INDIAN AIRLINES CORPORATION vs Consumer Education And Research Society Ahmedabad

IN these two petitions filed by the INdian Airlines Corporation and Ors., the common question raised is whether a State Commission Constituted under the Consumer Protection Act, 1986 (hereinafter called the Act) can validly entertain a complaint against a Corporation and exercise jurisdiction to adjudicate upon it in a case where no part of the cause of action has arisen within its territorial jurisdiction merely because the Corporation has a Branch Office within the territory of the concerned State.

SECTION 11 of the Act deals with the jurisdiction of the District Forum. Sub -clause(2) thereof states : - "Jurisdiction of the District Forum - (1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed is less than rupees one lakh. (2) A complaint shall be instituted in a District Forum within the local 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 personally works for gain, or (b) Any of the opposite parties, where there are more Lain one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business, 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 no separate corresponding provision relating to a State Commission and under Section 18 it is only Section 12 to 14 that are made applicable to the disposal of disputes by a State Commission. The jurisdiction of the State Commission will therefore be governed by the general principles of law with reference to which jurisdictions of Courts and Tribunals are ordinarily determined. The best guidance in respect of this matter is contained in the relevant provisions of the Code of Civil Procedure and more particularly Section 20 which directly deals with the matter. Section 20 of C.P.C. is in the following terms : "Other suits to be instituted where defendants reside or cause of action arises. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction, - (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. Explanation - A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a sub -ordinate office, at such place.

IF the principles incorporated in the above section read along with the Explanation thereto are to be applied, it is clear beyond doubt that where the defendant against whom a suit is proposed to be instituted is a corporation, the suit will lie only in the Court within the local limits of whose jurisdiction the sole or principle office of the corporation in India is situated except in cases where a cause of action has arisen at any other place where the corporation has a sub -ordinate office in which event the suit can be instituted in a Court within whose jurisdiction such sub -ordinate office is situated.

EVEN if the provisions of Section 11 of the Act are to be regarded as applicable in relation to the jurisdiction of the State Commission. It is to be noticed that sub -Section 2 of Section 11 is virtually a reproduction of the language used in Section 20 of C.P.C. with only substitution of the expressions "opposite parties" for "defendants" and "complaint" for "suit" which changes are of no consequence so far as the scope and effect of the provision are concerned. In our opinion it will be reasonable to interpret sub -Section (2) of Section 11 as laying down the same principle as is contained in section 20 C.P.C. which is to be understood in the light of the Explanation appended thereto which is only clarificatory in nature. We are unable to agree with the view expressed by the State Commission in the order passed by it in Consumer Education and Research Society and Anr. v. Canara Bank etc. II (1991) CPJ 148 Petition of Complaint No. 5 of 1990 and (a copy of which order was produced and relied on before us by the respondents) that the Parliament must be taken to have deliberately omitted the Explanation contained in Section 20(2) of C.P.C. while incorporating a provision similar to it in sub -Section (2) of Section 11 of the Act. In our opinion it will be reasonable to assume that the words used in Section 11(2)(b) were intended by Parliament to have the same scope, ambit and meaning as those contained in Clause (2) of Section 20 of C.P.C. as clarified by the Explanation appended to the said Section in the Code of Civil Procedure. It is well established that an Explanation is appended to a Section only with a view to explain the meaning of the words contained there in and it might well have been incorporated ex a bundanti acutely (See Bengal Immunity Company Ltd. v. State of Bihar, AIR 1955 SC 661 and S. Sundaram Pillai v. Pattabiruman, AIR 1985 SC 582 - An Explanation is not a substantive provision in any sense of the term but is merely meant to explain and clarify any ambiguities which may have crept in the statuary provisions. The proper function of an explanation is to make plain or elucidate what is enacted in the substantive provision and not to add to or subtract form it. When this Commission enquired from the Counsel for the Respondent as to the precise objection to the jurisdiction of Consumer Disputes For a being determined in accordance with the provisions of Section 20(2) of C.P.C., he could not spell out any.

We are inclined to take the view that in construing the words actually and voluntarily "carries on business" occurring in Clauses (a) and (b) of Section 11(2) of the Act in relation to a corporation, it would be proper to attribute to them the same sense as is carried by those words occurring in Section 20(2) of C.P.C. not withstanding the absence of the explanation in Section 11(2) of the Act.

The object and purpose of the Consumer Protection Act is to provide a speedy and inexpensive remedy to consumers as an alternative to the remedy already available to them by way of institution of a suit in the appropriate Civil Court. It does not appear to us to have been intended by Parliament that while instituting a complaint against the corporation which has its branches spread over all over India, a consumer should have the choice of file his complaint anywhere in the country irrespective of where the cause of action, arose merely for the reason that the corporation may have a branch office functioning in the particular place where the complaint is instituted. If Section 11 of the Act were to be interpreted in the manner contended for by the respondents it would lead to anomalous situations which are not conducive to the speedy administration of redressal justice by the Forums. To take one extreme illustration, if in the case of a banking company (which is a corporation in the eye of law) in relation to a transaction which took place between a consumer and the branch of the bank in Kanyakumari, the consumer was to be at liberty to institute his complaint in Srinagar where a branch of the same bank may be functioning all the records relating to transaction and witnesses who can be in a position to speak about it would be at Kanyakumari while the trial of the complaint is to proceed at Srinagar. This would be most inappropriate and undesirable from the point of view of speedy dispensation of justice as also of avoidance of unnecessary harassment, expenditure and inconvenience to the parties. With due respect, we are unable to share the view expressed by the State Commission, Gujarat in its order aforecited that the object of Parliament in enacting the Consumer Protection Act was to confer such a choice on the consumers to institute the complaint at any place within the country according to their whims and fancies. In our opinion it will be much more reasonable to assume that in respect of complaints instituted against a corporation Parliament intended that the Forum before which a complaint is instituted should have either the nexus or accrual of the cause of action within its territory or the location of the principal office of the corporation within its territory. We would therefore, hold that unless one of these tests is satisfied, the institution of the complaint before the Consumer Redressal Forum whether it be a District Forum or State Commission will not be legal and the Forum cannot validly exercise jurisdiction for adjudicating upon such a complaint.

THE two cases pending before the State Commission .Gujarat, out of which these petitions have been arisen are themselves sufficient to demonstrate the need for placing a restricted interpretation on section 11(2) of the Act by understanding its scope to be the same as that of Section 20(2) of C.P.C. In the first case (M.P. No. 42 of 1990), the complainant No. 1 is a registered voluntary consumer association based at Ahmedabad. Complainant No. 2 is a resident of Goa. Complainant No. 2 had purchased a ticket for a flight to Lucknow via Bombay by Indian Airlines Flight No. IC -195 on 17.8.1989. He traveled to Bombay but was unable to proceed further to Lucknow because the flight No. IC -195 which was scheduled to depart from Bombay for Lucknow at 3.40 p.m. was ultimately cancelled. Complainant No. 2 has authorized Complainant No. 1 to prefer on his behalf a complaint against the Indian Airlines Corporation seeking to recover compensation amounting to Rs. 1,04.489.20 for the alleged loss caused to him on account of the cancellation of flight No. IC -195. It will be noticed that no part of the cause of action had arisen within the State of Gujarat. The cancelled sector of the flight was one originating from Bombay and the cause of action, if any, can therefore be said to have" arisen only in Bombay. The complaint however has been filed before the State Commission, Gujarat at Ahmedabad on the ground that the Indian Airlines has an office at that place.

IN M.P. No. 43 of 1990 also the complainant No. 1 is the same registered consumer association located at Ahmedabad. Complainant No. 2 is a resident of Calcutta. He had travelled by an Indian Airlines flight from Bombay to Calcutta and it is alleged that in the course of the flight there was severe turbulence and that the complainant No. 2 fell out of his seat and suffered injuries to his back. Complainant No. 1 has been authorized to file a complaint on his behalf for the recovery of a sum of Rs. 8.38 lakhs from the Indian Airlines Corporation by way of compensation under the various heads set out in the petition. In this case also no part of the cause of action had arisen within the State of Gujarat. The flight in question was from Bombay to Calcutta and the passenger is a permanent resident of Calcutta. The Forum at Ahmedabad has been chosen by him only because the Indian Airlines has an office at Ahmedabad. Not withstanding, the objection raised by the respondents (Indian Airlines Corporation) challenging the jurisdiction of the State Commission, Gujarat to entertain and adjudicate upon the two complaints, the Stale Commission declined to decide the said question as a preliminary issue and proceeded to conduct the adjudication into the merits of the complaints. It was at this stage that these two petitions were filed before this Commission and stay of further proceedings before the State Commission obtained.

NO other point has been urged before us in these two petitions.

FOR the reasons indicated above, we are clearly of the opinion that the State Commission acted without jurisdiction in entertaining the two complaints and proceeding to adjudicate upon them. We accordingly allow the slow petitions and direct that the two complaint petitions -Complaint Petition No. 4 of 1990 and Complaint Petition No. 5 of 1990 pending before the State Commission at Ahmedabad will stand dismissed on the ground that the complaint petitions are not maintainable before the Stale Commission, Gujarat. The parties will bear their respective costs. Order accordingly.