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1996 Supreme(Cal) 84

High Court Of Calcutta
Ajoy Nath Ray
PEERLESS GENERAL FINANCE AND INVESTMENT CO.LTD.AND ANR. - Appellant
Versus
DISTRICT CONSUMER REDRESSAL FORUM AND ORS. - Respondent
Matter 3554  Of  1991
Decided On : 02/29/1996

Parliament is not permitted to set up courts parallel to the ordinary law courts unless there is a special need for a special class of litigants.

Headnote:

CONSUMER PROTECTION ACT - Validity - Parallel Courts - Natural Justice - Right of Appeal to Supreme Court - Constitutionality - Consumer Protection Act, 1986.

Fact of the Case:

The writ petitions challenged the validity of the Consumer Protection Act, 1986, raising two issues: (1) whether organizations like Peerless and CESC rendered services to individual respondents within the meaning of the Act; and (2) whether the Act was a valid enactment.

Finding of the Court:

The court held that the Consumer Protection Act, 1986, was ultra vires and struck it down. It also struck down all rules made under the Act and ordered a permanent stay on all disputes and proceedings pending before the District Forums, State Commissions, or the National Commission established under the Act.

Issues: 1. Whether organizations like Peerless and CESC rendered services to individual respondents within the meaning of the Consumer Protection Act, 1986? 2. Whether the Consumer Protection Act, 1986, was a valid enactment?

Ratio Decidendi: 1. The court held that organizations like Peerless and CESC rendered services to individual respondents within the meaning of the Consumer Protection Act, 1986, as per the Supreme Court's decision in Indian Medical Association v. V. P. Shantha. 2. The court held that the Consumer Protection Act, 1986, was ultra vires and struck it down on the following grounds: (a) It set up parallel courts to the ordinary law courts without any special need for a special class of litigants, violating the basic structure of the Constitution. (b) It allowed for a conflict of decisions between the ordinary courts and the Consumer Forums and Commissions. (c) It excluded the courts of law from enforcing the rules of natural justice, as evident in Section 13(3) of the Act. (d) It gave a special right of appeal to the Supreme Court from the decisions of the National Commission, which was not available even to litigants litigating before the Division Bench of any High Court.

Final Decision: The court declared the Consumer Protection Act, 1986, ultra vires and struck it down. It also struck down all rules made under the Act and ordered a permanent stay on all disputes and proceedings pending before the District Forums, State Commissions, or the National Commission established under the Act.

AJOY NATH RAY, J.

( 1 ) THESE writ applications raise two points. The first point is whether organisations like Peerless and CESC are rendering service to the individual respondents within the meaning of the definition of service as given in Section 2 (o) of the Consumer Protection Act, 1986. If these organisations are rendering such service then the second point arises, which is whether the said Act is at all a valid Act.

( 2 ) THE Supreme Court has already spoken on the Consumer Act on at least three occasions. Those are three reported cases which have been cited on behalf of the respondents.

( 3 ) ALTHOUGH due notice was sent to the highest law officers of the country yet their offices sent no special representation for contesting these writ matters. However, a strong contest has been put up both by Mr. Mukherji and by Mr. Das and, in my opinion, they have left no stone unturned in their attempt to support the Act as a whole and also each and every individual portion thereof.

( 4 ) THE three Supreme Court cases referred to above were also cited by ' them in support of their case. Those cases are respectively reported as Indian Medical Association v. V. P. Shantha , Laxmi Engineering Works v. P. S. G. Industrial Institute and Lucknow Development Authority v. M. K. Gupta. The cases have been carefully placed before me, as indeed those must be, since those are the pronouncements of the highest legal authority in India. Reading the doctor's case as I do, which is reported as Indian Medical Association v. V. P. Shantha, it appears to me that it is no longer open for Peerless to contend that the matter relating to the pension certificate payment referred to in their writ petitions would not constitute service rendered by them to the consumer (certificate purchaser) within the meaning of the 1986 Act. The case of CESC that their setting up of a public fountain is free of charge makes their case of not rendering service more arguable, but as the Peerless and the CESC case were presented together and both argued on the invalidity of the Act, a determination of that crucial issue can neither be postponed nor shelved.

( 5 ) IN the flat allotment case reported as Lucknow Development Authority v. M. K. Gupta, the Supreme Court showed that within the meaning of service there is possibility of Government service or allied public service being also included thus attracting the 1986 Act.

( 6 ) IN the case reported as Laxmi Engineering Works v. P. S. G. Industrial Institute extensive reference has been made as to the manner in which the legislation came into being. The United Nations' resolution is referred to and consumer redressal in respect thereof has been historically traced as an outcome of such a resolution.

( 7 ) IN the doctor's case, in the last paragraph their Lordships even went so far as to say that the challenge put forward by the doctors with regard to Articles 14 and 19 were also unacceptable to their Lordships. This being binding on me, much of the argument made by Mr. Gupta no longer needs to be considered.

( 8 ) BEFORE I go on to the other points, which, in my opinion, still remain outstanding, let me dispose of those points of Mr. Gupta which have become unarguable any further in view of the Supreme Court pronouncements.

( 9 ) THE proposition that Peerless (and arguably CESC too) renders no service within the meaning of the Act is no longer arguable. It is also no longer arguable that the composition of the forum makes the forum itself unconstitutional, as, such a composition will lead to arbitrariness and a possible violation of Article 14.

( 10 ) MR. Gupta heavily drew upon the decision of the Supreme Court in Special Courts Bill, 1978, In re, when he had first argued this case quite some time back. He pointed out that there the Supreme Court recorded three concessions in regard to the proposed Special Courts Bill, and one of the most important concessions related to the personnel who would preside over the Spe




























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