no express language indicating that all pending cases would stand transferred to the fora created by the Act of 2019 by applying its newly prescribed pecuniary limits.

The Act of 2019 is enacted to provide “for protection of the interests of consumers” and has taken note of the evolution of consumer markets by the proliferation of products and services in light of global supply chains, ecommerce and international trade.

“New markets have provided a wider range of access to consumers. But at the same time, consumers are vulnerable to exploitation through unfair and unethical business practices. The Act has sought to address “the myriad and constantly emerging vulnerabilities of the consumers. The recurring theme in the new legislation is the protection of consumers which is sought to be strengthened by procedural interventions such as strengthening class actions and introducing mediation as an alternate forum of dispute resolution.”

In this backdrop, something specific in terms of statutory language – either express words or words indicative of a necessary intendment would have been required for mandating the transfer of pending cases.

“One can imagine the serious hardship that would be caused to the consumers, if cases which have been already instituted before the NCDRC were required to be transferred to the SCDRCs as a result of the alteration of pecuniary limits by the Act of 2019. A consumer who has engaged legal counsel at the headquarters of the NCDRC would have to undertake a fresh round of legal representation before the SCDRC incurring expense and engendering uncertainty in obtaining access to justice. Likewise, where complaints have been instituted before the SCDRC, a transfer of proceedings would require consumers to obtain legal representation before the District Commission if cases were to be transferred. Such a course of action would have a detrimental impact on the rights of consumers. Many consumers may not have the wherewithal or the resources to undertake a fresh burden of finding legal counsel to represent them in the new forum to which their cases would stand transferred.”

Hence, it would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation.

Data on pendency of cases

Data drawn from annual reports of the Union Ministry of Consumer Affairs indicates pendency from financial year 2015-16 to financial year 2019-20 indicates that as on 31 October 2019, 21,216 cases were pending before the NCDRC and 1,25,156 cases were pending before the SCDRC. Many of these cases would have to be transferred if the view which the developer propounds is upheld.

“This will seriously dislocate the interests of consumers in a manner which defeats the object of the legislation, which is to protect and promote their welfare. Clear words indicative of either an express intent or an intent by necessary implication would be necessary to achieve this result. The Act of 2019 contains no such indication.”

Hence, the legislature cannot be attributed to be remiss in not explicitly providing for transfer of pending cases according to the new pecuniary limits set up for the fora established by the new law, were that to be its intention.

Conclusion

All proceedings instituted before 20 July 2020 under the Act of 1986 shall continue to be heard by the fora corresponding to those designated under the Act of 1986 and not be transferred in terms of the new pecuniary limits established under the Act of 2019.

[Neena Aneja v. Jai Prakash Associates Ltd., 2021 SCC OnLine SC 225, decided on 16.03.2021]


*Judgment by: Justice Dr. DY Chandrachud

Know Thy Judge| Justice Dr. DY Chandrachud

Appearances before the Court by:

For appellants: Advocate P Vinay Kumar

For respondent: Senior Advocate Krishnan Venugopal

Case BriefsTribunals/Commissions/Regulatory Bodies

Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla: Coram of Justice P.S. Rana (President), Vijay Pal Khachi (Member) and Sunita Sharma (Member), dismissed the appeal filed by Bharti Airtel Ltd. against the order of the District Forum whereby Bharti Airtel was directed to pay punitive compensation to one of its consumer (respondent herein).

The complainant was a user of the appellant’s services. He was downloading a file which was of size 4MB to 5MB on the internet of his mobile when he observed that the appellant company had deducted an amount of Rs 200 from his account. Thereafter, he reported the matter to the appellant who credited an amount of Rs 148 back in his main account but did not credit the remaining amount of Rs 52 and committed deficiency in service. Aggrieved thereby, he filed a complaint before the District Forum who ordered the appellant to pay Rs 52 to the complainant along with an interest at 9% per annum. In addition to this, the District Forum also ordered the appellant to pay punitive compensation and litigation cost to the complainant to the tune of Rs 2000 and Rs 4000 respectively. Feeling aggrieved against the order passed by the District Forum, Bharti Airtel Ltd. filed a present appeal before the State Commission.

The counsels for the appellants, Mr Ravinder Kumar and Mr Abhishek Sood, argued that complicated facts were involved in the complaint and complainant be relegated to the Civil Court. They further contended that there was a special remedy provided under Section 7-B of Indian Telegraph Act, 1885 and jurisdiction of consumer fora was prohibited. For this, they placed reliance on Section 3 of the Consumer Protection Act, 1986 where remedy under the Act is an additional remedy.

The State Commission held that the order of the District Forum was strictly in accordance with the law and proved facts. On the contention of relegating the matter to the Civil Court, it was opined, “present matter could be disposed of in proper and effective manner under Consumer Protection Act, 1986 and it is not expedient in the ends of justice and on the principle of natural justice to relegate complainant to civil court.”

 The Commission held that “there is no provision under Consumer Protection Act, 1986 which bars filing of consumer complaint by consumer on the concept of alternative remedy.” It further held, “Opposite parties have received consideration amount from complainant for service rendered and present matter falls within definition of consumer as defined under section 2(d) of Consumer Protection Act, 1986.”

 In the view of the above, the Commission dismissed the appeal and affirmed the order of the District Forum.[Bharti Airtel Ltd. v. Rohit Sharma, First Appeal No. 59 of 2018, decided on 09-05-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of S.M. Kantikar, Dinesh Singh, Members, dismissed a revision petition filed against the order of the State Commission whereby the appeal of appellants was dismissed on the ground of merits as well as delay.

The main issue that arose before the Commission was whether the appeal was maintainable under Section 21(b) of the Consumer Protection Act, 1986 (COPRA).

The Commission observed that the order passed by the state commission was well-appraised and well-reasoned. The state commission did not find just and reasonable cause for the delay in filing the appeal and the same was written in the order in a proper manner. The appellant had caused an unreasonable delay of 221 days in filing the appeal before the state commission. Further, the order of the state commission also states that the appellants did not approach the forum with clean hands. The Commission also observed that in order to exercise revisional jurisdiction under Section 21(b) of the COPRA, there must be a jurisdictional error or legal principle ignored or material irregularity in the order of the lower forum.

The Commission held that in the instant case the order passed by the state commission did not suffer from any form of irregularity as required under Section 21(b) of the COPRA. Resultantly, no interference by the Commission was required and hence the revision petition was dismissed by the Commission. [Agarwal Packers & Movers DRS Group v. Dibeyendu Pal, 2018 SCC OnLine NCDRC 418, order dated 01-11-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of S.M. Kantikar, Presiding Member and Dinesh Singh, Member, dismissed an appeal with costs filed against the order of State Commission whereby his claim for deficiency of services, against the respondents, was rejected.

The appellant had purchased a postpaid internet connection from the respondent company for a sum of Rs 5500. As per the appellant’s story, the internet connection was activated and he used the internet services for a period of 2 days after which the services were discontinued by the respondent company without any intimation. However, refuting the claim of the appellant, the respondent asserted that in the absence of a valid proof of residence, the internet services were never activated for the appellant.

The main question that arose before the Commission was whether the respondent company was liable for deficiency in services under the provisions of the Consumer Protection Act, 1986.

The Commission observed that the appellant had purchased the connection for Rs 5500 and the amount claimed by him in the form of compensation was highly disproportionate i.e. Rs 99,95,500. Further, the Commission observed that the appellant had previously filed a similar complaint against Tata Teleservices Ltd. which was found to be frivolous and vexatious, for which a cost of Rs 10,000 was imposed on the appellant. The Court observed that the Consumer Protection Act, 1986 is not meant to be a tool to attempt wrong gains or to create ‘nuisance value’.

The Commission held that the appellant had filed a frivolous case against the respondent company and that he was attempting to misuse the statutory processes provided for better protection of the interest of consumers to attempt wrong gains and to create ‘nuisance value’. Hence, the Commission dismissed the appeal and a cost of Rs 500 was imposed on the appellant for filing a frivolous case and abusing the process of law. [Uttamkumar Samanta v. Vodafone East Ltd., First Appeal No. 847 of 2017, order dated 05-08-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench comprising of R.K. Agrawal, J. and M. Shreesha, Member dismissed the revision petition filed against the order of Maharashtra State Consumer Disputes Redressal Commission confirming payment of compensation to the respondent/complainant – farmers for supply of inferior quality of seeds by the petitioner manufacturing company.

The respondent had purchased onion seeds from the petitioners and sown the same in their fields. When even after due care, the growth of crop was unsatisfactory, they informed about the same to the petitioner and lodged a formal complaint. An enquiry committee visited the fields of the respondent and made a detailed inspection report observing that the crop failure was on account of inferior quality of seeds. Despite sending a notice to the petitioner, the respondent received no response, constraining him to approach the District Forum seeking direction to for payment of expenses incurred towards the failure of crop along with compensation and costs. After appreciating the evidence on record, District Forum ordered payment of expenses along with compensation and costs. The said order was challenged by the petitioner in State Commission, which confirmed the order of District Forum. It is in this factual background, that the instant revision petition was filed by the petitioner.

Primary contention of revision petitioners was that the State Commission had erred in not appreciating that germination of seeds depends upon environmental factors and crop management practices such as climate, moisture content, temperature, usage of fertilizers and water supply; and that no samples of seeds were sent by the respondent for analysis as mandated by Section 13(1)(c) of the Consumer Protection Act, 1986.

The Commission relied on judgment of the Apex Court in National Seeds Cooperation Ltd. v M. Madhusudhan Reddy, (2012) 2 SCC 506 and Maharashtra Hybrid Seeds Co. Ltd. v Alavalapati Chandra Reddy, (1998) 6 SCC 738, to state that the onus to prove that the seeds manufactured are of good quality lies on the manufacturer as the farmers are not expected to store some of the seeds for future testing. Moreover, as per the Seeds Act, 1966 manufacturer is required to keep a small sample of each batch of seeds for a minimum period of time depending upon the nature of the seeds. Therefore, there was no reason for the petitioner to not have sent the seeds to a laboratory for testing as per Section 13(1)(c) of the Consumer Protection Act.

Apart from being devoid of merits, the revision petition was also held to be barred by limitation as the same was filed with a delay of 188 days and there was no explanation as to the reason for such delay. As such, the petition was dismissed on both delay as well as merits. [National Horticulture Research & Development Foundation v. Sahebrao Jibhau Deware, Revision Petition No. 279 of 2018, decided on 28-09-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of Dr S.M. Kantikar and Dinesh Singh, Members, dismissed a revision petition filed against the order of the State Commission.

The petitioners, in this case, had purchased a car in the name of their company Harmony Colonizers (P) Ltd. from respondent and it suddenly stopped one day after 4 years of its purchase. Thereafter, respondent charged a sum of Rs 3,95,190 as repair charges, which were paid by the petitioner under protest. The petitioner then filed a complaint before the District Forum, claiming deficiency of services on the part of respondent and the same was allowed. The State Commission reversed the order of the district forum on the ground that complainants do not fit into the definition of consumer for the purpose of Consumer Protection Act, 1986.

The main issue that arose for consideration was whether the petitioners fall under the definition of consumer for the purpose of Consumer Protection Act, 1986.

The Commission observed that as stated by the State Commission, the petitioner failed to provide cogent evidence to prove that the car was purchased for their personal use. It further observed that in order to interfere with State Commission’s order there must be a jurisdictional error, or grave error in appreciating the evidence, or ignorance of a legal or miscarriage of justice. None of the elements were present in the instant case.

The Commission held that the petitioners were not consumers under the Act and were attempting to misuse the statutory processes provided for better protection of the interest of consumers to obtain wrong gains and to create ‘nuisance value’ qua the respondents. It was further held that the petition filed was frivolous and vexatious and hence it was dismissed with costs of Rs 25,000 imposed on petitioners for filing a frivolous petition.[Suresh Singla v. Jaycee Automobiles (P) Ltd.,2018 SCC OnLine NCDRC 375, order dated 23-08-2018]