Aapka Consultant Judgment Series- In this series, we are providing case analysis of Landmark Judgments of Hon’ble Supreme Court of India.
State of Karnataka v. Vishwabarathi House Building Coop. Society and Ors.
AIR 2003 SC 1043: (2003) 2 SCC 412
JUDGES: S.B. Sinha, V.N. Khare and K.G. Balakrishnan
Date of Decision: 17-01-2003
FACTS:-
A case was filed by the Vishwabharathi House Building Cooperative Society and order was passed by a division bench of the High Court of Karnataka upholding the vires of the Consumer Protection Act, 1985 (the Act). Having certain issues with the interpretation of the High Court of Section 25 of the Consumer Protection Act, 1986, State of Karnataka has filed this present appeal.
ISSUE:-
Whether the provisions of Consumer Protection Act dealing with appeals and enforcement of its order are constitutional or not?
JUDGMENT:-
The Hon’ble Apex Court noted that a bare perusal of the Item 77-79, 95 of List I of Seventh Schedule and 11A and 46 of List III of the Seventh Schedule does not leave any manner of doubt as regard the legislative competence of Parliament to provide for creation of special courts and tribunals. Administration of justice; constitution and organization of all courts, except the Supreme Court and the High Courts is squarely covered by entry 11A of List III of the Constitution of India. The said entry was originally a part of Entry 3 of List II. By reason of Constitution (Forty-second Amendment) Act, 1976 and by Section 57(a)(vi) thereof it was inserted into List III as item 11A.
By virtue of Clause 2 of Article 246 of the Constitution, the Parliament has the requisite power to make laws with respect of constitution of organization of all courts except the Supreme Court and the High Court. Sections 15, 19 and 23 of the Consumer Protection Act provide for the hierarchy of appeals. By reason of Sub-sections (4), (5) and (6) of Section 13, the District Forum shall have the same powers as are vested in the Civil Courts for the purposes mentioned therein. Sub-sections (2) and (2-A) of Section 14 mandate that the proceedings shall be conducted by the President of the District Forum and at least one member thereof sitting together. By reason of Section 18, the provisions of Sections 12, 13 and 14 and the rules made thereunder would mutatis mutandis be applicable to the disposal of disputes by the State Commission. Section 23 provides for a limited appeal to the Supreme Court from an order made by the National Commission i.e., when the same is made in exercise of its original power as conferred by Sub-clause (i) of Clause (a) of Section 21.
The question arises regarding the legislative competence of the Parliament to create such special tribunals as also under the effect of Article 323-A and 323-B of the Constitution. The rights of the parties have adequately been safeguarded by reason of the provisions of the said Act in as much as although it provides for an alternative system of consumer jurisdiction on summary trial, they are required to arrive at a conclusion based on reasons. Even when quantifying damages, they are required to make an attempt to serve the ends of justice aiming not only at recompensing the individual but also to bring about a qualitative change in the attitude of the service provider. Assignment of reason excludes or at any rate minimizes the chances of arbitrariness and the higher forums created under the act can test the correctness thereof.
The District Forum, the State Commission and the National Commission are not manned by lay persons. The President would be a person having judicial background and other members are required to have the expertise in the subject such as economics, law, commerce, accountancy, industry, public affairs, administration etc. It may be true that by reason of Sub-section (2-A) of Section 14 of the Act, in a case of different of opinion between two members, the matter has to be referred to a third member and, in rare cases, the majority opinion of the members may prevail over the President. But, such eventuality alone is insufficient for striking down the Act as unconstitutional, particularly, when provisions have been made therein for appeal there against to a higher forum.
By reason of the provisions of the said Act, the power of judicial review of the High Court, that is a basic feature of the Constitution, has not been nor could be taken away. By reason of the provisions of Section 3 of the Act, it is evident that remedies provided there are not in derogation of those provided under other laws. The said Act supplement and not supplants the jurisdiction of the civil courts or other statutory authorities.
The question as regard to the applicability or otherwise of Article 323-A and 323-B of the Constitution in the matter of constitution of such Tribunals decided by this Court in L. Chandra Kumar v. Union of India and Ors. [1997] 228 ITR 725 (SC). This Court therein clearly held that “the constitutional provisions vest Parliament and the State Legislatures, as the case may be, with powers to divest the traditional courts of a considerable portion of their judicial work. It was observed that the Parliament and the State Legislatures possess legislative competence to effect changes in the original jurisdiction of the Supreme Court and High Court apart from the authorization that flows from Article 323-A and 323-B in terms of Entries 77, 78, 79 and 95 of List I so far as the Parliament is concerned and in terms of Entry 65 of List II and Entry 46 of List III so far as the State Legislatures are concerned. It was further held that power of judicial review being the basic structure of the Constitution cannot be taken away.”
The provisions relating to power to approach appellate court by a party aggrieved by a decision of the forums State Commissions as also the power of High Court and thus Court under Article 226/227 of the Constitution of India and Article 32 of this Court apart from Section 23 of the Act provide for adequate safeguards. Furthermore, primarily the jurisdiction of the forum/commissions is to grant damages. In the event, a complainant feels that he will have a better and effective remedy in a civil court as he may have to seek for an order of injunction, he indisputably may file a suit in an appropriate civil court or may take recourse to some other remedies as provided for in other statutes. A bare perusal of the Section 25 of the Act clearly shows that thereby a legal fiction has been created to the effect that an order made by District Forum State Commission or National Commission will be deemed to be a decree or order made by a civil court in a suit. Legal fiction so created has a specific purpose, i.e., for the purpose of execution of the order passed by the Forum or Commission. Only in the event the Forum State Commission or the National Commission is unable to execute its order, the same may be sent to the civil court for its execution.
Section 27 of the Act also confers an additional power upon the Forum and the Commission to execute its order. The said provision is akin to Order 39 Rule 2-A of the Code of civil Procedure or the provisions of the Contempt of Courts Act or Section 51 read with Ordered 21 Rule 37 of the Code of civil Procedure. Section 25 should be read in conjunction with Section 27. A Parliamentary statute indisputably can create a tribunal and might say that non-compliance of its order would be punishable by way of imprisonment of fine, which can be in addition to any other mode or recover. It is well settled that the cardinal principle of interpretation of statute is that courts or tribunals must be held to possess power to execute their own order.
HELD
Court held that the provisions of the Consumer Protection Act dealing with Appeal and enforcement of its orders are constitutional.
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