Manohar Infrastructure and Constructions Private Limited vs Sanjeev Kumar Sharma

Manohar Infrastructure and Constructions Private Limited ...Appellant(s)

Versus

Sanjeev Kumar Sharma and Ors. ...Respondent(s)

With

CIVIL APPEAL NO. 7099 OF 2021

TDI Infrastructure Ltd. ...Appellant(s)

Versus

Jyoti Bhardwaj ...Respondent(s)

With

CIVIL APPEAL NO. 7100 OF 2021

M/s. TDI Infrastructure Ltd. ...Appellant(s)

Versus

Surender Sharma ...Respondent(s)

With

CIVIL APPEAL NO. 7101 OF 2021

M/s. TDI Infrastructure Ltd. ...Appellant(s)

Versus Signature Not Verified

Digitally signed by R

Ved Prakash ...Respondent(s) Natarajan Date: 2021.12.07 17:13:07 IST Reason:

With 1 CIVIL APPEAL NO. 7104 OF 2021

M/s. TDI infrastructure ltd. ...Appellant(s)

Versus

Kusum Gaur and Anr. ...Respondent(s)

With

CIVIL APPEAL NO. 7102 OF 2021

M/s. TDI Infrastructure ltd. ...Appellant(s)

Versus

Ved Prakash ...Respondent(s)

And

CIVIL APPEAL NO. 7103 OF 2021

M/s. TDI Infrastructure Ltd. ...Appellant(s)

Versus

Kabita Bhattacharya and Anr. ...Respondent(s)

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned order passed

by the National Consumer Disputes Redressal Commission, New Delhi

(hereinafter referred to as “National Commission”) dated 27.09.2021 in

I.A. No. 3621 of 2021 in First Appeal No. 330 of 2021 by which, the

2 National Commission, while staying the order passed by the State

Commission has directed the appellant to deposit the entire decretal

amount with the State Commission, the original appellant – builder –

M/s. Manohar Infrastructure and Constructions Private Limited, has

preferred the Civil Appeal No. 7098 of 2021.

2. Feeling aggrieved and dissatisfied with the impugned order passed

by the National Commission dated 31.08.2021 passed in I.A. No. 5880

of 2021; I.A. No.5881 of 2021; I.A. No.5882 of 2021; I.A. No. 5883 of

2021 and I.A. No. 5884 of 2021 in respect of First Appeal Nos. 856 of

2020, 857 of 2020, 858 of 2020, 859 of 2020 and 860 of 2020 by which

the National Commission has dismissed the said I.A.s and refused to

modify or review or recall its earlier order dated 04.02.2021 by which,

while admitting the respective appeals, the National Commission granted

stay of the orders passed by the State Commission, subject to deposit of

entire decretal amount with up-to-date interest, if any, the original

appellant/applicant – builder – M/s. TDI Infrastructure Ltd. has preferred

the present Civil Appeal Nos. 7099 to 7104 of 2021.

3. At the outset, it is required to be noted that feeling aggrieved and

dissatisfied with the order passed by the State Commission directing the

appellant(s) to refund the amount paid by the respective home buyers

with interest, the appellant(s) have preferred the first appeals before the

National Commission under Section 51 of the Consumer Protection Act,

3 2019 (hereinafter referred to as the “Act, 2019”). That in the said

appeal(s), the respective appellant(s)/applicant(s) filed the said

application(s) to stay the respective order(s) passed by the State

Commission.

4. At this stage, it is required to be noted that as the said respective

appellant(s) have deposited 50 per cent of the decretal amount by

preferring the appeal(s), which the appellant(s) are required to deposit

as a pre-deposit at the time of preferring the appeal(s) as required under

Section 19 of the Act, 2019. But the National Commission has stayed

the order passed by the State Commission on condition that the

appellant(s) shall deposit the entire decretal amount with interest, if any,

with the State Commission. Feeling aggrieved and dissatisfied with the

order(s) passed by the National Commission passed on the stay

application(s) directing the appellant(s) to deposit the entire decretal

amount with interest, if any, while staying the respective order(s) passed

by the State Commission, the original appellant(s) have preferred the

present appeals.

5. Shri Sidharth Dave, learned Senior Advocate has appeared on

behalf of the appellant in Civil Appeal No. 7098 of 2021 and Ms. Kanika

Agnihotri, learned Advocate has appeared on behalf of the appellant –

M/s. TDI Infrastructure Ltd. in Civil Appeal Nos. 7099 to 7104 of 2021.

4

6. Shri Sidharth Dave, learned Senior Advocate on behalf of the

respective appellant has vehemently submitted that the National

Commission cannot pass an order to deposit the entire decretal amount

and/or any amount higher than 50 per cent of the amount in terms of the

order of the State Commission while entertaining the appeal in view of

the second proviso to Section 51 of the Act, 2019. It is submitted that

according to the statutory intent, the requirement of deposit at best can

be 50 per cent of the decretal amount and not higher than that. Learned

counsel appearing on behalf of the respective appellant(s) have heavily

relied upon the number of orders passed by this Court against several

orders passed by the National Commission granting stay of the order of

the State Commission subject to deposit of the entire decretal amount

with the State commission and this Court has disposed of the respective

special leave petition(s) with the direction that the appellant(s) shall

deposit 50 per cent of the decretal amount in view of the second proviso

to Section 51 of the Act, 2019.

6.1 It is further submitted that assuming that the National Commission

can pass the order to deposit the entire amount and/or any amount

higher than 50 per cent of the amount while staying the order passed by

the State Commission, in that case also such order(s) on stay

application(s) is/are not to be passed mechanically. It is submitted that

power to grant stay are akin to power to grant stay of the decree passed

5 by the Civil Court under the provisions of the Civil Procedure Code,1908,

namely Order XLI Rule 5.

6.2 It is submitted that a speaking order is required to be passed by

the National Commission, if on facts, the National Commission proposes

to pass an order to deposit the entire decretal amount and/or any

amount higher than 50 per cent. It is submitted that directing the

appellant(s) to deposit the entire decretal amount/entire amount would

be unreasonable and taking away the right of the appellant/aggrieved

party to challenge the order passed by the State Commission in an

appeal under Section 51 of the Act, 2019.

6.3 It is submitted that considering second proviso to Section 51 of the

Act, 2019, it can be said that the legislative intent is that before the

appeal of the aggrieved party is considered by the National Commission

on merits, he has to deposit 50 per cent of the decretal amount and it is

sufficient that 50 per cent amount of the decretal amount is deposited

and not higher than that.

7. Learned counsel appearing on behalf of the original complaint(s)-

respondent(s) in the appeals preferred by the TDI Infrastructure Ltd. has

vehemently submitted that as such the appellant - TDI Infrastructure Ltd.

has not challenged the original order dated 04.02.2021 directing the

appellant(s) to deposit the entire amount ordered by the State

commission as a condition for grant of stay. It is submitted that

6 thereafter by order dated 23.03.2021 the National Commission

dismissed the respective appeal(s) for waiver of the condition of deposit

of the entire decretal amount by earlier order dated 04.02.2021 and the

same is also not challenged. It is submitted that what is challenged is

the subsequent order dated 31.08.2021 passed in respective I.A. Nos.

5880 of 2021 to 5884 of 2021 in respective First Appeal Nos. 856 of

2020 to 860 of 2020, which were filed for modification of the earlier order

dated 04.02.2021. It is therefore submitted that in the absence of any

challenge to the earlier main National Commission’s orders dated

04.02.2021 and 23.03.2021, the present appeal(s)/special leave

petition(s) challenging only the order dated 31.08.2021 refusing to

modify the earlier order dated 04.02.2021 is not maintainable and the

same is not required to be entertained.

7.1 On merits, while opposing the present appeals, it is vehemently

submitted that as such the order passed by the State Commission is

akin to a money decree and therefore while staying the money decree

the National Commission is absolutely justified in directing the appellant

– judgment debtor to deposit the entire decretal amount while staying the

order passed by the State Commission. It is submitted that even

otherwise in the present case the order passed by the State Commission

is to refund the amount to the respective home buyers, which they

actually deposited and paid to the builder. It is therefore submitted that it

7 is their money that the State Commission has directed to refund. It is

therefore submitted that as such the National Commission has rightly

directed to deposit the entire decretal amount.

7.2 It is further submitted by the learned counsel appearing on behalf

of the original complainant(s) that the issue, whether the National

Commission can pass an order to deposit the entire amount and/or any

amount higher than 50 per cent of the amount as such is no longer res

integra in view of the decision of this Court in the case of Shreenath

Corporation and Ors. Vs. Consumer Education and Research

Society and Ors., (2014) 8 SCC 657.

7.3 It is submitted that while considering the pari materia provision

under the Consumer Protection Act, 1986 (hereinafter referred to as the

“Act, 1986) second proviso to Section 19, it is observed and held that the

pre-deposit condition has no nexus with grant of interim order of stay. It

is held that while considering the stay of the order passed by the State

Commission, the National Commission can direct the appellant(s) to

deposit the entire amount. It is submitted that deposit of 50 per cent of

the amount awarded by the State Commission would be a pre-condition

to entertain the appeal filed by the aggrieved party -appellant and that is

the minimum mandatory requirement before the appeal and application

for stay is considered on merits.

8 7.4 It is submitted that so far as the earlier orders passed by this Court

directing the appellant(s) to deposit only 50 per cent of the amount is

concerned, it is submitted that in none of the orders any law is laid down

by this Court. It is submitted that on the contrary, the issue involved in

the present appeal(s) is directly and squarely covered by the decision of

this Court in the case of Shreenath Corporation and Ors. (supra) by

which this Hon’ble Court has considered the issue in detail on merits and

has considered the object and purpose of deposit of the amount as a

pre-deposit. It is submitted that in the case of Shreenath Corporation

and Ors., this Court also considered the Order XLI Rule 5 and Order

XXXIX Rule 1 of the CPC alongwith the object and purpose of the

deposit of the amount as a pre-deposit before the appeal is entertained

under Section 19 of the Act, 1986.

7.5 Making above submissions, it is prayed to dismiss the present

appeals.

8. We have heard learned counsel for the respective parties at

length.

9. The short question which is posed for consideration of this Court

is:

“Whether in an appeal under Section 51 of the Consumer

Protection Act, 2019 and while considering the stay application to stay

the order passed by the State Commission, the National Commission

9 can pass an order to deposit the entire amount and/or any amount

higher than 50 per cent of the amount in terms of the order of the State

Commission while entertaining the appeal under Section 51 of the Act,

2019?”

10. While considering the aforesaid issue/question, Section 51 of the

Consumer Protection Act, 2019 is required to be referred to, which reads

as under:-

“51. Appeal to National Commission.—(1) Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of Section 47 may prefer an appeal against such order to the National 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 National Commission shall not entertain the appeal after the expiry of the said period of thirty days unless 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 State Commission, shall be entertained by the National Commission unless the appellant has deposited fifty per cent of that amount in the manner as may be prescribed. (2) Save as otherwise expressly provided under this Act or by any other law for the time being in force, an appeal shall lie to the National Commission from any order passed in appeal by any State Commission, if the National Commission is satisfied that the case involves a substantial question of law.

(3) In an appeal involving a question of law, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal.

10 (4) Where the National Commission is satisfied that a substantial question of law is involved in any case, it shall formulate that question and hear the appeal on that question:

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the National Commission to hear, for reasons to be recorded in writing, the appeal on any other substantial question of law, if it is satisfied that the case involves such question of law. (5) An appeal may lie to the National Commission under this section from an order passed ex parte by the State Commission.”

11. On a fair reading of Section 51 of the Act, 2019, more particularly,

second proviso to Section 51, it appears that the appellant(s) in an

appeal against the order passed by the State Commission may prefer an

appeal, however, before the appeal is entertained by the National

Commission, the appellant(s) has to deposit 50 per cent of the amount.

So, it is the pre-condition to deposit 50 per cent of the amount as

ordered by the State Commission before his appeal is entertained by the

National Commission. Therefore, it is a condition precedent to deposit

50% of the amount before his appeal is entertained by the National

Commission. However, that does not take away the jurisdiction of the

National Commission to order to deposit the entire amount and or any

amount higher than 50 per cent of the amount while considering the stay

application to stay the order passed by the State Commission. Rules for

entertainment of an appeal on deposit of 50 per cent of the amount

ordered by the State Commission, which is a statutory pre-deposit and 11 the grant of interim order on the stay application subject to deposit of

further amount are distinct and different. Pre-deposit condition as per

second proviso to Section 51 has no nexus with the grant of interim

order of stay by the National Commission subject to deposit of the

amount awarded by the State Commission.

12. An identical question came to be considered by this Court in the

case of Shreenath Corporation and Ors. (supra). In the aforesaid

case, this Court was considering the pari materia provision under the

Act, 1986 and second proviso to Section 19, which provided pre-deposit

of amount specified therein, i.e., 50 per cent of the amount awarded by

the State Commission or Rs.35,000/- whichever is less. In the aforesaid

case, this Court had occasion to consider the object and purpose of pre-

deposit condition while entertaining the appeal under Section 19 by the

National Commission, against the order passed by the State

Commission. In paragraphs 8 to 10, it is observed and held as under:-

“8. This Court in State of Haryana v. Maruti Udyog Ltd. [(2000) 7 SCC 348], while dealing with the case of waiver of “pre-deposit” in an appeal under first proviso to Section 39(5) of the Haryana General Sales Tax Act held:

(SCC p. 353, para 7)

“7. … There cannot be any dispute that right of appeal is the creature of the statute and has to be exercised within the limits and according to the procedure provided by law. It is filed for invoking the powers of a superior court to redress the error of the court below, if any. No right of appeal can be conferred 12 except by express words. An appeal, for its maintainability, must have a clear authority of law. Sub-section (5) of Section 39 of the Act vests a discretion in the appellate authority to entertain the appeal if it is filed within sixty days and the amount of tax assessed along with penalty and interest, if any, recoverable from the persons has been paid. The aforesaid restriction is subject to the proviso conferring discretion upon the appellate authority to dispense with the deposit of the amount only on proof of the fact that the appellant was unable to pay the amount. Before deciding the appeal, the appellate authority affords an opportunity to the party concerned to either pay the amount or make out a case for the stay in terms of proviso to sub-section (5) of Section 39 of the Act. Once the conditions specified under sub-section (5) of Section 39 are complied with, the appeal is born for being disposed of on merits after hearing both the sides.”

9. The second proviso to Section 19 of the Act mandates pre-deposit for consideration of an appeal before the National Commission. It requires 50% of the amount in terms of an order of the State Commission or Rs 35,000, whichever is less for entertainment of an appeal by the National Commission. Unless the appellant has deposited the pre-deposit amount, the appeal cannot be entertained by the National Commission. A pre-deposit condition to deposit 50% of the amount in terms of the order of the State Commission or Rs 35,000 being condition precedent for entertaining appeal, it has no nexus with the order of stay, as such an order may or may not be passed by the National Commission. The condition of pre-deposit is there to avoid frivolous appeals.

10. It is not the case of any of the appellants that the Consumer Forum, including the State and National Commissions, has no power to pass interim order of stay.

If the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded, it is open to the National Commission to pass an 13 appropriate interim order including conditional order of stay. Entertainment of an appeal and stay of proceeding pursuant to order impugned in the appeal stand on different footings, at two different stages. One (pre- deposit) has no nexus with merit of the appeal and the other (grant of stay) depends on prima facie case, balance of convenience and irreparable loss of party seeking such stay.”

13. We are in complete agreement with the view taken by this Court in

the case of Shreenath Corporation and Ors. (supra). Therefore, it is

held that National Commission can pass an order to deposit the entire

amount and/or any amount higher than 50 per cent of the amount in

terms of the order of the State Commission while staying the order

passed by the State commission.

However, at the same time, while considering the stay application

against the order passed by the State Commission and while passing

the order to deposit the entire amount and/or any amount higher than 50

per cent of the amount, the National Commission has to assign some

reasons and pass a speaking order why the conditional stay is being

granted on condition of deposit of the entire amount and/or any amount

higher than 50 per cent of the amount. Such an order on the stay

application is not to be passed mechanically. Even in the case of

Shreenath Corporation and Ors. (supra), it is observed that if the

National Commission after hearing the appeal of the parties in its

discretion wants to stay the amount awarded by the State Commission,

it is open to the National Commission to pass an appropriate interim

14 order including a conditional order of stay. The order passed by the

State Commission directing the appellant to refund the amount and/or

pay any amount higher than 50 per cent can be said to be akin to a

money decree. Even as per Order XLI Rule 5, the general rule is that

normally there shall not be any unconditional stay of a money decree,

however, at the same time, the Appellate Court may pass an appropriate

conditional order while staying the impugned decree depending upon the

facts of the case and by giving cogent reasons. Therefore, while

considering the stay application requesting to stay the order passed by

the State Commission and as observed and held hereinabove, the

National Commission can pass an order to deposit the entire amount

and/or any amount higher than 50 per cent of the amount while staying

the order passed by the State commission, however, the National

Commission has to pass a speaking order giving some reasons why in

the facts of the particular case the conditional stay of the order passed

by the State Commission is to be passed subject to deposit of the entire

amount and/or any amount higher than 50 per cent of the amount

awarded by the State Commission and that too after giving an

opportunity to the appellant as well as to the respondent. The order on

the stay application is not to be passed mechanically. It must reflect an

application of mind by the National Commission why the order passed by

the State Commission is to be stayed on condition of deposit of the

15 entire amount and/or any amount higher than 50 per cent of the amount

awarded by the State Commission. However, at the same time, there is

no discretion at all to stay the order passed by the State Commission

subject to deposit of any amount less than 50 per cent of the amount

which is required to be deposited as a pre-deposit before the appeal is

entertained as per second proviso to Section 51 of the Act, 2019.

14. Now in so far as the various orders passed by this Court relied

upon by the learned counsel for the respective appellant(s) by which, the

special leave petition(s) have been disposed of directing the appellant(s)

to deposit only 50 per cent of the amount as ordered by the State

Commission are concerned, at the outset, it is noted that in none of the

cases any law has been laid down by this Court. It appears that while

issuing a notice(s), the appellant(s) was/were directed to deposit 50 per

cent of the amount as ordered by the State Commission and thereafter

without discussing any law and/or considering anything on merits and

the scheme of the Act, 2019, more particularly, Section 51 of the Act,

2019, the special leave petition(s) has/have been disposed of. On the

contrary, there is a direct binding decision of this Court in the case of

Shreenath Corporation and Ors. (supra) laying down the law after

discussing the scheme, object and purpose of pre-deposit and the power

of the National Commission to grant conditional stay of deposit of the

entire amount and/or any amount higher than 50 per cent of the amount. 16

15. The sum and substance of the above discussion and our

conclusions would be that:-

(i) pre-deposit of 50 per cent of amount as ordered by the State

Commission under second proviso to Section 51 of the

Consumer Protection Act, 2019 is mandatory for

entertainment of an appeal by the National Commission;

(ii) the object of the said pre-deposit condition is to avoid

frivolous appeals;

(iii) the said pre-deposit condition has no nexus with the grant of

stay by the National Commission;

(iv) while considering the stay application in staying the order

passed by the State Commission, the National Commission

can grant a conditional stay directing the appellant(s) to

deposit the entire amount and/or any amount higher than 50

per cent of the amount in terms of the order of the State

Commission;

(v) however, at the same time, the National Commission has to

assign some cogent reasons and/or pass a speaking order

when the conditional stay of the order passed by the State

Commission is passed subject to deposit of the entire

amount and/or any amount higher than 50 per cent of the

amount either as an ex parte order or after hearing both

sides and considering the facts and circumstances of the

case.

17

(vi) Thus, the National Commission can grant a conditional stay

of the order passed by the State Commission on deposit of

the entire amount and/or any amount higher than 50 per cent

of the amount as ordered by the State Commission in the

aforesaid manner.

16. Considering the impugned order(s) passed by the National

Commission, it appears that the said order(s) on the I.A.(s)/stay

application(s) directing the appellant(s) to deposit the entire decretal

amount while staying the respective order(s) passed by the State

Commission have been passed mechanically and without assigning any

reason(s) and/or no speaking order is passed. Therefore, the matters

are remanded to the National Commission to decide the said

application(s) afresh and pass an appropriate order on the said

application(s) in light of the observations made hereinabove. Till then,

the respondent(s) herein shall not take any coercive steps against the

appellant(s) herein

17. In view of the above discussion and for the reasons stated above,

all the appeals succeed in part. The respective I.A.(s) in respective

appeal(s) are ordered to be restored to the file of the National

Commission and the National Commission to pass fresh orders on the

respective I.A.(s)/stay application(s) and pass speaking order/reasoned

order considering the observations made hereinabove. It will be open

18 for the original complainant(s) to submit that as it is a money decree and

the order passed by the State Commission is to refund the amount

deposited by them as a home buyer, therefore, the appellant(s) be

directed to deposit the entire amount and/or any amount higher than 50

per cent of the amount and the same may be considered by the National

Commission after giving opportunity to the appellant(s). At the same

time, it will also be open for the appellant(s) to pray for an unconditional

stay without deposit of the entire amount and/or any amount higher than

50 per cent of the amount. The said contentions may be considered by

the National Commission while exercising the discretion and considering

the respective stay application(s). The aforesaid exercise has to be

completed within a period of eight weeks from today. Either of the

parties to place a copy of the present judgment and order before the

National Commission forthwith.

All these appeals are partly allowed to the aforesaid extent only

with the law laid down on the powers of the National Commission to

grant conditional stay of the order passed by the State Commission on

condition of deposit of the entire amount and/or any amount higher than

50 per cent of the amount as observed hereinabove.

………………………………….J. [M.R. SHAH]

NEW DELHI; ………………………………….J. DECEMBER 07, 2021. [B.V. NAGARATHNA]

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