Today Homes & Infrastructure Pvt. Ltd. vs Sanjay Ahuja

For the purpose of computation of the cases filed before the National Commission, the Office is directed to register the case as First Appeal and number it accordingly.

These First Appeals, under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as "the 2019 Act"), has been filed by M/s Today Homes & Infrastructure Pvt. Ltd. through its Resolution Professional against the Order dated 13th March, 2020, passed by the State Consumer Disputes Redressal Commission, Delhi at New Delhi (hereinafter referred to as "the State Commission") in Complaint Cases No. 286, 287, 288, 289, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306 & 307 of 2017, filed by Sanjay Ahuja and other Complainants. The State Commission by the Impugned Order has allowed the Complaints, filed by Sanjay Ahuja and other Complainants, and directed M/s Today Homes & Infrastructure Pvt. Ltd. (Appellant herein) to refund the entire amount received from the Complainants, including service tax alongwith compensation in the form of simple interest @ 10% p.a. from the date of each payment till the date on which entire amount alongwith compensation is refunded, with a further direction to pay ₹10,000/- as costs of litigation to each of the Complainants. The payment was directed to be made within three months from receipt of copy of the Order.

An Application has been filed by M/s Today Homes & Infrastructure Pvt. Ltd. (Appellant herein) for exemption from pre-deposit of the amount, as provided under Second Proviso to Sub Section (1) of Section 51 of the 2019 Act, which has come into force w.e.f. 20th/24th July, 2020.

The learned Counsel appearing for M/s Today Homes & Infrastructure Pvt. Ltd. (Appellant herein) submitted that the Appellant is not in a position to deposit the amount as contemplated under the Second Proviso to Section 51(1) of the 2019 Act. The learned Counsel further submitted that under Sub-Section (2) of Section 51 of the 2019 Act an Appeal lies to the National Commission from an Order passed in Appeal by the State Commission, where there is no requirement of pre-deposit of 50% of the amount awarded by the State Commission, whereas under the Second Proviso to Sub Section (1) of Section 51 of the 2019 Act the Appellant is required to deposit fifty percent of the amount in terms of the Order passed by the State Commission before the National Commission so that the National Commission may entertain the Appeal. A harmonious construction of the various provisions of Section 51 of the 2019 Act has to be made and, if that is done, then the necessary corollary is that the deposit of 50% of the amount awarded by the State Commission for entertaining the appeal is not mandatory but only directory in nature.

The learned Counsel also referred to and relied upon a decision of the Hon'ble Supreme Court of India in the case of M/s Shreenath Corp. & Ors. Vs. Conum. Educ. & Res. Society & Ors., reported in (2014) 8 SCC 657, and submitted that it is open to the National Commission to pass an appropriate interim order including conditional order of stay.

We have heard the learned Counsel for the M/s Today Homes & Infrastructure Pvt. Ltd. (Appellant herein) and have considered the various pleas raised by the learned Counsel.

Before adverting to the various pleas raised by the learned Counsel for the Appellant, we deem it appropriate for ready reference to reproduce Section 51 of the 2019 Act:

"51. (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.

(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."

From a perusal of Section 51 of the 2019 Act, we find that under Sub Section (1) a right of Appeal has been given to any person who is aggrieved by the Order passed by the State Commission in exercise of the powers conferred by Sub Clause (i) or (ii) of Clause (a) of Sub Section (1) of Section 47. Sub Clause (i) or (ii) of Clause (a) of Sub Section (1) of Section 47 deals with the powers of the State Commission to entertain Complaints only. The Appeal has to be filed within a period of thirty days of such Order. However, the First Proviso to Sub Section (1) of Section 51 gives the discretion to the National Commission to entertain the Appeal even after the period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period meaning that it has the power to condone the delay in filing the Appeal beyond thirty days. The Second Proviso to sub Section (1) of Section 51 provides that the Appeal shall not be entertained by the National Commission of the person who is required to pay any amount in terms of the Order of the State Commission unless fifty percent of that amount has been deposited.

Sub-Section (2) of Section 51 of the 2019 Act provides a second Appeal to be preferred before the National Commission in an order passed by the State Commission in Appeal. However, the second Appeal should involve a substantial question of law. Sub Section 3 to 5 of Section 51 are not being referred to as they are not relevant for deciding the issue involved in these cases.

In our considered opinion the intention of the Parliament while enacting 2019 Act is that if the Complaint has been decided by any one forum then the person who has been directed to pay certain amount should deposit fifty percent of that amount if a first Appeal is being filed before the next forum. The provisions of Sub-Section (1) of Section 51 of the Consumer Protection Act, 2019 deals with the First Appeal being filed before the National Commission against an Order passed by the State Commission in the Complaint Case and, therefore, there is a requirement of deposit of 50% of the amount awarded by the State Commission.

We may mention here that similar provision has been made by the Parliament in Section 41 of the 2019 Act, which provides for preferring an appeal against an order passed by the District Forum before the State Commission. For ready reference, Section 41 is reproduced below:

"41. Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed:

Provided that the State Commission may entertain an appeal after the expiry of the said period of forty-five days, if 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 District Commission, shall be entertained by the State Commission unless the appellant has deposited fifty per cent. of that amount in the manner as may be prescribed:

Provided also that no appeal shall lie from any order passed under sub-section (1) of section 81 by the District Commission pursuant to a settlement by mediation under section 80."

Likewise, under Section 67 of the 2019 Act, a provision has been made for filing an Appeal before the Hon'ble Supreme Court against an order passed by the National Commission under Sub-Clause (i) or (ii) of Clause (a) of Sub-Section (1) of Section 58, which deals with the orders passed in the Complaint Cases. The Second Proviso of Section 67 also requires deposit of 50% of the amount awarded by the National Commission before the Appeal can be entertained by the Hon'ble Supreme Court. For ready reference, Section 67 of the 2019 Act is reproduced below:

"67. Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of section 58, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order:

Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if 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 National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent. of that amount in the manner as may be prescribed."

From a reading of the aforesaid provisions, it is absolutely clear that the Parliament wanted to make it mandatory for the Opposite Party in the Complaint Case to deposit a minimum of 50% of the amount awarded by the Consumer Fora/Commissions while preferring First Appeal.

So far as the judgment of the Hon'ble Supreme Court in the case of M/s Shreenath Corp. & Ors. Vs. Conum. Educ. & Res. Society & Ors. (Supra), relied upon by the learned Counsel, is concerned, we may mention here that in Paragraph-11 and 12 of the said decision, the Apex Court has held that unless the Appellant has deposited the pre-deposit amount, the Appeal cannot be entertained by the National Commission. Paragraphs 11 and 12are reproduced below for ready reference:

"11. 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 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. Condition of pre-deposit is there to avoid frivolous appeals.

(Underlined by us)

It is not the case of any of the appellants that the Consumer Forum including 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 appropriate interim order including conditional order of stay. Entertainment of an appeal and stay of proceeding pursuant to order impugned in the appeal stands at 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."

(Underlined by us)

Thus, the condition for pre-deposit of 50% awarded by the State Commission in Complaint Case in an Appeal preferred before the National Commission is mandatory. As held by the Hon'ble Supreme Court in the case of M/s. Shreenath Corp. & Others (Supra) in paragraph 11 reproduced above condition of pre-deposit is there to avoid frivolous appeals. This Commission cannot entertain any Appeal unless the concerned Appellant has deposited 50% of the amount awarded by the State Commission. There is no provision in the 2019 Act, empowering the National Commission to waive, relax or reduce the amount to be deposited under the Second Proviso, referred to above. The present First Appeals are, therefore, defective for want of pre-deposit of the fifty percent of the amount directed by the State Commission in the impugned Order, which has not been made by the Appellant.

Accordingly, the First Appeals cannot be entertained and are hereby dismissed.