Supreme Court of India · 2012

Order

(per Hon’ble Sri Justice V.V.S.Rao) As the two writ petitions arise out of common order dated

13.12.2010 of the A.P. State Consumer Disputes Redressal Commission, Hyderabad (‘the State Commission’ for brevity) and as the parties herein are also same, it is expedient to dispose of both the matters by this common order. The facts of the matter not at all in dispute are as follows: The first petitioner is an incorporated company (hereafter called ‘the company’) engaged in the construction business. In their venture called ‘Maytas Hill County’ at Bachupally near Hyderabad, the second respondent agreed to purchase a flat with a built up area of 1980 sft. He paid a sum of Rs.63,37,984/- to the company for the flat but the flat was not constructed. The second respondent then approached the State Commission by filing consumer case under Section 17 of the Consumer Protection Act, 1996 (for short ‘the Act’) being C.C.No.30 of 2009. The same was allowed by the State Commission on 30.4.2010. The Company, represented by its Directors was ordered to pay the above mentioned amount with interest at 12% per annum. An order of compensation for Rs.5,00,000/- and costs of Rs.5,000/- was also passed. The company approached the National Consumer Disputes Redressal Commission (‘National Commission’ for brevity) by filing F.A.No.189 of 2010, which was dismissed on 12.8.2010; however, the order of the State Commission to pay the compensation of Rs.5,00,000/- was set aside. The company’s effort to go in Civil Appeal proved futile and their S.L.P (C) No.26256 of 2010 was dismissed by the Supreme Court on 27.9.2010. The second respondent filed Execution Application being E.A.No.12 of 2010 before the State Commission under Section 27 of the Act. He also filed E.A.I.A.No.1262 of 2010 to implead the Directors of the Company as respondents to the Execution Application. The Company then moved two applications. E.A.I.A.No.2125 of 2010 praying the State Commission to dismiss the Execution Application with a direction to the second respondent not to proceed under Section 27 of the Act and the other application being E.A.I.A.No.2126 of 2010 filed to dismiss the application to implead the Directors. The Company contended before the State Commission that despite the efforts made, they could not complete the construction due to various orders of injunctions and orders of attachment passed by various Courts; that they were not in a position to comply with the order of the State Commission; that the properties of the Company are under attachment under the provisions of the Income Tax Act, 1961 and the Prevention of Money Laundering Act, 2002 and that the Company is not in a position to raise construction nor in a position to comply with the directions of the Commission. It was also submitted that the penal provisions under Section 27 of the Act cannot be resorted to without invoking the procedure contemplated under Section 25(3) of the Act for the enforcement of the orders of the State Commission and that the Directors of the Company who were not parties to the original consumer case, cannot be hauled up under Section 27 of the Act as under the said provision, it is only the parties who are before the State Commission initially against whom the penal provision can be invoked. These submissions did not find favour with the State Commission. Relying on the decision in Ravi Kant v. National Consumer Disputes Redressal Commission [1] and other decisions of the National Commission and Full Bench decision of this Court in Dr.C.V.Ratnam v. Union of India [2]

and the decision in Sriram Builders v. National Consumer Disputes Redressal Commission [3] and other precedents, the State Commission allowed E.A.I.A.No.1262 of 2010 while dismissing E.A.I.A.Nos.2125 and 2126 of 2010. However, it was directed that Sri Ved Kumar Jain, nominee director shall not be impleaded in the proceedings and the main case being E.A.No.12 of 2010 was directed to be posted at a subsequent date. This Court, while admitting the writ petitions, stayed all further proceedings in E.A.No.12 of 2010 and the second respondent has now filed separate applications being W.V.M.P.Nos.700 and 707 of 2011 for vacating the interim order. When these matters are called at interlocutory stage, with the consent of the parties, this Court heard both the writ petitions finally. The counsel for the Company besides reiterating the submissions made before the State Commission raised additional pleas, which are as follows: Section 27 of the Act can be a remedy to a complainant before the State Commission only as a last resort and Section 25(3) of the Act for enforcing the order under Section 27 of the Act cannot be invoked. It is also submitted that when there is no wilful failure or omission on the part of the Company or its Directors to comply with the orders of the State Commission, any order passed would result in miscarriage of justice. In support of his contention, the learned counsel relied upon the decisions in Ramchandra Keshav Adke (dead) by LRs. v. Govind Joti Chavare [4] , M.P. Wakf Board v. Subhan Shah (dead) by L.Rs. [5] , C.V.Ratnam v. Union of India [6] , M/s Megacity Builders, Hyderabad v. A.P. State Consumer Dispute Redressal Commission, Hyderabad [7] , Jolly George Varghese v. The Bank of [8] Cochin , Sarabjit Singh v. State of Punjab [9] , Brindaban Das v. State of West [10] Bengal and Standard Chartered Bank v. Directorate of Enforcement [11] . The learned counsel for the second respondent invites the attention of this Court to Section 27-A of the Act, which was inserted by the Central Act 52 of 2003 with effect from 15.3.2003. He would submit that when an effective alternative remedy by way of appeal is provided under Section 27 of the Act to the National Commission, both on facts and on law, a writ petition is barred. He has placed strong reliance on the decisions in Om Prakash Saini v. DCM Ltd. [12] , Trans Mediterranean Airways v. M/s Universal [13] Exports , M/s National Seeds Corporation ltd. v. M.Madhusudhan Reddy [14] , National Small Industries Corp. Ltd. v. Harmeet Singh Paintal [15] . In the background of the facts and submissions made in the Court, the following questions would arise for consideration. (i) Whether the writ petition is barred in view of Section 27-A of the Consumer Protection Act? (ii) Whether the complainant who obtained a favourable order from the State Commission is precluded from filing a penalty petition under Section 27 of the Act without first availing the remedy provided under Section 25(3) for the recovery of the amount ordered by the State Commission? (iii) Even though a petition under Section 27 of the Act is maintainable without first filing application under Section 25(3) in the absence of any wilful failure on the part of the opposite party to the consumer case, whether the State Commission can impose penalty as contemplated under Section 27(1) of the Act; (iv) Whether a juristic person like the first petitioner is liable for penal action as contemplated under Section 27 of the Act? In view of Section 27-A of the Act, after giving our anxious consideration, we deem it proper not to consider the points 2 to 4 as the petitioners have an effective alternative remedy under Section 27-A of the Act by way of appeal before the National Commission. Therefore, we are not inclined to go into other points and accept the writ petitions and virtually issue a Writ of Prohibition restraining the State Commission in proceeding with E.A.No.12 of 2010, especially when the petitioners have not shown any inherent lack of jurisdiction. Insofar as the order passed impleading the Directors and the order dismissing their applications as referred to supra, we do not find any reason to entertain the writ petitions having regard to Section 27-A of the Act. In the result, for the above reasons stated giving liberty to the petitioners, if so advised, to move learned National Commission, under Section 27-A of the Act duly seeking condonation of delay under the proviso to sub-section (3) of Section 27, we dismiss the writ petitions. There shall be no order as to costs. _____________ V.V.S.RAO, J ______________________________ G.KRISHNA MOHAN REDDY, J Dated: 24-1-2012 DA [1] [2] [3] [4] [5] [6] [7] [8] [9] AIR 1997 Delhi 182 2001(5) ALT 610 (FB) 2010 (1) ALD 710 (DB) (1973) 1 SCC 559 (2006) 10 SCC 696 2001(6) ALD 35 2004(1) ALT 345 (DB) (1980) 2 SCC 360 (2009) 16 SCC 46 [10] [11] [12] [13] [14] [15] (2009) 3 SCC 329 (2005) 4 SCC 530