Split NCDRC Bench: Supreme Court Says Third Member Who Decided the Whole Appeal Committed No Illegality

Case at a glance: The Supreme Court has set aside an Allahabad High Court order that quashed an NCDRC decision on the ground that a third member, to whom a difference of opinion was referred under Section 58(3) of the Consumer Protection Act, 2019, decided the whole appeal instead of only the points of difference. Because the referring members never identified those points, the third member had to survey the entire record, and his approach was not an illegality warranting Article 227 interference. The matter goes back to the High Court for a fresh decision on merits.

In Complaint No. 13 of 2006, the Uttar Pradesh State Commission awarded Rs 95 lakh with interest on 4 December 2012. In the respondent’s appeal to the NCDRC, the two members differed on 19 March 2021: the presiding member would have dismissed the complaint, while the other member would have reduced compensation to Rs 93 lakh.

On reference, the third member agreed with the second member on 9 January 2024, apportioned the Rs 93 lakh among the complainants, with special safeguards for one complainant’s share, and gave consequential directions. The High Court, in an Article 227 petition, quashed this on 11 December 2024, holding that the third member had exceeded his jurisdiction.

The Key Question Before the Court

When a reference under Section 58(3) is made to a third member, can he decide the appeal himself, or must he only answer the referred points and send the matter back to the referring Bench?

Reference Practice Meets Common Sense

The Court accepted the general rule, drawn from State of Punjab v. Salil Sabhlok, (2013) 02 SC CK 0011, that a referee answers the referred questions (and logically connected subsidiary ones) and returns the matter. It noted that the CPC has no equivalent of Section 392 CrPC or Section 433 BNSS, and that on a plain reading Section 58(3) confines the third member to the points of difference. It distinguished Bansi Dhar, (1985) 12 SC CK 0014, relied on by the High Court, as concerning interim stay relief under the Income Tax Act.

But the referring Bench had not identified the points of difference; it framed five questions going to the root of the complaint and inseparable from the evidence. The third member therefore had to survey the entire material, and the Court declined to disapprove his approach at this distance of time. Deciding the appeal was not an illegality warranting Article 227 interference, and the Single Judge had objected only to procedure, not to the answers on merits.

What the Court Actually Held

• The High Court’s order of 11 December 2024 was set aside.
• The Article 227 application was remanded to the High Court for a fresh decision on merits.
• All issues of fact and law were left open, and an early decision was requested.
• The NCDRC is not to proceed further until the High Court decides.

Why This Judgment Matters

• It addresses an unsettled practice point on references to a third member under consumer law.
• It cautions writ courts against setting aside outcomes on procedural grounds alone.
• It keeps a long-running consumer claim moving after two decades.

What Should Advocates Take Away From the Judgment?

For Consumer Practitioners

• Ask referring members to specify the exact points of difference.
• Where the questions referred cover the whole case, expect the third member to examine the full record.

For Writ Petitioners

• Challenge third-member decisions on merits, not just on procedure.
• Remember that Article 227 interference requires a real illegality.

Key Takeaways

Frequently Asked Questions

It set aside the High Court’s procedural quashing and remanded the Article 227 application for decision on merits; all issues remain open.

As described in the judgment, it provides for reference of points of difference between members to another member.

No. The Court expected the NCDRC not to proceed until the High Court decides.

Conclusion