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2009 DIGILAW 57 (KER)

N. S. Kumar v. K. Bincy

2009-01-19

J.B.KOSHY, V.GIRI

body2009
Judgment:- Koshy, Ag. C.J. Against the appellant-Writ petitioner, a complaint was filed before the District Consumer Redressal Forum, Kollam by the first respondent alleging manufacturing defect in the paper bag manufacturing machine supplied by the appellant. According to the first respondent, after spending an amount of Rs.15 lakhs the above machine was installed and it was found that there was manufacturing defect. When the case was posted for filing version of the appellant, appellant got an adjournment and on the next posting date, as he was absent, an ex parte decision on merits was taken by the Consumer Disputes Redressal Forum directing him to pay Rs.7,35,000/- with 9% interest from the date of the order. In addition to that, Rs.10,000/- as compensation and Rs.1,000/- as cost, were also ordered by Ext.P2 order. Though the appellant filed a petition under Order IX Rule 13 of the Code of Civil Procedure to set aside the ex-parte order, it was rejected by the forum. The above petition was rejected with the following endorsement: “As the final order of the O.P. stands pronounced (dated 29/7/2005) duly, the forum cannot entertain this petition”. Against the rejection of the petition, the appellant filed the writ petition. Learned Judge dismissed the writ petition holding that appellant is free to file an appeal before the State Commission. The question to be considered is whether the Consumer Reddressal Forum can set aside an order passed on merits, though passed ex parte. 2. It is contended before us that the Consumer Disputes Redressal Forums are rejecting such petitions to set aside the ex parte orders on the ground that they have no power under the Act and it is argued that every court or tribunal have inherent power to set aside exparte order and therefore though the impugned order is appealable, this controversy has to be settled. On that ground the appeal was admitted and after the pendency of the case before this court, it cannot be just dismissed without considering the above point. 3. Section 13 of the Consumer Protection Act, 1986 (in short, “the Act”) details the procedure on admission of the complaint. Section 13(2) deals with the procedure to be adopted by the District Forum. Section 13(2) and (3) of the Act reads as follows: “(2). 3. Section 13 of the Consumer Protection Act, 1986 (in short, “the Act”) details the procedure on admission of the complaint. Section 13(2) deals with the procedure to be adopted by the District Forum. Section 13(2) and (3) of the Act reads as follows: “(2). The District Forum shall if the complaint admitted by it under Section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services,- (a) refer a copy of such complaint to the opposite party directing him to give version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum; (b) Where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute,- (i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint, or (ii) ex party on the basis of evidence brought to its notice by the complainant where the opposite party omits and fails to take any action to represent his case within the time given by the Forum. (c) Where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint for default or decide it on merits. (3) No proceedings complying with the procedure laid down in sub-section (1) & (2) shall be called in question in any Court on the ground that the principles of natural justice have not been compelled with”. (Emphasis supplied) Sub-section (2)(c) of Section 13 was incorporated with effect from 15.3.2003 enabling the District Forum to dismiss the complaint for default or dismiss it on merits. Sub-section (4) of Section 13 invests the District Forum with certain powers vested in a civil court under the Code of Civil Procedure. It reads as follows: “(4). (Emphasis supplied) Sub-section (2)(c) of Section 13 was incorporated with effect from 15.3.2003 enabling the District Forum to dismiss the complaint for default or dismiss it on merits. Sub-section (4) of Section 13 invests the District Forum with certain powers vested in a civil court under the Code of Civil Procedure. It reads as follows: “(4). For purposes of this section, the District Forum shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the following matters, namely:- (i) The summoning and enforcing attendance of any defendant or witness and examining the witness on oath; (ii) The discovery and production of any document or other material object producible as evidence; (iii) The reception of evidence on affidavits; (iv) The requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source; (v) Issuing of any commission for the examination of any witness; and (vi) Any other matter which may be prescribed.”. Sub-section (5) provides that District forum shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure and certain other provisions of the CPC are also made applicable under sub-sec.(6) and (7) of Section 13. Admittedly, the power under Order IX.Rule 13 CPC is not made applicable to the District Forum. The question is whether there is any inherent power to set aside an order passed on merit, though ex parte. 4. Learned counsel for the respondent referred to the decision of the Honourable Supreme Court in New India Assurance Company Ltd. V. Srinivasan, 2000 (3) KLT 462 (SC) as well as the decision of the Madras High Court in Indian Bank and four others v. District Consumer Disputes Redressal Forum, Madras and another, III (1996) CPJ 597 and also a decision of the Single Bench of this court in St. Joseph’s Hospital V. Jimmy, 2001 (2) KLT 514. 5. First, we will consider the decision of the Honourable Supreme Court in New India Assurance Company Ltd’s case (supra). In the above decision, the Apex Court at paragraph 9 considered the power of the District Forum in setting aside the order dismissing the complaint on default. At that time, Section 13(2)(c) was not inserted in the Act. 5. First, we will consider the decision of the Honourable Supreme Court in New India Assurance Company Ltd’s case (supra). In the above decision, the Apex Court at paragraph 9 considered the power of the District Forum in setting aside the order dismissing the complaint on default. At that time, Section 13(2)(c) was not inserted in the Act. The Honourable Supreme Court held as follows: “9. The provisions of O.9 have not been made applicable to proceedings under the Consumer Protection Act.O.9 deals with appearance of parties and consequence of non-appearance. It is provided by R.2 of O.9 that if the plaintiff was found to have not taken any step for service upon the defendant, the suit would be dismissed. R.3 contemplates dismissal of suit for non-appearance of parties. If the suit is dismissed under R.3 on account of non-appearance of the parties, it would be open to the court to set aside the order by which the suit was dismissed and to restore the suit to its original file. R.4 also enables the plaintiff, whose suit was dismissed under R.3 to bring a fresh suit. But where the suit is dismissed under R.8 for non-appearance of the plaintiff, though the defendant is present, it will not be possible for the plaintiff to bring a fresh suit in respect of the same cause of action on account of the prohibitions contained in sub-r.(1) of R.9 of O.9. But it will be open to the Court to recall the order and restore the suit. It is this Rule which is being relied upon by the counsel for the appellant in support of his contention that the compliant filed by the respondent having been once dismissed and the restoration application having been rejected it was not open to him to file a fresh complaint on the same cause of action against the appellant. 10. We have already indicated above that the Code of Civil Procedure has been applied to the proceedings under the Consumer Protection Act only to a limited extent. If the intention of the legislature was to apply the provisions of O.9 also to the proceedings under the Consumer Protection Act, it would have clearly provided in that Act the provisions of O.9 will also be applicable to the proceedings before the District forum or the State Commission or, for that matter, before the National Commission. If the intention of the legislature was to apply the provisions of O.9 also to the proceedings under the Consumer Protection Act, it would have clearly provided in that Act the provisions of O.9 will also be applicable to the proceedings before the District forum or the State Commission or, for that matter, before the National Commission. If the legislature itself did not apply the rule of prohibition contained in O.9 R.9 (1), it will be difficult for the courts to extend that provision to the proceedings under the Act”. (emphasis supplied) In the above case, the owner of the vehicle approached the State Consumer Disputes Redressal Commission against the appellant therein in respect of the damage caused to his vehicle which was insured with the appellant. The complaint was dismissed for default. After two days, he filed an application for restoration of the complaint, but the application was dismissed by the State Commission and the complaint was not restored. Then a fresh complaint was filed against the appellant before the District Forum in respect of aforesaid claim. The District forum allowed the claim despite he fact that the earlier application was dismissed for default. The State Commission as well as the National Commission dismissed the appeal and the revision. This was challenged before the Supreme Court. The Honourable Supreme Court dismissed the appeal, but it was observed as follows: “we only intend to invoke the spirit of the principle behind the above dictum in support of our view that every court or judicial body or authority, which has a duty to decide a lis between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the Court or the judicial or quasi judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. This is not the function of the Court or, for that matter of a judicial or quasi-judicial body. In the absence of the complainant, therefore, the Court will be well within its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non-appearance of the complainant”. In the absence of the complainant, therefore, the Court will be well within its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non-appearance of the complainant”. At that time, there was no express power under the Act to dismiss a complaint for default. But the case was disposed of without going to the technical question whether after dismissal of the complaint, fresh complaint can be filed because of the undisputed merits of the case. The operative portion of the judgment is at paragraph 20, which reads as follows: “20. In the instant case, the vital fact of there being an insurance cover in favour of the respondent is not disputed. The loss suffered by the respondent is not disputed and the claim of the respondent is also not questioned. The only point urged before the State Commission as also before the National Commission and, for that matter, before us is that on account of the first complaint having been dismissed in default and the complaint having not been restored, the second complaint would not lie. The interest of justice, in our opinion, cannot be defeated by this rule of technicality. The rule of procedure, as has been laid down by this Court a number of times, are intended to serve the ends of justice and not to defeat the dispensation of justice. The respondent has suffered loss which was squarely covered by the policy of insurance granted by the appellant. Since his claim is not being questioned before us merits and is being sought to be defeated on the technical plea referred to above, we are not prepared to interfere with the orders passed by the District Forum, the State Commission and the National Commission, particularly as it is stated before us that the whole of the claim amount has already been paid to the respondent”. The Honourable Supreme Court noticed that the original case was not disposed of on merit and on merits the case of the complainant was not disputed by the appellant. 6. In the decision reported in Indian Bank and four others vs. District Consumer Disputes Redressal Forum, (supra), the Madras High Court considered the case where the parties were declared ex parte, but no decision on merits was taken. 6. In the decision reported in Indian Bank and four others vs. District Consumer Disputes Redressal Forum, (supra), the Madras High Court considered the case where the parties were declared ex parte, but no decision on merits was taken. Similar was the case of the Kerala High Court referred to by the appellant. The case was not decided on merit, but the Forum only declared the opposite party ex parte. It is stated that District Forum has got the power to dismiss the complaint for default and it has got inherent power to restore the complaint. Similarly, a decision declaring ex parte also can be set aside by using the inherent power as there is no decision on merit. In the course of discussion, the meaning of ‘ex-parte’ was discussed. Declaring a case ‘ex-parte’ was discussed. Declaring a case ‘ex parte’ would not mean that he would not be allowed to be heard in future proceedings, if any. But the ex parte decision is taken as if such person is present. Once the decision is taken, it could be challenged by the person aggrieved, in appeal. If no decision is taken, but the case is adjourned, in the next hearing he can appear, notwithstanding the fact that previous proceedings was decided ex parte. 7. In the cases decided by the Madras High Court and the Kerala High Court, which were relied upon by the appellant, no decision was taken ex parte, but the parties were declared ex parte. Rule 4(8) gives the power to the Forum to settle the case ex parte on the basis of evidence even if the opposite party is absent on the date of settling the case. In St.Joseph’s Hospital case, (supra), at paragraphs 2 and 3 it was held as follows: “2. In this case no ex parte decision has been taken by the District Forum. It is true that the District Forum has declared the petitioner ex parte. The power under R.4(8) is to decide the complaint ex parte. Here the complaint is not yet decided ex parte. When the case was called on 16.4.1999, the opposite party was absent and without taking ex parte decision, Forum adjourned the matter. Opposite party is free to attend and agitate in the next hearing date. The power under R.4(8) is to decide the complaint ex parte. Here the complaint is not yet decided ex parte. When the case was called on 16.4.1999, the opposite party was absent and without taking ex parte decision, Forum adjourned the matter. Opposite party is free to attend and agitate in the next hearing date. The word ‘ex parte’ is given the meaning in Black’s Law Dictionary (7th Edition at page 597) as without notice to or argument from the adverse party and exparte proceeding is defined as a proceeding in which not at all parties are present or given the opportunity to be heard. Therefore here the District Forum adjourned the matter to a subsequent date without hearing the petitioner. Nothing else happened. 3. The meaning of the expression ‘ex parte’ has been considered by the Supreme Court in Sangram Singh Vs. Election Tribunal, Kotah (AIR 1955 SC 425 at 431). Referring to a judgment of Wallace, J. in Venkatasubbiah V. Lakshminarasimham (AIR 1925 Mad.1274), the Apex Court opined that ‘exparte’ only means in the absence of other party. The declaration of ex-parte made by the Forum on 16.4.1999 and subsequent date, are only adjournments of the case ex parte and not ex parte decisions or orders. But power is given to the Forum under R.4(8) to decide the matter ex parte. This Court considered the power of the Industrial Tribunal to declare ex-parte under R.22 of the Industrial Tribunal Rules similar to R.4(8) of the Rules under consideration in F.A.C.T. Employees Association V. F.A.C.T. Ltd., (1976 KLT 474), Justice Kochu Thommen as he then was, observed as follows: “The Tribunal may imagine that the absentee is present, and having done so, it may give full effect to its imagination and carry it to its logical conclusion. The Tribunal has to bear in mind the purposes for which the fiction is created and has to give effect to them. Obviously, the intention of R.22 is to enable the Tribunal to imagine that a person is present, although he is in fact absent; and to further imagine that, although present, he is unwilling to adduce evidence or argue his case. The Tribunal then has of necessity to pass an award on the basis of the evidence placed before it by the party that in fact participated in the proceedings. The Tribunal then has of necessity to pass an award on the basis of the evidence placed before it by the party that in fact participated in the proceedings. This is the object of the fiction expressed by the words “as if he had duly attended”. If an ex-parte decision is taken, the opposite party can only file an appeal. In the present case no ex-parte decision is taken. Therefore, in subsequent postings opposite party is free to attend and continue with the proceedings….”. The operative portion of the above decision reads as follows: “…………….In any event, in this matter, since no ex parte decision is taken, I am of the opinion that the petitioner will be free to attend the case on subsequent dates of hearing. Therefore, no further orders are necessary in this Original Petition. Petitioner is free to attend the proceedings, cross examine the witness, adduce evidence of his defence, etc., in the subsequent postings”. 8. In the Madras High Court decision, there is no ex parte decision on merit. When a complaint is dismissed for default or the Forum merely declares a party ex parte, there is no decision on merit and therefore, those decisions can be set aside by using inherent powers. Further, as already explained, as noted in the St. Joseph’s Hospital case, if the Tribunal declared the parties as ex parte, in future proceedings, without setting aside the exparte order, they can participate. Only a decision can be taken ex parte. But in this case, a decision on merits was taken ex parte and therefore, if a decision on merit is taken, the remedy of the appellant is to file an appeal before the State Commission. Here, though ex-parte (As the other decisions), a decision was taken on merits after considering the evidence on record. Section 15 of the Act provides for an appeal, which is an efficacious remedy, against such order. Section 15 of the Act reads as follows: “15. Appeal.- Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed. Section 15 of the Act reads as follows: “15. Appeal.- Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed. Provided that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited in the prescribed manner fifty per cent of that amount or twenty five thousand rupees, whichever is less”. 9. In this case, since the decision was taken on merits, the remedy of the appellant lies only in filing an appeal to the State Commission, and, therefore, we see no ground to interfere with the decision of the learned Single Judge, especially in view of the observations of the New India Assurance Company Ltd’s case (supra). Since the case was pending before this court for more than three years, the time for filing the statutory appeal has elapsed. In the above circumstances, it is directed that if the appeal is filed within three weeks from today after complying with the statutory formalities, it should not be dismissed as time barred and should be considered on merits by the State Commission. The Writ Appeal is disposed of accordingly.