Skip to main content

Consumer commission can impose conditional stay

The Consumer Protection Act requires a party challenging an order in appeal to deposit the prescribed amount at the time of lodging the appeal. Can the appellate authority direct the appellant to deposit further money to grant conditional stay? This question has recently been decided by the Supreme Court in its July 7 judgment delivered by Justice Sudhansu Jyoti Mukhopadhaya and Justice V Gopala Gowda in the case of Shreenath Corporation & Others v/s CERS & Others.

Case study: Shreenath Corporation had constructed a building and had handed over possession of the flats in 1992. Within nine years of purchase, a portion of the building collapsed in January 2001 due to poor quality of construction. Several flat purchasers were killed while other sustained injuries. With the help of Consumer Education and Research Society (CERS), a complaint was filed against the builder, seeking compensation. The commission upheld the complaint and directed the firm to pay compensation ranging from Rs 1.5 lakh to Rs 18.6 lakh, along with 9% interest.

The builder appealed to the national commission. The Consumer Protection Act (CPA) requires a party challenging the order to deposit a certain amount of money when the appeal is lodged. In case of appeals to the national commission, this amount is 50% of the amount awarded or Rs 35,000, whichever is lower. Accordingly, the builder deposited Rs 35,000 per appeal.

The builder also applied for an interim stay on the enforcement of the state commission's order during the pendency of the appeal. The national commission granted conditional stay subject to the builder depositing 50% of the principal amount (excluding the interest component), within three months. The amount so deposited was to be invested in a fixed deposit with a nationalized bank. 

The builder challenged this interim order before the Supreme Court. The builder argued that since Rs 35,000 had already been deposited at the time of filing the appeal in accordance with the provisions of the CPA, the national commission had no authority to give a direction to deposit any further amount. 

The Supreme Court observed that the deposit of Rs 35,000 is a "pre-deposit", payable as a condition precedent to filing the appeal. The objective of this pre-deposit is to avoid frivolous appeals. At the time of hearing the appeal, the commission would have the power to pass suitable interim orders. The commission could exercise its discretion while passing such interim orders to either grant a total stay, or a conditional stay, or refusal to grant stay. 

The Supreme Court also observed that the amount payable as a pre-deposit and that which is payable under interim order occur at two different stages of the proceedings. The pre-deposit is payable at the time of filing the appeal and has no link with the merits of the dispute. In contrast, the direction to make a further deposit is passed during the hearing of the application for interim stay, and is determined on a consideration of the merits of the appeal, the balance of convenience, and whether irreparable loss would be caused to a party seeking a stay. 

The Supreme Court accordingly concluded that the interim order passed by the national commission was well within its jurisdiction, and dismissed the builder's appeal. 

Conclusion: It is the discretion of the appellate authority whether or not to grant stay or to impose conditional stay. If stay is not granted, the order has to be complied with regardless of pendency of the appeal. 

Article referred: http://timesofindia.indiatimes.com/India/Consumer-commission-can-impose-conditional-stay/articleshow/40033456.cms

Comments

Post a Comment

Most viewed this month

No Rebate For Stamp Duty Paid In Another State - Bombay HC

A three judge bench of the Hon'ble Bombay High Court (Bombay HC) in a recent judgment in the matter of Chief Controlling Revenue Authority, Maharashtra State, Pune and Superintendent of Stamp (Headquarters), Mumbai v Reliance Industries Limited, Mumbai and Reliance Petroleum Limited, Gujarat1 has held that orders in case of a scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (Act) involving different High Courts in multiple states, are separate instruments in themselves. Accordingly, stamp duty would be payable on all the orders (and consequently, all the states) without the benefit of remission, rebate or set-off.
Post a Comment
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more