S.B. Sinha, C.J.
1. In these applications various provisions of the Consumer Protection Act have been questioned. In Writ Petition Nos.10935, 10939 and 11109of 2001, the petitioners had questioned the validity of Sections 2 (d), (e), (f), (g), Sections 9, 10, 11, 14, 16, 21, 22, 23, 24(b) and 25 of the Consumer Protection Act, 1986 (for short 'the said Act') whereas in the other writ petitions the vires of Section 27 of the said Act is in question.
2. The main thrust of the submission of the learned Counsel appearing on behalf of the petitioners led by Sri S. Ramchandra Rao principally are:
(i) Having regard to the composition of the different Commissions, which are manned by, lay persons and as the decisions of the majority of the members who may be laymen would prevail over the decisions of ajudicial member/Chairman, the provisions of the said Act must be held to be violative of Article 21 of the Constitution of India.
(ii) As an appeal is provided to the Supreme Court from an order passed by the National Commission, by necessary implication, the power of judicial review of this Court has been taken away.
(iii) Since a new offence has been created by reason of Section 27 of the said Act, without providing for the safeguards as provided for under Order 21, Rule 37 of the Code of Civil Procedure, the same would be violative of Articles 14 and 21 of the Constitution.
(iv) The constitution of Commission consisting of a retired person and/or retired judicial officer or Judge and untrained persons is violative of the constitutional scheme as regard judicial independence.
3. The learned Counsel for the respondents, on the other hand, submitted:
(1) The concept of judicial review can not be applied in vacuum inasmuch as in terms of Section 3 of the said Act, the said Act is not in derogation of any other Act and thus does not take away any right of the parties;
(2) While considering the constitutionality or otherwise of a statute, the Court cannot go into the question of legislative policy or wisdom.
(3) Section 27 of the Act was enacted with a view to effectuate compliance of an order passed by the authorities thereunder and thus the same cannot be said to be violative of or unconstitutional, particularly, having regard to the fact that the original order is subject to appeal.
(4) By reason of the provisions of the said Act merely an additional forumhas been created.
4. The said Act was enacted to provide for better promotion of the interests of the consumers and for that purpose to make provisions for the establishment of consumer Courts. The statement of objects and reasons of the said Act provides that the same was enacted in order to promote and protect the rights of the consumers such as:
(a) the right to be protected against marketing of goods which are hazardous to life and property;
(b) the right to be informed about the quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;
(c) the right to be assured, wherever possible, access to variety of goods at competitive prices;
(d) the right to be heard and to be assured that consumers' interests will receivedue consideration at appropriate forums;
(e) the right to seek redressal against unfair trade practice or unscrupulous exploitation of consumers; and
(f) right to consumer education.
5. By reason of the provisions of the said Act, forums have been created at the District, State and National level. Sections 10, 16 and 20 of the said Act provide for the composition of the District Forum, State Commission and National Commission. Sections 15, 19 and 23 provides for the hierarchy of appeals. By reason of subsections (4), (5) and (6) of Section 13 the district forum shall have the same powers as are vested in the civil Courts for the purposes mentioned therein. Sub-sections (2) and (2-A) of Section 14 mandate that the proceedings shall be conducted by the President of the District Forum and atleast one member thereof sitting together. Only in the event of any difference between them on any point or points, the same is to be referred to the other member for hearing thereon and the opinion of the majority shall be the order of the District Forum. By reason of Section 18, the provisions of Sections 12, 13, and 14 and the rules made thereunder mutatis mutandis would be applicable to the disposal of disputes by the State Commission.
6. Section 23 provides for a limited appeal to the Supreme Court from an order made by the National Commission i.e., when the same is assed in exercise of its original power as conferred by sub-clause (i) of clause (a) of Section 21.
7. Section 25 provides for the enforcement of the orders by the District Forum, State Commission or the National Commission which is in the following terms:
Enforcement of orders by the District Forum, the State Commission or the National Commission :--Every order made by the District Forum, the State Commission or the National Commission may be enforced by the District Forum, the State Commission or the National Commission, as the case may be, in the same manner as if it were a decree or order made by a Court in a suit pending therein and it shall be lawful for the District Forum, the State Commission or the National Commission to send, in the event of its inability to execute it, such order to the Court within the local limits or whose jurisdiction,--
and thereupon, the Court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.
8. Section 26 empowers the District Forum, the State Commission or as the case may be the National Commission to dismiss the complaint and make an order that the complainant shall pay to the opposite party such costs not exceeding Rs.10,000/-in the event it is found that the complaint was frivolous or vexatious one.
9. Section 27 provides for penalties.
10. Before proceeding to advert to the question raised herein, it is necessary to consider the meaning of some words as defined in various provisions of Section 2 of the said Act.
(b) 'complainant' means,--
(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 or under any other lawfor the time being in force; or
(iii) the Central Government or any State Government, who or which makes a complaint;
(iv) one or more consumers, where there are numerous consumers having the same interest.
(c) 'complaint' means any allegation in writing made by a complainant that,--
(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader;
(ii) the goods bought by him or agreed to be bought by him suffer from one or more defects;
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;
(iv) a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods any package containing such goods;
(v) goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force, requiring trades to display information in regard to the contents, manner and effect of use of such goods;
with a view to obtaining any relief provided by or under this Act;
(d) 'consumer' means any person who-
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person;
Explanation :--For the purposes of sub-clause (i), 'commercial purpose' does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment';
(e) 'consumer dispute' means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;
(g) 'deficiency means any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;
(h) 'unfair trade practice' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely.
11. The provisions of the said Act clearly demonstrate that the Act was enacted keeping in view the long felt necessity of protecting the common man from wrongs wherefor the ordinary law for all intent and purport had become illusory. In terms of the said Act, a consumer is entitled to participate in the proceedings directly as a result whereof his helplessness against a powerful business house will be taken care of.
12. The Apex Court in a large number of decisions considered the purport and object of the statute. By reason of the said statute, quasi judicial authorities have been created at the Dislrict, State and Central levels so as to enable a consumer to ventilate his grievances before a forum where justice can be done without any procedural wrangles and hyper-technicalities.
13. One of the objects of the said Act is to provide momentum to the consumer movement. Central Consumer Protection Council is also to be constituted in terms of Section 4 of the Act to promote and protect the right of the consumers, with the following objects:
(a) the right to be protected against the marketing of goods and services which are hazardous to life and property;
(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumers against unfair trade practices;
(c) the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
(d) the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums;
(e) the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation on consumers; and
(f) the right to consumer education.
14. Section 7 of the said Act provides for constitution of State Consumers Protection Councils to promote and protect within the State the rights of the consumers with the same objects as quoted supra.
15. Section 9 provides for establishment of Consumer Disputes Redressal Agencies. A Consumer Disputes Redressal Forum to be known as 'District Forum' will be established by the State Government in each district. A Consumer Disputes Redressal Commission to be known as 'State Commission' will be established by the State Government in the State and a National Consumer Disputes Redressal Commission by the Central Council.
16. In terms of Section 10, the President of a District Forum shall be a person who is, or has been, or is qualified to be a District Judge and the forum shall also consist of two other members who are required to be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration and one of them shall be a woman. It may be true that the appointing authority for the District Forum is the State Government. However, the tenure of the members of the District Forum is fixed.
17. Section 13 of the said Act lays down a detailed procedure as regard themode and manner in which the complaints received by the District Forum shall be dealt with. Section 14 provides for the directions which can be issued by the District Forum on arriving at a satisfaction that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the deficiencies in services have been proved. Section 15 provides for an appeal from the order made by the District Forum to the State Commission.
18. Section 16 provides for composition of the State Commission which reads thus:
(1) Each State Commission shall consist of-
(a) a person who is or has been a Judge of High Court, appointed by the State Government who shall be its President:
Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court.
(b) two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman;
Provided that every appointment under his clause shall be made by the State Government on the recommendations of Selection Committee consisting of the following, namely:
(i) President of the State CommissionChairman.
(ii) Secretary of the Law Department ofthe State Member
(iii) Secretary in charge of the Departmentdealing with consumer affairs in theState. Member
(2) The salary or honorarium and other allowances payable to and the other terms and conditions of service of the members of the State Commission shall be such as may be prescribed by the State Government;
(3) Every member of the State Commission shall hold office for a term of five years or up to the age of sixty-seven years, whichever is earlier and shall not be eligible for re-appointment.
(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.
The members of the State Commission are to be selected by a Selection Committee, the Chairman whereof would be the President of the State Commission.
19. Section 19 provides for an appeal from a decision of the State Commission to the National Commission. Section 20 deals with the composition of National Commission, the President whereof would be a person who is or has been a Judge of the Supreme Court and such appointment shall be made only upon consultation with the Chief Justice of India. So far as the members of the National Commission are concerned, the same are also to be made on the recommendations of the Selection Committee, the Chairman whereof would be a person who is a Judge of the Supreme Court to be nominated by the Chief Justice of India. The tenure of the Office of the National Commission is also fixed by reason of sub-section (3) of Section 20. By reason of the provisions of the said Act, therefore, independent authorities have been created.
20. In the aforementioned situation, it is not correct to contend that laymen man the Commissions at whose hands justice cannot be expected.
21. The rights of the parties have been safeguarded by reason of the provisions of the said Act inasmuch as although it provides for an alternative system of consumer jurisdiction on summary trial, they are required to arrive at a conclusion based on reasons. Even when quantifying damages, they are required to make an attempt to serve the ends of justice aiming at recompensing the individual but also to bring about a qualitative change in the attitude of the service provider. Assignment of reasons excludes or at any rate minimises the chances of arbitrariness and the higher forums created under the Act can test the correctness thereof. (See Charan Singh v. Healing Touch Hospital, : AIR2000SC3138 .)
22. The purport and object of the said Act has succinctly been laid down by the Apex Court in Lucknow Development Authority v. M.K. Gupta, : AIR1994SC787 , wherein it has been held:
The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, 'a network of rackets' or a society in which, 'producers have secured power' to 'rob the rest' and the might of public bodies which are degenerating into store houseof inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked.
It has further been held:
The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services.....It is a milestone in history of socio-economic legislation and is directed towards achieving public benefit.
23. As noticed herein before, the District Forum, the State Commission and the National Commission are not manned by lay persons. The President would be a person having judicial background and other members are required to have the expertise in the subjects such as economics, law, commerce, accountancy, industry, public affairs, administration etc. It may be true that by reason of sub-section (2) of Section 14 of the Act, in a case of difference of opinion between two members, the matter has to be referred to a third member and, in rare cases, the majority opinion of the members may prevail over the President. But, such eventuality alone, in our considered view, cannot be said to be sufficient for striking down the Act as unconstitutional, particularly, when provisions have been made for appeal thereagainst to a higher forum.
24. In Indian Medical Association v. V.P. Shantha, , the Apex Court had the occasion to consider this aspect of the matter wherein it was held: ... It is no doubt true that thedecisions of the District Forum as well as the State Commission and the National Commission have to be taken by majorityand it may be possible in some cases that the President may be in minority. But the presence of a person well versed in law as the President will have a bearing on the deliberations of these Agencies and their decisions. As regards the absence of requirement about a member having adequate knowledge or experience in dealing with the problems relating to medicine it may be stated that the persons to be chosen as members are required to have knowledge and experience in dealing with problems relating to various fields connected with the object and purpose of the Act, viz., protection and interest of the consumers. The said knowledge an experience would enable them to handle the consumer disputes coming up before them for settlement in consonance with the requirement of the Act. To say that the members must have adequate knowledge or experience in the field to which the goods or services, in respect of which the complaint is made, are related would lead to impossible situations.
It is no doubt true that the decisions of Ihe District Forum as well as the State Commission and the National Commission have to be taken by majority and it may be possible in some cases that the President may be in minority. But the presence of a person well versed in law as the President will have a bearing on the deliberations of these Agencies and their decisions. As regards the absence of requirement about a member having adequate knowledge or experience in dealing with the problems relating to medicine it may be stated that the persons to be chosen as members are required to have knowledge and experience in dealing with problems relating to various fields connected with the object and purpose of the Act, viz., protection and interest of the consumers. The said knowledge an experience would enable them to handle the consumer disputes coming up before them for settlement in consonance with the requirement of the Act. To say that the members must have adequate knowledge or experience in the field to which the goods or services, in respect of which the complaint is made, are related would lead to impossible situations.
25. The Apex Court has referred to 'Administration of Justice' by Prof. Robin C.A. While and held that a Tribunal composed of a lawyer as Chairman and two lay members would present an opportunity to develop a model of adjudication that combines the merits of lay decision making wilh legal competence and participation of lay members would lead to general public confidence in the fairness of the process and widen the social experience represented by the decision makers. It was emphasised that apart from their breadth of experience, the key role of lay members, would be in ensuring that the procedures do not become too full of mystery and ensure that litigants before them are not reduced to passive spectators in a process designed to resolve their disputes.
26. The submission of Mr. Ramachandra Rao to the effect that by reason of the provisions of the said Act, the power of judicial review of the High Court, which is a basic feature of the Constitution, has been taken away is stated to be rejected. The Act nowhere provides that the power of judicial review is taken away. The innovative submission made by Mr. Ramachandra Rao to the effect that only because in terms of Section 23 of the Act, the Supreme Court has been made as an appellate authority and as its decision in terms of Article 141 of the Constitution of India are binding on all Courts, the power of judicial review is excluded cannot be accepted. The Supreme Court, as noticed hereinbefore, exercises a limited power of appeal.
27. Even in a case where a decision is rendered by the Supreme Court, if it can be shown, that a case for judicial review has been made out, an application under Article 226 would be maintainable. It is true that a decision of the Apex Court is binding on all other Courts. But the same does not mean that thereby the power of judicial review is taken away. The Court exercising the power of judicial review in other cases also may have to follow the decision of the Apex Court. But, it is also trite that in the event it can be shown that an order has been passed without any jurisdiction or in a case where no law has been laid down by the Apex Court, the right of the High Court to exercise its power of judicial review cannot be said to have been taken away. The Supreme Court itself has clearly held in L. Chandra Kumar v. Union of India, : [1997]228ITR725(SC) , held:
We also hold that the power vested in the High Courts to exercise judicial superintendence over the decisions of all Courts and Tribunals within their respective jurisdictions is also part of the basic structure of the Constitution. This is because a situation where the High Courts are divested of all other judicial functions apart from that of constitutional interpretation, is equally to be avoided.
However, it is important to emphasise that though the subordinate judiciary or Tribunals created under ordinary legislations cannot exercise the power of judicial review of legislative action to the exclusion of the High Courts and the Supreme Courts, there is no constitutional prohibition against their performing a supplemental as opposed to a substitutional-role in this respect. That such a situation is contemplated within the constitutional scheme becomes evident when one analyses clause (3) of Article 32 of the Constitution.....
If the power under Article 32 of the Constitution, which has been described as the 'heart' and 'soul' of the Constitution, can be additionally conferred upon 'any other Court,' there is no reason why the same situation cannot subsist in respect of the jurisdiction conferred upon the High Courts under Article 226 of the Constitution. So long as the jurisdiction of the High Courts under Articles 226/227 and that of this Court under Article 32 is retained, there is no reason why the power to test the validity of legislations against the provisions of the Constitution cannot be conferred upon Administrative Tribunals created under the Act or upon Tribunals created under Article 323B of the Constitution. It is to be remembered that, apart from the authorisation that flows from Articles 323A and 323B, both Parliament and the State Legislatures possess legislative competence to effect changes in the original jurisdiction of the Supreme Court and the High Courts. This power is available to Parliament under Entries 77, 78, 79 and 95 of List I and to the State Legislature under Entry 65 of List 11; Entry 46 of List III can also be availed of both of Parliament and the State Legislatures for this purpose.
In the years that have passed since the Report of the Malimath Committee was delivered, the pendency in the High Courts has substantially increased and we are of the view that its recommendation is not suited to our present context. That the various Tribunals have not performed upto expectations is a self-evident and widely acknowledged truth. However, to draw an inference that their unsatisfactory performance points to their being founded on a fundamentally unsound principle would not be correct. The reasons for which the Tribunals were constituted still persist; indeed, those reasons havebecome even more pronounced in our times. We have already indicated that our constitutional scheme permits the setting up of such Tribunals. However, drastic measures may have to be resorted to in order to elevate their standards to ensure that they stand up to constitutional scrutiny in the discharge of the power of judicial review conferred upon them.
We may first address the issue of exclusion of the power of judicial review of the High Courts. We have already held that in respect of the power of judicial review, the jurisdiction of the High Courts under Articles 226/227 cannot be excluded. It has been contended before us that the Tribunals should not be allowed to adjudicate upon matters where the vires of legislations is questioned, and that they should restrict themselves to handling matters where constitutional issues are not raised. We cannot bring ourselves to agree to this proposition as that may result in splitting up proceedings and may cause avoidable delay. If such a view were to be adopted, it would be open for litigants to raise constitutional issues, many of which may be quite frivolous, to directly approach the High Court and thus subvert the jurisdiction of the Tribunals. Moreover, even in these special branches of law, some areas do involve the consideration of constitutional questions on a regular basis; for instance, in service law matters, a large majority of cases involve an interpretation of Articles 14, 15 and 16 of the Constitution. To hold that the Tribunals have no power to handle matters involving constitutional issues would not serve the purpose for which they were constituted. On the other hand, to hold that all such decisions will be subject to the jurisdiction of the High Courts under Articles 226/227 of the Constitution before a Division Bench ofthe High Court within whose territorial jurisdiction the Tribunal concerned falls will serve two purposes. While saving the power of judicial review of legislative action vested in the High Courts under Articles 226/227 of the Constitution, it will ensure that frivolous claims are filtered out through the process of adjudication in the Tribunals. The High Court will also have the benefit of a reasoned decision on merits which will be of use to it in finally deciding the matter.
28. In Gulzari Lal Agarwal v. Accounts Officer, : (1996)10SCC590 , it has been held: ...We are of the considered opinionthat the relevant provisions which we have quoted hereinabove will have to be construed harmoniously to promote the cause of the consumers under the Act. As indicated earlier, the definition of member includes the President and a member of a District Forum/State Commission. It is true that subsection (2) of Section 14 read with Section 18 requires that every proceedings referred to under sub-section (1) shall be conducted by the President of the District Forum/State Commission and at least one member thereof sitting together. Subsection (2-A) is consequential in the sense that every order made by the State Commission under sub-section (1) shall be signed by its President and the member or members who conducted the proceeding. The procedure applicable to the District Forum is made applicable to the State Commission vide Section 18 with such modifications as may be necessary. Plain reading of subsections (2) and (2-A) of Section 14 may support the view taken by the National Commission but if these provisions are read with Section 29A of the Act and sub-rules (9) and (10) of Rule 6, it wouldbe quite clear that it could never be the intention of the Legislature to stall or render the State Commission nonfunctional in the absence of the President either having not been appointed in time due to some valid reasons or if the President is on leave due to certain reasons beyond his control. Subsections (2) and (2-A) of Section 14 and Section 18A of the Act were brought into force with effect from 18-6-1993 whereas Section 29A was made applicable from 15-6-1991. The Rules of 1987 were brought into force immediately. The complaint before the District Forum by the appellant was filed on 14-10-1993. Therefore, all these amended provisions were very much brought into force when the complaint was filed. Sub-section (2) of Section 14 is a presumptuous provision where the President of the State Commission is functional but it would not be correct to say that if the President of the State Commission is non-functional because of one or the other reason, the State Commission would stop its functioning and wait till the President is appointed. In order to avoid such a situation, the State Government has framed the rule and sub-rules (9) and (10) quoted hereinabove unmistakably provide answer to such a situation as in the present case. The only harmonious construction that could be given to sub-sections (2) and (2-A) of Section 14 read with sub-rules (9) and (10) is that as and when the President of the State Commission is functional, he along with at least one member sitting together shall conduct the proceedings but where the President being non-functional, sub-rules (9) and (10) of Rule 6 will govern the proceedings. Sub-rule (9) provides that where any such vacancy occurs in the Office of the President of the State Commission, the senior most (in order of appointment) member holding officefor the time being, shall discharge thefunction of the President until a prison is appointed to fill such vacancy. This sub-rule is made with a view to make the State Commission functional in the absence of the President and not to allow the State Commission to render non-functional for want of the President. It is well settled that every provision in the Act needs to be construed harmoniously with a view to promote the object and spirit of the Act but while doing so, no violence would be done to the plain language used in the section. It is this principle that needs to be made applicable while constructing the provision of sub-sections (2) and (2-A) of Section 14 read with sub-rules (9) and (10).
In view of the above discussion, we are of the opinion that the National Commission committed an error in holding that order passed by the two members of the State Commission without the Junction of the President is 'illegal and void'.
29. Reference in this connection may be made to Regional Provident Fund Commissioner v. Shiv Kumar Joshi, : (2000)ILLJ552SC , Sat Pal Mohindra v. Surindra Timber Stores. 1999 (5) SC 696, Fair Air Engineers Private Limited v. N.K. Modi, : AIR1997SC533 .
30. Yet again in Consumer Action Group v. Stare of T.N., : AIR2000SC3060 , it has been held:
Whenever any statute confers any power on any statutory authority including a delegatee under a valid statute, howsoever wide the discretion may be, the same has to be exercised reasonably within the sphere that statute confers and such exercise of power must stand the test of judicial scrutiny. This judicial scrutiny is one of the basic features of ourConstitution. The reason recorded truly discloses the justifiability of the exercise of such power. The question is whether the power has been exercised validly by the delegatee, in the present case; if yes, then it can only be for the furtherance of that policy. What is that policy? The policy is the development and use of rural and urban land including construction of colonies, buildings, etc., in accordance with the policy of the planning as laid down under the Act and the rules. When such a wide power is given to any statutory authority including a delegatee then it is obligatory on the part of such authority to clearly record its reasons in the order itself for exercising such a power. Application of mind of such authority at that point of time could only be revealed when the order records its reasons. Even if the section is silent about recording of reasons, it is obligatory on the Government while passing orders under Section 113 to record the reasons. The scheme of the Act reveals, the Government is conferred with wide-ranging power, including power to appoint all important statutory authorities; appoints Director and members of town and country planning under Section 4; constitutes Tamil Nadu Town and Country planning Board under Section 5; the Board to perform such functions as the Government assigns under Section 6; appoints Madras Metropolitan Development Authority under Section 9A; the Government entrusted for making master plan or any other new plan; any plans or modifications is subject to the approval of the Government. In fact, every statutory committee is created by the Government and its planning is subject to the approval by the Government. It is because of this that very wide power is given to it under Section 113. In a given case, where a new development in a rural or urban area may be required urgently andprovisions under the Act and rules would take a long procedure, it may in exercise of its exemption power exempt some of the provisions of the Act and rules to achieve the development activity faster or in a given case, if any hardship arises by following or having not followed the procedure as prescribed, the power of exemption could be exercised but each of these cases would be for furtherance of the development of that area.
In 'Principles of Statutory Interpretation', Seventh Edition, 1999, by Justice G.P. Singh, it has been stated:
There is a strong presumption that civil Courts have jurisdiction to decide all questions of civil nature. The exclusion of jurisdiction of civil Courts is therefore not to be readily inferred and such exclusion must either by 'explicitly expressed or clearly implied'. It is a principle by means to be whittled down and has been referred to as a fundamental rule. As a necessary corollary of this rule provisions excluding jurisdiction of civil Courts and provisions conferring jurisdiction on authorities and Tribunals other than civil Courts are strictly construed. The existence of jurisdiction in civil Courts to decide questions of civil nature being the general rule and exclusion being an exception, the burden of proof to show that jurisdiction is excluded in any particular case is on the party raising such a contention. The rule that the exclusion of jurisdiction of civil Courts is not be readily inferred is based on the theory that civil Courts are Courts of general jurisdiction and the people have a right unless expressly impliedly debarred, to insist for free access to the Courts of general jurisdiction of the State. Indeed, the principle is not limited to civil Court alones, but applies to all Courts of general jurisdiction including criminal Courts.
31. Reference in this connection may also be made to a decision rendered by one of us - V. V.S. Rao, J., in Prudential Capital Markets Limited, Calcutta v. State of A.P., : 2000(5)ALD418 .
The analysis of the provisions of the Consumer Act leaves no doubt that it is a special enactment aimed at protecting the consumers brought on to statute book as per the UN Resolution and it is a comprehensive Code in itself. The enactment is intended to provide for Forums at the primary level, appellate level and apex level so as to settle the consumer disputes and give redrcssal to consumers. The remedies provided are not in derogation of the provisions of common law remedies by way of a suit or other remedies provided under other enactments. Indeed, Section 3 of the Consumer Act categorically says that the provisions of the Consumer Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. As observed by the Supreme Court in Lucknow Development Authority's case : AIR1994SC787 , the Consumer Act intends to protect the common man for such wrongs for which the remedy under ordinary law has become illusory. (Para 34).
The submission of the learned Counsel for the PCML that by virtue of the provisions under Section 45QA read with Section 58A(9) and Section 45Q of the RBI Act the jurisdiction of the Consumer Forum stands excluded and the orders passed by the District Forum and the State Commission are without jurisdiction, if accepted would amount to doing violence to the language of Section 3 of the Consumer Act. Accordingly, on this point it is to be held that the provisions of the Companies Act or the RBI Act referred to hereinabove do not either specifically or impliedly exclude the jurisdiction of the DistrictForum and/or State Commission. (Para 47).
32. The provisions of Section 3 of the said Act makes it clear that the remedies provided thereunder are not in derogation of those provided under other laws. The consumer, therefore, will have the right either to move the civil Court or other statutory authorities despite creation of such fora. The jurisdiction of the civil Court and the other statutory authorities, apart from the fact that having been statutorily excluded, they are saved under Section 3 of the Act. A question, however, may arise that when a decision is rendered by District Forums, State Commission and National Commission having regard to the penalty clauses attached to their judgments, in terms of Section 24 of the Act, a civil Court's jurisdiction is not totally taken away. In Raja Ram Kumar Bhargava v. Union of India, : [1988]171ITR254(SC) , it has been held:
But then, even if the right to claim interest on the refunds of excess profit tax could be said to have been preserved, the question yet remains whether a suit for its recovery is at all, maintainable. The question turns on the scope of the exclusionary clause in the statute. The effect of clauses excluding the civil Courts' jurisdiction are considered in several pronouncements of the Judicial Committee and of this Court (See Secy. of State v. Mask and Company = AIR 1940 PC 105; K.S. Venkataraman and Company v. State of Madras, : [1966]60ITR112(SC) ; Dhulabhai v. State of Madhya Pradesh, : [1968]3SCR662 . The Premier Automobiles Limited v. Kamlakar Shantaram, : (1975)IILLJ445SC . Generally speaking, the broad guiding considerations are that wherever a right, not pre-existing in common-law, is created by a statute and that statuteitself provided a machinery for the enforcement of the right, both the right and the remedy having been created uno flatu and a finality is intended to the result of the statutory proceedings, then, even in the absence of an exclusionary provision the civil Courts' jurisdiction is impliedly barred. If, however, right preexisting in common law is recognised by the statute and a new statutory remedy for its enforcement provided, without expressly excluding the civil Courts' jurisdiction, then both the common-law and the statutory remedies might become concurrent remedies leaving open an element of election to the persons of inherence. To what extent, and on what areas and under what circumstances and conditions, the civil Courts' jurisdiction is preserved even where there is an express clause excluding their jurisdiction, are considered in Dhulabhai's case : [1968]3SCR662 .
33. The decisions of the Apex Court and the High Courts are galore to the effect that even the Public Sector Undertakings and the statutory authorities by reasons of the said Act, whoever deals in marketing a good or grant service, be it a trader, manufacturer or a professional or the statutory authorities and others, would come within the purview of the said provisions.
34. In Bhandara District Central Cooperative Bank Limited v. Slate of Maharashtra, : AIR1993SC59 , it has been held: ...Thus, the basis of distinctionmade between the 'designated officers' as defined in the Act and the other members has clear nexus with the object which the amendment seeks to achieve. The plea of illegal discrimination must, therefore, be repelled as being without any merit. It has been firmly established that this Court cannot be called upon to embark on an enquiry into public policyor investigate into questions of political wisdom or even to pronounce upon motives of the Legislature in enacting law which is otherwise within its legislative competence.
35. Reference in this connection may be made to Common Cause, A Registered Society v. Union of India, : 1997CriLJ195 , and New India Assurance Company Limited v. B.N. Sainani, : AIR1997SC2938 .
36. Reliance placed by Mr. Ramachandra Rao in Re Special Courts Bill, 1978, AIR 1978 SC 478, is totally misplaced. The Apex Court therein in exercise of its jurisdiction under Article 141(3) of the Constitution was dealing with a special Tribunal which was constituted for the purposes mentioned therein as a result whereof the valuable right under Article 21 was taken away. Chandrachud, CJ undoubtedly, observed that even a retired Judge should not be appointed to man such a Tribunal in preference to a sitting Judge as the latter enjoys a security of tenure until he attains a particular age. But, such observations had been made having regard to the fact that pleasure doctrine in subservient to judicial independence. In view of the fact that the tenure of the President and the members are fixed, the said pleasure doctrine has no application in the instant case. Furthermore, even the meaning of the word 'consultation' has undergone a sea-change after the second Judges case.
37. Let us now consider the validity of Section 27 of the Act which reads thus:
Penalties: Where a trader or a person against whom a complaint is made or the complainant fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or complainantshall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees or with both;
Provided that the District Forum, the State Commission or the National Commission, as the case may be, may if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both, for a term lesser than the minimum term and the amount lesser than the minimum amount specified in this section.
38. A bare perusal of the aforementioned provision would clearly go to show that it embraces within its fold not only the opposite party but also the complainant. By reason of such a provision, a separate offence has not been created. It is merely an exclusionary provision and to an extent may also be considered to be akin to Order 39, Rule 2A of CPC or the provisions of Contempt of Courts Act or Section 51 read with Order 21, Rule 37, CPC. The said question came up for consideration before a Division Bench of the Delhi High Court in Ravi Kant, v. National Consumer Dis. Redressal Commission, (1997) CPL 271, wherein it has been held:
The contention is that the petitioner has nowhere withal to obey the orders passed by the State and National Commissions and hence 1st petitioner cannot be detained in prison by passing an order for simple imprisonment. Reliance is here placed upon certain observations in the judgment of the Supreme Court in Jolly George Varghese v. Bank of Cochin : [1980]2SCR913 . In that case the Supreme Court was dealing with Section 51 and Order 21, Rule 37 of the Code of Civil Procedure permitting arrest of a person who does not obey a decree for money based on contract passed by a civil Court. Reference was made to Article 11 of the 'International Covenant on Civil and Political Rights' which contains a prohibition:
No one shall be imprisoned merely on the ground inability to fulfil a contractual obligation.
And reference was also made to Article 21 of the Constitution of India. On the facts of the case, the properties of the judgment-debtors stood attached and the detention was ordered because earlier a similar warrant was issued. The Supreme Court set aside the order and directed inquiry into the means of the judgment-debtors. Though the Supreme Court referred to Article 11 of the Covenant to which India is a party, the Court said (Para 6) that even so, 'until the Municipal Law is changed to accommodate the covenant, what binds the Court is the former, nor the latter. 'Their Lordships quoted A.H. Robertson on 'Human Rights - In National and International Law: (p13) to the effect that:
International Conventional Law must go through the process of transformation into Municipal Law before the International treaty can become an international law.
And they refused to strike down Section 41 as being violative of Article 21.
19. In fact, Section 27 of the Act has created a statutory offence - the non-compliance of an order of a duly constituted Tribunal under the Consumer Protection Act, 1986 - and has made the said non-compliance an offence punishable with simple imprisonment or fine. A statute can create a Tribunal and might say that non-compliance with theorders of the Tribunal is an offence and is punishable by way of imprisonment or flue (as in section 27) and this penal provision can be in addition to any other mode of recovery (as in Section). Section, 25 permits recovery as a civil Court and may also permit arrest under Section 51 and Order 25 Rule 37 as a mode of recovery. But under Section 25 no statutory offence is created while under Section 27 a separate offence is created if Section 25 order is not implemented. We are therefore unable to hold that Section 27 is either bad or that the order of punishment of simple imprisonment passed against the petitioner is violative of Article 21.
39. A different view, however, has been taken by a Division Bench of the Karnataka High Court, in Paramjit Singh v. Union of India, (1999) 4 Comp.LJ 465 (Karn).
40. The Karnataka High Court proceeded on the basis that by reason of Section 27, a separate offence has been created and thus the same should be dealt with and tried in accordance with the provisions of Code of Criminal Procedure. According to the Karnataka High Court, the section has in no way taken way nor barred the jurisdiction of the Court under the Criminal Procedure Code. It was held:
It follows, therefore, that where a trader or a person omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, the complainant in that event can file a complaint before such Forum or Commission and if despite opportunity, the trader or a person fails or omits to comply with the order passed under the Act, the appropriate Forum or the Commission can direct the filing of thecomplaint in a Court of competent jurisdiction. Upon filing of such complaint, the procedure prescribed under the Code of Criminal Procedure has to be followed and on proof of the allegations, the accused shall be convicted for the offence and sentenced to the penalties as contemplated under Section 27 of the Act. The provisions of Section 27 are not distinct from Section 25 of the Act..... It isonly upon his failure and omission, that a trader shall be deemed to be guilty of the commission of an offence triable by a ordinary Magistrate in accordance with the procedure prescribed under the Code of Criminal Procedure.
We are, therefore, of the opinion that the proviso to Section 27 being violative of the fundamental rights as enshrined under Articles 20 and 21 of the Constitution of India is liable to be quashed. We are further of the opinion that but for the proviso there is no unconstitutionality in the main section. It is, therefore, held that the offences created and penalties provided under Section 27 can be tried and imposed only in accordance with the observations made hereinabove by tiling a complaint before a criminal Court in accordance with the procedure prescribed in that behalf.
41. With utmost respect, we are unable to persuade ourselves to agree with the said view.
42. Section 27 should not be read in isolation, ft should be read in conjunction with Section 25. The provisions of Section 25 or for that matter Section 27 can be taken recourse to only when the order becomes final. As noticed hereinbefore, against the order of District Forum atleast two appeals have been provided for whereas against the orders of the State Commission and the National Commission one appeal is provided.
43. All objections to the liability of the opposite party therein would, therefore, be completely adjudicated by the District Forums and/or State Commission or by the appellate authority, as the case may be. Even, as noticed hereinbefore, a right of judicial review can be taken recourse to. Only when an order becomes final, Sections 25 and 27 would come into play.
44. By reason of the aforementioned provisions, not only the opposite party but also the complainant can be proceeded against. The statute has thus made no discrimination. The Parliament in exercise of its legislative competence may provide for a provision in terms whereof a statutory authority would become entitled to impose a penalty. There cannot, however, be any doubt whatsoever that before a penalty is imposed, the principles of natural justice have to be complied with. The authorities under the Act, can pass an ex parte interim order. Section 27 can be taken recourse to only by way of last resort. It has evidently been enacted for the purpose of dealing only with such defaulters, who, despite several opportunities, failed and/or negligent to comply with the directions.
45. It may be true that certain safeguards were provided under Section 51 or Order 21, Rule 37 CPC. But, under the Act, as the authorities are entitled to evolve their own procedure, they should, in a given situation, take recourse to the principles underlying the same. The submission to the effect that even a woman can be sent to prison despite the existence of the provisions of Code of Civil Procedure, in our opinion, has no basis inasmuch the provision appended to Section 27 of the Act empowers the authorities to impose a lesser punishment. We fail to understand as to how the Karnataka High Court while upholding the provisions of Section 27 struck down the proviso appended thereto as violative of Articles 20 and 21 of the Constitution ofIndia. The proviso appended to Section 27 is beneficent to the parties. It confers upon the authorities discretion even not to impose the minimum punishment provided under Section 27.
46. We may further observe that the Court while taking recourse to Section 27 of the Act, unless the Forum or the Commission comes to the conclusion that the action on the part of the defaulter is dishonest and intentional, it may not inflict the penalty.
47. There is no difference in the approach between the Delhi High Court and the Karnataka High Court, with which we agree, that the provisions of Section 27 are not distinct from Section 25 of the Act.
48. It may be true that the said provision does not lay down a detailed procedure but, as indicated hereinbefore, having regard to the provisions contained in Articles 20 and 21 of the Constitution of India and, as principles of natural justice are to be complied with, the authorities are under an obligation to adopt such procedure which must be fair and reasonable. It is now a well settled principle of law that the principles of natural justice must be read in every statute unless there exists any statutory interdict.
49. For the views we have, taken several decisions relied upon by the learned Counsel for the petitioners viz., Maneka Gandhi v. Union of India, : [1978]2SCR621 , cannot be said to have any application. The decision of the Apex Court in George Varghese v. Bank of Cochin, : [1980]2SCR913 , has been explained by the Delhi High Court and as such, we do not think it necessary to deal with the same separately. In Francis Coralie Mullin v. Union Territory of Delhi, AIR 1981 SC 746, the Apex Court was dealing with a matter relating to preventive detention. The decisions of the Apex Court in KihotaHollohon v. Zachilhu. : [1992]1SCR686 , and In Re, under Article 143(1) of Constitution of India, : AIR1965SC745 , upon which the learned Counsel for the petitioners has placed reliance, are again not apposite, as in those cases, the Apex Court has dealt with cases of political defection.
50. For the reasons aforesaid, we find no merit in the writ petitions and they are accordingly dismissed. No costs.
Bilal Nazki, J.
51. I have gone through the judgment prepared by My Lord the Chief Justice. I am in full agreement with the judgment but I would also like to add few lines.
52. The whole controversy is with regard to the question as to whether Section 27 of the Consumer Protection Act, 1986 creates an offence and if it creates an offence whether it has to be tried only under the provisions of Criminal Procedure Code. Sections 4 and 5 of the Criminal Procedure Code lay down :
'4. (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.'
'5. Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force.'
On perusal of these two provisions of Criminal Procedure Code it becomes manifest that all offences under Indian Penal Code have to be investigated, inquired into and tried under the provisions of Criminal Procedure Code and the offences under laws other than under Indian Penal Code shall also be tried in accordance with the provisions of Criminal Procedure Code, but the provisions of the Criminal Procedure Code would not apply where the special enactment which crates an offence indicates a special procedure and where an offence created by a special Act other than Indian Penal Code does not create a special procedure the Criminal Procedure Code would apply. The learned Chief Justice has dealt with the provisions of the Consumer Protection Act in detail and from perusal of Section 27 it is evident that the provision for punishment has been made only with a view to see that the orders of different authorities created under the Act are implemented. In a way it is not an offence in the way the offence in understood under Indian Penal Code or Criminal Procedure Code. This power is in the nature of a power of contempt available to High Court. The Courts have considered whether the persons accused of contempt have to be tried under Criminal Procedure Code, or not. Some of the judgments are necessary to be mentioned. The foremost judgment is the judgment of Supreme Court in Sukhdev Singh v. Teja Singh, AIR 1954 SC 186. The following argument was made before the Supreme Court :
'Contempt is punishable under the Contempt of Courts Act, 1952; therefore it is an offence punishable by a law which is in force; consequently, it is an offence. Being an offence it is triable under the Criminal Procedure Code because Section 5 makes the Codeapplicable not only to the trial of offences under the Indian Penal Code but also to the trial of offences against other laws.'
The Supreme Court did not agree with this proposition and held that the proceedings for contempt are under a special jurisdiction which are inherent to all the Courts of record. After mentioning sub-section (2) of Section 1 (now Section 5) of the Criminal Procedure Code, the Supreme Court held :
'The term 'special jurisdiction' is not defined in the Criminal Procedure Code but the words 'special law' arc defined in Section 41 of the Indian Penal Code to mean 'a law applicable to a particular subject'. In the absence of any specific definition in the Criminal Procedure Code, we think that that brings out the ordinary and natural meaning of the words 'special jurisdiction' and covers the present case. Contempt is a special subject and the jurisdiction is conferred by a special set of taws peculiar to Courts of Record.'
After dealing with the law on the subject the Supreme Court held;
'We hold, therefore, that the Code of Criminal Procedure does not apply in matters of contempt triable by the High Court. The High Court can deal with it summarily and adopt its own procedure. All that is necessary is that the procedure is fair and that the contemnor is made aware of the charge against him and given a fair and reasonable opportunity to defend himself.'
The judgment was followed in Mrs. V.G. Peterson v. O. V. Forbes, : AIR1963SC692 , and also in Delhi Judicial Service Association Tis Hazari Corut v. State of Gujarat, : 1991CriLJ3086 . In this judgment (supra) the Court again dealing with the contempt matter held:
'The jurisdiction to initiate the proceedings and take seisin of the contempt is inherent in a Court of record and the procedures of the Criminal Procedure Code do not apply to contempt proceedings. Section 5 of the Code of Criminal Procedure lays down that nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. The power to take proceedings for the contempt of Court is an inherent power of a Court of record, the Criminal Procedure Code does not apply (o such proceedings. Since, the contempt proceedings are not in the nature of criminal proceedings for an offence, the pendency of contempt proceedings cannot be regarded as criminal proceedings merely because it may end in imposing punishment on the contemnor. A contemnor is not in the position of an accused, it is open to the Court to cross-examine the contemnor and even if the contemnor is found to be guilty of contempt, the Court may accept apology and discharge the notice of contempt, whereas tendering of apology is no defence to the trial of a criminal offence. This peculiar feature distinguishes contempt proceedings from criminal proceedings. In a criminal trial where a person is accused of an offence there is a public prosecutor who prosecutes the case on behalf of the prosecution against the accused but in contempt proceedings the Court is both the accuser as well as the Judge of the accusation as observed by Hidayatullah, CJ in Debabrata Bandopadhyaya's case : 1969CriLJ401 . Contempt proceedings is sui generis, it has peculiar features which are not found in criminal proceedings.'
53. Admittedly the act which is punishable under Section 27 of the Consumer Protection Act is part of the special law and therefore Section 5 of the Criminal Procedure Code would not apply.
54. For the reasons given above, the writ petitions are dismissed.