Joseph v. Union of India — 1997 DIGILAW 190 (KER)

Judgment :- J.B. Koshy, J. Petitioners in this case are Partners of two Partnership concerns, namely, K.A. Joseph and sons and Jose & Sons. Petitioners 1 to 9 are partners of the partnership firm K.A. Joseph and sons and in Jose & Sons there are only four partners, petitioners 6,7,2 & 4 respectively. It is averred that these two firms are registered under the Kerala Money Lenders Act and they are having necessary licences for money lending business. It is stated that petitioners 10 and 11 are not partners Of either 'Of I hi "'concerns. Petitioners, in the course of business, did not refund the amount due to the customers and the customers approached the .Consumer Disputes Redressal Forum, Trissur constituted under the Consumer Protection Act,1986 (hereinafter referred to as 'the act). Respondents 5 to 43 have filed various claims before the Consumer Disputes Redressal Forum and all the petition were allowed. Copies of all orders were not produced in the original petition. Ext. P3 is the copy of order passed in O.P. No. 853/94 by the 2nd respondent. It can be seen from Ext. P3 order that respondents in that case (Petitioners 1, 4, 8 & 9 in the original petition) did not appear before the Forum. No objections were filed in spite of service of notice. It is also not stated that any statutory appeals were 'filed against the above orders. Therefore, the above orders have become final. 2. The customers filed execution petitions before the Consumer Disputes Redressal Forum under S.27 of the Act. Ext. P7 is an order passed in E.P. No. 61/96 in O.P. No. 855/94. Since the petitioner did not comply with the final order passed in O.P No. 855/94, Ext. P7 order was passed under S.27 of the Act by sentencing the respondents in that case to undergo simple imprisonment for one year and to pay fine of Rs. 10,000/- each. It was also ordered that fine if not paid will be realised by issuing warrant by the District Collector under S.421(1) of the Code of Criminal Procedure and fine, if realised, will be paid to the complainants. Only five of the petitioners are seen as respondents in the above Ext. P7 order. They are described in the order as partners of Kollannur Jose and sons. Only five of the petitioners are seen as respondents in the above Ext. P7 order. They are described in the order as partners of Kollannur Jose and sons. It is stated by the petitioners that the firm Kollannur Jose & Sons is wound up and is not in existence. It is also further stated that similar orders were passed or being passed under S.27 of the Act for implementing the orders in O.P. Nos. 257, 853, 854, 1054, 1085, 1089, 1086, 1087, 1088 of 1994, 548, 549, 671, 837, 842, 843, 845, 1339, 1340 of 1995, 199, 202, 203, 241, 540, 541, 542, 543, 750, 751 and 1079 of 1996 of the Consumer Disputes Redressal Forum, Trissur. Ext. P7 order is passed in E.P. No. 61/96 in O.P. No. 855/94. Other orders are not. produced. Individual orders are not challenged on merits of each case. According to the petitioners, S.27 of the Act is unconstitutional and is violative of Arts.14 and 21 of the Constitution of India. There is uncontrolled powers given to the Forum. There is no specific rule or procedure laid down for imposing extra-ordinary punishment of imprisonment for non-payment of. money. Personal liberty contemplated under Art.21 of the Constitution must be given in broad liberal interpretation and procedure established by law must be in accordance with law in continuity with Arts.14 and 21 of the Constitution. According to the petitioners, S.27 of the Act is arbitrary and unreasonable and against principles of natural justice. Therefore, prayer in the writ petition is to quash S.27 of the Act and consequently all the orders passed in O.P. Nos. 257, 853, 854, 855, 1054, 1085, 1089, 1086, 1087, 1088 of 1994, 548, 549, 671, 837, 842, 843, 845, 1339, 1340 of 1995, 199, 202, 203, 241, 540, 541, 542, 543, 750, 751 and 1079 of 1996 should be quashed. It is also pointed out that several other cases were also filed by the creditors against the petitioners and pending in Sub-Court, Thrissur etc. It is stated in paragraph 12 of the O.P. that petitioners preferred I.P. No. 1/96 before the Sub Court, Trissur. But Ext. P5 shows that it was filed only by one person and not by all the petitioners. It is also not stated that any orders were passed in the said petition. The merits of the individual orders are not challenged. But Ext. P5 shows that it was filed only by one person and not by all the petitioners. It is also not stated that any orders were passed in the said petition. The merits of the individual orders are not challenged. The only question to be looked into is whether S.27 of the Act is violative of the constitutional provisions and whether it is liable to be struck down. 3. Ext. P7 which is said to be one of the sample orders shows that only Jose @ Kochappan, 1st respondent: in that case appeared and filed objections. It is stated in paragraph 2 of the Original Petition that Sri. K.A. Joseph @ Jose P. Kochappan is the father of the petitioners, other than petitioners 10 & 11. Apart from 1st respondent in Ext. P7, that is, Jose @ Kochappan, who is described as the Managing Partner of Kollannur Jose & Sons, none of the respondents appeared and filed any objections before the Consumer Disputes Redresal Forum, Thrissur. Order in O.P. No. 853/94 which was produced as Ext. P3 shows that in the original proceedings before the Consumer Disputes Redresal Forum, Thrissur, none of the respondents in that case appeared and objected. They did not appear and make any objection or defended the case even though they received notices. Ext. P7 is an execution order passed for implementation of the order passed in O.P. No. 855/94. There also, only 1st respondent in that case filed objections. There is no contention that objections raised before the authorities were not considered by the District. Forum properly. The only point to be decided in this case is whether S.27 C of the Act is unconstitutional and is liable to be set aside for the reason stated in the original petition. 4. Petitioners in this case who were respondents in the Consumer Disputes Redresal Forum did not appear and orders were passed against them. They did not file appeal as provided under the Act and the order became final. Thereafter, consumers filed application for enforcement of the order. Ss.25 and 27 of the Act deals with execution of the orders of the Forum. They are as follows: "25. They did not file appeal as provided under the Act and the order became final. Thereafter, consumers filed application for enforcement of the order. Ss.25 and 27 of the Act deals with execution of the orders of the Forum. They are as follows: "25. Enforcement of orders by the Forum, the State Commission or the National Commission:- Every order made by We District Forum, the State Commission or the National Commission may be enforced by the District Forum, the State Commission or the National Commission, as the case may be, in the same manner as if i t were a decree or order made by a court in a suit pending therein and it shall be lawful for the District Forum, the State Commission or the National Commission to send, in the event of its inability to execute it, such order to the Court within the local limits of whose jurisdiction - (a) in the case of an order against a company, the registered office of the company is situated, or (b) in the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business or personally works for gain, is situated. and there upon, the court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution." "27. and there upon, the court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution." "27. Penalties:- Where a trader or a person against whom a complaint is made or the complainant fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or the complainant shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with tine which shall not be less than two does and rupees but which may extend to ten thousand rupees, or with both Provided that the District Forum, the State Commissioner the National Commission, as the case may be, if it is satisfied that the circumstances of the case so require, impose a sentence of imprisonment or fine, or body for the term lesser than the minimum term and the amount lesser than the minimum amount, specified in this section." S.25 provides for enforcement of the order of the District Forum in the same manner as if it is a decree or order of the court. In this case, the Forum did not take the procedure prescribed under S.25: instead, action was initiated under S.27 of the Act. S.27 gives power to the Consumer Court to execute the orders by itself. Under S.27, if a party to the dispute refuses to comply with the order of the Consumer Court, it can enforce the order by ordering imprisonment or fine or with both. This power is given for expeditious enforcement of its order. Parliament in its wisdom thought that if the order of the Consumer Court can be enforced only as decrees or orders of Civil Court, in the long delaying execution process therein with the hierarchy of appeals and revision of the Civil Procedure Code. Then the entire object of the Act will be defeated as the long delay for execution of the Act is sought to be reduced by the Act. The Act itself is enacted "to provide for better protection of the interest of the consumers" as can be seen from the Preamble of the Act. Then the entire object of the Act will be defeated as the long delay for execution of the Act is sought to be reduced by the Act. The Act itself is enacted "to provide for better protection of the interest of the consumers" as can be seen from the Preamble of the Act. Since S.27 gives ample power for the Consumer Courts to enforce its orders by imprisonment or fine or with both penalties together, principles of natural justice should be complied with before enforcing punishment and the person sought to be proceeded against should be heard. For complying with the principles of natural justice, when petition was filed by the consumers notice was issued to the present petitioners. Only one of the respondents who is not a party to this original petition filed objection. Others did not file any objection. The objection filed by that party was considered and final orders were passed. In this case, individual merits of the orders are not questioned. Only one sample order was produced. According to the petitioners, S.27 itself is invalid and unconstitutional. It is not the case that consideration of their objections by the Forum was not correct. In fact, petitioners did not appear before the Forum. So, I am not concerned with the individual merit of the orders passed in the execution. The only question to be considered is whether S.27 of the Act is valid or not. 5. In the decision reported in A. V. Georgekutty v. State of Kerala & Ors. 1993 (2) KLT 755 = (AIR 1994 Kerala 19) it was held by a Division Bench of this Court that the Consumer Protection Act has created a hierarchy of bodies under the Act with the power to hear appeals at every stage. The intention of the Legislature appears to be that the District Forum or the State Commission as well as the National Commission should be allowed to perform their duties speedily and without any interruption. The contention of the petitioners that wide discretion is given to the Consumer Disputes Redresal Forum under S.27 of the Act and the powers are not guided and, therefore, it may lead to' grave error cannot be accepted. The contention of the petitioners that wide discretion is given to the Consumer Disputes Redresal Forum under S.27 of the Act and the powers are not guided and, therefore, it may lead to' grave error cannot be accepted. The provisions with regard to the composition of the District Forum are contained in S.10 of the Act which provides that the President of the Forum shall be a person who is or who has been or is qualified to be a District Judge and the other two members shall be persons of ability, integrity and standing, having adequate knowledge or experience or, having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration and one of them shall be a woman. Similarly, with regard to the composition of the State Commission, it is provided in S.16 of the Act that the President of the Commission shall be a person who is or who has been a judge of High Court appointed by the State Government in consultation with the Chief Justice of the High Court and that the other two members shall be persons of ability, integrity and standing, having adequate knowledge or experience of, or having shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry 'public affairs or administration and one of them shall be a woman. The composition of the National Commission is governed by S.20 of the Act which provides that the President of the Commission shall be a person who is or who has been a judge of the Supreme Court to be appointed by the Central Government after consultation with the Chief Justice of India and four other members shall be persons of ability, integrity and standing having adequate knowledge or experience of, or having shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration and one of them shall be a woman. It will thus be seen that the President of the District Forum is required to be a person who is or who has been or is qualified to be a District Judge and the President of the State Commission is required to be a person who is or who has been the judge of the High Court and the President of the National Commission is required to be a person who is or who has been a judge of the Supreme Court, which means that all the Consumer Disputes Redressal Agencies are headed by a person who is well versed in law and has considerable judicial or legal experience. The Supreme Court in the decision reported in Indian Medical Association v. V.P. Shantha & Ors. (AIR 1996 SC 550) held that the composition of the Forum is competent to decide the disputes. It held as follows: "In the matter of constitution of the District Forum, the State Commission and the National Commission the Act combines with legal competence the merits of lay decision making by members having knowledge and experience in dealing with problems relating to various fields which are connected with the object and purpose of the Act, namely, protection and interests of the consumers." . (Para 36) At the end of paragraph 58 of the above decision, the Supreme Court also, in general, said that no case is made out that the Act suffers from the vice of arbitrariness or unreasonableness so as to be violative of Arts.14 & 19(1)(g) of the Constitution. The Supreme Court also held that the provisions of the Act are not violative of the provisions of the Constitution even though Court does not examine specifically with respect to S.27 of the Act. 6. In the decision reported in Lucknow Development Authority v. M.K. Gupta (AIR 1994 SC 787) it was held that the provisions of the Act have to be construed in favour of the consumer to achieve the purpose of enactment as it" is a social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to attempted objective of the enactment. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to attempted objective of the enactment. The Supreme Court held that the Forum is entitled to award not only value of the goods or service but also compensation to the consumer for injustice suffered by him. The provisions of the Act empowers the Commission to redress the injustice to the consumer. Considering the above principles, it can be seen that if S.27 is struck down, there will be no provisions in the Act for enforcing the orders of the Forum effectively. Recourse to S.25 and Code of Civil Procedure may take time and it will not serve the purpose which is sought to be achieved by the enactment. It is true that while exercising the powers under S.27, if the Forum exceeds its jurisdiction or causes miscarriage of justice, this Court will be entitled to interfere with the Act when judicial review is required. But in this case, petitioners are not asking for judicial review of the orders because of the non consideration of their objections by the Consumer Disputes Redressal Forum. 7. The Consumer Disputes Redresal Forum is a quasi-judicial tribunal to render speedy and inexpensive remedy to the consumers as held by the Supreme Court in Laxmi Engineering Works v. P.S.G. Industrial Institute (1995 (3) SCC 583). For enforcement of its orders, necessary remedies are provided under the Act itself. S.27 is an effective remedy for the enforcement of its orders. In this case, petitioners did not contest the case before the Forum. Orders were passed. It was disobeyed. Again, notices were issued to the petitioners. None of the petitioners filed objections and orders were passed imposing penalty under S.27 of the Act. The contentions of the petitioners is that no procedure is laid down at all while imposing penalty and, therefore, there will be violation of the principles of natural justice. In this case, notices were issued to the petitioners. They were given opportunity to explain. As held by the Supreme Court District. Forum is headed by a competent person with judicial experience. Considering the objections and explanations for non-implementation of the order, they are imposing the penalty. In this case, notices were issued to the petitioners. They were given opportunity to explain. As held by the Supreme Court District. Forum is headed by a competent person with judicial experience. Considering the objections and explanations for non-implementation of the order, they are imposing the penalty. It cannot be stated that the powers given under S.27 to the District Forum are unreasonable or arbitrary. Even though petitioners got an opportunity to file objections, they remained exparte. They did not file any objection. They cannot contend that principles of natural justice were violated. Originally, the order was passed after hearing the parties and after taking evidence. Thereafter, again, when execution came, before imposing penalty, they were issued with notices. Only one of the respondents in the execution petition filed objection and that was considered. That shows that the Forum was taking a procedure in consonance with the principles of natural justice. 8. Another ground urged by the petitioners is that they are unable to pay the amount as ordered by the Forum. They also pointed out that a person cannot be sent to civil prison under the provisions of the Code of Civil Procedure in execution of a money decree if he is unable to pay the amount. Here, under S.27 of the Act, no such provisions are incorporated. However, I am of the view that if one is unable to pay the amount, the Forum will consider that defence also while moldings the final order. Before passing order under S.27 of the Act all parties were given an opportunity to file objection. In Registrar, University of Madras & anr. v. Union of India & Ors. (1996 CCJ 668) a Division Bench of the Madras High Court held as follows: "There is also no merit in the contention that the provisions in S.27 enabling the District Forum or the Commission to award imprisonment besides fine are unreasonable. Obviously, the provision is made with a view to enable the Forum or the Commission to enforce its orders as quickly as possible. The very purpose of the Act to protect the interests of the consumers will be defeated if the consumers find it difficult or impossible to execute the orders of the Forum or the Commission for along time just as in civil courts. The very purpose of the Act to protect the interests of the consumers will be defeated if the consumers find it difficult or impossible to execute the orders of the Forum or the Commission for along time just as in civil courts. The provision is only similar to S.51(c) of the Code of Civil Procedure and the dicta of the Supreme Court in Jolly George Varghese v. Bank of Cochin (AIR 1980 SC 470) relating to arrest and execution proceedings in cases arising under the Code of Civil Procedure will certainly be borne in mind by the District Forum or the Commission when its powers under S.27 are exercised ". (Para24) In this case, petitioners in the original petition did not question each and every orders passed on the ground that the objections filed were not properly considered by the Forum. 9. The following principles laid down by the Supreme Court in Rama Krishna Dalmia v. Justice Tendolkar (AIR 1958 SC 538) are relevant here: "(b) that mere is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the legislature understands and correctly appreciates the need of its own principle, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation". (Para. 25) I am of the opinion that the petitioners failed to rebut the presumption of constitutionality in this case. A Division Bench of the Madras High Court in the decision reported in Registrar, University of Madras and Ann v. Union of India & Ors. (Para. 25) I am of the opinion that the petitioners failed to rebut the presumption of constitutionality in this case. A Division Bench of the Madras High Court in the decision reported in Registrar, University of Madras and Ann v. Union of India & Ors. (1996 CCJ 668) held that S.27 of the Act is constitutionally valid and it cannot be struck down, on the ground that it violates fundamental rights guaranteed under the Constitution.1 follow the reasoning of the Madras High Court in the above case and "hold that S.27 of the Act is perfectly valid. The Supreme Court also in Indian Medical Association's case (AIR 1996 SC 550) held that provisions of the Act are not unconstitutional. Therefore, there is no merit in the original petition and the original petition is dismissed.