Rajeev Hitendra Pathak & Ors vs Achyut Kashinath Karekar & Anr

Rajeev Hitendra Pathak & Others ... Appellants

Versus

Achyut Kashinath Karekar & Another ... Respondents

WITH

CIVIL APPEAL NO.8155 OF 2001

M.O.H. Leathers ... Appellants

Versus

United Commercial Bank ... Respondents

J U D G M E N T

Dalveer Bhandari, J.

1. These appeals emanate from the order dated 16.11.2005

in Revision Petition No.551 of 2005 and order dated 12.7.2001

in Miscellaneous Petition No.1 of 2001 in Original Petition

No.110 of 1993 passed by the National Consumer Disputes

Redressal Commission, New Delhi.

2 2. The main question which arises for consideration is

whether the District Consumer Forums and the State

Commissions have the power to set aside their own ex parte

orders or in other words have the power to recall or review

their own orders?

3. The questions of law involved in both the appeals are

identical, therefore, we deem it appropriate to dispose of both

these appeals by a common judgment.

4. Brief facts necessary to dispose of these appeals are

recapitulated as under:

CIVIL APPEAL NO.4307 OF 2007

5. Smita Achyut Karekar was admitted to Ashirwad Nursing

Home as she was suffering from the ailment of slip disc. The

operation was performed on 8.10.1997. It was noticed, at

about 3.45 pm on that day, that her blood vessels had

ruptured accidentally during the surgery. She was declared

dead at 5.35 pm.

6. The complainants issued a legal notice on 24.7.1999.

Reply to the legal notice was sent on 7.8.1999. The

complainants filed complaint alleging deficiency in service and

3

claimed compensation of Rs.15,00,000/-. The complainants

did not take necessary steps to remove objection and to

complete procedure under the Consumer Protection Act, 1986.

The State Commission, Maharashtra issued notice to the

opposite parties/appellants herein on 10.02.2004. On

9.9.2004, the State Commission dismissed the complaint for

want of prosecution. On 04.11.2004, the complainants filed

an application for recalling 9.9.2004 order and consequently

the State Commission recalled the order dated 9.9.2004 and

restored the complaint.

7. The appellants aggrieved by the said order preferred a

Revision Petition No.551 of 2005 before the National

Consumer Disputes Redressal Commission, New Delhi. The

appellants in the revision petition made two main arguments

before the Commission : firstly, that the State Commission did

not have the power to restore the complaint and, secondly,

that the State Commission restored the complaint without

issuing notice to the appellants. The National Commission

dismissed the revision petition which has been challenged by

the appellants before this Court.

4 8. The appellants relied on the judgment in the case of

Jyotsana Arvind Kumar Shah & Others v. Bombay

Hospital Trust (1999) 4 SCC 325. In this case, the Court

held that the State Commission did not have the power to

review or recall its ex parte order.

9. In New India Assurance Co. Ltd. v. R. Srinivasan

(2000) 3 SCC 242, this Court took the contrary view and held

that the State Commission could review or recall its ex parte

order.

10. In the instant case, a two-Judge Bench of this Court vide

judgment and order dated 17.9.2007 reported in 2007 (11)

SCALE 166 noted the controversy and observed as under:

"5. In Jyotsana's case it was observed at para 7 as

follows:

"We heard the learned counsel on both

sides for quite some time. When we asked

the learned counsel appearing for the

respondent to point out the provision in

the Act which enables the State

Commission to set aside the reasoned

order passed, though ex parte, he could

not lay his hands on any of the provisions

in the Act. As a matter of fact, before the

State Commission the appellants brought

to its notice the two orders, one passed

by the Bihar State Commission in Court

Master, UCO Bank v. Ram Govind

5

Agarwal 1996 (1) CPR 351 and the other

passed by the National Commission in

Director, Forest Research Institute v.

Sunshine Enterprises 1997 (1) CPR 42

holding that the redressal agencies have

no power to recall or review their ex parte

order. The State Commission had

distinguished the abovesaid orders on the

ground that in those two cases the

opponents had not only not appeared but

also failed to put in their written

statements. In other words, in the case

on hand, according to the State

Commission, the opponent (respondent)

having filed the written statements, the

failure to consider the same by the State

Commission before passing the order

would be a valid ground for setting aside

the ex parte order. The State

Commission, however, fell into an error in

not bearing in mind that the Act under

which it is functioning has not provided it

with any jurisdiction to set aside the ex

parte reasoned order. It is also seen from

the order of the State Commission that it

was influenced by the concluding portion

of the judgment of the Bombay High

Court to the effect that the respondent

(writ petitioner) could approach the

appellate authority or make an

appropriate application before the State

Commission for setting aside the ex parte

order, if permissible under the law. Here

again, the State Commission failed to

appreciate that the observation of the

High Court would help the respondent, if

permissible under the law. If the law does

not permit the respondent to move the

application for setting aside the ex parte

order, which appears to be the position,

the order of the State Commission setting

aside the ex parte order cannot be

6

sustained. As stated earlier, there is no

dispute that there is no provision in the

Act enabling the State Commission to set

aside an ex parte order."

6. Subsequently, in New India Assurance case

this Court appears to have taken a different view as

it is evident from what has been stated in para 18,

the same reads 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. That 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."

7. In the latter case i.e. New India Assurance case

reference was not made to the earlier decision in

Jyotsana case. Further the effect of the

amendment to the Act in 2003 whereby Section 22A

was introduced has the effect of conferment of

power of restoration on the National Commission,

but not to the State Commission. In view of the

divergence of views expressed by coordinate

7

Benches, we refer the matter to a larger Bench to

consider the question whether the State

Commission has the power to recall the ex parte

order. Records be placed before the Hon'ble Chief

Justice of India for appropriate orders."

11. We have been called upon to decide whether the State

Commission has the power to recall an ex parte order.

12. Shri Siddharth Bhatnagar, learned senior counsel

appearing for the appellants in Civil Appeal No.4307 of 2007

submitted that the Consumer Tribunals set up under the

Consumer Protection Act, 1986 are creatures of that Statute

and derive their powers only from the express provisions of the

Statute. He has drawn our attention to various provisions of

the Consumer Protection Act, 1986 to strengthen his

submission. He referred to Section 13(4) of the Consumer

Protection Act, 1986 which reads as under:

"13 (4) For the 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 the attendance

of any defendant or witness and examining the

witness on oath;

(ii) the discovery and production of any document

or other material object produced as evidence;

8

(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."

13. Mr. Bhatnagar has also drawn our attention to

Regulation 26(1) of the Consumer Protection Regulations,

2005, framed in exercise of powers conferred by Section 30-A

of the Consumer Protection Act, 1986. Regulation 26(1) reads

as follows:

"26. Miscellaneous-- (1) In all proceedings before

the Consumer Forum, endeavour shall be made by

the parties and their counsel to avoid the use of

provisions of Code of Civil Procedure, 1908 (5 of

1908):

Provided that the provisions of the Code of Civil

Procedure, 1908 may be applied which have been

referred to in the Act or in the rules made

thereunder."

14. Mr. Bhatnagar submitted that only very few provisions of

the Code of Civil Procedure have been made applicable to the

proceedings before the District Forums and the State

Commissions under Section 18 of the Consumer Protection

9

Act, which applies Sections 13 and 14 to the State

Commission and the National Commission (under Section

22(1) are those under Section 13(4)). He relied on the

judgment of this Court in Morgan Stanley Mutual Fund v.

Kartick Das (1994) 4 SCC 225 to strengthen his argument

that the consumer tribunals can derive powers only from the

express provisions in the Statute. In the said case, the Court

observed as under:

"44. A careful reading of the above discloses that

there is no power under the Act to grant any interim

relief of (sic or) even an ad interim relief. Only a final

relief could be granted. If the jurisdiction of the

Forum to grant relief is confined to the four clauses

mentioned under Section 14, it passes our

comprehension as to how an interim injunction

could ever be granted disregarding even the balance

of convenience."

15. Mr. Bhatnagar also placed reliance on another judgment

of this Court in Gulzari Lal Agarwal v. Accounts Officer

(1996) 10 SCC 590. In this case, the Court relied on earlier

judgment of this Court in the case of Morgan Stanley Mutual

Fund and observed that the Consumer Forum has no

jurisdiction or power to pass any interim order pending

disposal of the original complaint filed before it.

10 16. Mr. Bhatnagar relied on Section 17 of the Act which deals

with the jurisdiction of the State Commission. Sections 17-A

and 17-B were added by the 2002 Amendment of the Act

dealing with the "Transfer of Cases" and "Circuit Benches"

respectively. The objects and reasons for introducing the said

provisions by way of the said amendment were as follows:

"Objects and Reasons-- Clause 15 (old) seeks to

insert a new Section 17-A to empower the State

Commission to transfer a case from one District

Forum to another District Forum within the State if

required for the ends of justice. It also seeks to

insert another new Section 17-B to enable the State

Commissions to hold Circuit Benches."

17. Mr. Bhatnagar also relied on Section 22 of the Act, which

deals with the power and procedure of the National

Commission. Before the 2002 Amendment, the said provision

was as follows:

"22. Power of and procedure applicable to the

National Commission-- The National Commission

shall, in the disposal of any complaints or any

proceedings before it, have--

a) the powers of a Civil Courts as specified in

Sub-Sections (4), (5) and (6) of Section 13;

b) the power to issue an order to the opposite

party directing him to do any one or more of

the things referred to in clauses (a) to (i) of

Sub-Section (1) of Section 14,

11

and follow such procedure as may be prescribed by

the Central Government."

18. After the 2002 Amendment, Section 22 of the Act now

reads as follows:

"22. Power and procedure applicable to the

National Commission -- (1) The provisions of

Sections 12, 13 and 14 and the rules made

thereunder for the disposal of complaints by the

District Forum shall, with such modifications as

may be considered necessary by the Commission,

be applicable to the disposal of disputes by the

National Commission.

(2) Without prejudice to the provisions contained in

Sub-Section (1), the National Commission shall

have the power to review any order made by it,

when there is an error apparent on the face of

record."

19. The 2002 Amendment also introduced Section 22A which

reads as follows:

"22A. Power to set aside ex parte orders.-Where

an order is passed by the National Commission ex

parte against the opposite party or a complainant,

as the case may be, the aggrieved party may apply

to the Commission to set aside the said order in the

interest of justice."

20. Mr. Bhatnagar contended that Section 22(2) was

introduced in 2002 to give the National Commission the power

to review its own order. This power could not have been used

12

by the Commission before the amendment. After amendment,

now the Commission has specific power to set aside an ex

parte order. This power has only been given to the National

Commission and not extended to the District Forums or the

State Commissions. If the legislature intended to give this

power to the State Commissions and District Forums then it

would have extended the same to those forums also.

21. Mr. Bhatnagar has also drawn our attention to the

objects and reasons for carrying out the amendment which

reads as follows:

"Objects and Reasons-- Clause 21 (old) seeks to

substitute Section 22 so that the provisions of

Sections 12, 13 and 14 and the rules made

thereunder for the disposal of complaints by the

District Forum, shall, with such modifications as

may be considered necessary by the Commission,

be applicable to the disposal of disputes by the

National Commission. It also seeks to empower the

National Commission to review any order made by it

when there is an error apparent on the face of

record. These provisions will make the powers and

procedures in respect of the National Commission

more explicit. It also seeks to insert new Sections

22-A, 22-B and 22-C and 22-D. New Section 22-A

empowers the National Commission to set aside ex

parte orders against the opposite party or

complainant in the interest of justice........"

13

22. Mr. Bhatnagar submitted that the limited applicability of

the provisions of the Civil Procedure Code to the Tribunals

under the Act is under Section 13(4) of the Act. There is no

power of review or recall under the said provision. Even under

Section 13(4)(vi), no Rule has been framed in terms of Section

30(1) by the Central Government which provides power to

review or recall of orders.

23. Learned senior counsel for the appellants also relied on

M/s Eureka Estates (P) Ltd. v. A.P. State Consumer

Disputes Redressal Commission and Others AIR 2005 AP

118 in which the Court observed that the District Forums and

the State Commissions are entitled to exercise only such

powers which are specifically vested in them under the Act

and the Rules.

24. Mr. Bhatnagar submitted that it is evident from the

Statement of Objects and Reasons of the Act that the purpose

of the Act is to provide speedy and simple redressal to

consumer disputes. It is for this reason that all the provisions

of the Civil Procedure Code have not been extended to the

Consumer Forums.

14 25. Mr. Bhatnagar further submitted that the salutary object

of speedy and simple redressal under the Act is to be found

inter alia in Sections 13(2) and (3) of the Act which provide for

the procedure to be adopted by the forum in deciding the

complaints admitted by it. The said provisions read as follows:

13. (2) The District Forum shall, if the complaints

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 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 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 parte on the basis of evidence brought

to its notice by the complainant where

the opposite party omits or fails to take

any action to represent his case within

the time given by the Forum.

15 (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-Sections (1) and (2) shall be called

in question in any court on the ground that the

principles of natural justice have not been complied

with."

26. Mr. Bhatnagar also relied on Section 12(3) of the Act

which reads as follows:

"12(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 Sub-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."

27. Mr. Bhatnagar tried to explain the legislative intent

behind introducing Section 22-A. According to him, only the

National Commission has been given power to set aside ex

parte orders and the same power has not been extended to the

District Forums or the State Commissions because against the

orders of the District Forums and the State Commissions,

16

appeal or revision can be filed before the State Commission

and the National Commission respectively. But in the case of

the orders of the National Commission, prior to the

amendment, the parties were compelled to approach this

Court even against the orders by which the cases were

dismissed in default. It became extremely expensive and time

consuming. In this view of the matter, it became imperative to

give this power to the National Commission.

28. According to the counsel for the appellants, in New

India Assurance Co. Ltd., this Court did not notice the

earlier decision in Jyotsana's case. He submitted that the

Tribunals constituted under the Consumer Protection Act,

1986 exercise only such powers as are expressly conferred by

the provisions of the said Act and Rules framed thereunder.

Since no power of review and recall was conferred on the

District Forums and the State Commissions, they can exercise

no such power.

29. The counter affidavit was filed by the respondents stating

that the Commission was justified in setting aside the ex parte

17

order and restoring the respondents' complaint. The counter

affidavit also states that the respondents cannot be deprived

of their right without contest on the basis of trivial

technicalities.

30. The respondents relied upon the judgment of this Court

in New India Assurance Co. Ltd. in which this Court held

that the Consumer Courts have inherent powers to restore the

complaints dismissed for default. It is also stated in the

counter affidavit that due to old age, respondent no.1 lost

track of the case and therefore, the State Commission was

justified in setting aside the ex parte order in order to ensure

that justice is done to the parties.

CIVIL APPEAL NO.8155 OF 2001

31. In Civil Appeal No.8155 of 2001, the National

Commission passed an ex parte order and in the appeal

against the order, this Court gave liberty to the appellants to

approach the Commission for setting aside the ex parte order.

Thereafter, an application was filed by the complainants for

review of the order. The Commission vide order dated

12.7.2001 (relied on the judgment of Jyotsana's case)

18

dismissed the application. Aggrieved by the said order, the

appellant has filed this appeal.

32. Mr. M.S. Ganesh, learned senior counsel appearing on

behalf of the appellants in Civil Appeal No.8155 of 2001

submitted that the National Commission has implied and

inherent power to recall the order dated 30.5.1996 passed in

Original Petition No.110 of 1993.

33. Mr. Ganesh also submitted that the notice of hearing

sent by the National Commission was never served on the

counsel for the appellants yet the National Commission

proceeded to an ex parte decision on the appellants' complaint

and dismissed it on the ground of limitation.

34. According to Mr. Ganesh, the decision in Jyotsana's

case is manifestly per incuriam. It does not even refer to the

doctrine of implied powers and was not aware of its

applicability. The later decision in New India Assurance Co.

Ltd. is expressly mindful of the doctrine. He submitted that

an external aid to the interpretation of the Consumer

Protection Act, 1986 also reinforces the above construction of

the Act.

19 35. We have carefully scrutinized the provisions of the

Consumer Protection Act, 1986. We have also carefully

analyzed the submissions and the cases cited by the learned

counsel for the parties.

36. On careful analysis of the provisions of the Act, it is

abundantly clear that the Tribunals are creatures of the

Statute and derive their power from the express provisions of

the Statute. The District Forums and the State Commissions

have not been given any power to set aside ex parte orders and

power of review and the powers which have not been expressly

given by the Statute cannot be exercised.

37. The legislature chose to give the National Commission

power to review its ex parte orders. Before amendment,

against dismissal of any case by the Commission, the

consumer had to rush to this Court. The amendment in

Section 22 and introduction of Section 22-A were done for the

convenience of the consumers. We have carefully ascertained

the legislative intention and interpreted the law accordingly.

20 38. In our considered opinion, the decision in Jyotsana's

case laid down the correct law and the view taken in the later

decision of this Court in New India Assurance Co. Ltd. is

untenable and cannot be sustained.

39. In view of the legal position, in Civil Appeal No.4307 of

2007, the findings of the National Commission are set aside as

far as it has held that the State Commission can review its

own orders. After the amendment in Section 22 and

introduction of Section 22A in the Act in the year 2002 by

which the power of review or recall has vested with the

National Commission only. However, we agree with the

findings of the National Commission holding that the

Complaint No.473 of 1999 be restored to its original number

for hearing in accordance with law.

40. There has been considerable delay in disposal of the

complaint. Therefore, we direct the State Commission to

dispose of the Complaint No.473 of 1999 [in Civil Appeal

No.4307 of 2007] as expeditiously as possible and in any event

within three months from the date of the communication of

this order.

21 41. Similarly, in Civil Appeal No.8155 of 2001, we set aside

the impugned order and direct the National Commission to

dispose of the Original Petition No.110 of 2003 de novo as

expeditiously as possible and in any event within three

months from the date of the communication of this order.

42. Both the appeals are disposed of accordingly. The parties

are directed to bear their own costs.

................................J.

(Dalveer Bhandari)

................................J.

(Mukundakam Sharma)

...............................J.

(Anil R. Dave)

New Delhi;

August 19, 2011