Supervision of High Courts over National Consumer Disputes Redressal Commission: A Conundrum Unresolved

It was on 13-5-2022 that a 2-Judge Bench of the Supreme Court seemed to have finally settled by way of its judgment passed in Ibrat Faizan v. Omaxe Buildhome (P) Ltd.¹ one of the moot questions in the field of consumer law, namely:

Is the High Court empowered under Article 227² of the Constitution of India to entertain challenge against the judgment of the National Consumer Disputes Redressal Commission (NCDRC) (“National Commission” hereinafter) passed by the Commission while exercising the powers vested in it under Section 58(1)(a)(iii)³ of the Consumer Protection Act, 2019 (“the CP Act”)?

and the Court after observing in paras 20, 22 and 26 held that:

20. Therefore an appeal against the order passed by the National Commission to this Court would be maintainable only in case the order is passed by the National Commission in exercise of its powers conferred under Section 58(1)(a)(i) or under Section 58(1)(a)(ii) of the 2019 Act. No further appeal to this Court is provided against the order passed by the National Commission in exercise of its powers conferred under Section 58(1)(a)(iii) or under Section 58(1)(a)(iv) of the 2019 Act. In that view of the matter, the remedy which may be available to the aggrieved party against the order passed by the National Commission in an appeal under Section 58(1)(a)(iii) or under Section 58(1)(a)(iv) would be to approach the High Court concerned having jurisdiction under Article 227 of the Constitution of India.'

22. Therefore, the National Commission can be said to be a ‘tribunal' which is vested by statute the powers to determine conclusively the rights of two or more contending parties with regard to any matter in controversy between them. Therefore, as observed hereinabove in the aforesaid decision, it satisfies the test of an authority vested with the judicial powers of the State and therefore may be regarded as a ‘tribunal' within the meaning of Article 227 and/or Article 136⁴ of the Constitution of India.

26. No so far as the remedy which may be available under Article 136 of the Constitution of India is concerned, it cannot be disputed that the remedy by way of an appeal by special leave under Article 136 of the Constitution of India may be too expensive and as observed and held by this Court in L. Chandra Kumar v. Union of India⁵, the said remedy can be said to be inaccessible for it to be real and effective. Therefore, when the remedy under Article 227 of the Constitution of India before the High Court concerned is provided, in that case, it would be in furtherance of the right of access to justice of the aggrieved party, may be a complainant, to approach the High Court concerned at a lower cost, rather than a special leave to appeal under Article 136 of the Constitution of India.

and finally proceeded to hold as follows in para 29:

29. In view of the above discussion and for the reasons stated above and subject to the observations made hereinabove, it cannot be said that a writ petition under Article 227 of the Constitution of India before the High Court concerned against the order passed by the National Commission in an appeal under Section 58(1)(a)(iii) of the 2019 Act was not maintainable.

In a nutshell, the Court by way of the said judgment answered the question saying that: A High Court under Article 227 is empowered to interfere with the orders passed by the National Commission wherein no specific right to appeal has been conferred upon by the said legislation viz. Section 58(1)(a)(iii) or Section 58(1)(a)(iv) of the 2019 Act because Section 67⁶ of the 2019 Act provides remedy of appeal before the Supreme Court only in cases where power has been exercised by the National Commission under Section 58(1)(a)(i) or Section 58(1)(a)(ii) only and not where power has been exercised under Section 58(1)(a)(iii) or Section 58(1)(a)(iv).

To arrive upon the said ratio, the 2-Judge Bench of the Supreme Court in para 12.1 of its judgment placed reliance on 7-Judge Bench decision of the Supreme Court in L. Chandra Kumar v. Union of India⁷ to hold that jurisdiction of High Courts under Articles 226⁸ and 227 of the Constitution of India cannot be wholly excluded.

Before proceeding further, it is relevant to have a look at few relevant observations unanimously made by the 7-Judge Bench in L. Chandra Kumar case⁹, which are:

(i) We therefore hold that power of judicial review over the legislative action vested in High Courts under Article 226 and in this Court under Article 32¹⁰ of the Constitution of India is an integral and essential feature of the Constitution constituting part of its basic structure.

(ii) We also hold that the power vested in High Courts to exercise judicial superintendence over the decisions of all courts and tribunals within their respective jurisdictions is also a part of basic structure of the Constitution.

(iii) We hold that all decisions of tribunals whether constituted pursuant to Article 323-A¹¹ or Article 323-B¹² of the Constitution of India will be subject to High Court's writ jurisdiction under Articles 226/227 of the Constitution before a Division Bench of the High Court within whose jurisdiction the particular tribunal falls.

It is these aforesaid findings of L. Chandra Kumar case¹³ that have time and again been relied upon by various High Courts throughout the country to exercise their writ jurisdiction as and when they found that the Tribunal/quasi-judicial body concerned has failed to exercise its jurisdiction in a judicious manner.

If we look at the provisions dealing with the jurisdiction of the National Commission (Section 21¹⁴ of the 1986 Act and Section 58 of the 2019 Act) and provisions dealing with remedy of appeal before the Supreme Court against the orders passed by the National Commission (Section 23¹⁵ of the 1986 Act and Section 67 of the 2019 Act) in both the consumer protection legislations, then it becomes clear that remedy of appeal before the Supreme Court against the order of National Commission has always been expressly made available only qua the complaints entertained by the National Commission as the court of first instance and not with regard to appeals or revisions dealt with by National Commission which gave birth to the question as to whether the High Court is empowered to interfere in such cases or still it is only Supreme Court which is to be approached by way of a special leave petition to challenge the order of the National Commission.

In fact, a similar situation arose before the Division Bench of the High Court of Jharkhand with regard to the 1986 Act in S.S. Prasad v. Sumitra Devi¹⁶ wherein [even though the Court in para 12 observed that appeal before the Supreme Court under Section 23 of the 1986 Act lies even in cases covered by Section 21(a)(ii) in addition to Section 21(a)(i) of the 1986 Act] it came to the conclusion that:

16. In the light of catena of decisions of the Supreme Court including L. Chandra Kumar case¹⁷ it can safely be concluded that there is no bar entertaining the writ petition under Article 226 of the Constitution of India against the order passed by the National Commission exercising revisional jurisdiction under Section 21(b) of the Act.

It was in the year 2012 when the Supreme Court had an opportunity to deal with this question in Cicily Kallarackal v. Vehicle Factory¹⁸ wherein the Division Bench of the Kerala High Court had in its appellate jurisdiction partly modified the order passed by the Single Judge which had exercised its writ jurisdiction under Article 226 against the order passed by the National Commission which was passed by the Commission while exercising its appellate jurisdiction under Section 21(a)(ii) of the 1986 Act. Even without making any mention to L. Chandra Kumar case¹⁹ and other judgments of same line, Supreme Court in this case while dismissing the petition on ground of delay held that:

4. … it is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution of India against the orders passed by the Commission, as a statutory appeal is provided and lies to this Court under the provisions of the Consumer Protection Act, 1986²⁰. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain petitions in exercise of its powers under Article 226 of the Constitution of India.

9. While declining to interfere in the present special leave petition preferred against the order passed by the High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India, we hereby make it clear that the orders of the Commission are incapable of being questioned under the writ jurisdiction of the High Court, as a statutory appeal in terms of Section 27-A(1)(c)²¹ lies to this Court. Therefore, we have no hesitation in issuing a direction of caution that it will not be proper exercise of jurisdiction by the High Courts to entertain writ petitions against such orders of the Commission.

10. A copy of this order may be sent to the Registrar General of all the High Courts, for bringing the same to the notice of the Chief Justices and Judges of the respective High Courts.²²

It is interesting to note that recently a Division Bench of the Calcutta High Court in Universal Consortium of Engineers (P) Ltd. v. State of W.B.²³ after noting the dicta of L. Chandra Kumar case²⁴ raised doubt over correctness of ratio of Cicily Kallarackal case²⁵ insofar as it completely excludes jurisdiction of the High Court over decisions of the National Commission irrespective of nature of challenge posed against the orders of the National Commission in the following words:

116. In an appropriate case, where a party without exhausting the alternative remedy that is available to him/it, invokes the writ jurisdiction of a High Court and while challenging an order of the National Commission sets up a case of any of the exceptional situations to exist [the writ is claimed (i) for enforcement of a fundamental right, or (ii) to remedy a breach of natural justice, or (iii) for quashing an act/order that is wholly without jurisdiction], there ought to be no valid reason as to why the High Court may not look into the petition to ascertain whether what is claimed is correct, instead of dismissing it at the threshold on the ground that the impugned order has been passed by the National Commission. Incidentally, if in such a writ petition constitutionality of a provision of the CP Act is under challenge along with an order of the National Commission and the petition contains dual prayers to declare the impugned statutory provision as ultra vires the Constitution as well as a writ of certiorari to quash such order, would the remedy of an appeal being available before a higher court i.e. the Supreme Court, be of any immediate significance and relevance? We doubt whether the Supreme Court would declare a provision unconstitutional while exercising its appellate power under the CP Act. Any declaration on the vires of a statute/statutory provision ideally would come from the Supreme Court exercising original writ powers (Article 32) or writ powers while hearing a civil appeal arising out of a writ petition after grant of special leave (Article 136). On the other hand, if the High Court is satisfied that there has been gross miscarriage of justice and also that the provision impugned is unconstitutional, should the High Court stay at a distance and say that the dicta in Cicily Kallarackal case²⁶ has to be shown respect since the decision itself has been circulated for ensuring compliance and not the other decisions of high authority which went unnoticed in Cicily Kallarackal case?²⁷

On the one hand, the Bench dealing with Cicily Kallarackal case²⁸ did not make any reference to the 7-Judge Bench decision of L. Chandra Kumar case²⁹ which constitutes the foundation of dicta of Ibfrat Faizan case³⁰ and on other hand another Coordinate Bench dealing with Ibrat Faizan case³¹ also did not even make a mention to Cicily Kallarackal case³² and resultantly the dilemma sought to be redressed by both the abovesaid decisions largely remains unaddressed till date.

In fact, on 21-9-2021 the Supreme Court relying on the decision of Cicily Kallarackal case³³ was pleased to stay the operation of the impugned order³⁴ passed by the High Court of Delhi in proceedings under Article 227 of the Constitution of India, which is still pending adjudication in STUC Awasiya Grahak Kalyaan Assn. v. Supertech Ltd.³⁵

It is also worthy to note that as per the ratio laid down in L. Chandra Kumar case³⁶ the decision of the Administrative Tribunal is to be dealt with by a Division Bench of the High Court whereas in view of Ibrat Faizan case³⁷ no such restriction has been prescribed for the High Courts while entertaining the challenge against decision of the National Commission. Therefore, the clouds of uncertainty still loom large over the arena of consumer law and its interplay with the inherent powers vested in constitutional courts.

Hence, it would be in the interests of justice that while dealing with STUC Awasiya Grahak Kalyan Assn. case³⁸ or any other appropriate case as it deems fit, the Supreme Court refers the aforesaid question to a larger Bench so that this controversy can be put to rest once and for all by way of an authoritative pronouncement.