P.V.CHACKO v. STATE OF KERALA

C.R. S.S.SATHEESACHANDRAN, J.-------------------------------O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 -----------------------------------Dated this the 13th day of August, 2012J U D G M E N TThese original petitions have been filed under Articles 226and 227 of the Constitution of India to quash the proceedingstaken for execution of its orders by the Consumer DisputesRedressal Forum, Ernakulam, setting forth a case that suchForum is not competent to entertain complaint over, and proceedwith, execution of its orders exercising the powers of a FirstClass Magistrate.2. Petitioner, who is common in all the above petitions, hadraised identical challenge as aforesaid to question thecompetency of the Consumer Disputes Redressal Forum, forshort, the 'Forum' to enforce its orders as a First ClassMagistrate. Some of the facts involved deserve to be taken note O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 2of before analysing the challenge posed for consideration. 3. The Forum on complaints filed by aggrieved personsagainst a financial concern and its Managing Director, thepetitioner, has passed orders directing them to refund theamount collected from the respective complainant with interestand costs. Complainants in five cases, after passing of theorders by the Forum, filed separate petitions for execution.Receiving such petitions, the Forum proceeded with furthersteps thereof. Petitioner, who appeared before the Forum wasenlarged on bail and at the stage when the proceedings wereposted for enquiry, he filed the above original petitions raising acommon challenge questioning the competency of the Forum toexercise the powers of a Magistrate to enforce its orders. 4. The facts are not in dispute, and the question emergingfor consideration is strictly a pure question of law relating theinterpretation to be placed over the 'conferment of powers' to O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 3the Forum to execute its orders exercising the powers of aJudicial First Class Magistrate. That being so, a detailedreference to the particulars of each case or of the exhibitsproduced in the cases is not called for. Still, to appreciate thequestion of law emerging for consideration, facts involved ineach case, in a nutshell, can be stated thus:-(i). In O.P.(Crl.).No.659 of 2012, petitioner is challengingthe execution proceedings arising from Ext.P4 order produced inthe above original petition, passed by the Forum in a complaintnumbered as C.C.No.45 of 2011 filed by the 2nd respondent. TheForum vide Ext.P4 order has directed the opposite parties inExt.P1 complaint (Financial concern and the petitioner, itsManaging partner) to refund a sum of Rs.4,20,000/- collectedfrom the complainant/2nd respondent with interest at 12% perannum and with a compensation of Rs.1,000/-. Ext.P6 petitionwas filed by the complainant before the Forum complaining ofthe failure of the opposite parties in the proceedings to complywith Ext.P4 order. (ii). O.P.(Crl.).No.664 of 2012 relates to a O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 4complaint numbered as C.C.No.46 of 2011 filed by the 2ndrespondent in that original petition before the Forum, in which,Ext.P4 order was passed directing the opposite parties in thatcomplaint to pay a sum of Rs.3,64,000/- collected from thecomplainant with interest at 12% per annum with compensationof Rs.1,000/-. Ext.P6 petition was filed by the complainant overthe non-compliance of Ext.P4 order and the proceedings takenthereof are pending. (iii). O.P.(Crl.).No.1374 of 2012 relates toC.C.No.118 of 2011, the complaint filed by the 2nd respondent inthe above original petition, in which, Ext.P3 order was passeddirecting the opposite parties to pay a sum of Rs.25,000/- with9% interest per annum to the complainant within a period ofthirty days with further direction that in default of paymentwithin such period, the amount awarded shall carry interest at12% per annum from the date of such default. Ext.P5 petitionwas filed by the complainant/2nd respondent before the Forum onthe failure of the opposite parties to comply with its order andthe proceedings taken thereof are pending. (iv). O.P.(Crl.). O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 5No.1383 of 2012 relates to a complaint numbered as C.C.No.152of 2011 filed by the complainant/2nd respondent, in which, theForum has passed Ext.P2 order directing the opposite parties topay a sum of Rs.1,38,750/- with 9% interest per annum within aperiod of thirty days with further direction that failing suchpayment, the amount awarded shall carry 12% interest perannum from the date of default. Ext.P4 petition was filed by thecomplainant/2nd respondent complaining of the non-payment ofthe amount ordered before the Forum and the proceedings takenthereof are pending. (v). O.P.(Crl.).No.1384 of 2012 relates tothe compliant numbered as C.C.No.139 of 2011, in which, Ext.P2order was passed by the Forum directing the opposite parties topay a sum of Rs.20,000/- with 9% interest per annum to thecomplainant with further direction how the payment is to beeffected and also liable to pay higher rate of interest if there wasdefault in payment within the time fixed. Ext.P4 petition wasfiled by the complainant reporting the non-compliance of theorder and proceedings taken by the Forum thereof are pending. O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 65. Perusing the complaints and also the orders passed bythe Forum, it is noticed that in two among the complaint cases,the petitioner had been proceeded against as the Managingpartner of a concern, namely, 'M/s Devadhan Lottery Services',which was implicated as the 1st opposite party in suchcomplaints, and in the other three complaints as the Chairman ofa concern, namely, 'LIS Group' with that concern as the1st opposite party in such complaints, in relation to variousschemes operated by such concerns inviting deposits from thegeneral public promising them double or more of the amountdeposited after the maturity period, with some extra benefitsduring the period of deposit. Such deposits have been collectedby unfair trade practice and the amount deposited were notreturned even after the completion of the maturity period, wasthe case of the complainants, which found approval with theForum in passing the orders indicated above in thecomplainants. Orders passed by the Forum not being complied O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 7with, in the proceedings taken by the complainants for executingthem, summons being ordered to the petitioner, after enteringappearance and enlarged on bail in such proceedings he hasfiled the above original petitions questioning the competency ofthe Forum to exercise the powers of the Judicial First ClassMagistrate in executing its orders passed under the Act.6. Though notices were ordered and served on therespective 2nd respondent/complainant before the Forum, onlythe 2nd respondent in O.P.(Crl.).No.1383 of 2012 has enteredappearance through a counsel. 7. I heard the learned counsel for the petitioner, learnedPublic prosecutor and also the learned counsel for the 2ndrespondent in the aforementioned original petition.8. Learned Senior counsel Sri.M.K.Damodaran, whoappeared for the petitioner, adverting to Section 27(2) of the O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 8Consumer Protection Act, 1986, for short, the 'Act' contendedthat the conferment of powers on the Forum with the powers ofthe Judicial Magistrate of the First Class for trial of the offencesunder the Act will come into effect and be operative only if it isso authorised and empowered under a notification published bythe Government in the Official Gazette. Stressing upon thewords 'on such conferment of powers' in the aforesaid subsection, it is urged by the learned Senior counsel, what has beenstated preceding those words that the Forum “shall have thepower of a Judicial Magistrate of the first class for the trial ofoffences under this Act” as such will not empower the Forum toexercise the powers of a Judicial Magistrate of the First Class.Section 11 of the Code of Criminal Procedure, for short, the'Code' dealing with the establishment of Courts of JudicialMagistrate of the First Class, and Section 32 of the Code dealingwith mode of conferring powers under the Code empoweringpersons by name or in virtue of their offices is also referred to bythe learned Senior counsel to give emphasis to the words “on O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 9such conferment of powers” appearing in Section 27 (2) of theAct, to buttress the proposition canvassed that without aGovernment notification conferring powers of a First ClassMagistrate the Forum is incompetent and has no jurisdiction toexercise the powers of such a Magistrate. Pointing out that theoffences under the Act are to be tried summarily, as ordainedunder sub section (3) of Section 27 of the Act, learned Seniorcounsel contended the Forum without conferment powers of aMagistrate under a Government notification and also furtherempowered to try the offences summarily by the High Courtcannot exercise any powers of the Magistrate nor carry out anysummary trial of the offences under the Act. Without havingspecial empowerment by the High Court on the Forum to try theoffences under the Act summarily, in accordance with themandatory prescription covered under Section 260 (1) (c) of theCode, the Forum cannot try the offences summarily, is theargument of the counsel to assail the proceedings on thecomplaints proceeded in the cases by the Forum as vitiated, O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 10irregular and unsustainable under law. On the aforesaidchallenges, learned Senior counsel urged for quashing of theproceedings in the complaint cases, referred to in the respectiveoriginal petitions, pending on the file of the Forum.9. Section 25 of the Act provides for enforcement of ordersof the District Forum, the State Commission or the NationalCommission. Over and above that provision for enforcement ofthe orders passed by the Forum/Commission, a penal provisionhas also been provided under Section 27 of the Act to imposepunishment against a person who fails or omits to comply withany order made by the Forum or Commission under Section 27of the Act. That Section reads thus:“27. Penalties:- [1] Where a trader or a personagainst whom a complaint is made [or thecomplainant] fails or omits to comply with anyorder made by the District Forum, the StateCommission or the National Commission, as thecase may be, such trader or person [orcomplainant] shall be punishable with O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 11imprisonment for a term which shall not be lessthan one month but which may extend to threeyears, or with fine which shall not be less thantwo thousand rupees but which may extend toten thousand rupees or with both:[xxxx][(2) Notwithstanding anything containedin the Code of Criminal Procedure, 1973 (2 of1974), the District Forum or the StateCommission or the National Commission, as thecase may be, shall have the power of a JudicialMagistrate of the first class for the trial of theoffences under this Act, and on such confermentof powers, the District Forum or the StateCommission or the National Commission, as thecase may be, on whom the powers are soconferred, shall be deemed to be a JudicialMagistrate of the first class for the purpose of theCode of Criminal Procedure, 1973 (2 of 1974).(3) All offences under this Act may be triedsummarily by the District Forum or the StateCommission or the National Commission, as thecase may be.]”Previously, before substitution of sub section (2), with new subsection (3), to the Section under Act 62 of 2002, sub section (2)reads thus: O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 12“Provided that the District Forum, the StateCommission or the National Commission, as thecase may be, may, if it is satisfied that thecircumstances of any case so require, impose asentence of imprisonment or fine, or both, for aterm lesser than the minimum term and theamount lesser than the minimum amountspecified in this section.”Competency of the Forum or Commission to impose sentence ofimprisonment or fine or with both, provided under the subsection earlier was seriously doubted of, and to obviate anddispel any question over the jurisdiction and authority of theForum/Commission to do so that sub section has beensubstituted under Act 62 of 2002, and it has come into effectfrom 15.03.2003. That sub section commencing with a nonobstante clause emphatically make it clear that it shall haveoperation and effect notwithstanding anything stated in theCode. When that be so, on coming into effect of that sub sectionin the Statute, normally, no special conferment of powers of aJudicial First Class Magistrate on the Forum/Commission, by a O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 13notification issued by the Government to exercise its powers toimpose penalties against a trader or a person or complainantwhere he fails or omits to comply with any of its order is needed. 10. The Supreme Court had occasion to consider theimpact of Section 27 of the Act, but, before the substitution ofsub section (2) in Section 27 of the Act when a challenge wasmooted against the Constitutional validity of some provisions ofthe Act in an appeal arising from the judgment rendered by theHigh Court of Karnataka. The High Court has turned down thechallenges, but, with some observations regarding theinterpretation to be placed over Section 25 of the Act regardingthe mode of enforcement of its orders by the Forum/Commission.An appeal was preferred by the State of Karnataka takingexception to the observations made by the High Court, and in thedecision rendered in that case reported as State of Karnatakav. Vishwabharathi House Building Co-operative Societyand Others ((2003) 2 SCC 412), after examining the O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 14Constitutional validity over the establishment of theForum/Commission and its jurisdiction, competency andauthority, agreeing with the finding of the High Court andupholding the Constitutionality of the Act, the Supreme Courtdisagreed with the observations placed over by Section 25 of theAct by the High Court. In considering and interpreting Section25 of the Act, which, as already indicted, deal with theenforcement of orders of the Forum/Commission, Section 27 ofthe Act which deal with the additional power of the Forum toexecute its orders imposing penalty, was also taken note of andconsidered, and the following observations thereto have beenmade:-“58. .................. Section 27 of the Act alsoconfers an additional power upon the Forum andthe Commission to execute its order. The saidprovision is akin to Order 39 Rule 2-A of theCode of Civil Procedure or the provisions of theContempt of Courts Act or Section 51 read withOrder 21 Rule 37 of the Code of Civil Procedure.Section 25 should be read in conjunction withSection 27. A parliamentary statute indisputablycan create a tribunal and might say that non-compliance with its order would be punishable O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 15by way of imprisonment or fine, which can be inaddition to any other mode of recovery.59. It is well settled that the cardinalprinciple of interpretation of statute is thatcourts or tribunals must be held to possess powerto execute their own order.60. It is also well settled that a statutorytribunal which has been conferred with thepower to adjudicate a dispute and passnecessary order has also the power to implementits order. Further, the Act which is aself-contained code, even if it has not beenspecifically spelt out, must be deemed to haveconferred upon the Tribunal all powers in orderto make its order effective.”11. The interpretation placed over Section 27 of the Act bythe Supreme Court was before substitution of sub section (2) ofthat Section does not in any way affect its binding force, nor is ita reason to hold that it is not applicable in examining,interpreting, considering and also understanding the effect andimpact of the newly substituted sub section vis-a-vis the powers,authority and jurisdiction of the Forum/Commission. Statute hasempowered the Forum or Commission to impose penalty againstthe person who fails to comply with its order. It also provides O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 16authority to punish such person with imprisonment or fine orwith both, fixing the minimum and also the maximum thereof. Inimposing of such punishment as a penalty for non-compliance ofits order, the Forum/Commission shall have the power of theJudicial Magistrate of First Class for the trial of offencesnotwithstanding anything contained in the provisions of theCode, is the pith and substance of sub section (2) of Section 27 ofthe Act. The words in that sub section 'on such conferment ofpowers' no way indicate that a separate notification from theGovernment is required to enable the Forum or Commission toexercise the powers of a Judicial Magistrate of the First Class,especially, where the Statute makes it clear that it has beenconferred with the power of a Judicial Magistrate of the FirstClass in enforcing its orders by imposing penalty against thedefaulting party. The aforesaid words 'on such conferment ofpowers' cannot be read in isolation but to be understood andread in relation to the preceding clause, by which, on thesubstitution made, the Forum/Commission has been conferred O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 17with the power of a Judicial Magistrate of the First Class for trialof the offences under the Act. So much so, when a Forum orCommission is established under the Act, and, then, statutorilyempowered with the powers of a Judicial Magistrate of the FirstClass for trial of the offences to enforce its orders to proceedagainst a trader, person or complainant for non-compliance of itsorders, there is no requirement for conferment of powers of aMagistrate by way of a notification by the Government to enablethe Forum or Commission to exercise the powers of a Magistratein imposing penalties. Such conferment of powers of aMagistrate on the Forum/Commission to exercise the powers of aMagistrate, is necessary, the challenge canvassed with referenceto Sections 11 and 32 of the Code cannot have any merit wheresub section (2) itself makes it clear that the power conferred andenjoined on the Forum or Commission to exercise the powers forthe trial of the offences is statutorily conferred notwithstandinganything to the contrary in the Code. O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 1812. There is also no merit in the challenge that the Forumor Commission for trying the offence relating to non-complianceof its orders 'summarily' as provided under sub section (3) ofSection 27 requires empowerment on that behalf from the HighCourt as under Section 260 (c) of the Code. A Forum orCommission established under the Act and empowered to try theoffences relating to non-compliance of its orders, for impositionof penalties, as provided, does not require any sanction from theHigh Court where the Act itself makes it clear that it can try theoffence under the Act summarily. In a deserving case it may beopen to the Forum or Commission to follow a different procedurehaving regard to the imposition of penalty that may be called forin the facts and circumstances presented. Sub section (2) ofSection 27 of the Act providing for trial of the offencessummarily by the Forum or Commission in no way indicates thatto proceed for summary trial over offences covered by the Act,the Forum/Commission established under that Act requiressanction from the High Court. What has been stated by sub O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 19section (3) of Section 27 of the Act is only that the offence maybe tried summarily by the Forum or Commission, leaving it opento the Commission to decide its own procedure in consonancewith the Procedural Code in trial of the offences under the Actfor imposing penalty covered under the aforesaid section whenproceedings are initiated for non-compliance of its order. 13. A Division Bench of Madras High Court had occasion toconsider similar challenges canvassed as in the present case thatthe Forum/Commission to exercise powers of the JudicialMagistrate of First Class requires conferment of powers by anotification from the Government and also permission from theHigh Court for summary trial of the offences under the Act. TheDivision Bench in that case reported as Anil Kumar.V. v. Stateof Tamil Nadu (2008 (2) KHC 346) has repelled thechallenges pointing out that the District Forum/StateCommission has been established by the State Governmentunder Sections 9(a) and (b) of the Act, and when that be so, with O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 20the statutory conferment under sub section (2) of Section 27 ofthe Act to exercise the powers of a Magistrate in the trial of theoffences under the Act on such Forum/Commission, no secondnotification is required under Sections 11(1) or 16(1) or 32(1) ofthe Code. To do so, it has been stated, would be violative of thestatutory conferment of powers given under the Act and more so,imposition of an artificial restriction on the powers of the Forumor Commission established under the Act. I am in respectfulagreement with the views so expressed by the Division Bench.Then also, it has to be noted conferment by way of notificationunder Section 11(1) of the Code is for establishment of a Courtof Judicial Magistrate, and where a Forum or Commissionalready established by notification under Section 9(a) or (b) ofthe Act when endowed with the powers of the Judicial Magistratethat too only for the purpose of exercising its authority toenforce its order by imposition of penalty, no question ofestablishment of any court of the Judicial Magistrate is called foror needed. No establishment of the Court of Judicial Magistrate O.P.(Crl.)NOS.659, 664, 1374, 1383 & 1384 OF 2012 21as envisaged under Section 11(1) of the Code and conferring ofpowers under Section 32(1) of the Code on a Forum orCommission duly established under a notification by theGovernment is required for, more so, where it has been statutoryempowered to exercise the powers of a Judicial First ClassMagistrate in the trial of the offence under the Act. 14. There is no merit in the challenges raised questioningthe competency and authority of the Forum to exercise thepowers of the Judicial Magistrate of First Class to enforce itsorders on its non-compliance.All original petitions are dismissed.S.S.SATHEESACHANDRAN JUDGEprp