This is the era were ‘consumers are the kings ‘ . The globalization and e – commerce has spurred the wheel in favor of need of consumer protection. In India Consumer Protection Act 2019 is the legal enactment. Any person aggrieved can approach respective State Consumer Redressal Commission from were , an appeal is preferred to National Consumer Redressal Commission as per /section 19 of the Act and prior to the appeal the appellant(s) has to file a pre- deposit ,as per Section 51, to avoid frivolous appeals. A major breakthrough regarding pre-deposits were held in the Hon’ble Supreme Court in the case of Manohar Infrastructure and Constructions Pvt. Ltd v. Sanjeev Kumar Sharma,2021 SC 1182 .
FACTS:
A construction company was ordered by State Consumer Dispute Redressal Commission to pay the home buyers the whole amount with interest. Aggrieved by this decision the Company approached National Consumer Dispute Redressal Commission under Section 51 of Consumer Protection Act, 2019, after paying 50% of decretal amount as mandated by the Act. The National Commission orders the stay of the order of State Commission upon the condition to pay the whole amount with interest , if any. Dissatisfied by this order the appellant(s) approach the Hon’ble Supreme Court.
ISSUE:
- Whether National Consumer Dispute Redressal Commission can direct the appellant(s) to pay entire amount or any amount higher than 50% while entertaining an appeal under Section 51 of Consumer Act?
- Whether the order passed by National Commission is arbitrary and unreasonable?
DECISION:
The court while deciding the appeal took the aid of Section 51 and precedent Shreenath Corporation v Consumer Education and Research Society.
As per Section 51 of the Act, 2019, more particularly, second proviso to Section 51, the appellant(s) in an appeal against the order passed by the State Commission may prefer an appeal, however, before the appeal is entertained by the National Commission, the appellant(s) has to deposit 50 per cent of the amount . However, that does not bar the court to order to deposit the entire amount or more than 50% of decretal amount. In the decided case, the Hon’ble Supreme Court held that The order passed by the State Commission directing the appellant to refund the amount and/or pay any amount higher than 50 per cent can be said to be akin to a money decree. Even as per Order XLI Rule 5, the general rule is that normally there shall not be any unconditional stay of a money decree, however, at the same time, the Appellate Court may pass an appropriate conditional order while staying the impugned decree depending upon the facts of the case and by giving cogent reasons.
Bearing in mind the Section and precedence court held that the object of the said pre-deposit condition is to avoid frivolous appeals ,the said pre-deposit condition has no nexus with the grant of stay by the National Commission. The National Commission can pass an order to pay entire amount or amount more than 50% as decretal amount but that order should be backed with a speaking order or reasons for such an order. The court directed the National Commission to reconsider the case after hearing both sides.
ANALYSIS:
The National Commission while staying the order by the State Commission, ordered the appellant(s) to pay entire decretal amount with interest , if any. Such an order by the National Commission without speaking order was purely arbitrary . The legislation and precedence intent the Commission to make a reasonable grounds for conditional orders but the negligence from the part of Commission was unreasonable and unacceptable. The justice was clearly denied and rights turned down. The order was passed mechanically and the absolute powers were exercised by the court.
The Supreme Court rightly recognised the mistake , or rather negligence from the part of the Commission . The Commission was not wrong in ordering a pre-deposit of entire amount but the inaccuracy stands at the point were no speaking orders were passed with stay order ; as a precedence was also available before the commission , Shreenath Corporation v Consumer Education and Research Society ,in which necessity of a speaking order was cemented in the conditions were a pre- deposit of more than 50% of the decretal amount is ordered. Passing of such a mechanical order and exercising of absoluteness of power where there was a proper curtailment applicable ,made the decision by National commission arbitrary and unjust. The Supreme Court rightly restored the right by commanding the National Commission to pass an appropriate order without mistake after hearing both sides once again; as the Commission passed the order mechanically without applying due diligence and caution.
CONCLUSION:
The pre-deposit of amount for first appeal is a mandatory condition. The Hon’ble Supreme Court has cemented that the Commission can order to deposit entire decretal amount or 50% or more than 50% but should be backed by reasonable conditions or cogent reasons stated for such an order. The absolute power the Commission tried to exercise was curtailed appropriately by the Supreme Court.
REFERENCE:
- Shreenath Corporation v. Consumer Education And Research Society, (2014) 8 SCC 657
- Consumer Protection Act,2019
- Roy .d, NCDRC can direct deposit of more than 50% of amount determined by SCDRC for stay, Bar and Bench ( Dec 7, 2021)