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THE Consumer Protection Act was enacted by Parliament in December, 1986 "to provide for the protection of the interests of consumers and for that purpose to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumers disputes and for matters connected therewith".
CHAPTER III of the Consumer Protection Act, 1986 (herein after called the ''Act'') consisting of Sections 9 to 27 contains the provisions relating to the establishment of Consumer Redressal Agencies, their jurisdiction, powers and procedure etc. This CHAPTER was brought into force with effect from July 1,1987 as per Notification S.O. 568(E) issued by the Government of India. Under the scheme of the statute a three tier hierarchy of quasi judicial authorities is to be set up with the District Forum at the base level, the State Commission at the intermediate level and the National Commission at the apex level. It was laid down in Section 11 of the Act as originally enacted that the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed is less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. Similarly, under Section 17 which deals with the jurisdiction of the State Commission, it was provided in the Act as originally passed that the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one lakh but does not exceed rupees ten lakhs. The above two Sections amongst some other provisions of the Act were amended by the Consumer Protection (Amendment) Ordinance, 1993 with effect from June 18,1993. By Clause (9) of the Amending Ordinance, the words "does not exceed rupees five lakhs" occurring in Section 11 of the Principal Act were substituted for the words "is less than rupees on lakh". Likewise by Clause (14) of the Amending Ordinance, the words "five lakhs but does not exceed rupees twenty lakhs" were substituted for the words "one lakh but does not exceed rupees ten lakhs" occurring in Section 17 of the Principal Act. The result was that by virtue of the aforesaid amendments introduced in the provisions of Sections 11 and 17 of the Act with effect from 18.6.1993, the jurisdiction of the District Forum got enhanced so as to enable it to entertain all claims not exceeding rupees five lakhs in value and the jurisdiction of the State Commission became enlarged so as to make it competent to entertain all claims which have a valuation above rupees five lakhs but not exceeding rupees twenty lakhs. The above provisions contained in the Ordinance were re-enacted verbatim in the Consumer Protection (Amendment) Act, 1993 with retrospective effect from 18.6.1993.
The question raised in these three Revision Petitions is whether consequent on the enhancement of the pecuniary jurisdiction of the District Forum from rupees one lakh to rupees five lakhs, the State Commission has been divested of its jurisdiction to adjudicate upon complaints having a valuation above rupees one lakh and not exceeding rupees five lakhs which had been validly instituted before it prior to the commencement of the amending Ordinance in conformity with the law as it then obtained.
THE State Commission, Karnataka has taken the view that by reason of the amendments carried out by the Act in Sections 11 and 17 it has been divested of jurisdiction to adjudicate on pending complaints instituted before it prior to the date of promulgation of the Ordinance (18.6.1993) where the value of goods or services and the compensation, if any, claimed does not exceed rupees five lakhs. Based on the said view the State Commission has passed the orders impugned in these three Revision Petitions directing that three complaints which were pending before it and which had been instituted much prior to the promulgation of the Ordinance be all sent to the Urban District Forum, Bangalore for adjudication since the value of goods and services and the compensation claimed in the complaint petitions did not exceed rupees five lakhs. THE aforementioned orders passed by the State Commission declining to exercise its jurisdiction and adjudicate upon the complaint petitions are challenged by the revision petitioners. We have carefully examined the matter with reference to reported decisions of the Federal Court of India and the Supreme Court and we are firmly and clearly of opinion that the view taken by the State Commission, is erroneous in law and that the impugned orders passed by it require to be set aside.
IN our opinion the approach of the State Commission is seriously vitiated by the fact that instead of considering the crucial aspect as to whether the amendments introduced by the Ordinance are only prospective in operation or whether they would on the other hand affect pending proceedings and have the effect of divesting the litigants of their right to have their cases adjudicated upon by the very Forums before which they had been validly instituted in accordance with the law as it stood at the time of such institution, the State Commission laid undue emphasis on the word "entertain" which occurs in Sections 11 and 17 of the Act. It is well established principle to be kept in mind while construing the effect of any Amending Act that any amendment to a statute which affects the vested rights of an individual which are substantive in nature must be presumed to be only prospective in operation unless the Legislature by language which expressly or by necessary implication has clearly indicated its intention to bring about the change with retrospective operation. Generally and Amending Act should be taken to have been passed in order to advance the purpose of the Act as reflected in the Preamble thereto. The main scheme of the original enactment will ordinarily control the meaning of the amending provisions. The aim and purpose of the parent Act being to facilitate the speedy and inexpensive settlement of consumer disputes. This laudable objective will certainly not be advanced if the aforesaid provisions of the Amending Act are to be construed as requiring the State Commission to discontinue the adjudication of cases which have been pending before it having a valuation not exceeding five lakhs which may have already progressed to various stages of the trial procedure and to transfer all such cases to the District Forum where the entire process will have to be commenced all over again right from the stage of issue of notices. The result of such transfer of pending cases will be only that the trial and final disposal of the cases would be considerably delayed and the complainants (consumers) would also be put to unnecessary additional expenditure by reason of the change of venue of the adjudication. The paramount factor to be considered while interpreting the scope of an amendment which either takes away the pre-existing jurisdiction of a Court or Forum or brings about a substantial change in the limits of the jurisdiction is the Legislative intent; whether the Parliament has indicated by express words or by clear implication on intention that the changes brought about by the amendment should have retrospective effect so as to take away the vested rights of parties in relation to pending proceedings already instituted by them validly prior coming into force of the amendment. Unfortunately, this aspect has not at all been considered by the State Commission which appears to have rested its conclusion only on the fact that the expression "entertain" has to be construed as taking in not merely the initial filing of a proceeding but also the adjudication to be conducted thereupon. Reliance has been placed on certain rulings of the Supreme Court and of some High Courts wherein the scope of the expression "entertain" has been explained. We consider, with respect, that the State Commission was in error in thinking that a decision on the question as to whether the amending provision is prospective in operation or whether it has retrospective effect would depend upon the meaning of the word "entertain" occurring in the parent Act itself. We are also of the further view that the interpretation of the expression "substitution'''' which is the only other aspect discussed by the State Commission in its order can hardly have any impact on the question as to whether the amendment in question has the effect of taking away the vested rights. While substitution no doubt cannotes replacement, the question nevertheless remains whether such replacement is with retrospective effect or whether it has only prospective operation. As early as in 1943, the Federal Court of India had authoratively ruled in Venugopala Reddiar and Another v. Krishnaswami Reddiar alias Raja Chidambara Reddiar and Another A.I.R. (30) 1943 Federal Court 24, that the right to continue a duly instituted suit before a particular Court or Forum is in the nature of a vested right and it cannot be taken away except by a clear indication of Legislative intention to that effect. By the Constitution Act, 1935 the territory of Burma was separated from British India and it ceased to be a part of British India. Dealing with the question whether the British Indian Court had jurisdiction to continue to adjudicate upon a suit validly instituted before it in respect of properties situated in Burma while the territory of Burma formed part of British India, the Federal Court held that since no contrary intention was expressly expressed or indicated by implication by any of the provisions contained in the Government of India Act, 1935 which brought about the separation, the British Indian Court continued to have jurisdiction to proceed with the trial of a suit which was already pending before it even though it related to properties situated in Burma. Dealing with the effect of Section 38(2)(e) of the Interpretation Act which provided that any legal proceeding in respect of any right acquired of accrued under the repealed enactment may be "continued" as if the repealing Act had not been passed, the Federal Court further said that:- "The view has some times been taken that what is saved is a substantive right acquired under the repealed enactment and that the paragraph cannot be invoked in cases where the substantive right is not taken away by the repealing Act, but the forum for or the method of enforcing it is changed. It has, on the other hand, been maintained that a right to obtain relief in a suit pending at the time when the repealing enactment comes into operation is itself in the nature of a substantive-right."
The following observations made by their Lordships at page 28 of the Report is particularly apposite in the present context: "The true position, as we have already stated, is not whether there is an express provision permitting the continuance of pending proceedings, but whether there is any clear indication against the continuance of pending proceedings to their normal termination."
In Mohd. ldris and Others v. Sat Narain and Others - A.I.R. (1966) S.C. 1499, a Constitution Bench of five Judges of the Supreme Court had to consider a similar question. In that case an application under Section 12 of the U.P. Agriculturists Relief Act for redemption of a mortgage of Sir Land had been filed by the party who figured as the respondent before the Supreme Court and the said application was pending before the Munsif, East Allahabad, at the time when the U.P. Zamindari Abolition and Land Reforms Act was amended by Section 67 of Act No. 16 of 1953 as a consequence of which the U.P. Agriculturists Relief Act stood repealed. The question raised in the appeal before the Supreme Court was whether after such repeal, the application for redemption which was still pending could continue to be tried by the Munsif, East Allahabad under the U.P. Agriculturists Relief Act. Dealing with the said question, the Supreme Court held:"There is nothing in the Abolition Act which takes away the right of suit in respect of pending action.there is no provision in the Abolition Act that pending cases were to stand transferred to the Assistant Collector for disposal. Such provisions are cornonly found in a statute which takes away the jurisdiction of one Court and confers it on another. From these two circumstances it is to be inferred that if there is at all any expression of intention, it is to keep Section 6 of the General Clauses Act applicable to pending litigation."
THE same principle was reiterated by the Supreme Court in Manujendra Dutt v. Purneda Prasad Roy Chowdhury and Others, A.I.R. (1967) S.C. 1419. THE question which arose for consideration in that case was whether the deletion of Section 29 of the Calcutta Thika Tenancy Act, 1949 by Amendment Act (6 of 1953) had the effect of depriving the Thika Controller of his jurisdiction to continue the adjudication of a suit which was pending before him by virtue of an order of transfer to his Court passed by the Subordinate Judge of Alipore for adjudication under Section 29 of the Tikha Tenancy Act. Rejecting the contention advanced before it by the Counsel for the appellant that the deletion of Section 29 from the Calcutta Tikha Tenancy Act by Section 8 of the Amending Act of 1953 had the effect of depriving the Controller of his jurisdiction to try the suit, the Supreme Court observed thus :- "In our view this contention has no force. Though Section 29 was deleted by the Amendment Act of 1953 the deletion would not affect pending proceedings and would not deprive the Controller of his jurisdiction to try such proceedings pending before him at the date when the Amendment Act came into force. Though the Amendment Act did not contain any saving Clause, under Section 8 of the Bengal General Clauses Act, 1899, the transfer of the suit having been lawfully made under Section 29 of the Act its deletion would not have the effect of altering the law applicable to the claim in the litigation. THEre is nothing in Section 8 of the Amending Act of 1953 suggesting a different intention and therefore the deletion would not affect the previous operation of Section 5 of the Calcutta Thika Tenancy Act or the transfer of the suit to the Controller or anything duly done under Section 29. That being the correct position in law the High Court was right in holding that in spite of the deletion of Section 29, the Controller still had the jurisdiction to proceed with the said suit transferred to him."
REFERENCE may also be made with advantage to the rulings of High Courts of Bombay, Madhya Pradesh and Punjab and Haryana in C.P. Bannerjee v. B.S. Irani, A.I.R (1949) Bombay 182, Commissioner of Income-tax, M.P. v. A.N. Tiwari, (1980) 124 ITR 680 (M.P.) and Commissioner of Income-tax v. Raman Industries, (1980) 121 ITR 405 (P&H) where also similar views have been taken. In the first decision aforementioned Bhagwati, J. (Senior) sitting as a Judge of the Bombay High Court followed the ruling of the Federal Court cited supra (1943 Federal Court 24 ) and held that- "Where an action has been rightly instituted in a Court which had jurisdiction to entertain it, it would require strong and distinct words to defeat such vested right which has accured to the litigant."
It was further held that- "The absence of a provision in the Amending Act for transfer of proceedings instituted in the original side of the High Court to the Small Causes Court had the result of continuing the jurisdiction of the High Court in the matter of determination and trial of suits which had been rightly received by it."
Likewise, in (1980) 121 ITR 405 cited above a Division Bench of the Punjab and Haryana High Court held that while a statute dealing with procedure is generally regarded as retrospective and its provisions will apply to proceedings pending at the time of its enactment, a statute which affects substantive vested rights will be only prospective in operation unless there is a clear indication by the legislature to the contrary effect. The learned Judges further observed that the jurisdiction of a Tribunal to try a case is vested right and is to be determined according to the law in force at the time of its institution and any change in law brought about while a case is pending cannot affect the right of parties to continue proceedings in that Tribunal in the absence of clear provisions to the contrary. To the same effect is the dictum of a Division Bench of the Madhya Pradesh High Court in Commissioner of Income-tax v. A.N. Tiwari, (1980) 124 ITR 680. Therein the Division Bench referred to the rulings of the Supreme Court in Mohd. Idris and Others v. Sat Narain and Ors., A.I.R. (1966) S.C. 1499 and Manujendra v. Purnedu Prosad Roy Chowdhury and Ors., A.I.R. (1967) S.C. 1419 and held - "It may be stated as a general principle that a law which brings about a change in forum does not affect pending actions unless intention to the contrary is clearly evinced. One of the modes by which such an intention is shown is by making a provision for change-over of proceedings from the Court or tribunal where they are pending to the Court or tribunal which under the new law gets jurisdiction to try them."
The legal position is further placed beyond all realm of doubt by a very recent pronouncement of the Supreme Court in Commissioner of Income-tax, Orissa v. Shri Dhadi Sahu, JT 1992 (6) S.C. 714 wherein a Division Bench consisting of Yogeshwar Dayal and Dr. A.S. Anand, JJ. had occasion to consider the question whether an amendment carried out in Section 274(2) of the Income-tax Act by the Taxation (Laws) Amendment Act, 1970 with effect from April 1, 1971 whereby the jurisdiction of the Inspecting Assistant Commissioner of Income-tax to hold proceedings for imposition of penalty under Section 271(1)(c) was restricted to cases where the income in respect of which particulars have been concealed or incorrect particulars have been furnished by the assessee execeeded Rs. 25,000/-. Prior to the said amendment, the jurisdiction to deal all cases concerned with imposition of penalty under Section 271(1)(c) where the minimum penalty imposable exceeded a sum of Rs. 1,000/was vested in the Inspecting Assistant Commissioner of Income-tax. The question which arose for consideration before the Supreme Court was whether by reason of the amendment of Section 274(2) of the Income-tax Act, the Inspecting Assistant Commissioner stood divested of his jurisdiction to adjudicate upon proceedings pending before him for the imposition of penalty in cases where the income forming the subject matter of concealment etc. did not exceed Rs. 25,000/which proceedings had been validly commenced by him prior to the coming into force of the amending Act or whether they had all to be transferred? to the Income-tax Officer. Expressing their approval of the dictum laid down by the decisions of the Bombay, Madhya Pradesh and Punjab and Haryana High Courts cited above and following the earlier rulings of the Supreme Court in A.I.R. (1966) S.C. 1499 and A.I.R. (1967) S.C. 1419, the learned Judges held- "That the general principle is that a law which brings about a change in the forum does not affect pending actions unless intention to the contrary is clearly shown. One of the modes by which such an intention is shown is by making a provision for change over of proceedings, from the Court or the Tribunal where they are pending to the Court or the Tribunal which under the new law gets jurisdiction to try them."
It was further observed that- "It is also true that no litigant has any vested right in the matter of procedural law but where the question is of change of forum it ceases to be a question of procedure only. The forum of appeal or proceeding is a vested right as opposed to pure procedure to be followed before a particular forum. The right becomes vested when the proceedings are initiated in the Tribunal or the Court of first instance and unless the legislature has by express words or by necessary implication clearly so indicated, that vested right will continue inspite of the change of jurisdiction of the different Tribunals or forums."
THE Supreme Court overruled the decision of the Karnataka High Court in Addl. Commissioner of Income-tax, Karnataka v. M.Y. Chandragi, (1981) 128 ITR 256 and also the decision of the Allahabad High Court in Commissioner of Income-tax v. Om Sons, (1979) 116 ITR 215. In the light of the principles laid down as above by the aforesaid decisions of the Federal Court of India and the Supreme Court and also by the rulings of the Bombay, Madhya Pradesh and Punjab and Haryana High Courts referred to supra which have all been approved in the latest judgment of the Supreme Court referred to above, it becomes clear that the correct legal position is that a right to have the adjudication proceeding continued before the State Commission itself became vested in the complainants when the validly instituted complaints before the State Commission prior to the coming into force of the amending Ordinance whereby the provisions of Section 11 of the Consumer Protection Act were amended. Since there is no provision for transfer of proceedings from the State Commission to a District Forum or anything else indicative of Parliamentary intention that the said amendment is to have retrospective effect the jurisdiction of the State Commission to continue the adjudication in respect of pending matters validly instituted prior to the coming into force the amendment stands unaffected.
WE hold that the contrary view taken by the Karnataka State Commission is incorrect and unsustainable in law and that the State Commission has acted illegally and without jurisdiction in directing the transfer of the case to the District Forum. Hence the impugned orders passed by the State Commission directing that the complaint petitions which had been validly instituted before it long prior to the commencement of the Amendment Ordinance should be sent to the Bangalore Urban District Forum for the reason that the value of goods or services and the compensation claimed therein did not exceed Rs. 5 lakhs are hereby set aside. These Revision Petitions are accordingly allowed. The parties will bear their respective costs. Revision Petitions allowed.