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2014 DIGILAW 953 (AP)

P. Saraswathi Devi v. Andhra Pradesh State Consumer Redressal Commission

2014-07-31

L.NARASIMHA REDDY, M.SATYANARAYANA MURTHY, RAMESH RANGANATHAN

body2014
Judgment L. Narasimha Reddy, J. The writ petition is filed challenging a circular dated 24-06-2010 issued by the Andhra Pradesh State Consumer Redressal Commission, the 1st respondent (for short ‘the State Commission’). Through the said circular, the State Commission insisted that in any complaint filed under the Consumer Protection Act, 1986 (for short ‘the Act’) against any firm or company, the complainant shall file a certificate from the Registrar of Firms or the Registrar of Companies, as the case may be, showing the names of partners or directors as well as the memorandum of association and the articles of association. The petitioner raised several grounds in challenge to the same. When a Division Bench of this Court comprising of Justice N.V. Ramana (as his Lordship then was) and Justice P. Durga Prasad took up the matter for hearing, the respondent relied upon an order dated 09-02-2011 passed in Writ Petition No.2545 of 2011 by a Division Bench of this Court comprising of Justice Ghulam Mohammed and Justice K.G. Shankar in which the validity of the circular was upheld. Taking the same into account, a detailed order dated 05-09-2011 was passed by the Bench which heard this case, expressing the view that the order in Writ Petition No. 2545 of 2011 requires reconsideration. Since both the Benches were of same strength, the matter was required to be placed before the Hon’ble the Chief Justice for necessary orders, to examine the feasibility of constituting a Full Bench, to get an authoritative pronouncement on the issue. Accordingly, the matter is placed before us. The contentions of the parties are summed up in the order of reference itself. The gist of the contention of the petitioner is that the very objective of enacting the Act is to provide easy access and to ensure speedy and inexpensive justice to the parties and the circular has the effect of placing, additional burden on the persons who seek redressal. She submits that once the identity of a party against whom there is a deficiency of service; is clear from the description in the cause title, there is absolutely no necessity to file the certificate of registration of a firm or a company, much less the memorandum of association and the articles of association. She submits that once the identity of a party against whom there is a deficiency of service; is clear from the description in the cause title, there is absolutely no necessity to file the certificate of registration of a firm or a company, much less the memorandum of association and the articles of association. It is the case of the petitioner that even in regular suits there is no such requirement and, the circular runs contrary to the letter and spirit of the Act. Respondent Nos. 1 and 2, on the other hand, state that the circular is issued with a view to overcome certain practical problems and issues. According to them, the absence of particulars of the partners or the directors of a firm or company, as the case may be, is becoming a stumbling block for implementation of the orders passed by the District Consumer Forums or the State Commission. It is urged that the circular was issued in the interests of the persons who seek redressal and it is not intended to cause any hurdles. The regular adjudicatory system is existing in the country, for the past several centuries catering to the needs of the litigant public, both on civil and criminal sides. The regular civil Courts are mostly conventional in nature and guided by the procedure prescribed under CPC. Two important developments that have taken place in the past century, are industrialisation and consumerism. The quantum of litigation generated through them is phenomenal. The adjudication thereof in the regular Courts was not to the level of expectation; from the point of view of the time consumed for disposal, as well as the intricacies of procedure. The mechanism for consumer protection has taken its roots in the western countries and slowly it percolated to India. The Parliament recognised the necessity to provide a system for speedy and simple redressal of consumer disputes and accordingly enacted the Act. The Statement of Objects and Reasons for the Bill read as under: “1. The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith. 2. The Statement of Objects and Reasons for the Bill read as under: “1. The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith. 2. It seeks, inter alia, to promote and protect the rights of consumers such as, -- (a) the right to be protected against marketing of goods which are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to an authority of goods at competitive price; (d) the right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums; (e) the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) right to consumer education. 3. These objects are sought to be promoted and protected by the Consumer Protection Council to be established at the Central and State level. 4. To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the District, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give reliefs of a specific nature and to award, wherever appropriate, compensation to consumer. Penalties for noncompliance of the orders given by the quasi-judicial bodies have also been provided.” From a perusal of this, it becomes manifest that one of the important objectives was to provide speedy and simple redressal to the consumer disputes. In categorical terms, the Parliament made it clear that the fora to be established for this purpose are going to be quasi-judicial in nature and even while requiring them to observe the principles of natural justice, they were relieved of the rigour of complicated procedure. The redressal mechanisms at the district, state and national level have been brought into existence and they are functioning. The State Commission has control over the district fora that are functioning within the State. There is no provision in the Act conferring any power to frame rules or to issue directions, upon the State Commission. The redressal mechanisms at the district, state and national level have been brought into existence and they are functioning. The State Commission has control over the district fora that are functioning within the State. There is no provision in the Act conferring any power to frame rules or to issue directions, upon the State Commission. Section 16 provides for composition of State Commission; Section 17 delineates the jurisdiction thereof. It reads: 17. Jurisdiction of the State Commission. — (1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction— (a) to entertain— (i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore; and (ii) appeals against the orders of any District Forum within the State; and (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State, where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity. (2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction,— (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally work for gain, as the case may be, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises.” There is not even a residuary provision which confers in it, any power of superintendence upon the district fora. However, being the apex forum within the State, the administrative control over the district fora can be inferred. However, being the apex forum within the State, the administrative control over the district fora can be inferred. The manner in which a district forum has to function is dealt with under Sections 11 and 12 of the Act. Commensurate with the statement of objects and reasons, these provisions simply provide for submission of complaint by a consumer, issuance of a notice by the forum to the opposite party and adjudication thereof in a very informal manner. The circular issued by the 1st respondent, which is challenged in the writ petition; reads: “All the Presidents of District Fora are hereby informed that whenever a Complaint is filed against Partnership Firm or Company, the office should require the Complainant to file a certificate of Registrar of Firms showing the name of the partners, and in the case of Companies certificate from the Registrar of Companies showing the names of the Directors along with copies of Memorandum of Association and Articles of Association in order to find out the persons to be sued or sued. The above instructions should be followed scrupulously. ” From this, it becomes clear that whenever any complaint is submitted against a partnership firm or a company, the complainant must not only furnish the required details thereof, but also must enclose certificate of registration of firms in case of a partnership firm and certificate of registration, memorandum of association and articles of association, in case, if the complaint is against a company. It is a matter of common knowledge that the relief in the proceedings under the Act are mostly against firms or companies as regards the deficiency in the service or defect in manufacture. The petitioner instituted proceedings before the District Forum i.e., the 2nd respondent against a construction company i.e., the 3rd respondent and it was given SR No.1644 of 2010. The dispute was in relation to construction of an apartment. The complaint was returned on 08-11-2010 with an endorsement that the petitioner shall file certificate of registration of the 3rd respondent – company from the Registrar of Companies. The petitioner felt aggrieved by that. Even where an aggrieved person files a suit, it would be sufficient if he furnishes the particulars of the defendants against whom he claims relief. Order XXX of CPC deals with the suits that are filed against firms and other persons carrying on business. The petitioner felt aggrieved by that. Even where an aggrieved person files a suit, it would be sufficient if he furnishes the particulars of the defendants against whom he claims relief. Order XXX of CPC deals with the suits that are filed against firms and other persons carrying on business. It is only under Rule 2 of Order XXX that a firm, which figures as a plaintiff, is placed under obligation to declare the names and places of residences of the persons comprised in the firm, when demanded by the defendants. Such a requirement is not provided when the firm or company is shown as a defendant. When this is the arrangement in a regular suit, the question of a more stringent or complicated procedure being prescribed in relation to a complaint submitted before a consumer forum, does not arise. While examining the legality of the impugned circular, first, the source of power under which it is issued needs to be verified. The second step is to examine whether it conforms to the relevant provisions of the Act or the letter and spirit thereof. On the first aspect, we have not come across any provision that confers power upon the State Commission to issue such a circular. In the preceding paragraphs, we have given an indication that being the superior forum at a state level, some regulatory power can be inferred in favour of the State Commission. However, when any step taken in that behalf is put to question, it can be sustained, if only a specific provision exists therefor. This is particularly so, when the aggrieved party contends that the circular is contrary to the Act. Coming to the second aspect, we find it difficult to sustain the provision. Sections 12 and 13 that regulate the proceedings before a District Forum do not speak of any such requirement. The rules framed by the Government of Andhra Pradesh are also silent on this. A perusal of Sections 12 and 13 of the Act discloses that a complainant has just to file, if not drop a complaint before the forum, ventilating his grievance. The manner in which a complaint is to be filed is provided for under Section 12 and the steps to be taken thereon, are indicated in Section 13. Section 12 and clauses (a) and (b) of Section 13 of the Act read: 12. The manner in which a complaint is to be filed is provided for under Section 12 and the steps to be taken thereon, are indicated in Section 13. Section 12 and clauses (a) and (b) of Section 13 of the Act read: 12. Manner in which complaint shall be made.— (1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by – (a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided; (b) any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not; (c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or (d) the Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.(2) Every complaint filed under sub-section (1) shall be accompanied with such amount of fee and payable in such manner as may be prescribed. (3) On receipt of a complaint made under sub-section (1), the District Forum may, by order, allow the complaint to be proceeded with or rejected: Provided that a complaint shall not be rejected under this section unless an opportunity of being heard has been given to the complainant: Provided further that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was received. (4) Where a complaint is allowed to be proceeded with under sub-section (3), the District Forum may proceed with the complaint in the manner provided under this Act: Provided that where a complaint has been admitted by the District Forum, it shall not be transferred to any other court or tribunal or any authority set up by or under any other law for the time being in force. Explanation. Explanation. - For the purpose of this section “recognised consumer association” means any voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being in force”. 13. Procedure on admission of complaint. — (1) The District Forum shall, on admission of a complaint, if it relates to any goods,— (a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his 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 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 in the manner specified in clauses (c) to (g). (The remaining part of the Section is omitted since it is not relevant for the purpose of this case).” When such is the simplicity of the procedure stipulated under the Act, there cannot be any justification to place restrictions and burden upon the complainants through the circular. When a plaintiff in a suit is not placed under obligation to furnish the details as to the composition or registration of a firm or company that is shown as a defendant, it is just unimaginable as to how a complainant in a proceedings under the Act can be required to furnish such details in respect of a firm or company that is shown as a respondent in the complaint. The circular runs contrary to the letter and spirit of the Act which is reflected in Clause 4 of the Statement of Objects and Reasons that has been extracted in the preceding paragraphs. In Writ Petition No. 2545 of 2011, this very circular was challenged. A Division Bench of this Court which heard the matter did not undertake any discussion with reference to the relevant provision of law. In Writ Petition No. 2545 of 2011, this very circular was challenged. A Division Bench of this Court which heard the matter did not undertake any discussion with reference to the relevant provision of law. After taking note of the contentions advanced by the petitioner on the one hand and the learned Government Pleader on the other hand, the following observation was made: “The State Commission issued the impugned circular for production of certain certificates specifying the names of the Partners and the Directors in order to ascertain the particulars of the persons to be sued or sued. Therefore, the State Commission in exercise of its administrative powers issued the same for effective functioning of the internal mechanism. With regard to the matters pertaining to the Partnership firm or Company, the names of Partners and the Directors are required for the purpose of adjudication. Therefore, we are not inclined to interfere with the impugned circular. Accordingly, the Writ Petition is dismissed. No order as to costs.” Attention was not focussed on to the relevant provisions of the Act and the comparative provisions of the CPC, much less to the Statement of Objects and Reasons of the Act. We have already pointed out that the circular would place a complainant before a forum, in a more disadvantageous and difficult situation, than a plaintiff in an ordinary suit, before a civil Court. When the intention of the Parliament was to provide a speedy and simple remedy in comparison to a suit, the step taken by the State Commission making the proceedings more stringent cannot be sustained. The view taken by the Bench which heard Writ Petition No. 2545 of 2011 cannot be treated as an authoritative pronouncement on the circular, nor a correct statement of law. We, therefore, hold that the circular is ultra vires the Act and we accordingly set aside the same. The writ petition is accordingly allowed. The miscellaneous petitions filed in this writ petition shall stand disposed of. There shall be no order as to costs.